Friday, June 28, 2013

Foot Locker

Footlocker up today up 2.57% on positive earnings from Nike who's their main contributor and one company that should be followed closely along side Footlocker.

Tuesday, June 18, 2013

BE Aerospace New Awards

B/E Aerospace was awarded 2 new contracts yesterday for their lavatory oxygen systems. The contracts were awarded by Boeing and Airbus. They will be utilized on all narrow bodied planes currently in production beginning in 2014. Additionally, the system will be available for retrofit on older narrow body planes beginning in 2014. The contracts are for approximately $100 million each. We continue to maintain our BUY rating on B/E Aerospace (BEAV).

Friday, June 14, 2013

Spirit Airlines Traffic

Spirit Airlines (SAVE) reported revenue passenger miles (air traffic) for the month of May this week. RPM's increased 28.5% YOY, and available seat mile increased 25% YOY. This shows that Spirit is continuing to show strong growth, and we reaffirm our BUY rating on the stock.

Thursday, June 13, 2013

Google Acquires Crowdsourced Navigation App "Waze" Expanding Into Mobile Mapping


Google has acquired Waze, a high tech Israeli navigation software company for $1.03B. Waze’s smartphone application combines GPS capabilities with social networking features, which allows real time updates to traffic reports, road congestion, directions, speed traps and more by its intelligent use of crowdsourcing big data. UASBIG views this acquisition positively as a sale to Google can give Waze a greater ability to monetize its customer base, which currently consists of nearly 50MM users. Also the move is likely to lead to navigation updates to Google’s current platform which will further extend Google’s lead over rivals- most notably Apple in the navigation space. The stock was relatively flat off the news and is trading currently around the levels we purchased it. We reiterate our buy thesis for Google with conviction that this acquisition will help increase advertising revenue, which was the prominent catalyst to our investment thesis. 

Thursday, June 6, 2013

Yum! Brands

A report released today from the China Cuisine Association shows that revenue for Yum! Brands Inc. in China was up 24% in 2012, to almost $6.9 billion. This amount, according to the report, represents more than 50%of the company's total revenue.

Shares closed up $3.09, at $71.12. This represents a 4.5% rise. The report supports our investment thesis and we reiterate our BUY rating.  

Tuesday, June 4, 2013

Joy Global Inc. Q2 Earnings


Joy Global Inc. released earnings on Thursday May 30th, reporting an EPS of $1.73, beating consensus of $1.56, with revenue falling to $1.36 billion from $1.54 billion. Backlog for the company fell to $2.2 billion from $2.4 billion, with net sales decreasing by 12% vs. the second quarter a year ago.

A decreasing backlog is the major concern for Joy, as it questions potential revenue that will be streaming into the company in the coming quarters. This is showing that they are not acquiring new projects, which is something to be monitored very closely in the future. Another problem for Joy is its reliance heavily on their sale of coal, which has not been doing as well as natural gas. Joy believes that the future still is coal, and they expect an increase of 60 million to 70 million tons this coming year, but I think those numbers are ambitious due to natural gas emerging in the market, taking up 30% of the market already and still growing.
           
            In China, Joy has struggled. The company is having trouble gaining traction, as the growth in electricity slowed to 5%, less than half the rate that it was. China is continuing to produce great amounts of coal, but Joy is having an excess supply that they are still looking to sell off, keeping the price low. Right now, they are selling the coal near marginal costs.

            Joy has readjusted their forecasts for the rest of the year. They believe that they are in a correctional period right now, and are making adjustments accordingly. They reduced earnings to between $5.60 and $5.80 and revenue between $4.9 billion and $5 billion, cutting higher estimates from the beginning of the year. After being up the day of earnings being reported, the company is down 6%. I believe that we need to monitor Joy within the portfolio right now, as it could have a potential to increase its backlog in these coming quarters, but our position needs to be watched closely.