The Ascena Retail Group (ASNA), known as Dress Barn prior to a corporate reorganization, closed today above my initial target price of $31.20. The stock has been up recently on above-expectation 2Q results and positive macroeconomic trends. ASNA is up 23.5% since inception into the portfolio.
After updating the model, I have re-evaluated the price target to $36.15 based on calendarized EPS of $2.41 and a P/E multiple of 15x. This represents 15% upside potential from current trading levels.
ASNA's second quarter conference call will be held on March 2. Dress Barn continues to hit on all cylinders as they continue to recognize synergy from the Justice acquisition. Consolidated comp performance for 2Q was 9%; resulting from 1% in dressbarn division, 17% from maurices, and 11% from Justice.
-Ian
Thursday, February 17, 2011
Thursday, February 10, 2011
Rapid Micro Biosystems Partners with Life Technologies Corporation
Rapid Micro Biosystems, a leading provider of automated, non-destructive, rapid microbial detection, today announced a sales and marketing agreement with Life Technologies Corporation. For quality control microbiology customers, the agreement combines best in class automated microbial detection and enumeration with gold-standard microbial identification.
The agreement leverages the strengths of both companies, benefiting customers who struggle daily with time consuming, manual processes, and product safety testing where accuracy and time to results are critical. The goal of the agreement is to maximize industry adoption of the complementary technologies. The Growth DirectTM System from Rapid Micro Biosystems enables rapid microbial detection, and the MicroSEQ® Rapid Microbial Identification System from Life Technologies facilitates accurate bacterial and fungal identification.
The agreement leverages the strengths of both companies, benefiting customers who struggle daily with time consuming, manual processes, and product safety testing where accuracy and time to results are critical. The goal of the agreement is to maximize industry adoption of the complementary technologies. The Growth DirectTM System from Rapid Micro Biosystems enables rapid microbial detection, and the MicroSEQ® Rapid Microbial Identification System from Life Technologies facilitates accurate bacterial and fungal identification.
Ralph Lauren Beats Estimates and Doubles Dividend in 3Q
Ralph Lauren (RL), which is currently trading at a price of $126.86, released 3rd quarter earnings yesterday February 9th 2011. Net income rose to $168.4 million or $1.72 a share which beat expectations of $1.29. Revenue climbed to $1.5 billion beating the expectations of $1.46. Same store sales increased by 15%. As of close of February 8th 2011 the stock is up 47% in this past year. Also announced was the approval for a $250 million dollar buy back which is in addition to about $469 remaining under another plan. In addition, the company has declared an increase in the regular quarterly cash dividend to $0.20 per share from $0.10 per share. While performance has improved there will be challenges facing RL including increasing cotton prices. UASBIG will monitor this closely however does believe that Ralph Lauren has the pricing power to offset the increase in commodity costs.
~Susan Jacobson
~Susan Jacobson
Thursday, February 3, 2011
IP F4Q10 Earnings 2/3/2011 - Jeremy Pellizzari
International Paper Co. released their 4th quarter earnings on February 3 and showed an adjusted EPS of $0.68, which is more than triple that from the year prior. They also turned in revenues of $6.5 billion, a 9% year over year increase. International Paper was able to have what they called their best 4th quarter in ten years due to solid volume, pricing, and cost performance. A highlight from the earnings call pointed out the strong margin expansion both in the 4th quarter and throughout the year. In the 4th quarter, margins expanded 240 basis points, which is actually more than the annual expansion of 110 basis points. On an annual basis, IP earnings were just of $2 per share and they had a strong free cash flow of $1.7 billion. Sales finished the year up 8% and ended the year with a lower debt level and a solid cash balance of $2 billion.
Broken down into segments, the Industrial Packaging segment had revenue growth of 16% year over year and adjusted operating profits of $274 million, a 226% year over year increase. The printing papers segment showed a 1% increase in revenue with a 70% increase in adjusted operating profit to $236 million. Consumer packing posted revenues of $880 million, up 12% year over year, and also increased their adjusted operating profits to $64 million. Xpedx, the company’s distribution business, reported revenues of $1.77 billion and actually showed a decrease in year over year operating profits of 71%, down to $9 million.
As for the future, International Paper Co. has highlighted the ability of their company to produce high amounts of free cash flow and expansion in foreign markets as factors of continuing success. As well as producing a solid year of earnings, IP was able to raise their dividends back to the pre-recession level of $.75 cents per share.
Jeremy Pellizzari - Junior Analyst
Broken down into segments, the Industrial Packaging segment had revenue growth of 16% year over year and adjusted operating profits of $274 million, a 226% year over year increase. The printing papers segment showed a 1% increase in revenue with a 70% increase in adjusted operating profit to $236 million. Consumer packing posted revenues of $880 million, up 12% year over year, and also increased their adjusted operating profits to $64 million. Xpedx, the company’s distribution business, reported revenues of $1.77 billion and actually showed a decrease in year over year operating profits of 71%, down to $9 million.
As for the future, International Paper Co. has highlighted the ability of their company to produce high amounts of free cash flow and expansion in foreign markets as factors of continuing success. As well as producing a solid year of earnings, IP was able to raise their dividends back to the pre-recession level of $.75 cents per share.
Jeremy Pellizzari - Junior Analyst
LIFE Releases 4th Quarter Earnings
Life Technologies reported after the close of today's market that its fourth-quarter revenues rose 7 percent to $932.3 million (exceeding Wall Street estimates of $929.4 million) year over year with 11% sales increases for its Genetic Systems and Cell Systems divisions.
The company posted a net profit of $70.7 million, or 37 cents per share, compared with a profit of $48.9 million, or 26 cents per share, a year ago.
It projected 2011 revenue growth in the mid-single digits and forecast earnings excluding items of $3.80 to $3.95 per share. Analysts' on average are looking for 2011 earnings of $3.86 per share for the company.
-Jesus
The company posted a net profit of $70.7 million, or 37 cents per share, compared with a profit of $48.9 million, or 26 cents per share, a year ago.
It projected 2011 revenue growth in the mid-single digits and forecast earnings excluding items of $3.80 to $3.95 per share. Analysts' on average are looking for 2011 earnings of $3.86 per share for the company.
-Jesus
Illinois Tool Works earnings report
Illinois Tool Works reported their Q4 earnings and the earnings per share were $0.79 versus the $0.80 predicted by the analysts. The company's fourth-quarter profits fell by 23% as prior year. The decrease was primarily due to a big tax cut recorded in 2009. The last year tax benefit gave an extra 37 cents boost to EPS. For the whole year the company earned a total of $3.03 per share or a total of $1.53 billion compared to $1.49 per share and $947 million in 2009.
Even though the profits decreased the revenue for the fourth quarter was up by 11%. The best preforming segments were the Power Systems and Electronics which contribute almost 23% growth in revenue, and Welding Equipment increased their revenue by 18%. The total revenue for the year was $15.87 billion from $13.88 billion in 2009.
The volume of trades for the day was double the daily average, and despite not beating the analyst estimates the stock the stock closed the day with only a loss of 1.3% or $0.70.
The company is very optimistic on their first quarter earnings prediction which are higher then the estimates on the street. The company predicted 12% to 15% earnings growth for the first quarter, which will result in 81 cents to 87 cents EPS. Analysts predict earnings to be 76 cents per share a 10.6% growth.
Roman Beleuta
Even though the profits decreased the revenue for the fourth quarter was up by 11%. The best preforming segments were the Power Systems and Electronics which contribute almost 23% growth in revenue, and Welding Equipment increased their revenue by 18%. The total revenue for the year was $15.87 billion from $13.88 billion in 2009.
The volume of trades for the day was double the daily average, and despite not beating the analyst estimates the stock the stock closed the day with only a loss of 1.3% or $0.70.
The company is very optimistic on their first quarter earnings prediction which are higher then the estimates on the street. The company predicted 12% to 15% earnings growth for the first quarter, which will result in 81 cents to 87 cents EPS. Analysts predict earnings to be 76 cents per share a 10.6% growth.
Roman Beleuta
Tuesday, February 1, 2011
Novartis 4Q10 1/27/2011
Novartis released earnings Thursday, and reported $14.2 billion in sales for the fourth quarter and $50.6 billion in sales for year 2010. Novartis increased their fourth quarter sales by $1.3 billion, or 10%, from fourth quarter 2009, and increased their annual sales by $6.3 billion, representing an increase of 14%. In addition to sales, profit also exceeded last year’s numbers, but did not exceed analyst expectations. Profits for the year jumped to $10 billion, representing an increase of 18% over the previous year’s $8.4 billion in profits. Quarterly profits fell by 2% from $2.32 billion to $2.27 billion.
Despite fairly positive numbers, Novartis shares dropped 2.7%, as the reported earnings did not meet analyst recommendations. Wall Street analysts had expected Novartis to report earnings of $1.25 per share, but the company only returned $1.14. The earnings underperformed analyst expectations mainly due to restructuring charges and currency impacts. However, the company praised its acquisition of Alcon, and expects the new eye-care division to be a driver of earnings growth in the future. In addition, the company saw 13 major products approved, and filed 16 new products during the 2010 year. Novartis saw strong growth in its generic division, which saw sales increase 14% from $7.5 billion to $8.5 billion. The generic arm of Novartis capitalized on patent expirations of other large pharmaceutical companies such as Sanofi-Aventis and Merck. Novartis created generic version of Sanofi-Aventis’ Lovenox, a blood thinning drug, and Cozaar, a major cardiovascular drug created by Merck. Novartis also has some potential blockbuster drugs in the pipeline. The company is currently working on an experimental respiratory drug called QVA149, which is expected to be a major drug if it is approved. A new blockbuster drug is necessary, as Novartis is about to face patent expirations of some of its biggest drugs. Diovan, the company’s best-selling heart drug, drove $6 billion in sales in 2009, and is now facing patent expiration in 2011. In addition, Gilvec drove nearly $4 billion in sales, and is facing patent expiration in 2015.
To summarize, Novartis saw increase in annual and quarterly sales, and an increase in annual earnings. Despite these increases, the company missed analyst expectations, and the stock dropped by 2.7%. Going forward, the company needs to find a new blockbuster drug to help alleviate the earnings loss that will come when two major drugs, Diovan and Gilvec, face patent expiration. Considering the patent expirations the company is facing, and the uncertainty surrounding healthcare reform, I am cautious about Novartis’ return potential and its place in our portfolio.
-Ryan M. Kennedy
Despite fairly positive numbers, Novartis shares dropped 2.7%, as the reported earnings did not meet analyst recommendations. Wall Street analysts had expected Novartis to report earnings of $1.25 per share, but the company only returned $1.14. The earnings underperformed analyst expectations mainly due to restructuring charges and currency impacts. However, the company praised its acquisition of Alcon, and expects the new eye-care division to be a driver of earnings growth in the future. In addition, the company saw 13 major products approved, and filed 16 new products during the 2010 year. Novartis saw strong growth in its generic division, which saw sales increase 14% from $7.5 billion to $8.5 billion. The generic arm of Novartis capitalized on patent expirations of other large pharmaceutical companies such as Sanofi-Aventis and Merck. Novartis created generic version of Sanofi-Aventis’ Lovenox, a blood thinning drug, and Cozaar, a major cardiovascular drug created by Merck. Novartis also has some potential blockbuster drugs in the pipeline. The company is currently working on an experimental respiratory drug called QVA149, which is expected to be a major drug if it is approved. A new blockbuster drug is necessary, as Novartis is about to face patent expirations of some of its biggest drugs. Diovan, the company’s best-selling heart drug, drove $6 billion in sales in 2009, and is now facing patent expiration in 2011. In addition, Gilvec drove nearly $4 billion in sales, and is facing patent expiration in 2015.
To summarize, Novartis saw increase in annual and quarterly sales, and an increase in annual earnings. Despite these increases, the company missed analyst expectations, and the stock dropped by 2.7%. Going forward, the company needs to find a new blockbuster drug to help alleviate the earnings loss that will come when two major drugs, Diovan and Gilvec, face patent expiration. Considering the patent expirations the company is facing, and the uncertainty surrounding healthcare reform, I am cautious about Novartis’ return potential and its place in our portfolio.
-Ryan M. Kennedy
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