Investment Ideas of the Week 6-11-12
We had a busy week with lots of investment ideas. Catch up on all the ideas we had for the past week:
Check Point Software Technologies (CHKP)
We entered into a long position in Check Point Software Technologies (CHKP) after it reported its Q1 EPS because we were shocked at the price drop that resulted from its report. While we can understand that there were a number of momentum investors who were expecting CHKP to raise its forward earnings outlook, we felt that investors overreacted to the news. We would like to remind everyone that CHKP generated non-GAAP EPS of $.68 in Q2 2011 and the company projected $.74-$.77 per share, which represent a healthy 9%-13.25% EPS growth for CHKP. READ MORE
Wells Fargo (WFC)
As everyone knows, Wells Fargo (WFC) is not only an industry leading money center bank and diversified financial institution, but it managed to strengthen itself during the financial crisis with the acquisition of Wachovia Corporation. That acquisition helped catapult Wells Fargo to the position of fourth largest US banking institution by assets. READ MORE
Exelon (EXC)
Exelon (EXC) was formed from the October 2000 merger between Unicom and PECO Energy. This merger was interesting because it combined two utilities which despite have the benefit of operating in large metropolitan areas had a reputation as poor performers financially and for stockholders. After a few years of stagnant revenues and choppy profitability, Exelon recorded an impressive 21% revenue increase in 2007. EPS grew by 71% that year and was due to the revenue growth and ability to avoid goodwill impairments. READ MORE
Southern Company (SO)
We have long admired the Southern Company (SO) because not only is it the most valuable privately owned utility company that trades on the major U.S. Exchanges by market cap, but because of its strong operational performance, which has resulted in strong capital appreciation, dividend yields and steady dividend growth to shareholders. READ MORE
Ford Motor Company (F)
After we read Berkshire Hathaway’s (BRK.A, BRK.B) recent 13-F filing that Berkshire had purchased 10M shares of General Motors (GM), we analyzed GM versus Ford Motor Company (F). We were blown away at the interest our analysis report generated and have decided to expand further our analysis and evaluation on Berkshire’s GM investment and Ford versus GM. READ MORE
UMB Financial Corp. (UMBF)
We reiterate our Accumulate rating on UMB Financial Corp. (UMBF) and increase our Target Fair Value Price. We Expect Continued Strong Asset and Wealth Management Net Revenue Growth, Fair Value Price of $51.86 per share. READ MORE
SUPERVALU (SVU)
We were absolutely blown away and inspired by the response to our initial analysis of SUPERVALU. We were so inspired we decided to follow it up. We most certainly expect a higher dividend and free cash flow yield for SUPERVALU (SVU) than Wal-Mart (WMT), after all, SVU hired Craig Herkert from Wal-Mart to come back and turn around SVU’s fortunes. READ MORE
Annaly Capital’s (NLY) and BlackRock (BLK)
When we first heard of mortgage real estate investment trusts, we were skeptical of those products. We would wonder why an institution would bother to lend money to the mortgage REITs through repurchase agreements instead of buying the MBS securities themselves and pocketing the MBS yields themselves. After researching the companies in the industry ourselves, we have seen the benefits that mREITs offer. READ MORE