February 3, 2012
Written by Nathan Slaughter
“Las Vegas is a poster child for the excesses of the real estate bubble. Land that was bid up to astronomical levels now sits vacant, strewn with half-finished projects that were abandoned when funding dried up. Overcapacity from the construction boom has made life difficult, even for experienced operators. Just look at Las Vegas Sands Corp. (LVS), which owns the glitzy Venetian and Palazzo mega-resorts. The shares ran up to the exorbitant price of $148 in October 2007 amid unbridled optimism. But they plummeted 99% over the next 18 months. By March 2009, you could pick up LVS for about the price of a cup of coffee—$1.38 per share. Clearly, the market overcorrected to the downside. The stock has since clawed its way back to $47. Bargain hunters who invested just $1,380 to scoop up 1,000 shares at the bottom are now sitting on a cool $47,000. Read More »
January 20, 2012
Written by Ingrid Hendershot
“Paychex, Inc. (PAYX) is a leading provider of payroll, human resource and benefits outsourcing solutions for small and medium-sized businesses. With a strong brand, Paychex has more than 100 offices nationwide and serves more than 564,000 payroll clients. The company’s average client has 17 employees. Payroll processing is the bedrock of the company’s business and will continue to be so in the future. There are over 11 million businesses in the markets Paychex serves, with only a 15% penetration rate by the industry—providing plenty of future growth opportunities. Read More »
January 6, 2012
Written by Benjamin Shepherd
“Online gaming is one of the fastest-growing segments of the global technology sector and the pastime’s popularity has grown beyond the geek squad. In the U.S., 67% of households have at least one gamer who devotes an average of eight hours per week to playing video games. With 49% of gamers between the ages of 18 and 49 years, gaming is no longer exclusively the domain of youth. In fact, the average gamer is now 34 years old. Although the majority of gamers are male, women comprise 40% of the market and their share is growing every year. Read More »
December 19, 2011
Written by Paul Goodwin
“If you’ve been reading Cabot China & Emerging Markets Report for a while, you know that our stock- selection discipline uses the acronym SNaC, which stands for story, numbers and chart. The idea is that our ideal stock presents an attractive combination of 1) a great story (business proposition, including uniqueness and appeal of products, size of potential consumer pool, barriers to entry, intellectual property, brand strength, etc.) 2) strong numbers (revenue and earnings growth, profit margins, trading volume, growing institutional support, positive earnings estimates, etc.) and 3) a chart that shows increasing investor appetite for the stock or a positive technical base. Read More »
December 2, 2011
Written by Elliott H. Gue
“International Data Corp (IDC), a market research firm that tracks trends in information technology (IT), estimates that the amount of data created and replicated has grown nine times over the past five years and will surpass 1.8 zettabytes in 2011. One zettabyte is equivalent to the information stored on about 250 million DVDs. The data storage industry is at the heart of these structural trends, both enabling and benefiting from the virtual revolution. Read More »
November 18, 2011
Written by John D. Staszak
“We are reiterating our BUY rating on Focus List selection Fiserv, Inc. (FISV) and our target price of $70. We are also increasing our EPS estimates for 2011 and 2012. Our estimates for both years are slightly above the consensus. Analyst estimates for Fiserv have been increasing in recent weeks. Fiserv’s 3Q11 results were solid, with revenues and operating EPS slightly exceeding consensus and our forecasts. At its recent investor day, Fiserv’s management team was upbeat about recent sales and demand trends while also sketching out a reasonable long-term roadmap to double revenue growth (from 2%-4% guidance for 2011 to 4%-8% on average for 2011-13). Read More »
November 4, 2011
Written by Amy Calistri
“Consumer sentiment is usually an important indicator for the U.S. economy. More than two-thirds of this country’s GDP comes from consumer spending. Traditionally, when consumers are unhappy, retailers are unhappy. That is, until this year. Times are still uncertain. The economy is still fragile. And while I don’t normally think of retail as a defensive sector, I can’t ignore the demonstrated resiliency of consumers. And unlike traditional defensive sectors, if economic conditions improve, the retail sector has tremendous upside potential. … Read More »
October 21, 2011
Written by Porter Stansberry
“In the full two years since [its 2008 creation by] merger, this company produced $4.2 billion in gross profit. That’s revenues minus the cost of sales—before all operating costs and capital investments. In those same two years, this company distributed $2.1 billion to shareholders in the form of cash dividends and share buybacks. That’s a capital efficiency of 50%. … Read More »
October 7, 2011
Written by Dr. Stephen Leeb
“Headquartered in Pennsylvania, FMC Corp. (FMC) is a global seller of chemicals widely used in both agriculture and industry. In terms of revenues, the company holds the No. 1 or No. 2 position either globally or within North America for most of its product groups. Its agriculture segment produces and sells branded insecticides, herbicides, and fungicides, many based on patented technologies. Read More »
September 16, 2011
Written by Timothy Lutts
The McDonald’s of South America: Arcos Dorados (ARCO)
“We all know McDonald’s (MCD). The emperor of fast-food has nearly 33,000 restaurants globally, getting 40% of its revenues from Europe, 34% from the U.S., 21% from Asia, the Middle East and Africa, and just 5% from Latin America and the Caribbean. That’s a low percentage, and the reason is this: While McDonald’s Corp. owns roughly two-thirds of the brand’s restaurants in the world and franchises one-third, the corporation owns no restaurants in Latin America and the Caribbean! Read More »
