Archive for the ‘Large Cap Stocks’ Category
Electronics bellwether Philips (NYSE: PHG) reported that net income more than doubled in Q4 2007 vs. Q4 2006. However, the majority of gains were due to the sale of shares in LG Philips LCD (NYSE: LPL) and Taiwan Semiconductor Manufacturing (NYSE: TSM). The company also announced plans to increase the shareholder dividend to 0.70 Euros in 2008 (an increase of 17%).
Of note were robust sales growth in its Domestic Appliances and Personal Care (12%), Consumer Electronics (10%), and Lighting (8%) divisions. Further, revenue increased in Europe / Africa (11%), Asia (17%), and Latin America (10%) but fell slightly in North America (down about 2%). The company also saw strong revenue growth in emerging markets, where sales increased approximately 18% vs. the prior quarter.
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Philips - Earnings Results Presentations
Tags: Large Cap Stocks, PHG, Philips
Market bellwether General Electric (NYSE: GE) reported a 4% rise in Q4 earnings today, citing strong profit growth in its infrastructure business (26%). The company’s energy (38%), oil & gas (50%), aviation (27%), and transportation (21%) portfolios were responsible for infrastructure net margin growth . Further, GE’s NBC Universal, finance, and industrial units showed reasonable margin growth as well (Healthcare profit was down 4%).
Over half of the company’s revenue is now derived overseas - which is a good thing given the falling dollar and the possibility of a recession in the US. In addition, the stock has promise with a P/E of 15x Trailing Twelve Month (TTM) earnings, strong gross margins (43%), high Return On Equity (20%) and a 4% dividend. However, GE is significantly leveraged with a Debt / Equity ratio of over 4x. As a result, its Return On Invested Capital (ROIC) is a tepid 4%.
In sum, we’ll watch this one for now. The stock is already down 10% this year, but could definitely suffer further from the psychological impact of a recession moving forward.
Tags: ge, general electric
The Wall Street Journal announced today that Bank of America (NYSE: BAC) will indeed purchase troubled lender Countrywide Financial (NYSE: CFC) for $4 billion in stock. CFC shareholders will receive around 0.1822 shares of BAC for each share of CFC they own (which is actually a discount to yesterday’s closing price). The deal is expected to close in Q3 of this year.
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Per the Wall Street Journal, Bank of America (NYSE: BAC) is in talks to finally acquire ailing mortgage giant Countrywide Financial (NYSE: CFC). After buying a 16% stake in CFC last year, Bank of America has returned to the table to buy the rest of the company outright. It’s a good strategic move, as they’ll be buying at a significant discount in the wake of the subprime collapse.
Further, since a subsidiary of the company is technically a federal “thrift”, BAC may slip through a loophole in the law that normally prevents a bank from owning over 10% of US national deposits after an acquisition. Even so, given the current state of financial stocks and the overall economy, it looks like it will be a long road to recovery for both of these firms.
Tags: bank of america, countrywide
Dow Chemical announced today that it is teaming up with Kuwait Petro’s Petrochemical Industries Company (aka PIC) to market and manufacture polyethylene and polypropylene products (just fancy terms for plastic). The new joint venture will leverage PIC’s “feedstock” position and strength in the energy / hydrocarbon space.
So, what does that mean? In a nutshell: plastic comes from petroleum - and you have a clear leader in the plastics industry (Dow) and a strong petroleum player teaming up to form an $11 billion dollar business. It just makes sense, especially given the current level of oil prices.
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