Latest Research

Tesla Proved The Shorts Wrong But Can It Survive Independently?

By saibusresearch99 - 14th May 2013

Since we last talked about Tesla (TSLA) with the Wall Street Journal, Tesla was in a pivotal quarter. We felt that this was the quarter that would be the make or break it quarter for Tesla to show significant progress in its production and generate revenue in order to survive independently going forward. Until this quarter, Tesla has had a record of losses with a significant level of cash burn. Tesla has turned it all around, recently blowing out earnings, and earning...

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Did Ron Johnson Wreck J.C. Penney?

By Saibus Research - 10th May 2013

We have been following J.C. Penney Company Inc. (JCP) off and on since 2011 because Bill Ackman had taken a position in JCP and becauseAckman was influential in recruiting Ron Johnson away from Apple Retail (AAPL) in order to become JCP’s new CEO to succeed Myron Ullman, who was JCP’s CEO from 2004-2011. Although we demurred from taking a stake in JCP, we were intrigued by the idea of JCP’s willingness to “shake things up” as its EPS peaked in FY...

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Expect An Earnings Rebound For Tiffany & Co.

By Saibus Research - 10th May 2013

Tiffany & Co. (TIF) reported 4Q12 EPS of $1.40, a 1% increase YoY and $0.04 above consensus estimates of $1.36. Net sales increased 4% YoY; comp sales were flat. In constant currency, sales in the Americas, Japan, and Europe all had low single-digit growth, while Asia-Pacific rebounded with a 10% sales increase. Japan had a negative 8% currency impact on sales. Gross margin decreased 121bp to 59.1%, pressured by the continuation of product sales mix skewed towards lower-margin products, unfavorable but...

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Get Comfortable With Select Comfort

By Saibus Research - 9th May 2013

Founded in 1987, Select Comfort (SCSS) operates in the specialty segment of the U.S. mattress industry. The company is the exclusive manufacturer and retailer of the Sleep Number bed, which allows individuals to adjust the firmness and support of each side at the touch of a button. Sleep Number beds are offered in four series: Classic, Performance, Memory Foam, and Innovation. And with a price range of $699 to $4,399, these beds are intended to target 30-54 year-old, above-median-income consumers...

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Will Donnelley’s Dividend Avoid A Decline?

By Saibus Research - 9th May 2013

We previously analyzed and evaluated R.R. Donnelley & Sons Company (RRD) last November because we were taking a second look at it after its share declined by 50% relative to when we were apprised of it. As we previously mentioned, a local registered investment advisory firm tipped us off to the “potential surrounding RRD” back in 2011. Thank G-D we demurred back in 2011 because although RRD has been able to maintain its $1.04/share dividend, its share price has declined steadily...

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Is Cliffs Natural Resources A Value, Or A Value Trap?

By Saibus Research - 9th May 2013

Cliffs Natural Resources (CLF) has gone from being a shooting star of the industrial metals and minerals sector to suffering through the indignity of a $1B asset impairment charge on its 2011 acquisition of Consolidated Thompson Iron Mines Limited.

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State Street Is A Stress-Free Trust Bank

By Saibus Research - 9th May 2013

Although we were displeased to see State Street Corporation’s (STT) share price slip by 4% after it released its results, we were content that it was able to bounce back and close the day’s trading .71% higher than the prior day’s close.

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Media Industry Review

By Saibus Research - 6th May 2013

Our “Media” investment theme in our portfolio has done extremely well across the board. We continue to see firms moving to acquire strong brands and digital media assets that are hard to replicate.           Core Media Bucket: SNI: Scripps Media DISCK: Discovery Communications NWS: News Corp DIS: The Walt Disney Co Special Situation / Turnaround: PRIS: Grupo Prisa  LEE: Lee Enterprises

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Berkshire Hathaway Is Undervalued By 20%-25%

By Saibus Research - 4th May 2013

We don’t see Warren Buffett, Todd Combs and Ted Wechsler repeating the 19.8% returns that Berkshire Hathaway (BRK.B) enjoyed from 1964-2011 due to its size and the fact that it has already bought up many of the most desirable investment opportunities out there. However, we think that Berkshire will continue to chug along to solid growth and performance as if it was one of its Burlington Northern Santa Fe railcars.

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Exelon: The President’s Utility Continues Its Record Of Futility

By Saibus Research - 4th May 2013

We think Exelon Corporation’s (EXC) Chief lobbyist Elizabeth Moler said it best when she said that Exelon is “The President’s Utility.” Exelon reminds us of President Barack Obama in that both were the hottest and most popular figure in each figure’s respective field of endeavors back in the summer of 2008. Obama was the most popular political figure in our lifetime during the summer of 2008 and Exelon’s stock had reached a peak of $92.13 in July of 2008.

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BlackRock: This Industry-Leading Asset Manager Is Like A Rock

By Saibus Research - 4th May 2013

We enjoy covering BlackRock (BLK) because it is the industry leader in our favorite industry (asset management). We were pleased that Ignites Europe (Financial Times’ subscription only subsidiary that covers the asset management industry) cited our research in an article that firm wrote about BlackRock’s $1B stock buyback.

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Lee Enterprises’s Revenue Is Starting To Stabilize

By admin - 4th May 2013

We were disappointed that Lee Enterprises’ (LEE) progress in narrowing its revenue decline in FY 2012 and H1 2013 was not enough for Berkshire Hathaway (BRK.B) to maintain its equity position in LEE. Berkshire has sold 3.1M of its 3.2M LEE shares it received when it acquired $85M of Lee’s 2nd-Lien Term Loans in April 2012. Berkshire had made this investment in Lee Enterprises last year as part of his highly-publicized spate of investments in the newspaper industry.

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Investment Ideas of the Week – Free Newsletter

By Saibus Research - 3rd May 2013

Saibus Research: Dividend Value Newsletter Sign up for our investment newsletter for FREE!

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Will Pitney Bowes’ New Management Stabilize Sales?

By Saibus Research - 1st May 2013

Although Pitney Bowes (PBI) is struggling to hold on to its sales, we were considering it as an investment based on its (at the time) 10% dividend yield (before its recent dividend cut of 50%) and its free cash flow yield of 16%.

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Citigroup: Can Citi’s Comeback Continue?

By Saibus Research - 1st May 2013

In our previous reports on Citigroup (C), we cannot repeat enough how we believe that investors should view Citigroup as two firms consisting of the following exposures: Citicorp-Consists of the businesses that Citigroup has decided to retain. These businesses include Consumer Banking, Corporate and Institutional Banking and Transaction Services. Citicorp generates 96% of its revenue from Citicorp operations. Citi Holdings-Consists of assets that Citigroup is willing to let run-off or try to sell. The goal with Citi Holdings assets is to minimize...

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Wisconsin Energy: 70-Plus Years Of Reliable Dividend Payments

By Saibus Research - 1st May 2013

We continue to be amazed with the performance of Gale Klappa and his management team since they took over the executive leadership of Wisconsin Energy (WEC) from Richard Abdoo and his team. We even had the pleasure of interviewing Gale Klappa and the new CFO Pat Keyes in October, with regards to the factors that have led to Wisconsin Energy’s resurgence since 2003.

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Is LPL Financial A Broken Growth Company?

By Saibus Research - 23rd April 2013

We previously analyzed and evaluated LPL Financial (LPLA) in August when we saw that the company was generating sluggish results due to its breakneck pace of acquisition growth. At least the company has not announced any acquisitions since its July acquisition of Veritat.

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Is There Any Value In Argan?

By Saibus Research - 23rd April 2013

We previously analyzed Argan, Inc (AGX), and while there were elements of Argan’s business that we liked, there were also elements that we didn’t like. We liked that the company had a very liquid balance sheet. We were able to determine this because Argan had $175M of cash as of Q4 2012 versus no debt; Argan’s cash represented nearly 75% of its asset base and 90% of its market capitalization.

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Wells Fargo Stock Is Well Positioned To Grow

By Saibus Research - 7th April 2013

Wells Fargo (WFC) is a financial service company that focuses primarily on mortgage banking, wholesale banking, consumer, and commercial finance. The bank is traded on the New York Stock Exchange at a current price of $35.39 and a market capitalization of $186.73 billion.

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Scripps Networks Interactive: Strong Growth And Valuable Media Assets

By Saibus Research - 7th April 2013

We recommend Scripps Networks Interactive (SNI) as an Accumulate with a Fair Value Price of $70.99 per share. Our rating is based on SNI’s strong revenue and profit growth from lifestyle media content business and ample free cash flows. We expect to see the company generate earnings per share of $3.70 in 2013 and to increase EPS by 12-15% annually over the following three years.

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Select Comfort Is Undervalued And Oversold

By Saibus Research - 7th April 2013

4Q12 Disappointed, Further Challenges in 1Q13; Expect Long-Term Benefit from R&D and Acquisition; Stock is Oversold. SCSS reported 4Q12 EPS of $0.22, an 8% decrease from 4Q11 adjusted EPS and $0.10 below consensus estimates of $0.32. The decrease was a result of 1) $0.05 impact from sales decline in the final two weeks of 4Q and lower-than-expected new store timing; 2) $0.03 from marketing deleverage in media testing, and investments in R&D and consumer insights.

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Will Cintas’s Recent Revenue Growth Result In Future EPS Growth?

By Saibus Research - 26th March 2013

We entered into a long position in Cintas (CTAS) in March 2012. Despite the market volatility having an impact on the company’s share price, we are pleased that the company has been able to meet our expectations. We have been interested in Cintas for the longest time as it is the industry leader in the uniform rental business and we also like that the founding family (the Farmers) has transitioned its management and ownership interests to the third generation of...

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Will Institutional Support For J.C. Penney Vanish?

By Saibus Research - 18th March 2013

We have been following J.C. Penney Company Inc. (JCP) off and on since 2011 because Bill Ackman had taken a position in JCP and becauseAckman was influential in recruiting Ron Johnson away from Apple Retail (AAPL) in order to become JCP’s new CEO to succeed Myron Ullman, who was JCP’s CEO from 2004-2011. Although we demurred from taking a stake in JCP, we were intrigued by the idea of JCP’s willingness to “shake things up” as its EPS peaked in FY...

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Coach Inc. Is An Undervalued, High Quality Blue Chip Company

By Saibus Research - 5th March 2013

Coach is a leading U.S. marketer of premium handbag and accessories. The company sells products globally through both direct and indirect channels, and by building a business model that emphasizes “accessible luxury”, Coach is able to reach a larger demographic than many of its higher-priced competitors. With superior margins and consistent double-digit annual revenue growths, Coach runs a highly profitable business, generates strong cash flows, and has virtually no debt. However, on January 23, 2013, Coach reported earnings that missed analysts’ estimate...

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Is Berkshire Hathaway Media Group Delivering Profits For Warren?

By Saibus Research - 4th March 2013

In June, we wrote about Berkshire’s recent newspaper investments. We followed up that report with a deep dive analysis of the newspaper related investments that Berkshire has made through the years. In our second report installment we were interested in examining further the newspaper portfolios of the companies that Warren Buffett and Berkshire Hathaway (BRK.B) (BRK.A) has invested in the past and has invested in recently. In this report we will examine the recent performance of Berkshire’s newspaper investments, regardless of whether in the...

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