Eric Lumsden

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  • What This Spin-Off Means for Sears

    By Eric Lumsden - March 5, 2012 | Tickers: HD, OSHWQ, SHLD | Editor's Choice

    Orchard Supply Hardware Stores (NASDAQOTH: OSHWQ) sells home and gardening products from 89 stores in California.  The company is a recent spin-off from Sears Holdings Corporation (NASDAQ: SHLD)

    There are bodies of research everywhere that document how well the stocks of spin-offs do.  An old study from Lehman measured the performance of 88 spinoffs from 2000 to 2005 and found that they beat the S&P 500 by 45% over more »

  • Another Solid Semiconductor Stock

    By Eric Lumsden - February 20, 2012 | Tickers: MU, OVTI, SNE, STM

    A little while back I wrote about Micron Technologies (NASDAQ: MU), a semiconductor stock that had just emerged from a legal dispute with Rambus Inc.  The stock was down in value to a little over two times its cash holdings.  The company was a leading supplier of its product line, Dynamic Random Access Memory (DRAM), and it had yet to recover the value it lost during the period the lawsuit more »

  • Two Great Stocks Getting a Thumbs Up

    By Eric Lumsden - February 3, 2012 | Tickers: AAPL, QCOM, V

     Visa (NYSE: V): Earnings are coming up on Febuary 8th.  Management traditionally guides low and delivers a surprise which could cause a nice bump in the stock if analysts have not allowed themselves to become spoiled and expectant of such things. 

    It's easy to deliver earnings surprises when your revenue has grown consistently for the past eight quarters.  Visa has been able to create this top line growth while more »

  • Banking Sector Outlook

    By Eric Lumsden - January 30, 2012 | Tickers: BAC, C, JPM, WFC

    The Stage: Banking Sector Environment

    Deloitte and Touche recently released their 2012 industry outlooks.  The highlights of their predictions and analysis for the banking sector, available here, are as follows:

    • There will continue to be regulatory uncertainty within the industry as Dodd-Frank continues to be implemented.
    • There is still risk from a European financial contagion.  Deteriorating sovereign debts may cause investment losses at a time when banks’ financials are somewhat more »
  • Lee's Big Move: What You Need to Know

    By Eric Lumsden - January 25, 2012 | Tickers: LEE

    Lee Enterprises (NYSE: LEE), a local news provider with 48 daily newspapers, filed for Chapter 11 bankruptcy.  Legal proceedings have completed and the company is company emerging from Chapter 11 on Jan. 30, 2012.

    CEO Mary Junck has this to say in the press release about the restructuring:

    This is the favorable outcome we fully expected, and it provides Lee with a nearly four-year runway to continue improving our balance more »

  • Google Beats SOPA & PIPA, Then Takes a Beating

    By Eric Lumsden - January 19, 2012 | Tickers: GOOG

    Google (NASDAQ: GOOG) dove into the new year just like a kid dives into the shallow end of a swimming pool –with a clonk and a sink.  The stock fell 6% between January 3rd and January 10th from analyst downgrades.  That’s particularly upsetting because analysts love Google (normal people love Google too, but we will get to that later).  More than 80% of the analysts covering Google more »

  • Homebuilders: Consumer Discretionary Champions

    By Eric Lumsden - January 16, 2012 | Tickers: LEN, XHB

    The chart below details a performance between SPDR S&P Home Builders ETF (NYSEMKT: XHB), SPDR Consumer Discretionary Select Sector SPDR, SPDR S&P Retail ETF, the Consumer Discretionary Select Sector SPDR Fund, and the SPDR S&P 500 ETF.

    <img src="/media/images/user_21/perf_large.bmp" />

    In the past 90 days, homebuilders have outperformed the S&P by 18% and outperformed all of its SPDR ETF counterparts in the consumer discretionary space.  That’s a level more »

  • What is Happening With Ebix's Top Line?

    By Eric Lumsden - January 12, 2012 | Tickers: EBIX, XRX

    Ebix (NASDAQ: EBIX) is on fire.  The stock is up 47% this quarter.  In addition, management retired a full 4% of the float through buybacks, and paid a dividend out of $0.04 per share. The dividend comes out to a yield of 0.18%, which means it’s more like the sprinkles on top of the capital appreciation and share buyback sundae.  That does not mean it’s not more »

  • Carmax - For Whom the Horn Honks

    By Eric Lumsden - January 9, 2012 | Tickers: KMX, COST, WMT

    Today we are going to talk about Gallup’s U.S. Economic Confidence Index and Carmax (NYSE: KMX).

    The index is created from a daily poll about economic conditions in the United States among a sample of 1,700 adults.  According to Gallup, the poll is accurate within plus or minus 3 percent. Carmax is the largest retailer of used cars in the United States.

    How are these things related more »

  • Vail Resorts' Winter Report

    By Eric Lumsden - January 8, 2012 | Tickers: MTN

    You may have noticed an unusually warm winter this year.  Vail Resorts (NYSE: MTN) noticed it too. 

    On January 6th the company issued a press release of Ski Season Metrics for the winter season detailing the effects of the weather on Vail.

    For the first time in thirty years, the ski resort company will not have adequate snowfall to open the back bowls in Vail.  Those back bowls had 38 more »

  • Nike: Down(graded) But Not Out

    By Eric Lumsden - January 5, 2012 | Tickers: ADDYY, NKE

    Analyst firm McAdams Wright Ragen downgraded Nike (NYSE: NKE) from Buy to Hold on December 5th, and since then the stock hasn’t done much except chop sideways around the $98 level.  For the 9 months that that McAdams Wright Ragen had a buy rating on the stock it appreciated 24%.  Does the removal of their rating signal the end of the runup?

    <img src="/media/images/user_21/nke_large.jpg" />

    The 10Q Nike just posted is a more »

  • Bed Bath and Beyond Has a Few Things to Make You Feel Warm and Cozy

    By Eric Lumsden - January 4, 2012 | Tickers: BBBY, CPWM, KIRK

    Earnings per share at Bed Bath & Beyond (NASDAQ: BBBY) have climbed in an almost mesmerizing staircase pattern over the years.

    <img src="/media/images/user_21/bbby_large.jpg" />

    Bed Bath & Beyond’s latest 10Q, filed today, details more of the same earnings growth story –diluted earnings per share of $0.95 versus $0.74 for the same quarter last year.  Other specialty home goods sellers Kirkland’s Inc (NASDAQ: KIRK), Cost Plus Inc (NASDAQ: CPWM) that stock home more »

  • A Brief Walk Through Cal-Maine's 10Q

    By Eric Lumsden - January 3, 2012 | Tickers: CALM

    You probably didn’t know that egg sales typically go up for the holidays.

    That is one of many gems tucked away in the latest quarterly earnings report of Cal-Maine Foods (NASDAQ: CALM), the largest egg distributor in the US.

    What a quarter it has been, the stock is up 20%.

    Cal-Maine Foods has been riding the wild tide of increasing egg prices.  As awkward as that sounds, egg prices more »

  • US Airways - A Value Trap?

    By Eric Lumsden - January 2, 2012 | Tickers: LCC

    Investors seem to be pricing disaster in to US Airways (NYSE: LCC).  Over the last 52 weeks the stock has fallen nearly 50% in value.  Analysts have issued a mean recommendation of ‘underperform.’

    Value investors may be interested in the fact that the stock is so beaten down, that it is now trading at $5.07 per share while holding $12.60 of cash per share.

    Is this a value more »

  • An in depth look at the state of Tesla Motors

    By Eric Lumsden - December 21, 2011 | Tickers: GM, PCRFY, TSLA, TM

    Tesla Motors (NASDAQ: TSLA) made a name for itself redesigning the electric car from something that looked like a science fair project to this…

    <img src="/media/images/user_21/tsla-roadster_large.jpg" />

    …A sporty, yet eco-friendly, luxury coupe that can deliver 0-60 mph in 3.9 seconds.

    But, there was more than just the cool cars to be excited about when the stock debuted.

    The founder, CEO, and product architect of the company, Elon Musk, was a bit more »

  • After the bell earnings: Will Oracle surprise analysts again?

    By Eric Lumsden - December 19, 2011 | Tickers: ORCL

    Oracle (NYSE: ORCL) has announced earnings surprises for their last four quarters.  On December 20th, 2011 they are expected to announce earnings again.  Someone is going to be surprised.  Management and analysts are each forecasting their own sets of numbers for the quarter.

    Management issued guidance of $0.56 to $0.58 earnings per share for this quarter when they last reported earnings.  The Zacks Consensus Estimate has analysts pinning more »

  • Alcoa: Trading at a Discount?

    By Eric Lumsden - December 18, 2011 | Tickers: AA

    Alcoa (NYSE: AA) is one of the world’s largest producers of aluminum.  The aluminum industry is incredibly concentrated: in 2010 the largest three companies accounted for 47.2% of global aluminum output.  That’s an exclusive club Alcoa belongs to and right now, it may be attractively valued.

    The primary earnings driver for large aluminum producers is the global economy.  Alcoa’s largest markets were construction, transportation, and packaging more »

  • A Complete Picture of the Global Economy Was Provided Today

    By Eric Lumsden - December 13, 2011 | Tickers: EWZ, MAN, RA

    Yesterday was a day of mixed economic news.  The overall economic picture is positive, but contracting.

    Ratings agency Fitch cut their growth outlook for Brazil from 3.5% to 2.8%.  The iShares MSCI Brazil Index ETF (NYSEMKT: EWZ) fell 1.42% over the day.  The ETF took a dive in the beginning of August and is currently down 24.37% year to date.

    Shipper RailAmerica Inc. (NYSE: RA), which more »

  • U.S. Steel -- A Speculative Play for Two Reasons

    By Eric Lumsden - December 13, 2011 | Tickers: MT, NUE, X

    U.S. Steel (NYSE: X) has always been a volatile stock.  From 2006 to mid 2008, the stock tripled in value – only to give up all of those gains in the next 4 months.  Now the price is close to where it was in 2004 – listlessly drifting sideways.

    The fundamentals of the company have weakened significantly over the past few years.  Poor earnings over the last 2 years have eroded more »

  • Microsoft: Pressured to Guide Earnings Estimates

    By Eric Lumsden - December 12, 2011 | Tickers: COST, MSFT

    Is Microsoft (NASDAQ: MSFT) set up for a disappointing earnings announcement?  On January 12th the company is expected to announce their Fiscal Year 2012 second quarter earnings.  Heather Bellini, of Goldman Sachs, stated that she believes consensus earnings estimates for the company are too high.

    Bellini’s conclusion is a result of several interviews with product line managers at Microsoft. 

    Analysts covering Microsoft have disparate estimates for the costs of more »

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