UBS analyst Michael Lasser and team ask when the acquisition of Jet.com will be profitable for Wal-Mart Stores (WMT):
To size the impact to Wal-Marts P&L, we assume Jet achieves $1b in GMV over the next 12 mos & its 3P commissions are ~10%. This implies ~$400m in rev. Also, we est. a gross margin of 20% (assuming a ~10% GM on 1P & ~75% on 3P). News reports suggest its spending $20m-$25m/mo. in advertising. We assume this tapers to $10m, meaning ad costs will be ~$120m for the yr. According to CrunchBase, it has 1k-5k employees. Taking the mid-point & assuming $100k/employee means ~$300m of labor costs. Assuming another $100m of misc costs would mean its EBIT loss is ~$440m. This would translate to ~$0.15-$0.20 of EPS dilution for WMT. But, it can likely reduce this by eliminating redundant costs & using its heft to get better terms from partners. Previously, Jet.com said it aims to reach $20 bn in GMV & break even by 2020. We dont think WMT will incorporate the NT impact in its guidance until the deal closes (expected this CY).
Best Warren Buffett C ompanies To Own In Right Now: Dominion Resources, Inc.(D)
Dominion Resources, Inc. produces and transports energy in the United States. The company operates through three segments: Dominion Virginia Power (DVP), Dominion Generation, and Dominion Energy. The DVP segment engages in regulated electric transmission and distribution operations that serve residential, commercial, industrial, and governmental customers in Virginia and North Carolina. The Dominion Generation segment is involved in electricity generation through coal, nuclear, gas, oil, hydro, and renewable sources; and related energy supply operations. It also comprises generation operations of the companys merchant fleet and energy marketing, and price risk management activities for its assets. The Dominion Energy segment engages in regulated natural gas distribution operations, gas transmission pipeline and storage operations, natural gas gathering and processing activities, and liquefied natural gas operations. As of De cember 31, 2015, the companys portfolio of assets included approximately 24,300 megawatts of generating capacity; 6,500 miles of electric transmission lines; 57,300 miles of electric distribution lines; 12,200 miles of natural gas transmission, gathering, and storage pipelines; and 22,000 miles of gas distribution pipelines. It served approximately 5 million utility and retail energy customers in 14 states; and operated underground natural gas storage systems with approximately 933 billion cubic feet of storage capacity. In addition, the company sells electricity at wholesale prices to rural electric cooperatives, municipalities, and into wholesale electricity markets. Dominion Resources, Inc. was founded in 1909 and is headquartered in Richmond, Virginia.
- [By Jim Jubak, Senior Markets Editor, MoneyShow.com]
A big part of that is Wednesday’s news that the US Department of Energy had approved a permit for Dominion Resources (D) to export liquefied natural gas from an existing liquefied natural gas import terminal in Maryland.
- [By David Dittman]
But power generators across the country, including Dominion Resources Inc (NYSE: D) in Virginia and Southern Company (NYSE: SO) in the Southeast, are taking significant steps to boost their solar capacity.
Best Warren Buffett Companies To Own In Right Now: Monro Muffler Brake, Inc.(MNRO)
Monro Muffler Brake, Inc., incorporated on October 5, 1959, is engaged in the provision of automotive undercar repair and tire services in the United States. The Company provides a range of services on passenger cars, light trucks and vans for brakes; mufflers and exhaust systems, and steering, drive train, suspension and wheel alignment. The Company also provides other products and services, including tires and routine maintenance services, including state inspections. The Company is also engaged in repair and replacement of parts. The Company’s store provides a range of undercar repair services for brakes, steering, mufflers and exhaust systems, drive train, suspension and wheel alignment, as well as tire replacement and service. These services apply to all makes and models of domestic and foreign cars, light trucks and vans.
The Company also offers scheduled maintenance services in its stores where services are packaged and offered to consumers based upon t he year, make, model and mileage of each specific vehicle. The Company’s maintenance services include oil change services, heating and cooling system flush and fill service, belt installation, fuel system service and a transmission flush and fill service. The Company’s Tire Warehouse and Tire Barn Warehouse stores are typical service or tire stores involving tire services, including the mounting and balancing of tires, and the sale of road hazard warranties. All stores provide the installation of wiper blades. The Company offers mobile applications on the iPhone and Android platforms for the Monro, Mr. Tire, Tire Warehouse, and The Tire Choice brands. The Company’s mobile applications enable customers to manage vehicle service records on their smart phones and access information, coupons and specials.
The Company operated stores in approximately 25 states, including Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachuse tts, Michigan, Missouri, New Hampshire, New Jersey, New York! , North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia and Wisconsin, primarily under the names Monro Muffler Brake & Service, Tread Quarters Discount Tire, Mr. Tire, Autotire Car Care Center, Tire Warehouse, Tire Barn Warehouse, Ken Towery’s Tire & Auto Care, The Tire Choice and Car-X. The Company operated a chain of approximately 1,030 Company-operated stores, over 135 franchised locations and approximately 15 dealer-operated stores providing automotive undercar repair and tire services in the United States.
- [By Ben Levisohn]
Yesterday, shares of Monro Muffler Brake (MNRO) plunged 3.1% after Barron’s Leslie Norton panned the stock in this weekend’s issue of the magazine. And wouldn’t you know it? Monro’s shares are skidding lower once again today.
Norton’s argument was straightforward:
At a recent $62, Rochester, N.Y.based Monro (ticker: MNRO) trades at a lofty 28 times forward earnings, compared with a 10-year average of 21.1, and 17 times earnings for the Standard & Poors 500. With sales growth slowing as competition increases, Monros strategic goal of achieving 15% annual sales gains and 20% profit growth seems distant.
Any hint of more sluggish sales could push the shares down at least 10%. Bruce Geller, CEO of money manager Dalton Greiner Hartman Maher, who is short the stock, says, A fairly commoditized business with low organic growth deserves a more reasonable multiple of 20 times.
That would put the stock in the mid-$40s.
Shares of Monro Muffler Brake have dropped 4% to $57.59 at 3:49 p.m. today, leaving around 20% of downside.
UPDATE: This post initially misspelled ‘Brake’ as ‘Break.’ It’s been corrected.
Best Clean Energy Companies To Own For 2017: Rockwell Medical Technologies Inc.(RMTI)
Rockwell Medical Technologies, Inc. manufactures, sells, and distributes hemodialysis concentrate solutions and dialysis kits primarily in the United States, Latin America, Asia, and Europe. The company?s hemodialysis product duplicates kidney function in patients with failing kidneys, known as end stage renal disease, an advanced stage of chronic kidney disease; and dialysis solutions are used to maintain life, remove toxins, and replace nutrients in the dialysis patient?s bloodstream. Its products include Renal Pure and CitraPure liquid acid concentrate, Dri-Sate dry acid concentrate and mixing systems, RenalPure powder bicarbonate concentrate, and SteriLyte liquid bicarbonate concentrates; and various ancillary products comprising blood tubing, fistula needles, specialized custom kits, dressings, cleaning agents, filtration salts, and other supplies. The company also has a license to manufacture and sell soluble ferric pyrophosphate (SFP), a Phase III clinical trial p r oduct to improve the treatment of dialysis patients with iron deficiency. Rockwell Medical Technologies sells its products to domestic hemodialysis providers through direct sales people and independent sales representation companies, as well as through independent sales agents and distributors internationally. The company was founded in 1995 and is based in Wixom, Michigan.
- [By Lisa Levin]
Thursday morning, the healthcare sector proved to be a source of strength for the market. Leading the sector was strength from Keryx Biopharmaceuticals (NASDAQ: KERX) and Rockwell Medical Inc (NASDAQ: RMTI).
Best Warren Buffett Companies To Own In Right Now: Media General, Inc.(MEG)
Media General, Inc., formerly Mercury New Holdco, Inc., incorporated on March 19, 2014, is a connected-screen multimedia company. The Company provides news, information and entertainment. The Company’s operating segments include Broadcast and Digital. Its Broadcast segment includes over 70 television stations that are either owned, operated or serviced by the Company in approximately 48 United States markets, all of which are engaged principally in the sale of television advertising. The Company’s Digital segment includes the operating results of the Company’s digital businesses, as well as the business operations related to the television station companion Websites. Digital segment includes LIN Digital, LIN Mobile, LLC (LIN Mobile), HYFN, Inc. (HYFN), Dedicated Media, Inc. (Dedicated Media), BiteSize TV and Federated Media, as well as the business operations related to the television station companion Websites.
The Company’s digital company, LIN Digital, prov ides display and video advertising on LIN Digital’s advertising network. LIN Mobile provides mobile advertising, including software to optimize audience reach. Federated Media provides display and video advertising on a network of Website publishers, including lifestyle bloggers. Dedicated Media provides marketing, data focusing and analytics for digital marketing campaigns. HYFN is a service digital agency that develops and implements mobile, social and Web experiences. BiteSize TV is a video content creator.
- [By Monica Gerson]
Media General Inc (NYSE: MEG) is estimated to report its quarterly earnings at $0.04 per share on revenue of $340.17 million.
National Health Investors Inc (NYSE: NHI) is expected to post its quarterly earnings at $1.17 per share on revenue of $57.82 million.
Best Warren Buffett Companies To Own In Right Now: AAON Inc.(AAON)
AAON, Inc., together with its subsidiaries, engages in the manufacture and sale of air conditioning and heating equipment primarily in the United States and Canada. The company offers rooftop units, chillers, air-handling units, make-up air units, heat recovery units, condensing units, commercial self contained units, and coils. It serves the commercial and industrial new construction and replacement markets. AAON, Inc. sells its products through manufacturers representatives and internal sales force. The company was founded in 1987 and is based in Tulsa, Oklahoma.
- [By Jonas Elmerraji]
We’re seeing the exact same setup in shares of small-cap HVAC firm Aaon (AAON). The biggest difference is that in AAON’s case, the ascending triangle pattern is coming in at the top of this stock’s recent price action, not at the bottom. That makes this a more textbook trade for September.
Another important difference is the fact that AAON hasn’t triggered yet. Shares have been coiling below $26 resistance since the middle of the summer; a breakout above that $26 level is the indicator that it’s time to buy. Whenever you’re looking at any technical price pattern, it’s critical to think in terms of buyers and sellers. Triangles and other price pattern names are a good quick way to explain what’s going on in this stock, but they’re not the reason it’s tradable. Instead, it all comes down to supply and demand for shares.
That resistance line at $26 is a price where there’s an excess of supply of shares; in other words, it’s a place where sellers have been more eager to take recent gains and sell their shares than buyers have been to buy. That’s what makes the move above it so significant — a breakout indicates that buyers are finally strong enough to absorb all of the excess supply above that price level.
Wait for that to happen before you put your money on this trade.
Best Warren Buffett Companies To Own In Right Now: Euro FX(P)
Ecopetrol S.A. operates as an integrated oil company in Colombia, Peru, Brazil, and the U.S. Gulf Coast. The company engages in the exploration, development, and production of crude oil and natural gas. As of December 31, 2010, its proved reserves of crude oil and natural gas consisted of 1,714.0 million barrels of oil equivalent. The company also transports crude oil, motor fuels, fuel oil, and other refined products, as well as mixture of diesel and palm oil. It owns transportation network consisting of 3,003 kilometers of crude oil pipeline directly, as well as an additional 2,178 kilometers of crude oil pipeline with its business partners; and 3,017 kilometers of multi-purpose pipelines for transportation of refined products from refinery to wholesale distribution points. As of the above date, Ecopetrol S.A. owned 58 stations with a nominal storage capacity of 19 million barrels of crude oil and 6 million barrels of refined products. In addition, the company owns and o perates refineries that produce a range of refined products, including gasoline, diesel, kerosene, jet fuel, aviation fuel, liquefied petroleum gas, sulfur, heavy fuel oils, motor fuels, and petrochemicals, including paraffin waxes, lube base oils, low-density polyethylene, aromatics, asphalts, alkylates, cyclohexane and aliphatic solvents, and refinery grade propylene, as well as provides industrial services to third parties. Further, it markets various refined and feed stock products, including regular and high octane gasoline, diesel fuel, jet fuel, natural gas, and petrochemical products. The company was formerly known as Empresa Colombiana de Petroleos and changed its name to Ecopetrol S.A. in June 2003. Ecopetrol S.A. was founded in 1948 and is based in Bogota, Colombia.
- [By Jon C. Ogg]
Pandora Media Inc. (NYSE: P) is supposed to be under a brand new chief executive officer, and we noted recently about waves and waves of insider selling. Now we are getting word that Pandora plans to increase its float with a secondary stock offering.
- [By Monica Gerson]
Pandora Media (NYSE: P) announced its plans to sell 14 million shares of common stock, including 4 million shares from current stockholders. Pandora shares tumbled 4.54% to $22.90 in the after-hours trading session.
- [By Monica Gerson]
Pandora Media (NYSE: P) dipped 3.08% to $23.25 in the pre-market session as the company announced its plans to sell 14 million shares of common stock, including 4 million shares from current stockholders.
- [By Monica Gerson]
Pandora Media (NYSE: P) surged 3.57% to $26.56. The volume of Pandora shares traded was 554% higher than normal. Pandora priced an underwritten public offering of 18,200,000 shares of its common stock at a price of $25.00 per share.