Posts tagged FDX
The market was down today as retail sales disappointed (thanks to the weather, a little something called rampant unemployment, and everyone hoarding cash for the next generation of the fleshlight to be released), food prices continued to increase and spook investors as rising costs pushed 44MM more people in to poverty (though at least 13% of the increase in food costs was caused by Kirstie Alley‘s night out at Sizzler’s all you can eat bar), and Sports Illustrated’s latest Swimsuit issue hit the stands which caused investors’ dip buying trigger fingers to be otherwise occupied (oh wait, what’s that, it’s not 1970 and at the click of a mouse people can easily go to spankwire, meinmyplace, and goldmoney.com which all make the Swimsuit issue more irrelevant than valuation is for NFLX shareholders or Valentine’s Day is in Iran? Hmm. (And quick digression, but Money McBags hopes you all got his Valentine’s Day heart yesterday)).
The real news though continues to be the scent of inflation which is wafting through the air like the gentle bouquet of a carafe full of Chateau Lafite, only if that Chateau Lafite had been shit in by a homeless skunk who had eaten a week old Arbys roast beef sandwich and a pair of Tila Tequila‘s underwear. Money McBags has been harping on this for months now as you simply can’t perpetually stimulate the economy without pumping more money in to the system than Charlie Sheen at an AVN Awards show afterparty, and now inflation is starting to rear its ugly head.
As a result, companies are all warning about rising prices and more articles like this one about clothing prices to rise 10% are coming out daily as the media finally figures out that prices can get high off their money supply. Money McBags listens to a shit load of conference calls during earnings season (well technically he just reads the transcripts because the only thing more boring than listening to a CEO drone on about his/her business for an hour is Network TV) and ~90% of the companies he follows talked about rising costs and in turn raising prices. Holy Stagflation “Using the Wrong Stat” Man (the wrong stat being core inflation), maybe it’s time to make like Annabel Chong and load up on hard assets while everyone buys the rip.
And inflation is a global issues as UK consumer prices were up 4% to their highest in more than two years and double the Bank of England’s target as the country rushes to stock up on black jeans before the price of denim reaches cockposterous levels. Also, China’s inflation was up 5% on soaring food prices even though their version of the B(L)S (perhaps the phonetic BRS for them) recalculated the index to give less weight to food costs and more weight to housing costs because “Chinese food prices rising 50% in ten days” headlines were starting to look as bad for the country as Pedobear showing up to a Justin Beiber concert.
As commodities rise and cause rioting in Egypt, Jordan, Algeria, Iran, Bahrain, and casting couches across the world, one can only guess that Bernanke is playing for some kind of Kerr solution to occur (and if Money McBags were in charge, Miranda Kerr would be a frequent solution) and thus have time freeze before hyperinflation wreaks havoc like Silvio Berlusconi at a finishing school. It is certainly an interesting strategy, and not one Money McBags would have picked, but alas, Money McBags is a simple dick joke writer and not the unelected head of the becoming less free world.
As far as macro news in the US, retail sales rose .3% which was the smallest gain since a drop in June but witch doctors once again blamed the weather for the disappointing number as the weather is now becoming a bigger scapegoat than Waddell & Reed or Steve Bartman and will soon be blamed for other such atrocities such as kidnapping the Lindbergh baby, weakening the levees in New Orleans, and encouraging Chuck Klosterman to keep writing (that is if one considers what he does writing). In the details, building material and gardening outlets saw receipts down 2.9%, food service and drinking places saw receipts down .7%, clothing and clothing accessories stores saw receipts down .3%, and Lindsay Lohan‘s agent saw receipts down 69%.
In other macro news home builder sentiment remained shitacular as builders must compete with a glut of unsold properties, a shit ton of foreclosures, and stubbornly high unemployment causing fewer people to switch jobs than Manuel Uribe skips meals. The National Association of Home Builders/Wells Fargo Housing Market Index held steady at 16 from last month with readings above 50 indicating that more builders view sales conditions as good than poor and readings below 20 meaning more builders view sales conditions as fucking poor than really poor. And finally a report from the New York Federal Reserve showed a gauge of manufacturing in New York State climbed to 15.43 in February as the state produces more paper bags for Mets fans to put over their heads now that baseball season is getting close to starting.
In the market, The Gap was up ~6% after decent comps and after it was announced that Sears Chairman Eddie Lampert has taken a 5% stake in the company in his attempt to run another proud US brand in to the ground. Also, Fed Ex delivered a crappy quarter as a result of weather and rising fuel prices but the stock was up as investors focus on increased long-term shipping demand as emerging markets continue to emerge and the closing of local businesses ramps up e-commerce.
Finally, Barclay’s was up ~7% on better than expected results proving that even tougher regulations can be manipulated, Deutsche (bag) Borse bought the NYSE for $9.53B and a promise not to fire any of NYSE’s croupier’s, and SIRI reported a loss, though Money McBags was unable to hear the reason why as management was interrupted by a caller yelling BaBa Booey over the response.
In small cap stocks, SAAS traded down at the end of day on decent size volume for them on the same day Money McBags dropped 2.5k words on why he has such a crush on this stock that it causes him to be more tongue tied than Serene Branson. Also, GKNT got its geek on and shot up ~28% on a 53% jump in revenues. This is a weird little company and Money McBags actually spent a few hours looking in to it about a month ago and decided to punt on it because they are still burning cash and rely on hitting on trends to sell products (though they do have an audience that is potentially sticker than the floor of a bukkake movie set, so that is positive), Even with the huge Q the company still had negative EBITDA and earnings for the year, and a bunch of the jump up today had to be short covering, but Money McBags is intrigued because they have shown consistent topline growth. Definitely put this on a watch list for more work (and put this on a watch list for more jerk).
That said, Money McBags wanted to get to DGIT today as they obliterated estimates and jumped another 7% to close at a price ~$32.50 (and remember Money McBags told you to buy when it dropped under $16 on 8/30/10 after a bad Q and even took on some assclown in the comments section a few times showing everyone why Money McBags is the premier small cap analyst on the Street). After DGIT’s last Q, Money McBags advised readers to take some profits because the easy money had been made, but hopefully you didn’t take all of your profits because even more easy money is now being made.
As for the Q, revenue was up 32% but most importantly HD revenue was up 61% and that is the driver of this whole fucking business. They said HD is still only 11% of volume so there is more room for growth than in Sheyla Hershey’s old bra, especially as they grow internationally. EBITDA was up 47% to $38MM, GAAP net income was $.51 per share (though included a $.13 impairment write-down for Springbox, and Money McBags would like to spring in this box), and non-gaap net income was $.76 per share. Both their HD revenue and standard revenue beat Money McBags’ guesses as he had $29.5MM for HD and $38.5MM for standard and they killed it with $34.5MM for HD and $41.6MM for standard, so boo fucking ya.
So what do we do here as the company seems to be firing on all cylinders and the rumors of competition from Extreme Reach and Ascent Media are but a whisper. HD just grew 70% for the year so one question is what will it grow next year and another question is who is this girl and is she free for dinner? Anyway,after last Q Money McBags estimated HD could grow ~30% in 2011 and got an eps guess of ~$1.95 and an EBITDA guess of ~$125MM for the year, but shit that may be low. Lets assume HD grows 40%, their standard business grows 10% (~22% total top line growth), costs go up 15%, and the tax rate is 40% and we get to ~$2.23 in GAAP eps and the company is trading at only ~15x that right now but using a non-gaap number with stock comp we get to ~$2.50 per share. Not only that, but they have been running ~46% to 48% EBITDA margins so if we call it 47% (though it should scale as they continue to get leverage), and revenue ~$295MM, we get ~$140MM EBITDA.
The company has ~$73MM in net cash and a market value of ~$923MM, so an EV of ~$850MM and they are trading at only 6x that high end but reasonable EBITDA estimate. Shit, with that kind of growth they should trade closer to 8x and thus 30% upside to ~$42 is not unreasonable here. So if the stock trades down, consider adding a bit and if you still own some, hold on because this could be another solid year as they continue to have the killer app for HD ad delivery and as we saw, HD video is still at the inflection point.
The market was remarkably flat today despite a flurry of economic news including new claims for unemployment, the producer price index, census data on poverty, and Craigslist officially shutting down its section for sex ads (thereby forcing wealthy scumbags to seek other arrangements). The most important, and frankly confusing, of the economic reports was the (No) Labor Department’s new claims for unemployment figures which showed a decline from last week to 450k and an upward increase of last week’s 451k to only 453k. Money McBags was willing to bet two shares of NTZ that the upward revision would be to at least 470k so it’s a good thing he didn’t make that bet because then he would have been out ~$7 (though as NTZ is going to $0, he’ll eventually be out that money anyway).
As we all learned here last week, Karissa Shannon is hot (even with her so early 2000s tramp stamp). But as we also learned last week, the government estimated last week’s new claims for unemployment number for 10 of the 50 states (not including the states of confusion, despair, or utter bliss) when those states didn’t send in their numbers due to the Labor Day holiday. Since government number crunchers are likely as good at realistically estimating data as economists, sell side analysts, and lobotomized dik-diks (which is very very badly), Money McBags was certain their estimates would have been further off than General Custer’s estimate of the number of Native Americans at Little Big Horn or Time Warner’s estimates as to the value of AOL. So new claims coming in at only 450k this week (though they will be revised upwards next week) and last week’s number being revised up only 2k is shocking, and Money McBags can’t believe it didn’t rally the market. Afterall, the 450k was 9k below analyst guesses and if one doesn’t care about absolute numbers, it was a slight positive.
In other macro news, PPI was up slightly more than forecast thanks to an unusual spike in the demand for water sports videos (that pun may take a second or two) as producer prices rose .4%. The rise is well below inflationary targets and when one strips out food and energy costs (because why include things which people actually buy?), core PPI was only .1% vs. .3% analyst guesses. Some economists worry that the uptick being so small could signal deflationary pressures starting to mount while other economists believe that the small uptick signals deflation will be averted, so as always, economics proves to be .0001% science and 99.9999% making shit up. In the final bit of macro news, the Philly Fed announced that manufacturing in the region contracted, likely the result of rabid Eagles fans burning down manufacturing facilities after Kevin Kolb threw his first incomplete pass. The Philly Fed’s index came in at -.7 while analysts had expected it to come in at 2, but to be fair, those were economists making the guesses so the fact that they could even guess a non-imaginary number (like boogerteen) should be applauded.
One more interesting note on the current state of the US Economy is that according to the census bureau, the poverty rate rose last year to 14.3% which is the highest since 1994 and the second statistically significant (gaussian bell curve be damned) rise in the rate in 5 years. And that number may even be understated as according to the Census bureau the weighted average poverty threshold, to be known from here on out as the “Americans Need Aid Line,” or more familiarly, ANAL, was actually lower in 2009 than in 2008 because the “average annual CPI-U for 2009 was lower than the average annual CPI-U for 2008,” and Money McBags believes in the accuracy of anything called a CPI-U as much as he believes in aliens, supply side economics, and feelings. 43.6MM people are now so impoverished that they have to look up to see the seemingly unattainable and yet oh so aspirational ANAL (as opposed to Alexis Texas who usually just needs to look backwards to see the anal) and thus one in seven Americans earn as much in a year as the great robber barons of the day like the inconceivable Lloyd Blankfein and the likely incontinent John Paulson scrape off of their well whitened teeth after a light mid-morning snack of caviar and unicorn fetuses (or is it feti?). But hey, we’ll always have the housing bubble.
Internationally, Treasury Administrative Assistant Timothy Geithner is getting all up in China’s tea cup again about their policy of artificially keeping the yuan too low against the dollar. Geithner is threatening to label China as a “currency manipulator” in the next foreign-exchange report and if that doesn’t work, rumors are he’ll try to hit them with his purse. When told that they may be labeled “currency manipulators,” the Chinese government simply responded “I know you are but what am I” before yelling “no backsies” and slamming the door shut. Finally, UK retail sales unexpectedly dropped by .5% as people grow concerned about job security, tax increases, and the dye that goes in to black jeans potentially being hazardous to their health.
As for stocks, F drove away from the market after Barclay’s upgraded them to “outperform” and raised their price target to $16 based on operational improvements and US consumers’ love of shitty cars. Also Fed Ex failed to deliver and traded off by 4% despite profit doubling and sales rising 18% as they missed analyst guesses by $.01 and guidance for Q2 was also $.01 below guesses.
In small cap news, KIRK competitor PIR put up a very nice Q with 11% comp store sales growth (though off of a very easy 7.6% decline last year), gross profit expansion from 28.5% to 36.9%, and cash increasing to $186MM. The company also decreased clearance activity and reduced vendor and supply chain costs which is almost exactly the opposite of what KIRK did, so well done PIR, and once more with feeling, fuck you KIRK. KIRK will always be the poorman‘s (or woman‘s) PIR and while they are not exact competitors as PIR sells furniture and shit while KIRK just sells shit, there is enough overlap to cause one to scratch one’s head and wonder why KIRK was unable to execute as well as PIR. There is obviously a reason why KIRK trades at a discount to PIR, and KIRK was coming off of tougher comps, but management tone’s could not have been more different so if KIRK did not have a ~30% cash cushion and a ridiculously low multiple (thus bad news already being priced in to the stock), Money McBags would be staying further away from KIRK than Jets players now have to stay away from Ines Sainz (who is welcome to visit the award winning When Genius Prevailed’s lockerroom any time). While it is disappointing to see such contrasting quarters, and it may make KIRK more of a show me story than a Heidi Montag sex tape (because, please, please show Money McBags that story), Money McBags is fine with waiting on the name for another quarter to see if they can once again deliver (and remember, KIRK only missed guesses by $.01 while PIR only beat guesses by $.01, but like a small Georgia town, it’s all relative).
The market ran again today as Fed Ex boosted guidance due to international companies wanting shit faster and macro data headlines were manipulatedly good (like Cameron Diaz‘ face on a magazine cover). The big macro news was that new home sales jumped 24% which is the biggest jump since May of 1980 and totally sounds better than saying new home sales were the second lowest since 1963 (and you remember 1963, the year the Beatles released their first album, JFK was assassinated, Raquel Welch was breaking in to Hollywood, and full muff was the norm). Of course 1963 is also when this data started being recorded, so for all we know it could also be the second lowest month since 1863, but whatever. So before we start handing out lobster tails and buy one get one free blumpkin passes to Amber Lancaster‘s powder room (and Money McBags will take two of those please), perhaps we shoud look at the shittiness (which may be too technical of a term for most) of the absolute number and ignore the relative spin.
To start with, last month’s new home sales were revised down from 300k to 267k which is only a minor 11 fucking percent downward revision (and minor in the way that reading a Thomas Pynchon book gives someone a minor headache or bumping in to Audrina Patridge would give someone a minor stiffy). Anyway, last month’s number of 300k, which is now 267k, means that new home sales fell by 37%, 40%, or 47% last month depending on which of the manipulated numbers from two months ago you want to use as the base line (the 504k initially reported, the 446k downwardly revised number from last month, or the even more downwardly reviesed 422k reported this month, and yes, two fucking months after the data, the numbers are still being downwardly revised because apparently they have yet to hit zero).
The point is, the awfulness of last month’s number keeps getting worse but investors are overlooking that because the headline growth for this month is 24% and 24% growth is a big fucking number (even though in absolute terms it is still the second worst number ever and will more than likely be revised down next month to 305k). So while economists and the Commerce Department can point to growth rates as a sign of accomplishment, it’s as disingenuous as landing on an aircraft carrier and claiming Mission Accomplished in Iraq or telling Rosie O’Donnell she doesn’t look fat in those jeans. In short, last month’s historically bad number gets revised down more and thus this month’s second worst historically bad number gets to look slightly better because of the BS growth rate off of the downward revision. Just imagine how great this month’s number would have looked if it went from one new home sold to two.
Anyway, the 330k number being reported is in fact ~24% higher then the 267k number (but only 10% higher than the 300k number that was actually reported last month) and it beat analyst guesses by 10k and since analysts have proven to be so right over the last 5 years to 3,000 years, a beat is such good fucking news that the commerce department can spend the day admiring the new portrait of Carlos Gutierez instead of trying to fix shit. But lets not let details get in the way of a good rally because that would be like letting a little hepatitis get in the way of boning Pam Anderson.
There wasn’t much international news today except that Europe is starting an anti-trust case against IBM, though if Money McBags were IBM, he wouldn’t trust the europeans in their black jeans and with their love of european fudge pops. The EU is claiming that IBM may have abused their dominant position in the mainframe computer market like the dominant Ariel X abuses her defeated foes in the NSFW Ultimate Surrender Summer Vengeance tournament. This anti-trust case stems out of complaints from a company called T3 communications which is a firm invested in by MSFT and other than Tiger Woods’ ex-wife, MSFT is the foremost authority on anti-trust.
The big stock news of the day is that Fed Ex raised their guidance for fiscal 2011 from $4.40 to $5.00 per share to $4.60 to $5.20 per share and this comes after UPS showed everyone what Brown can do for them by squeezing out a solid quarter last week. UPS’ revised guidance was driven by increased demand for international priority packages where according to a Wellls Fargo analyst: “Growth in Asia has been red hot, fueled by the tech sector and iPhones and handheld devices and discounts on Hello Kitty’s line of dildos.” Fed Ex is feeling good enough about their operational efficiences and global volume growth that they have reinstituted their 401k matching program so now employees can lose the company’s money in addition to their own.
In other stock news, BP is getting a new CEO and hopefully this one won’t won’t be a dud even with a name like Robert Dudley (and that was such a bad pun that Jay Leno should feel free to steal it). Dudley will be the first Amercian born CEO of BP as the company’s board hopes to improve on the langauge barrier between themselves and the US government (as apparently “your shit is not safe” didn’t translate correctly from US regulators to BPs former CEO). Otherwise, it was a light earnings day on the market but Roper industries put up a nice Q despite a rumored take over from Furley Industriies which turned out just to be a wrongly overheard conversation in the company kitchen.
In small cap stocks, IMAX had a strong day on Inception’s continued box office outperformance and the stock has bounced back nicely since Money McBags talked about it as something to avoid the other week. Money McBags favorites CRUS and KITD also had solid days, as did just about everything else in the small cap space, except for IBKR which deserves to go down for how they made Money McBags feel after their earnings announcement last week which he was more highly anticipating than the inevitable Christina Hendricks playboy spread (and yes, it will happen). Money McBags is short on time today so he won’t be getting to any detailed small stock analysis but it should be a busy week with QCOR, IMAX, CTGX, and NTRI reporting so he promises he will have more compny breakdowns for you as necessary. If you are craving for more dick jokes though, Money McBags was busy in the comments section from Friday’s column, so enjoy.
First of all, Money McBags would like to thank all of you for your feedback yesterday. His inbox is currently overflowing like Whitezilla’s urethra after downing three cases of Mountain Dew in ten minutes (and feel free to google “Whitezilla” on your own time, Money McBags refuses to link to it due to good taste) but he promises to try to get back to each and everyone of you. The feedback was helpful as Money McBags learned that he does both too much analysis and not enough, the posts are both too long and too short, and the jokes both add to the analysis and detract from it. The only thing that was universal was that his readers love the pics so Money McBags is thinking of dropping all subject matter, words, and rational thought and turning WGP into another NSFW photo site. Anyway, Money McBags is still just short of his goal of 1MM visitors so if you all could spread the word, he will be able to continue to provide you with what you like best.
In macro news today, US housing starts declined by 10% to their lowest level since December (driven by a 17% drop in single family home building ) as the government tax credit finally disappeared like poor old Yorick did from the Danish royal court back in the day or America’s global domination. Not only did housing starts drop but they were way below analyst guesses as data and common sense apparently don’t figure in to analysts’ regression models (and Money McBags is anxiously awaiting the day analyst guesses regress to some fucking mean where the mean isn’t “dead wrong” or “not even fucking close”). Analysts guessed housing starts would come in at 650k, which would have been down 22k from last month’s 672k or down only 9k from the Commerce department’s newly manipulated number from last month of 659k (though the Commerce department uses the less pointed word: “readjusted”). In actuality, new housing starts were 593k, which is the 10% drop that is being reported, but since analysts used the 672k number released last month in their models (and not the newly made up 659k number), the drop was really 13% which shows that analyst models work as well as a union member in Greece or a Rush Limbaugh marriage (but hey, maybe the 4th time will be the charm). So by “readjusting” last month’s number, the market got the bump from a better than expected number in April and now doesn’t feel as bad about the drop since it’s being reported as 10% and not 13%. That is mind fucking boggling. Money McBags has less faith in any of these numbers than Elin Nordegren has faith that Tiger Woods wasn’t “sinking his putts” in only grassy holes.
But the most mind numbing thing about it all is that analysts were expecting only a 3% fucking drop. Really? I guess the government PUBLICLY announcing that the first time home buyers’ tax credit was going away didn’t make it up to the top of the ivory fucking towers on Wall Street where analysts dance their fat tails around pictures of Carl Freidrich Gauss while discussing their homoskedasticity and ignoring common fucking sense. Look, last month was a record month for new home starts and featured a 6% increase which was the most since October 2008, so the rational person would probably start with saying this month will probably feature a 6% decline, you know, the amount of the ARTIFICIALLY INFLATED (as opposed to artificially fellated) increase last month. And since the economy has improved by at most a Herve Vellachaize nut hair since then, why don’t we start by knocking some shit off the 6%, I don’t know lets call the baseline a fucking 8% decrease and then based on which way the wind is blowing, we’ll move it a couple % from there. Is that so fucking hard? While it’s an out of the ordinary least squares regression and the coefficient of determination may be less determinable than Caster Semenya’s gender, it makes a fuck load more sense than whatever analysts are doing. So here’s the deal. Money McBags isn’t going to open up his excel, he isn’t going to look at any data or any trends, and he’s going to spend fewer than 10 seconds on this guess but he’ll say next month’s new housing starts will come in a 585k, a slight downtick from this month as the economy remains stagnant and those people who rushed to get the tax break the other month will still have a negative effect on the absolute number of housing starts. Anyone want to bet if that guess is better than the econometrically arrived at bullshit spewed by the economists on the street whose PhDs are less practical than a bridge to Gravina Island? Rant fucking over, but Wall Street analysts, it’s on like Donkey Kong and this fucking Mario is going to save the princess.
In other macro news, manufacturing expanded by 1.2%, building on its .7% gain last month, and setting everyone up for a bigger drop when no one buys rebuilt inventories because they don’t have fucking jobs. Capacity utilization at manufacturing plants was up slightly and companies like Deere are seeing improvement as they said sales of utility tractors rose in the “double digits” last month, largely due to the need to shovel all of the shit economists have been spewing about the economy. Also, Producer prices fell .3%, or rose .2% if one uses the ridiculously derived core PPI that excludes food, energy, and intelligence. These low prices give the Fed a longer time frame to hold rates flat and reinflate the bubble (I mean economy).
Internationally, France and Spain are increasing their austerity plans. France has pledged to raise the retirement age by 2 years from 60 to 62 (though since they use the metric system, Money McBags believes that really translates to 29 years old), wants to raise income taxes on the rich, and will start charging fees based on the amount of armpit hair their women are sporting. Leaks of the proposed actions have somehow caused the French to once again surrender to the Germans while praying to the great Jerry Lewis that he’ll dump the MDA and adopt them as the new enfants de Jerry. C’est dommage bitches! Spain is also getting frisky with their workers again (though if those workers include Helen Lindes, who can blame them?). The Spanish prime minister Jose Luis Rodriguez Zapata, who never saw a spanish name he couldn’t add to his own, is seeking to spur full time hiring by employers while easing their layoff burden in order to get unemployment to drop from 20% to Spain’s historic unemployment rate of 19%. Money McBags isn’t sayng the people of Spain don’t work, well, actually, that’s exactly what he is saying.
In stock news, Fannie Mae and Freddie Mac have been told to delist from the stock exchange though the FHFA’s acting director Edward J. DeMarco (and the J apparently stands for “just kidding”) said that the action “does not constitute any reflection on either enterprise’s current performance or future direction, nor does delisting imply any other findings or determination on the part of F.H.F.A. as regulator or conservator.” Really? The performance of those two shitawful enterprises which has led their stock prices to drop below $1 because no one wants to fucking own them is not a “reflection of current or future performance?” Fuck, if that’s the case then markets are terribly inefficient (which they are thanks to high frequency traders) and Mr. DeMarco should sink his entire life savings into those shitrags (and Money McBags says shitrags with all due respect). In other company news, BP’s credit default swaps are now showing a 40% chance of default which means the market is only mispricing them by 60% so if you can, there is money to be made here despite BP agreeing to put $20B in escrow to pay claims from the oil spill while somehow also creating enough new water to drain the entire Gulf and refill the whole fucking thing since they’ve basically ruined that natural habitat like Robin Williams ruined comedy or Simona Halep ruined her post tennis marketability (and ask Soleil Moon-Frye what losing one’s Punky Brewsters can do to one’s career). In other stock news, Fed Ex is down despite a good Q thanks to a disappointing outlook casued by growing pension liabilites and increased maintenace spend needed for their aircrafts. Now Money Mcbags doesn’t want to sound overly morbid here, but why not just not fix the planes and have the older workers fly them and thus kill two birds with one stone (figuratively and literally).
In small cap news, QCOR is up another 10% despite getting the Heisman from the FDA on Friday, pushing back the decision on approving Achtar for IS for the 9 billionth time. Money McBags has talked about this ad nauseum (though not as nauseum as Lady Gaga’s face, or her music) and he likes the company, especially with the potential for the NS market, but the stock is starting to get overvalued here. Money McBags only has them earning $.60 next year and their gross sales were actually a bit disappointing this last Q. Net sales had been running at ~68% of gross sales and this last Q they were 78% and Money McBags still hasn’t heard why that was other than perhaps their reimbursement issues with Tricare were fixed. The point is, Money McBags thinks this Q coming up will disappoint and you will get a better opportunity to buy this in a couple of months. That said, the CEO has done a nice job turning this company around and pointing them in the right direction. Finally, keep your eyes open for WGO’s earnings report tomorrow to see if their core business can break even and how much cash from operations they burn. They might have one more decent manipulatedly good quarter, but this stock is looking at a bigger uphill climb than Stedman Graham has to take on “couples night.”