Cowen’s Oliver Chen and team call Signet Jewelers (SIG) a “‘must have’ stock” following yesterday’s earnings. They explain why:
SCOTT EELLS/BLOOMOBERG NEWS
We continue to see multiple positive catalysts of sales & earnings growth over the long-term, including: agile leverage of proprietary brand portfolio (~31% of mix), inelastic bridal demand (50% of mix), and a healthy middle income consumer. Near-term, we’re encouraged by mgmt. confidence in the business with FY17 outlook for top & bottom line exceeding expectations. We acknowledge FY17 comp guide implies a 2H acceleration, but still appears achievable on: 1) momentum continuing to build with the Ever Us collection compounded by new line extensions (e.g. earrings & bracelets); 2) roll-out of Pandora shop-in-shops + new Chosen Diamond program; 3) further refining of marketing campaigns; 4) Zales synergies; and 5) cont’d investments in store ops/sales training. In terms of profitability, mgmt. expects both GM and SG&A leverage to drive strong earnings flow during the year, with GM improvement driven by higher sales & synergies, while SG&A leverage expected to flow due to marketing & organizational design efficiencies. Reit. Outperform on SIG with $165PT on 17x FY18 EPS.
Hot Trucking Companies To Own In Right Now: Pinnacle West Capital Corporation(PNW)
Pinnacle West Capital Corporation, through its subsidiaries, provides retail and wholesale electric services primarily in the State of Arizona. The company involves in the generation, transmission, and distribution of electricity through coal, nuclear, gas and oil, and solar resources. It also offers energy-related products and services, such as energy master planning, energy use consultation and facility audits, cogeneration analysis and installation, and project management with a focus on energy efficiency and renewable energy to commercial and industrial retail customers in the western United States. In addition, the company owns minority interests in various energy-related investments and Arizona community-based ventures; and develops residential, commercial, and industrial real estate projects in Arizona, Idaho, New Mexico, and Utah. As of December 31, 2010, it owned or leased approximately 6,290 mega watts of regulated generation capacity; and serviced approximately 1.1 million customers. Pinnacle West Capital Corporation was founded in 1920 and is based in Phoenix, Arizona.
Advisors’ Opinion:
- [By Ben Levisohn]
Iron Mountain has gained 2.6% to $26.55 at 3:05 p.m., making it the fourth-best performer in the S&P 500, ahead of WPX Energy (WPX), which has gained 2.4% to $19.94, Pinnacle West Capital (PNW), which has gained 2.3% to $53.55 and Dominion Resources (D), which has risen 2.1% to $59.85.
Hot Trucking Companies To Own In Right Now: Kinder Morgan, Inc.(KMI)
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Kinder Morgan, Inc. operates as an energy infrastructure and energy company in North America. The company operates through Natural Gas Pipelines, CO2, Terminals, Products Pipelines, Kinder Morgan Canada, and Other segments. The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipeline and storage systems; natural gas and crude oil gathering systems, and natural gas processing and treating facilities; and natural gas liquids fractionation facilities and transportation systems. The CO2 segment produces, transports, and markets CO2 for use in enhanced oil recovery projects; and owns interest in oil-producing fields, gas processing plants, and crude oil pipelines located in the Permian Basin region of West Texas. The Terminals segment owns and operates liquids and bulk terminals, and rail transloading and materials handling facilities that transload and store refined petroleum products; crude o il; condensate; and bulk products, including coal, petroleum coke, cement, alumina, salt, and other bulk chemicals, as well as owns and operates seven tankers. The Products Pipelines segment owns and operates refined petroleum products, and crude oil and condensate pipelines; and associated product terminals and petroleum pipeline transmix facilities. The Kinder Morgan Canada segment owns and operates Trans Mountain pipeline system that transports crude oil and refined petroleum products from Edmonton, Alberta, and Canada to marketing terminals and refineries in British Columbia, Canada, and Washington State; and aviation turbine fuel pipeline. The Other segment includes various physical natural gas contracts with power plants. Kinder Morgan, Inc. owns an interest in or operates approximately 80,000 miles of pipelines and 180 terminals. The company was formerly known as Kinder Morgan Holdco LLC and changed its name to Kinder Morgan, Inc. in February 2011. Kinder Morgan, Inc. was founded in 1936 and is headquartered in Houston, Texas.!
Advisors’ Opinion:
- [By Roberto Pedone]
One energy player that insiders are buying up a huge amount of stock in here is Kinder Morgan (KMI), which owns interests in an energy transportation and storage company. Insiders are buying this stock into modest strength, since shares are up 2.4% so far in 2013.
Kinder Morgan has a market cap of $37.5 billion and an enterprise value of $71 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 37.94 and a forward price-to-earnings of 23.03. Its estimated growth rate for this year is 153.1%, and for next year it’s pegged at 26.6%. This is not a cash-rich company, since the total cash position on its balance sheet is $1.02 billion and its total debt is a whopping $35.60 billion. This stock currently sports a dividend yield of 4.2%
The CEO and chairman of the board just bought 500,000 shares, or about $17.86 million worth of stock, at $35.74 a share.
From a technical perspective, KMI is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending for the last two months, with shares moving lower from its July high of $40.03 a share to its recent low of $34.82 a share. During that downtrend, shares of KMI have been making mostly lower highs and lower lows, which is bearish technical price action.
If you’re bullish on KMI, then I would look for long-biased trades as long as this stock is trending above its 200-day at $36.97, and then once takes out some near-term overhead resistance levels at 50-day at $37.80 a share to more resistance at $38.29 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 4.91 million shares. If we get that move soon, then KMI will set up to re-test or possibly take out its next major overhead resistance levels at $40.03 to $41.06 a share.
- [By Dimitra DeFotis]
In a nutshell: Hedgeye says investors should worry more about Kinder’s pipeline maintenance and spending therein. And it says Kinder’s exploration and production business, while small, is NOT a pipeline enterprise and valuation should reflect that.Moreover, Hedgeye says it thinks Kinder Morgans strategy is to “starve its pipelines and related infrastructure of routine maintenance spending” so that it can maximize distributable cash flow and payments to the general partner, Kinder Morgan(KMI). As a structure,MLPs pay out most of their cash flow as tax-deferred distributions to investors in their “units,” as shares are called.
Terra Nitrogen Company, L.P. engages in the production and sale of nitrogen fertilizer products for agricultural and industrial applications. The company primarily offers anhydrous ammonia and urea ammonium nitrate solutions. Its customers for fertilizer products include dealers, national farm retail chains, and distributors. Terra Nitrogen GP Inc. serves as the general partner of the company. Terra Nitrogen Company, L.P. was founded in 1991 and is based in Deerfield, Illinois. Terra Nitrogen Company, LP. operates as a subsidiary of Terra Industries Inc.
Advisors’ Opinion:
- [By Robert Rapier] While the MLP space is dominated by the oil and gas sector, in last week’s article we began to explore some of the more exotic master limited partnership offerings. This week we continue our exploration of nontraditional MLPs by looking at the partnerships supplying fertilizer.
Rentech (Nasdaq: RTK) has been around for more than a decade, and it has shifted strategies several times. Full disclosure: Rentech’s Chief Technology Officer Harold Wright is a former manager of mine when we were both at ConocoPhillips, and I have visited Rentech’s facility in Commerce City, Colorado.
For most of Rentech’s existence, the company has sought to commercialize alternative fuels. At one time it had ambitions to build a large coal-to-liquids (CTL) plant, but federal legislation ultimately nudged it instead into the biomass-to-liquids (BTL) space. The company did build a BTL demonstration plant, but ultimately shut it down and has now refocused its effor ts on becoming “one of the largest wood processing companies in the world.”
During its interesting journey as a company, Rentech acquired two ammonia nitrogen fertilizer facilities, which turned out to be a profit center that funded the alternative energy research. In November 2011, Rentech spun off this fertilizer business into an MLP called Rentech Nitrogen Partners LP (NYSE: RNF).
In the months leading to the spin-off, RTK’s market capitalization was about $200 million. Rentech maintained 60 percent ownership of RNF, and three months after the spin-off RTK’s market cap had risen to $400 million, while investors had bid RNF up to $1 billion. Interestingly, RTK’s share of RNF was worth more than RTK’s entire market cap, a situation that persists. The market currently values Rentech at $482 million, while the valuation of Rentech Nitrogen Partners makes RTK’s 60 percent stake in RNF worth slightly more than $600 million — another illu
Hot Trucking Companies To Own In Right Now: T-Mobile US, Inc.(TMUS)
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T-Mobile US, Inc., together with its subsidiaries, provides mobile communications services in the United States, Puerto Rico, and the U.S. Virgin Islands. The company offers voice, messaging, and data services in the postpaid, prepaid, and wholesale markets. It also provides wireless devices, such as smartphones, tablets, and other mobile communication devices, as well as accessories, which are manufactured by various suppliers. It offers services, devices, and accessories through its owned and operated retail stores, as well as through its Websites. T-Mobile US, Inc. also sells its devices and accessories to dealers and other third party distributors for resale through independent third-party retail outlets and various third-party Websites. The company provides its services under the T-Mobile and MetroPCS brands. As of December 31, 2014, it provided services to approximately 55 million customers. T-Mobile US, Inc. was founded in 1994 and is headquartered in Bellevue, Washington. T-Mobile US, Inc. operates as a subsidiary of Deutsche Telekom AG.
Advisors’ Opinion:
- [By Andrea Tse]
Despite Verizon consistently being able to keep churn rates at very low levels over the last decade, rates have edged up compared to five years ago. The company’s churn rate for retail postpaid customers came in at 0.93% and 0.97% for the three months and six months ended June 30. Five years ago during the same period, the figures were at 0.83% and 0.88%, respectively. The latest wireless churn rate data on other telecom companies show T-Mobile USA (TMUS) coming in at 1.6% and 1.8% during those same periods, and AT&T’s arriving at 1.02% and 1.03% and almost rivaling Verizon’s during those respective time frames. In any case, Verizon still has the chance to prove that it’s able to beat its own churn rate lows again in the coming years. [Read: Blackberry Fails at the ‘Vision Thing’]
Hot Trucking Companies To Own In Right Now: Foot Locker, Inc.(FL)
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Foot Locker, Inc. operates as an athletic shoes and apparel retailer. The company operates in two segments, Athletic Stores and Direct-to-Customers. The Athletic Stores segment retails athletic footwear, apparel, accessories, and equipment under various formats, including Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sports, Footaction, and SIX:02, as well as Runners Point, and Sidestep. As of January 30, 2016, it operated 3,383 primarily mall-based stores in the United States, Canada, Europe, Australia, and New Zealand. The Direct-to-Customers segment sell athletic footwear, apparel, equipment, team licensed products, and private-label merchandise through Internet Websites, mobile sites, and catalogs. This segment operates sites for eastbay.com, final-score.com, eastbayteamsales.com, and sp24.com, as well as footlocker.com, ladyfootlocker.com, six02.com, kidsfootlocker.com, champssports.com, footaction.com, footlock er.ca, footlocker.eu, runnerspoint.com, and sidestep-shoes.com. The company also provides franchise licenses to operate its Foot Locker stores in the Middle East and the Republic of Korea; and Runners Point Germany. It operates 64 franchised stores. The company was founded in 1879 and is headquartered in New York, New York.
Advisors’ Opinion:
- [By Jeroen Jongbloed]
Foot Locker (FL) is a retailer of athletic shoes and apparel which operates 3369 stores in the US, Canada, Europe, Australia and New-Zealand. On July 10th 2013, it completed its acquisition of Runners Point Group. In today’s article, I will be looking at FL’s revenue, net income, dividend and valuation. At certain points, I will use DSW, Inc. (DSW) and Shoe Carnival, Inc. (SCVL) for comparison.
Hot Trucking Companies To Own In Right Now: BorgWarner Inc.(BWA)
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BorgWarner Inc. develops, manufactures, and sells engineered automotive systems and components primarily for powertrain applications worldwide. The companys Engine segment offers turbochargers; turbo actuators; and timing systems, such as timing chains, variable cam timing products, crankshaft and camshaft sprockets, tensioners, guides and snubbers, HY-VO front-wheel drive transmission chains, and four-wheel drive chains. This segment also provides emissions and systems products comprising electric air pumps and exhaust gas recirculation (EGR) modules, EGR coolers, EGR tubes, and EGR valves; thermal systems products consisting of viscous fan drives, polymer fans, and coolant pumps; and ignition systems, such as glow plugs and instant starting systems, pressure sensor glow plugs, and ignition technology. The Drivetrain segment develops and manufactures friction and mechanical products, including dual clutch modules, friction clutch modules, friction and steel plates, transmission bands, torque converter clutches, one-way clutches, and torsional vibration dampers. This segment also offers control products comprising electro-hydraulic solenoids, transmission solenoid modules, and dual clutch control modules. In addition, this segment provides torque management products, including rear-wheel drive/all-wheel drive (AWD) transfer case systems, front wheel drive-AWD coupling systems, and cross-axle coupling systems. The company sells its products to original equipment manufacturers of light vehicles consisting of passenger cars, sport-utility vehicles, vans, and light trucks; commercial vehicles, such as medium-duty and heavy duty trucks, and buses; and off-highway vehicles, including agricultural and construction machinery, and marine applications, as well as to tier one vehicle systems suppliers and the aftermarket for light, commercial, and off-highway vehicles. BorgWarner Inc. was founded in 1987 and is headquartered in Auburn Hills, Michigan.
Advisors’ Opinion:
- [By Ben Levisohn]
Shares of auto-part makers like Delphi Automotive (DLPH), BorgWarner (BWA), and Tenneco (TEN) are getting killed today, ostensibly due to an article in Automotive News. Wells Fargo’s Richard Kwas and team think Tesla Motors (TSLA) and its Model 3 deserve at least some of the blame:
