Services Are the Key to General Electric's Growth

The market didn't receive General Electric Company's latest earnings report very well, even though the industrial giant maintained full-year 2016 guidance. For obvious reasons, most of the immediate attention focused on its oil and gas segment, but I think its overall services business, and particularly services orders, is the key metric to follow this year. Here's why.

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Is Advance Auto Parts a Buy?

Advance Auto Parts offers a lot to investors in 2016: It's a deep-value stock in a recession-resistant industry. Same-store sales increased during the last recession for it, O'Reilly Automotive, and AutoZone, and through its 2014 acquisition of General Parts International (owner of Carquest and Worldpac), the company has an opportunity to raise its margin to the level of its peers.
Let's take a look at the latest fourth-quarter results and asses the investment proposition.

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BorgWarner Returns to Form

The market received BorgWarner's latest fourth-quarter results well, and after a very difficult 2015, investors will be hoping the company has turned the corner in 2016. Having disappointed the market by lowering its 2016-2018 growth expectations at a conference in January, BorgWarner saw earnings and revenue come in ahead of internal guidance in its most recent set of results. Let's take a look at what happened.

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Cisco Systems Earnings Analysis

Despite the bearish sentiment in the market at present, Cisco Systems' mixed second-quarter results were enough to take its stock higher. It wasn't a flawless report, but the tech giant did enough to dispel fears of an impending collapse in IT spending. Meanwhile, its transition toward more software and software-as-a-service (SaaS) based revenue continues to gain traction, even while its end markets are under pressure. It was definitely a mixed report, so let's take a look at the details.

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5 Conclusions From United Parcel Service Earnings

As I write this, United Parcel Service  stock is up year to date. Not only that, but it's significantly outperforming its main rival, FedEx Corporation even while speculation mounts over the threat of losing business to, and more importantly from, Amazon.com I decided to take a look at the recent earnings and conference call to see what's going on.




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Cognex Corporation Earnings Analysis

Machine vision company Cognex Corporation  delivered a pretty good fourth-quarter earnings report under the conditions of a deteriorating industrial economy. Management's commentary and guidance were muted -- probably a good thing after a year in which Cognex's second-half growth proved a lot less than it had expected at the start of 2015. Let's take a look at the results and what to expect in 2016.

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Deere & Company Stocks Faces Risk in 2016

Deere & Company is a great business with good long-term prospects, but it's facing a significant amount of risk in its near-term prospects. Given that its upside potential is reliant on crop prices rising, it makes more sense to buy an ETF in a crop like corn or wheat than carry the near-term risk in Deere stock. Here's why.

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Emerson Electric or Dover Corporation?

Thematically, Emerson Electric and Dover Corporation have much in common. Both are industrials with heavy expsure to the oil & gas sector and dividend aristocrats with around 60 years of increasing dividends behind them. The bull case for both stocks lies within the idea that 2016 will prove to be a trough year in their underlying earnings, and that their current valuations provide compelling value for long-term investors in anticipation of a 2017 rebound. Let's take a closer look to see if this thesis has merit.

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Illionis Tool Works or 3M Company Stock for 2016?

Illinois Tool Works  and 3M Company both delivered solid fourth-quarter earnings recently, and maintained their full-year guidance for 2016. Given the deterioration in the economy in the fourth-quarter that's no mean feat.  As a consequence both stocks are now outperforming the S&P 500 and the industrials sector -- measured in this case by the IShares US Industrials ETF. Does this make the stocks a buy?

MMM data by YCharts

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Cognex Corporation Earnings Analysis

The manufacturing sector faces a difficult start to 2016, but companies with secular growth prospects like Cognex Corporation (NASDAQ:CGNX) have the capability to buck the trend. Its machine vision solutions are a facet of the increasing usage of industrial automation and robotics in manufacturing. That said, the company faces an uncertain 2016. Let's take a look at what to expect from its upcoming results on Feb. 10.

CGNX data by YCharts.

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Jones Lang LaSalle Earnings Analysis

Earnings from commercial real estate services company Jones Lang LaSalle Incorporated usually create volatility, not least because management doesn't give revenue and earnings guidance. In other words, unlike with a box of sugar-laden chocolate, you don't know what you are going to get.
In addition, it operates in a highly cyclical industry, which leads investors to be nervous as to when the commercial property market will have peaked. The stock is down heavily post-results, but let's take a close look at the actual results and what management said.

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Dassault Systemes Earnings Analysis

Engineering and design software consultancy Dassault Systemes (NASDAQOTH:DASTY) released a strong set of fourth-quarter results on Feb. 4 that hit or exceeded internal expectations. Its full-year 2016 guidance is also good, but may raise some concerns, because management predicts growth will increase in the second half. Let's take a more detailed look at what's going on with Dassault Systemes' fourth-quarter results.

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Robert Half International Earnings Analysis

Given the volatility in equity markets and slowing growth in the global economy, investors had a right to be slightly fearful about staffing company Robert Half International's fourth-quarter results. In the end, the numbers were pretty much in line with guidance, although management declared that customers took a more cautious tone at the end of the year.
Let's take a closer look at the earnings and what management had to say about trends in its business.

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Emerson Electric Earnings Analysis

Emerson Electric CEO David Farr has done a pretty good job of preparing investors for a tough year ahead for the company. You know you're in trouble when an earnings presentation begins with the words, "It is a global industrial recession." That said, investing isn't just about buying companies that are currently flying high, and Farr's guidance was enough to reassure investors, who took the stock higher in a down market. Let's take a look at Emerson Electric's first quarter and what management said about it.

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United Parcel Service Earnings Analysis

United Parcel Service  delivered a solid set of results demonstrating its ability to deal with peak demand during the holiday season. This is all the more impressive because UPS and FedEx  had both already signaled a strong holiday shopping season. Following the disappointments of the last two years, the fact that UPS made it through the holidays unscathed is extremely welcome news. That aside, there were some complex trends in the earnings report.

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Danaher Corporation: Still a Safe Haven?

It's no secret that the industrial sector is facing a difficult 2016, and historically investors have favored stocks such as Danaher Corporation for their "safe haven" qualities. The company's exposure to healthcare, environmental, and dental technologies gives it defensive qualities. Moreover, 60% of its revenue comes from recurring (often high-margin consumables) sales. That said, its recent fourth-quarter results saw core revenue come in flat, when management had expected 2% growth. Which of course begs the question: Is Danaher still a safe haven?

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Roper Technologies Earnings Analysis

Diversified industrial company Roper Technologies, Inc. (NYSE:ROP) played out the recurring theme established by far larger companies in the industrial sector. As with General Electric (NYSE:GE), Roper's energy-related operations posted disappointing results, and like 3M Company (NYSE:MMM), its cyclically exposed industrial business saw weakness as well. However, just as 3M reported strong results in its healthcare segment, so Roper did with its medical technologies. Let's take a closer look at the details of Roper's fourth-quarter earnings.

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IDEXX L aboratories Earnings Analysis

IDEXX Laboratories' (NASDAQ:IDXX) mix of companion animal/livestock diagnostics and water health products/services make it a relatively defensive stock to hold in a world worried about economic growth. That said, every company needs to deliver on its objectives in order to keep investors happy, and IDEXX certainly did that in its fourth-quarter results on Friday.

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Check Point Software Technologies CHKP Earnings Analysis

Network security company Check Point Software Technologies Ltd. (NASDAQ:CHKP) delivered a solid set of results on Thursday, helping ease fears of a slowdown in security spending. The headline numbers look good enough, and they came in toward the top end of the company's guidance, but there's a lot going on beneath the surface. Let's take a deeper dive into the numbers.

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McCormick & Company Earnings Analysis

Spice and seasonings company McCormick & Company (NYSE:MKC) is the very definition of a company buffeted by negative currency effects from a stronger U.S. dollar. As such, its fourth-quarter earnings, which were reported Thursday, need to be looked at in the context of currency conversion and judged on the basis of its underlying aims. In a nutshell, the results saw a return to form for the company and it appears on track with its long-term aims. Let's take a closer look.

MCCORMICK & COMPANY IS ACHIEVING STRONG GROWTH INTERNATIONALLY. IMAGE SOURCE: MCCORMICK & COMPANY WEBSITE

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Deere & Company (DE) Sales Figures Give Little Cheer

The latest retail sales and dealer inventory figures from Deere & Company  gave little cause for optimism. Consequently, the near-term risk in the stock is increasing. Longer term, Deere may be an attractive stock -- its prospects can turn around quickly if crop prices start to rise -- but investors are going to have to stomach the potential downside from a number of challenges in 2016. Let's take a quick look at the latest update from Deere.

DEERE NEEDS TO SHIFT ITS LARGE AGRICULTURAL MACHINERY INVENTORY. IMAGE SOURCE: DEERE & COMPANY.

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Wesco International Earnings Analysis

Given the negative U.S. industrial production figures from November and December, Wesco International's Earnings report was already certain to reveal that its fourth quarter was a tough one. That said, industrial supply company MSC Industrial Direct is actually up more than 11% year-to-date at the time of writing. The market rewarded MSC Industrial after the company executed well in a quarter of negative daily sales growth. Could Wesco duplicate that trick?

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Illinois Tool Works Earnings Analysis

In common with its peer 3M Company, diversified industrial Illinois Tool WorkS reported a solid set of earnings that helped reassure investors who were fearful of an industrial recession. Both companies have been busy streamlining their businesses and managing to squeeze every bit of margin expansion possible from difficult end markets. Let's take a closer look at the earnings trends from Illinois Tool Works' fourth quarter.

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Dover Corporation Stock Starting to Look Tempting

In a week when General Electric Company stock fell after a decent set of results marked by weakness in its oil and gas segment, energy-heavy industrial Dover Corporation's stock rose nearly 6% after reporting in a very similar vein. What happened to Dover, and does this mean market sentiment is changing?
Market expectationsU.S. industrial production turned negative in the last two months of 2015, and heavy industries like mining, energy, and shipping have been weak for some time. In response, the market has increasingly sought so-called safe-haven stocks with relatively favorable end market exposures. General Electric springs to mind as one. Dover does not, and as you can see in the chart below, the former has notably outperformed the latter in the last six months.

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Johnson Controls and Tyco Merge, What You Need to Know

Monday's announcement of a merger agreement between Tyco International (NYSE:TYC) and Johnson Controls Inc (NYSE:JCI) brings different things to each set of investors. Adding Tyco's fire and security systems to Johnson Controls' heating, ventilation, and air conditioning, or HVAC, solutions will create a leading player in the commercial building-products marketplace. However, Johnson Controls also contains a Power Solutions and Automotive Experience business (car batteries, and car seating and interiors, respectively) that Tyco investors will now be invested in. Let's take a closer look at the deal and what it means to both sets of investors.
Two stages You can think of the process in two stages. First, Tyco and Johnson Controls will merge, with Tyco investors owning around 44% of the combined entity, to be called Johnson Controls plc, with current Johnson Controls investors owning the remaining 56%.

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J.B. Hunt Transport Services Earnings Analysis

As the transportation sector goes, so goes the economy. At least that's the conventional investing wisdom. However, the recovery since the financial crisis has been uneven and inconsistent, so merely looking at the headline numbers when a transportation logistics company such as J.B. Hunt Transport Services (NASDAQ:JBHT) reports earnings isn't enough. That said, let's look at its earnings and what they say about the transportation sector and U.S. economy at large.

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