Tuesday, November 14, 2017

WESCO International Earnings Review

Despite having a tough year WESCO International, Inc. (NYSE:WCC) stock is only down single digits on the year so far. After a difficult first half, the supply chain solutions provider finally reported the kind of revenue growth commensurate with a strengthening industrial economy.
That said, the margin performance and earnings guidance may have disappointed some investors. Let's take a look at a mixed set of earnings for the company.

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What John Flannery Wants to Change at GE

General Electric Company (NYSE:GE) CEO John Flannery will outline his strategy for the company at the GE Investor Update event on Nov. 13. There's plenty of anticipation about the event from beleaguered investors hoping he can set the company, and the stock price, on the right path. While Flannery's exact plans will be outlined in a few weeks, his comments on the recent, and tumultuous, third-quarter earnings call offered a broad-based overview of what to expect.
So let's look at what was said and how it differs from Jeff Immelt's running of the company

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Sunday, November 12, 2017

Is Rockwell Automation a Buy?

Rockwell Automation (NYSE:ROK) is well known as a backdoor way to play growth in the industrial internet of things (IIOT). However, its 50% stock-price surge in the past year is probably more a matter of having its string of earnings upgrades come largely from improving capital spending trends in industrial automation.
The company heads into its fourth-quarter earnings on Nov. 8 with a lot of momentum, but given its high valuation on a current and forward basis, management probably needs to demonstrate its strong run can continue. In this context, let's look at the three things to focus on in the results presentations.

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Thursday, November 9, 2017

Dassault Systemes Earnings Analysis

Engineering design software company Dassault Systemes (NASDAQOTH:DASTY) reported a mixed set of third-quarter results. The underlying earnings are strong and the company is strategically setting itself up for long-term growth with its new licenses sales and exciting deals with large companies like Boeing and Scania. However, there was some near-term weakness in services revenue, and management was forced to lower full-year margin and earnings expectations due to adverse currency movements. Let's take a closer look at the quarter.

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Wednesday, November 8, 2017

Robert Half Earnings Review

Leading staffing company Robert Half International Inc. (NYSE:RHI) always gives good color on employment trends, and if its latest third-quarter results are anything to go by, the job market in the U.S. is definitely improving. Meanwhile, the company's international revenue growth remains strong. That said, there were still a couple of weak areas in the company's earnings report.

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Tuesday, November 7, 2017

General Electric Earnings Review: A Stock to Buy?

By now, most investors know that General Electric Company's (NYSE:GE) third-quarter earnings fell way short of expectations. Furthermore, the reduction in full-year guidance signals ongoing weakness in the overall business -- issues that are unlikely to be resolved in a quarter or two.
Let's look at the key issues that long-term investors need to understand from the earnings report.
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Caterpillar Earnings Preview

Caterpillar Inc. (NYSE:CAT) stock has soared in 2017, on the back of a string of consensus-busting earnings and analyst upgrades. The main reason has been its improving construction, mining, and energy industry verticals. Moreover, analysts have recently raised price targets for the stock in anticipation of a strong set of third-quarter earnings.
Clearly, the company has a lot of good momentum behind it, but can it continue? Let's preview the earnings report that comes out on Oct. 24 to see what investors need to keep an eye out for.

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3M Earnings Preview

Given that 3M Co (NYSE:MMM) and its fellow multi-industrial company Illinois Tool Works Inc. (NYSE:ITW) trade at a premium compared to earnings multiples in the last decade (see below) there will be increased pressure on both companies to deliver in the coming quarters. Focusing on 3M, let's take a look at the three things investors need to look out for when the company reports earnings on Oct 24th. 

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Monday, November 6, 2017

GE CFO Jeff Bornstein Leaving

The news that General Electric Company (NYSE:GE) CFO Jeff Bornstein will leave at the end of the year caught the market by surprise. But how much should investors really worry about the news? After all, Bornstein is an industry veteran with 28 years of service to GE, so his departure could be a completely natural move.  
However, I happen to think his departure could be something deserving close attention from investors. Here's why.

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Friday, November 3, 2017

Honeywell International Preview

It's been a good year so far for Honeywell International (NYSE:HON). The stock is up nearly 24% year to date, and management has raised the bottom end of its full-year earnings guidance range in the first two earnings reports.
In order to judge whether its good run can continue, let's preview the key things to look out for from each segment when Honeywell reports its third-quarter earnings on Oct. 20.

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United Technologies Earnings Preview

United Technologies Corporation (NYSE:UTX) reports its third-quarter earnings on Oct. 24, and there's a lot for investors in the company and the industrial sector at large to focus on. Here are the key things for investors to look out for in each of United Technologies' four segments.

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Wednesday, November 1, 2017

AZZ Inc Earnings Analysis

Having previously updated full-year 2018 guidance at the end of September, investors were already prepared for the negative news in AZZ Inc's (NYSE:AZZ) second-quarter results. Management gave a plethora of reasons why AZZ's performance is lagging expectations in fiscal 2018 and promptly guided investors toward thinking about a stronger 2019.

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Should I Buy FedEx Corporation Stock?

We've already considered the bearish case for FedEx Corporation (NYSE:FDX). The glass-half-empty viewpoint focuses on the margin pressures that the ground operations of both FedEx and rival United Parcel Service, Inc. (NYSE:UPS) face from growing e-commerce deliveries. Both companies are having to make substantial capital investments to service e-commerce growth, which is crimping free-cash-flow generation. FedEx also faces execution risks in integrating TNT Express.
Now let's consider...

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Tuesday, October 31, 2017

General Electric's Turbines Face Competition From Siemens

Power matters to General Electric Company (NYSE:GE). The segment generated more than 28% of industrial profit in 2016 and is GE's best-known activity, with gas turbines being its most important product. Indeed, GE's success with its market-leading H-class turbine has broken world records for efficiency and driven order growth at the segment. That said, there are reasons to believe GE might come under pressure in the future, and here's how and why it matters.

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Time to Sell FedEx Corporation Stock?

Given the 26% rise in FedEx Corporation (NYSE:FDX) stock in the last year, investors should reassess the value proposition of the stock. After all, as you can see below, FedEx has been trading at a higher valuation than where it was during most of the period since 2010, and it has had a cash outflow of $186 million in its fiscal year ending in May. In this article, I will focus particularly on the bear case against buying the stock and then follow up with the bull case in a future article.

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Monday, October 30, 2017

GE Sells a Business to ABB

The agreement by ABB Ltd. (NYSE:ABB) to buy the industrial solutions business of General Electric Co. (NYSE:GE) sheds new light onto the strategic plans of both companies, and arguably makes them more investable. Let's take a look at the deal and what it means for investors in both stocks.

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5 Takeaways From FedEx's Earnings

While the media's attention was firmly focused on the $300 million income hit from a cyberattack, FedEx Corporation's (NYSE:FDX) recent earnings presentations contained a whole lot more useful information for investors. Let's look at the five key takeaways from the earnings and how they might affect the investment thesis behind buying both FedEx and, by extension, United Parcel Service, Inc. (NYSE:UPS) stock.

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Saturday, October 28, 2017

General Electric Should Sell its Healthcare Business

General Electric Company (NYSE:GE) CEO John Flannery has a job to do if he wants to restore investors' confidence in the blue chip industrial stock in 2017. Previous CEO Jeff Immelt's last earnings call saw management lower earnings and cash flow expectations to the low end of guidance ranges, and Flannery needs to start his tenure by setting a positive tone.
One way he could do so is by selling or spinning off GE Healthcare. Here's why.

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General Electric and United Technologies Are Facing Changes

By coincidence, General Electric Co. (NYSE:GE), and United Technologies Corp.(NYSE:UTX) are both under significant pressure to undertake far-reaching strategic restructurings. Let's take a look at what's going on, and how these changes might affect the investment proposition for each stock.

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Tuesday, October 24, 2017

FedEx Earnings Analysis

By now, most investors know that FedEx Corporation (NYSE:FDX) was hit by a malware attack earlier this year. The impact was significant, with a $300 million income hit to FedEx's newly acquired TNT Express business.
With that in mind, let's take a broad-based view at FedEx's fourth-quarter earnings.

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Parker Hannifin, Emerson Electric, Stanley Black & Decker

Investors in industrial companies Parker-Hannifin Corp (NYSE:PH)Stanley Black & Decker, Inc. (NYSE:SWK) and Emerson Electric Co. (NYSE:EMR) have all seen their stocks rise strongly in 2017, only to correct after their last set of results and then bounce back. With the recovery in U.S. industrial production now firmly in place, is this a good time to sell and look for the next investment? Alternatively, are these stocks still a good value?

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Tuesday, October 17, 2017

Owens Corning is a Very Attractive Stock

Despite a stellar rise in its stock price this year, shares of Owens Corning (NYSE:OC) still offer investors a good value. While other areas of the stock market are starting to look expensive, Owens Corning's stock price rise has been backed by earnings guidance hikes and ongoing strategic improvements which are preparing the company for good long-term growth.
There are two key arguments that make it a good buy, which I'll go into in detail below:

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Monday, October 16, 2017

Rockwell Automation; A Stock o Buy?

Following a strong run in 2017, the stock price of Rockwell Automation (NYSE:ROK) corrected a bit following the third-quarter earnings report. In general, it's been a good year for the industrials sector, as U.S. industrial production growth has picked up, creating earnings tailwinds for companies such as Rockwell that have heavy exposure to cyclical capital spending.
That said, the industrials sector could face a tricky period in the second half of 2017. Does that mean it's time to sell stock in Rockwell Automation?
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Best Railroad Stocks to Buy

Railroads are always worth looking at for those seeking good dividend growth prospects. But since no two railroads will have exactly the same dividend or growth potential, let's consider which ones are best for income seekers.

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Saturday, October 14, 2017

2 Dividend Aristocrats to Buy?

Income-seeking investors love buying dividend aristocrats -- stocks that have increased their dividends for more than years -- so when their stock prices fall it's a good idea to look at buying them. As you can see below, automotive and industrial replacement parts distributor Genuine Parts Company (NYSE:GPC) and industrial supply company WW Grainger Inc (NYSE:GWW)have significantly underperformed the S & P 500 so far in 2017, with Amazon.com(NASDAQ:AMZN) playing a big role in both declines. Let's take a closer look at whether these stocks are worth buying right now.

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Tuesday, October 10, 2017

Key Takeaways From Deere & Co Earnings

The strong run-up in the stock price of Deere & Company (NYSE:DE) was rudely interrupted by the negative reaction to the recent third-quarter earnings report. Why did the market react like this when the company raised full-year net income guidance from $2 billion to $2.075 billion? To try answering this question, let's look at the five key takeaways from the earnings presentations

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Why Caterpillar Stock is Soaring

Caterpillar Inc. (NYSE:CAT) investors have enjoyed watching their stock appreciate nearly 24% in 2017 and 38% in the past year, so perhaps now it's time to take a step backward and look at just what's happened to propel the price higher. The construction and mining equipment company has outperformed the S&P 500 by some 15% this year, so clearly there's something stock-specific going on. 

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Monday, October 9, 2017

Siemens Earnings and Fall Through for GE Investors

It's been a difficult year for General Electric Company (NYSE:GE) investors as they have watched their stock decline 22% year to date while the S&P 500 is up by more than 8%. The decline is largely due to the company lowering expectations to the bottom end of its guidance ranges, amid disappointing performance from its oil and gas and power segments. While the oil and gas issue looks to be a case of expectations being set too high, the power segment's issues could be more troubling in the long term. In order to get more color on what's going on in GE's power segment, let's take a look at what its key rival Siemens AG (NASDAQOTH:SIEGY) said in its recent results.

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Saturday, October 7, 2017

CSX Corp Earnings Analysis

Investors hoping that CSX Corp. CEO Hunter Harrison will bring about the operational improvements required to justify the optimism that's currently baked into its stock price may want to benchmark its performance against peers Union Pacific Corp. and Norfolk Southern Corp. The former is its closest peer in terms of valuation, and the latter is its most important direct competitor. In this line of thought, let's take a look at what Harrison needs to do at the freight railroad operator, and whether its most recent earnings report suggests he's starting to make a difference.

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Thursday, September 28, 2017

AgroFresh Earnings Analysis

It was a relatively uneventful quarter for AgroFresh Solutions, Inc. (NASDAQ:AGFS), and that's fine for investors. The company's earnings reports have caused a significant amount of stock price volatility in the past. However, this time around the results were pretty much as expected, and investors slept soundly after them. That said, what really matters for the company are the upcoming quarters (which contain the northern hemisphere fruit harvest). With this in mind, let's take a look at the results and commentary from the second-quarter earnings report.

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HVAC Sector Stock Analysis

Following a strong rise in the past year, Ingersoll-Rand PLC's (NYSE:IR) stock has corrected in recent weeks alongside competitors in the heating, ventilation, and air conditioning (HVAC) space such as United Technologies Corporation (NYSE:UTX) and Lennox International Inc. (NYSE:LII). Clearly, something about the HVAC sector has spooked the market, so let's take a look at the underlying dynamics in all three companies' earnings, and specifically Ingersoll-Rand as an investment proposition. Is it a structural problem that's set to last or merely a temporary issue?

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Monday, September 18, 2017

How Caterpillar Makes Money?

Analyzing how Caterpillar Inc. (NYSE:CAT) makes money is a useful exercise for investors because it sheds light on what investors need to know before buying the stock right now. In a nutshell, the stock's near-40% rise in the past year has been propelled by its positive earnings momentum, which is largely due to an improvement in its end markets. So in order to take a view on whether this can continue, it's useful to know how Caterpillar makes money

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Friday, September 15, 2017

3M Company Earnings Analysis

3M Company (NYSE:MMM) needs sales growth. Just like peer Illinois Tool Works (NYSE:ITW), its stock price is starting to look heady -- both companies are trading in excess of their pre-recession valuations -- and it needs growth now in order to justify its rating. Moreover, with 3M's CFO Nick Gangestad claiming dividend growth would "be very similar to what we anticipate for earnings-per-share growth," 3M needs sales and earnings growth in the future -- a near 2.2% dividend yield isn't particularly exciting. Can 3M Company increase its growth rate? 

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What General Electric Company Needs to Learn From Honeywell International

A quick look at the relative stock price performances of Honeywell International (NYSE:HON)and General Electric Company (NYSE:GE) in 2017 shows a nearly 40% outperformance by the former. How is this so? Both companies are diversified industrial conglomerates with many end markets in common, particularly aerospace, so their stock prices should be roughly correlated, right?

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Tuesday, August 29, 2017

United Technologies Earnings Analysis

On the whole, United Technologies Corporation's (NYSE:UTX) earnings were a net positive, but they still left investors with plenty of answered questions. Although management raised full-year sales and earnings guidance, the reasons behind it --strengthening end markets -- was largely anticipated following earlier results from companies such as Honeywell International(NYSE:HON). It's the company-specific commentary that may have left investors concerned.

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Jones Lang LaSalle Earnings Analysis

Commercial property services company Jones Lang LaSalle (NYSE:JLL) strategic growth plan remains on track, but you wouldn't think it from looking at its declining EBITDA in the first half of the year. No matter, it's all part of the company's acquisition-led expansion plans, which management hopes will generate strong earnings growth in the years to come. The second-quarter earnings saw the company aggressively growing its top line while generating what management called "underlying operating momentum."

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Emerson Electric Earnings Analysis

It's been a long time coming, but Emerson Electric Co. (NYSE:EMR) is finally growing again. For the first time since the second quarter of 2015, the company's underlying sales were in positive territory. Moreover, Emerson's results were pretty much in line with expectations, but improving trends encouraged management to raise full-year guidance as a consequence.
Let's look at the details behind a busy third quarter for the company

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Tuesday, August 22, 2017

Roper Technologies Earnings Analysis

Diversified industrial company Roper Technologies, Inc. (NYSE:ROP) reported a solid set of second-quarter results, which contained the usual hallmarks of a Roper earnings report. Revenue and core operating margin expanded in all four segments, and the company's asset-light business model helped to ensure strong ongoing free cash flow generation.
Meanwhile, Roper's acquisitions are settling in well, and the company's transition to more software-based revenue continues. Let's take a look at the report.

Cognex Corporation Earnings Analysis

Machine vision company Cognex Corporation (NASDAQ:CGNX) reported record results in its second quarter and promptly guided investors toward a "monster" third quarter.
There are a lot of good things going on with the company in 2017, and the earnings call hinted at more long-term growth, even if the third quarter is likely to prove somewhat of an outlier. Let's take a look at another strong quarter for the company.
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Wednesday, August 16, 2017

Robert Half International Earnings Analysis

Leading staffing company Robert Half International Inc. (NYSE:RHI) delivered a solid set of results in its latest earnings report, and its numbers imply a relative improvement in the U.S. employment market. Moreover, management highlighted a leading indicator that suggests conditions will improve in the coming quarters.
Let's look at the results from one of the best bellwethers of the U.S. economy.

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BorgWarner Earnings Analysis

According to BorgWarner Inc. (NYSE:BWA) management, the outlook for the auto industry worsened in the past few months. But you wouldn't know it from the company's second-quarter results released on Thursday. BorgWarner is outperforming its end markets, and to such an extent that management felt compelled to raise full-year sales and earnings guidance.
Let's take a look at a strong quarter for the engine and drivetrain company.

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WESCO International Earnings Analysis

Not all industrial recoveries are equal. That's the message in the second-quarter earnings report from supply chain solutions provider WESCO International, Inc. (NYSE:WCC). Aside from construction, the company's end markets are improving, but the lackluster nature of the recovery has led to pressure, and management cut its full-year expectations for margin and earnings. Let's take a look at the mixed earnings report.

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Saturday, August 12, 2017

Dassault Systemes Earnings Analysis

It's not often that long-term considerations overshadow current trading matters on an earnings call, but that was the case with engineering design software company Dassault Systemes(NASDAQOTH:DASTY). In a nutshell, the company is on track with its objectives in 2017, but the announcement of Boeing's (NYSE:BA) decision to adopt Dassault's 3DExperience platform across its commercial aviation, space, and defense work grabbed the attention of investors. Let's take a look at the earnings report and the the Boeing announcement in more detail.

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Illinois Tool Works Earnings Analysis

Multi-industrial company Illinois Tool Works (NYSE:ITW) delivered another good quarter of earnings and raised full-year guidance across the board. It was a positive quarter for the company, driven by its automotive segment and recovery in some of its more cyclical segments (specifically welding, test and measurement, and electronics). That said, management served notice of a relative slowdown in the third quarter. Let's take a look at a busy second quarter for the company.

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Thursday, August 10, 2017

General Electric's Earnings Fail

A quick look at the headline guidance from General Electric Company (NYSE:GE) would conclude that everything is on track in 2017, as the guidance ranges were exactly the same as those given in the first-quarter earnings presentation. However, the devil is in the details, and the reality is that this was a disappointing set of earnings, as Jeff Immelt signed off his tenure as CEO by guiding investors toward the low end of expectations. Moreover, the tone and commentary suggested more difficulties to come, and it wouldn't be surprising if new CEO John Flannery begins his tenure by cutting guidance.
Let's take a closer look a difficult quarter for the company.

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Honeywell International Guidance Looks Conservative

Honeywell International's  second-quarter results created a sense of déjà vu, leaving some analysts feeling that management was being conservative with regard to its outlook. Earnings of $1.80 came in at the high-end of management's guidance, and organic sales growth of 3% was significantly above the guidance range of 0%-2%. However, management merely raised the bottom end of its full-year guidance to $7-$7.10 from a previous range of $6.90-$7.10. Is Honeywell's management being too cautious with guidance?

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