Saturday, May 27, 2017

Cognex Corporation Earnings Analysis

Machine vision company Cognex Corporation (NASDAQ:CGNX) continues to please investors by releasing guidance-busting results and winning large orders from customers in new markets.The first-quarter earnings report continued the company's run of strong earnings reports, and management signaled that it is on track to see a significant pickup in revenue in the second half. Let's take a look at Cognex's first quarter.

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Dassault Systemes Earnings Analysis

France-based engineering and design software company Dassault Systemes(NASDAQOTH:DASTY) produced a mixed set of results in its first quarter. The headline numbers were fine, and management sounded an upbeat tone with regard to its 3DExperience and Solidworks platforms, but new software license sales were lower than the forecast rate for the full year. Let's take a closer look at what happened.

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Wednesday, May 24, 2017

WESCO International

In an earnings season where other industrial-related companies such as Illinois Tool Works (NYSE:ITW)Dover Corp (NYSE:DOV) and CSX Corporation (NASDAQ:CSX) have reported strengthening conditions, WESCO International Inc.'s (NYSE:WCC) first-quarter earnings report and guidance were somewhat lackluster. Let's take a look at what happened in the quarter.

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Honeywell International Earnings Analysis

After a strong set of first-quarter earnings, investors in Honeywell International might have expected a bit more in terms of a guidance hike, but it's hard to be too churlish. The new CEO, Darius Adamczyk, can be forgiven for taking a conservative approach to guidance -- particularly after a difficult 2016 -- and the underlying fundamentals do seem like they are turning in the company's favor.
Let's take a look at the key takeaways from the earnings presentations.

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General Electric Earnings Analysis

In an act of almost poetic symmetry, General Electric Company's (NYSE:GE) latest results left investors confused. Whereas in previous quarters, the headline revenue guidance was down, but management gave assurances that the underlying performance was fine, this time around, it was the opposite. Simply put, the headline numbers were good, but the twist in the tale came from the magnitude of cash outflow in the quarter. There is a lot going on in the results, so let's take a look at the key takeaways from the earnings report.

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Tuesday, May 23, 2017

CSX Earnings Analysis

Railroads always give great color on the economy, and if the latest earnings report from CSX Corporation (NASDAQ:CSX) is anything to go by, then overall conditions are definitely improving in the U.S. industrial economy. That said, it's not an even recovery, and some parts of the economy are improving more than others. Let's take a look at the details in the latest numbers and what they mean for investors

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Illinois Tool Works Earnings Analysis

Diversified industrial specialist Illinois Tool Works (NYSE:ITW) did it again: The company's first-quarter results breezed past guidance, and management raised full-year expectations. It continues to outperform its end markets and expand operating margin. In addition, its segments most affected by the industrial weakness in the U.S. in 2016 are now starting to turn. There's a lot to look at, so let's dive into the details.

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Dover Corp Earnings

Dover Corp. (NYSE:DOV) is one of the most heavily oil and gas-focused industrial companies on the market. For example, at the start of 2013 the company's energy segment generated more than 40% of total segmental earnings. No prizes for guessing that that figure is a lot lower now -- less than 14% in recent first-quarter results -- but the segment looks to be in recovery mode, and management's commentary on the earnings call reads across well for other companies with oil exposure. Let's look, then, at Dover's earnings.

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Wednesday, May 17, 2017

Top Aerospace Stocks For 2017

A combination of multiyear backlogs at Boeing (NYSE:BA) and Airbus(NASDAQOTH:EADSY), and projections from industry bodies like the International Air Transport Association (IATA) for long-term passenger growth of 3.7%, make the aerospace sector very attractive for investors. I think large cap United Technologies Corporation(NYSE:UTX) and small cap Ducommun Incorporated (NYSE:DCO) are worthy investment candidates; here's why.

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Robert Half Earnings Analysis

Once again, investors in staffing company Robert Half International (NYSE:RHI) have been left wondering just when the company will see the benefits of a pickup in hiring by its customers. While its first-quarter 2017 earnings were at the high end of expectations, it certainly wasn't due to any increase in temporary or permanent hiring among its client base in the U.S. Let's take a closer look at what's going on.

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AZZ Inc Earnings Analysis

It's never a good thing when a company misses its current full-year guidance and then promptly reduces its guidance for the coming fiscal year, but that's the reality of AZZ Inc.'s (NYSE:AZZ) fourth-quarter earnings report. A combination of weak ongoing end-market conditions and the bankruptcy of Westinghouse hit AZZ hard. In short, it was another difficult quarter for the company. Let's take a closer look at what went wrong

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Value Stocks for 2017

Value stocks are attractive because there's usually something about them that limits the downside, whether it's a high dividend yield, a low price-to-earnings (P/E) ratio, or high free cash flow (FCF) generation. Investors can think of a value stock as having limited downside but good upside potential -- a good investment, in my book. Let's look at three good examples of value stocks you can buy right now. 

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Thursday, May 11, 2017

Genuine Parts Company Earnings

Genuine Parts Company (NYSE:GPC), owner of NAPA Auto Parts, became the first of the major auto parts companies to report earnings and sales for its first-quarter period ending on March 21.
The key issue to focus on is automotive group comparable sales, which can be seen in the chart below. I've also included the most directly applicable sales numbers for its peers, O'Reilly Automotive Inc (NASDAQ:ORLY)AutoZone, Inc (NYSE:AZO) and Advance Auto Parts, Inc. (NYSE:AAP). The disappointing sales performance of Advance Auto Parts is largely due to the effects of integrating a troublesome acquisition. 

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Electrical Equipment Stocks to Buy

Stock prices in the electrical equipment sector have been buoyed by a combination of expectations for an infrastructural stimulus, stabilization in oil and gas capital spending, and a general pickup in U.S. industrial production. While all three drivers are well founded, the market has seemingly baked them into companies' valuations and it's harder to find value in the sector. Still, I think there's a good case for buying stock in Parker-Hannifin Corp. (NYSE:PH)ABB Ltd. (NYSE:ABB), and Ingersoll-Rand plc (NYSE:IR) .

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Fastenal Earnings

Industrial supply company Fastenal Company (NASDAQ:FAST) recently reported its first-quarter earnings, and in common with its peer MSC Industrial Direct Co Inc (NYSE:MSM), the company beat sales expectations in the quarter. However, also like MSC Industrial, the stock sold off heavily post earnings.

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GE Earnings Preview

The next few quarters are extremely important for the investment thesis for General Electric Company . The stock has significantly underperformed the S&P 500 and the industrial sector over the last year or so amid fears that the company might miss its target of $2 in operating earnings per share. After a 2016 in which revenue estimates were significantly lowered throughout the year, investors need to see a few quarters of stabilization in order to regain confidence.
In this vein, let's analyze what to look out for in GE's first-quarter earnings on April 21.
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Wednesday, May 10, 2017

Emerson Electric Presentations

Emerson Electric Co.'s (NYSE:EMR) 3.2% dividend yield and 60-year history of increasing dividend payments makes it an income investor's favorite. However, following the divestitures of the network power segment and two industrial automation businesses, and a tough 2016 in which underlying sales fell 7%, investors might be concerned about its dividend growth prospects. Simply put, Emerson needs to get back to growth. With this in mind, here are some key takeaways from management's recent presentation.

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How FedEx Corporation Makes Money

How does FedEx Corporation (NYSE:FDX) make most of its money? That's a question worth investigating since the company's chief moneymaking segment has changed hands a few times in the past decade. Moreover, a fuller understanding of how the company operates will help investors appreciate what's happening with the investment propositions at FedEx and its main rival, United Parcel Service, Inc. (NYSE:UPS). Let's take a closer look.

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MSC Industrial Earnings Analysis

MSC Industrial Direct's second-quarter earnings came in broadly ahead of internal expectations, and management served notice of continued growth going forward. Let's take a look at the earnings and guidance from an upbeat quarter

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Friday, May 5, 2017

FedEx Corporation or UPS?

The perennial question facing investors in the package delivery industry: Should you choose FedEx Corporation (NYSE:FDX) or United Parcel Service (NYSE:UPS) stock? Or even buy both -- or avoid both? Let's take a look at the relative merits of each company and speculate on which stock is the better buy.

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3 Residential Construction Stocks to Buy

The U.S. housing market remains on a good trend, and provided that new household formation and employment growth continues, it's reasonable to expect continued growth. Which stocks are best placed to take advantage of residential construction growth? Lowe's Companies, Inc. (NYSE:LOW)Masco Corp. (NYSE:MAS), and Owens Corning(NYSE:OC) are three well-positioned names; here's why.

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3 Commercial Construction Stocks to Buy

With optimism high for an infrastructure stimulus, ongoing strength in the residential sector, and improving industrial production in the U.S., expectations for a strong commercial construction market in 2017 are well founded. But which stocks to buy? United Technologies Corporation (NYSE:UTX)Ingersoll-Rand (NYSE:IR), and Allegion (NYSE:ALLE) are attractive stocks for investors looking for exposure. Here's why.

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Monday, April 17, 2017

Can GE Hit its Target of $2 in EPS by 2018?

General Electric Company (NYSE:GE) set to abandon its target of $2 in operating EPS (earnings per share) by 2018? It surely wouldn't be a welcome event: Just ask investors in International Business Machines Corp. (NYSE:IBM) after the IT giant abandoned, in late 2014, its target of EPS of $20 by 2015. IBM's decision followed its coming to terms with fundamental declines in its legacy businesses; the stock is still below the level it traded at before the announcement was made. Is GE experiencing the same problems?

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Rockwell Automation's Lucky Quarter?

Rockwell Automation's (NYSE:ROK) recent first-quarter earnings report had more than its fair share of bullish signals to encourage investors in the stock. Indeed, Rockwell looks well-placed in an environment in which most forecasters are predicting a pickup in North American industrial production. So is it time to pile into the stock? Let's look at the cases for and against.

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Ingersoll-Rand is a Buy

Given the market's exuberance about the prospect of an industrial renaissance following President Donald Trump's election victory, it's becoming harder and harder to find industrial stocks at a good value. However, Ingersoll-Rand Plc (NYSE:IR) trades at a discount to its peers and offers investors a compelling mix of near- and long-term value creation prospects. In short, it's a smart buy for investors. Here's why.

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Monday, April 10, 2017

FedEx Corporation Earnings Analysis

The third-quarter results from FedEx Corporation (NYSE:FDX) look horrible on a superficial basis, but the devil is in the details, and a deeper analysis shows them to be solid. Moreover, management's outlook contained a number of positive points that should encourage investors. Let's take a look at the numbers from the earnings report and what they mean.

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Is Caterpillar Stock a Buy?

The stock market and Caterpillar Inc.  management appear to be taking a different tone with regard to the construction machinery giant's outlook for 2017. The stock is up nearly 60% since the start of 2016 and now trades at a forward P/E ratio of 30. Clearly, the market is expecting a strong recovery in the coming years, but management's recent commentary has been somewhat more cautionary. What's going on, and who is right?

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General Electric's Capital Arm

It's well known that General Electric Company  is shifting back to its industrial roots with CEO Jeff Immelt planning to generate 90% of the company's earnings from its digital industrial businesses by 2018. As such, GE Capital assets have been sold off to banks like Wells Fargo & Co and Capital One Financial Corp., while the highly successful Synchrony Financial spinoff also saw General Electric jettisoning financial businesses. With all of this going on, it's easy to forget that the company still has a capital arm, and it happens to be a key part of its future. Here's how and why.

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Wednesday, April 5, 2017

Oil Stock Crisis in the 1970s: The Key Lessons

The shocks to oil prices created by the Arab oil embargo in 1973 and the revolution in Iran in 1979 had far reaching consequences that still affect investor thinking today. Analyzing the aftermath of the ensuing energy crisis and stagflation (high inflation with stagnant growth) leads to one key conclusion oil stock pickers need to be aware of: the demand for oil is not price inelastic.

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Time to Buy Owens Corning Stock?

Buying a stock at an all-time high naturally invokes a kind of fear, but how about adopting Oscar Wilde's advice: believing that the cynics know the price of everything but the value of nothing? Despite its stock being at an all-time high, roofing and insulation materials company Owens Corning looks like a good value, and a great stock to play the housing recovery.

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What United Technologies Management Wants You to Know

Anyone following or invested in United Technologies Corporation (NYSE:UTX) knows that it faces near-term headwinds as the management team engages in positioning the company for long-term growth. So, it's important to monitor how well management is achieving their strategic aims, and how what they said might have a direct relevance to peers Ingersoll-Rand Plc (NYSE:IR) and Watsco Inc. (NYSE:WSO). With this in mind, let's take a look at five key takeaways from the recent investor and analyst meeting.

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Monday, March 27, 2017

Deere & Company Retail Sales

Deere & Company (NYSE:DE) has released commentary on its retail sales data for February. According to Deere, its February retail sales did better than the industry in all the two-wheel drive categories but worse in four-wheel drives and combines.
The chart below shows industry retail sales, so it's also relevant for investors in Deere's peers as well. The monthly numbers can bounce around a lot, so the chart shows the average of the last three months for selected data. As you can see, smaller tractors continue to do well, but the industry is still experiencing significant declines in its more profitable larger agricultural machinery sales.
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Is 3M Co a Good Buy For Income Investors?

3M Co.  has increased its dividend for 59 years in a row and is one of the most highly regarded stocks in the industrial sector. That said, any investment analysis of a stock's value must be forward-thinking, as well as mindful of the company's history. The key question is whether 3M can be relied upon to deliver for income investors in the future or not. Let's take a look at what it means to invest in 3M stock.

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3 Stocks You Wouldn't Want to Own

For three completely different reasons, Euronet Worldwide IncHerbalife Ltd. and Snap Inc  are stocks I won't be investing in anytime soon. While the reasons behind avoiding them are different, they all face some kind of existentialist threat which makes the worth avoiding -- no matter what the near term trends may suggest.

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Thursday, March 23, 2017

Trucking Stocks for 2017

The trucking sector has been on fire since the start of 2016, and anyone buying a basket of stocks in the industry would have generated handsome returns. At top of the bunch lies truck and engine manufacturer Navistar International Corp., whose ongoing turnaround and alliance with Volkswagen  helped the stock soar 176% in the period.
In light of Navistar's recent earnings, let's look at the company's turnaround progression and what its earnings and outlook say about the trucking market in 2017.
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AgroFresh Earnings Review

AgroFresh Solutions (NASDAQ:AGFS) needed to steady the ship after a difficult few quarters. After discussing increasing market competition for its core SmartFresh product and lowering its forecast for the U.S. apple harvest in 2016 on the third-quarter results presentation, management was under pressure to demonstrate it was back on track in the fourth quarter. The good news is that AgroFresh pretty much did that. In addition, management outlined some strategic actions taken to create growth. Let's analyze what happened in the quarter.

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Honeywell International Presents to Investors

Last year wasn't a great one for Honeywell International (NYSE:HON), at least from an operational perspective. Core organic growth declined 1%, as management lowered its revenue guidance due to a combination of three separate issues in its aerospace and PMT (performance materials and technologies) segments. Ultimately, full-year revenue came in at $39.3 billion, somewhat below the guidance for $39.6 billion to $40.9 billion given at the start of 2016.

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Fortive vs Danaher Stock

Danaher Corporation (NYSE:DHR) vs. Fortive Corp. (NYSE:FTV) makes for one of the most interesting comparisons in the industrial sector. Of course, there is nothing stopping you from owning both stocks -- in fact, before the spin-off of Fortive in July 2016, investors did own both businesses as a set -- and certainly their differing investment propositions would provide diversification.However, the split has created two significantly different companies, so let's take a look at the contrasting investment cases for the two stocks.

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Thursday, March 16, 2017

Jeff Immelt Writes to Investors

General Electric Company (NYSE:GE) CEO Jeff Immelt's annual letter to shareholders outlines what investors should expect from the company in the coming years. While Immelt usually addresses analysts and the professional investment community during presentations, the annual shareholder letter is a chance to directly speak to ordinary shareholders. If you own or are considering buying shares in the company, it's worth taking the time to see what he has planned. In that vein, let's take a look at five key takeaways from Immelt's letter.

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Why Huntington Ingalls Stock is Up in 2017

Stock in America's largest military shipbuilding company, Huntington Ingalls (NYSE:HII), rose 13.3% in February, significantly outperforming the S&P 500 gain of 3.7% in the same period. The move was likely promulgated by two factors:

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Wednesday, March 15, 2017

Deere & Company Equity Research

You have to hand it to Deere & Company's management. Not much has gone right from an end-market perspective in the last few years, with US farm cash receipts declining since 2014 as prices of key agricultural crops (ex. corn, wheat, and soybean) continue to fall. The end result is that farmers are declining to buy new equipment -- particularly the kind of high-margin large agricultural machinery that Deere thrives on -- and the company's sales have slumped.
However, Deere's stock is up nearly 40% on the year as management continues to defy the doubters. Let's analyze the key takeaways from the recent earnings report in order to see what's been going on and why the company looks set for better days.

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Tuesday, March 14, 2017

Honeywell International's Adamczyk Takes Over

What happened?

Honeywell International  gave its annual investor conference on Wednesday and updated investors on its 2017 outlook. In a nutshell, there was no change to the guidance given on its first quarter. That said, there is a case for believing that management is being a little conservative with its 2017 guidance, and at the conference management described the oil & gas and defense sectors -- previously problematic for Honeywell -- as improving. On a less positive note, the business-jet market still looks weak, with Honeywell predicting a recovery only toward the end of 2018

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Rockwell Automation, Ingersoll-Rand and Parker-Hannifin are Buys

Rockwell Automation (NYSE:ROK)Ingersoll-Rand PLC (NYSE:IR), and Parker-Hannifin Corp. (NYSE:PH) are three industrial companies that have seen their stock prices go up by more than 40% in the last year. Can these stocks maintain an upwards momentum this year? Let's take a brief look at prospects for all three now that earnings reports for the first calendar quarter of 2017 are all in.

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Friday, March 10, 2017

Advance Auto Parts Equity Research

Did Advance Auto Parts Inc.  just have a good or bad quarter? The 3.1% increase in comparable-store sales, after four straight quarters of declines, certainly suggests the company is starting to generate traction with its turnaround plans. On the other hand, the sales figures were flattened by a couple of non-recurring factors, and the adjusted operating margin decline to 6% from 7.7% in the same period last year says management still has a lot of work to do. Let's take a closer look at the earnings.

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UPS or FedEx Stock in 2017?

A quick look at the stock price charts of United Parcel Service Inc. (NYSE:UPS) and FedEx Corporation (NYSE:FDX) suggests UPS has had a harder row to hoe in recent years. FedEx has outperformed UPS even though a plethora of operational metrics continue to suggest UPS is the better-run company. Let's look at why, and in the light of UPS's recent updated guidance for 2018-2019, let's see whether UPS can turn things around.

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