July 24th, 2007
Mid Cap Watch List (Track at Marketocracy) and Large Cap Watch List (Track at Marketocracy) member Laboratory Corporation of America(R) Holdings (LH) announced results for the quarter and six months ended June 30, 2007. Excluding restructuring and other special charges recorded in 2007, net earnings increased 14.1% to $132.8 million. Earnings per diluted share (EPS) increased 20.7% to $1.05, compared to $0.87 per diluted share in the second quarter of 2006. Excluding restructuring and other special charges recorded in 2007, EPS increased 25.3% to $1.09, in line with consensus estimates.
Revenues for the quarter were $1,043.1 million, an increase of 15.4% compared to the same period in 2006 and ahead of the $1.03 billion consensus. Looking ahead, the Company expects revenue growth of 13% to 14%, EBITDA margins of approximately 26.4% to 26.9%, and diluted earnings per share of between $4.11 and $4.27. With the consensus at 13.5% revenue growth and $4.21 in earnings per share, the apparent margin pressure (relative to expectations) is forecast to continue.
July 23rd, 2007
Featured at the Festival of Stocks.
Large Cap Watch List (Track at Marketocracy) member American Standard Companies Inc. (ASD) announced that it has signed a definitive agreement to sell the company’s worldwide Bath and Kitchen products business to funds advised by Bain Capital Partners, LLC, a leading global private investment firm, for $1.755 billion in cash. Upon completion of the sale, Bain Capital will acquire all of American Standard’s Bath and Kitchen business with 2006 annual sales of $2.4 billion, 26,000 employees and 54 production facilities in 23 countries worldwide. American Standard will then change its name to Trane. Trane is the flagship brand of its global Air
Conditioning Systems and Services business, which last year generated sales of $6.8 billion.
At 0.73x sales, American Standard is selling the bath and kitchen division for a multiple lower than the company’s own 1.03x. However, the lower valuation appears more than justified, because according to the company’s annual report the division had lower asset turnover and lower profitability. Many investors are excited about the prospect of the company’s strongest division trading on a stand-alone basis.
July 21st, 2007
The Economic Calendar is quiet in the early part of this week but there are important reports at the end of the week. On Thursday is the Durable Goods report, for which the consensus estimates a 2.0% increase. On Friday is the Preliminary Estimate of 2Q GDP, which the consensus has pegged at 3.2%. That sounds a little high to me based on the economic data table I’ve been compiling.
EconomicData
The Earnings Calendar is as busy as it can get. Some of the names I’ll be watching:
Monday
Tuesday
- CH Robinson (CHRW - Annual Report) – estimates have been rising and now stand at $0.47, but Landstar (LSTR - Annual Report) disappointed.
- CDW Corporation (CDWC) – stellar monthly sales reports have kept estimates rising. They now stand at $0.97.
- EMC Corporation (EMC - Annual Report) – The big news is still the VMWare IPO, but it is also a decent look at enterprise tech spend.
- Laboratory Corporation of America (LH) – The Mid Cap and Large Cap Watch List (Track at Marketocracy) member has been seeing positive earnings revisions and is now expected to earn $1.09 on $1.03 billion in revenue.
- Lexmark (LXK) preannounced and will probably offer poor guidance.
- Linear Technology (LLTC) – expected to earn $0.35 on $267 million in sales.
- Norsk Hydro (NHY) – The Large Cap Watch List (Track at Marketocracy) member has no analyst coverage right now.
- Plantronics (PLT) – my covered call position is now being cashed out so I’ve no skin in this one. But it is often volatile.
- United Parcel Services (UPS) is a great read on the health of the economy. Expectations are $1.03 on $12.23 billion in revenue.
Wednesday
Thursday
Disclosure: William Trent has a long position in SMH.
Topics:
Air Courier,
Altera (ALTR),
Basic Materials,
CDW Corp (CDWC),
CH Robinson Worldwide (CHRW),
Colgate Palmolive (CL),
Communications Equipment,
Computer Hardware,
Computer Peripherals,
Computer Storage Devices,
Conglomerates,
Consumer Non-cyclical,
Corning (GLW),
Durable Goods,
EMC Corp. (EMC),
Economy,
Electronic Instruments and Controls,
Federated Investors (FII),
Financials,
Freeport McMoRan (FCX),
GDP,
Graco (GGG),
Healthcare,
Healthcare Facilities,
Hexcel (HXL),
Ingram Micro (IM),
Investment Services,
Iron and Steel,
Laboratory Corp. of America (LH),
Large Cap Watch List,
Lexmark (LXK),
Linear Technology (LLTC),
MEMC Electronic Materials (WFR),
Metals and Mining,
Mid Cap Watch List,
Miscellaneous Capital Goods,
Miscellaneous Transportation,
Norsk Hydro (NHY),
Personal and Household Products,
Plantronics (PLT),
Retail (Catalog and Mail Order),
Semiconductors,
Services,
Small Cap Watch List,
Steel Dynamics (STLD),
Stock Market,
Technology,
Texas Instruments (TXN),
Transportation,
United Parcel Service (UPS),
Watch List,
Xerox (XRX),
Xilinx (XLNX) |
3 Comments
July 21st, 2007
My watch lists did not perform as well as the benchmarks this week. The Small Cap Watch List (Track at Marketocracy) lost 2.54%, compared with losses of 2.25% for the Russell 2000 and 1.59% for the S&P Small Cap 600.
The Mid Cap Watch List (Track at Marketocracy) lost 1.96%, compared with 1.32% for the S&P Midcap 400.
The Large Cap Watch List (Track at Marketocracy) lost 1.43% while the S&P 500 lost just 1.19%. At least it is still doing better since inception.
The economic data last week continued the prior trend – mixed with a skew to the weak side.
EconomicData
Topics:
Durable Goods,
Economy,
Large Cap Watch List,
Mid Cap Watch List,
Producer Price Index,
Russell 2000 (RUT),
S&P 500 (SPY),
S&P Midcap (MID),
S&P Smallcap 600 (SML),
Small Cap Watch List,
Watch List |
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