Friday, December 25, 2009

Apple Tablet Update

AAPL shares rose $6.99 to a new high of $209.09 Christmas Eve on news that Apple's tablet may be more finished than expected and could demo late January 2010.

Wednesday, December 16, 2009

Boeing 787 Takes its Maiden Flight

Boeing's first flight ready 787 Dreamliner took to the skies yesterday morning. While the four hour scheduled flight was cut slightly short due to bad weather, all test results were positive and a major hurdle for the 787 program has been cleared. This test plane is the first of six that Boeing plans to test around the clock, all over the world, for the next several months. Barring any other delays – which the 787 program has been notorious for – Boeing, expects to begin delivery of its 787 Dreamliner in the beginning of the fourth quarter 2010.

As discussed before, the 787 truly is a remarkable aircraft that Boeing has dubbed the “first aircraft of the 21st century.”

The link below provides a great deal of information on the innovative features of the 787 Dreamliner:

When markets closed yesterday, December 15th, shares of PCP were down a little over $1 (1%).

Wednesday, December 9, 2009

BF.B Q2 2010 Earnings 12/08/09 - (Christian LaBier)

Brown-Forman's two strongest brands (Jack Daniel's and el Jimador) have been driving the company to better than expected sales for the quarter. Management has feared that the consumer would trade down because of the difficult economic situation, but Jack Daniel's and the Pre Mix products have been producing strong sales globally. Effective cost cutting measures taken by the company have helped the company stay competitve in the current market.

Management increased FY2009 guidance to a range of $2.95-$3.15 per share from an original estimate of $2.60-%3.00 per share.

"This updated guidance reflects our better than expected sales performance in the first half of the year, our excellent management of operating expenses and our confidence about our ability to operate effectively in what remains a competitive and uncertain environment." - Don Berg (CFO)

The stock price moved up approximately 5% yesterday when earnings were released, however, the stock ended the day flat. BF.F is currently trading at $51.78 and the position in the portfolio is down 2.38%. I want to hold the position because the Jack Daniel's brand and the upcoming ready-to-drink segments are solid and have room for growth. I don't see the stock price ranging far from it current level. BF.F also pays a steady dividend. I will continue to monitor.


Monday, December 7, 2009

Precision Castparts Tops $110 Price Target

During the day Friday, December 4th, and early in the session today, December 7th, Precision Castparts has been trading at or above the twelve month price target of $110 that I had pitched the stock for during the November 6th conference call.

Fortunately, I feel that there is even more upside to Precision Castparts going forward. Due to the uncertainty of both the aerospace market and the Boeing 787 Dreamliner project, I feel that the projections I made in my model were relatively conservative, resulting in a price target in the lower range. Furthermore, good news over the past several weeks concerning Boeing’s 787 progress and strong backing from Boeing management to meet its goal of getting the first 787 off the ground by 2010 can only bolster the stock price of Precision Castparts.

Additonal good news regarding Precision Castparts was released last week at Credit Suisse’s 2009 Aerospace & Defense Conference as well. Precision Castparts announced a slowing of customer inventory destocking over the course of its third quarter FY10 and even started to experience some pull-ins of new orders. Precision Castparts also anticipates the gap to narrow between aircraft production schedules and actual build rates in its fourth quarter FY10 and even more in FY11.

Precision Castparts also presented their potential synergies with recently acquired Carlton Forge Works. This acquisition filled a significant hole in Precision Castparts’ portfolio of products and services and gives it greater access to a $1 billion market in seamless rolled rings for various turbine and industrial applications. Precision Castparts targets synergies with Carlton Forge Works to be between $15 and $20 million within the next 12 to 16 months and $35 to $40 million within the next 22 to 26 months.

All in all, Precision Castparts has been one of the top performers from the November 6th conference call and with all of this good news taken into consideration, I feel that Precision Castparts will continue to perform well in the near future and it is worth holding onto our position going forward.

Once finals and semester projects start to ease, I will attempt to revise my model given all the new information and see how it affects my previous price target of $110.

If you have any comments, suggestions or concerns, please do not hesitate to contact me.

-Matthew Opanowski

Friday, December 4, 2009

Eldorado-Sino Gold Merger Update

EGO is moving forward with its acquisition of Sino Gold. Sino shareholders approved the takeover on Thursday, 12/2 with almost unanimous consent. This deal creates a premier intermediate gold producerin China and Turkey with current production of 550,000 ounces/year from 4 different mines. Expected production growth by 2013 of beyond 1 million ounces. The transaction will increase EGO's share count from about 400 million shares to 535 million, which will increase its market cap almost 50%. Proven and probable reserves will go from 7,561 (000 oz Au) to 12,668 and revenue is expected to go from $518 million to $760 million.

This deal just increases the size and growth potential of EGO without having any adverse or beneficial effect on immediate EPS.

Gold got crushed today (12/4), down to $1,150 an ounce and EGO's price went down 3.45% to $13.43 with it. We're still positive on EGO and I am confident in owning it. If gold hits a temporary road block, UASBIG would have an opportunity to turn our EGO position into a full one at a much cheaper price.

Ecolab Raises Cash Dividend 11 Percent

The Board of Directors of Ecolab Inc. today increased the company’s quarterly cash dividend by 11% to $0.155 per common share, to be paid January 15, 2010, to shareholders of record at the close of business on December 15, 2009. This results in a new indicated annual cash dividend of a record $0.62 per share for 2010, and represents Ecolab’s 18th consecutive annual dividend rate increase.

“We continued our record of consecutive annual cash dividend increases, reflecting our expected attractive 2009 pro forma earnings performance, good cash flows and solid balance sheet. Ecolab remains a strong company with a strong future, and this action reflects our equally strong commitment to improving shareholder returns.”--quote from CEO Douglas Baker

The dividend increase was announced Thursday (12/3). Ecolab (ECL)--$45.24 is about 10% off my price target of $50.

Tuesday, December 1, 2009

Cyber Monday

This past Monday was Cyber Monday for all the shopping junkie, bargain hunters out there. If online shopping becomes even more dominant than store shopping, the electronic payment method systems stands to gain benefit from this.

This is part of my reasoning why Visa is still a strong hold in the portfolio, and I will be doing more work to see if it makes to buy more even at a current price of just about $83

-Richie Civello