Tom Gibbs

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• Ford's China Initiative Overshadowed by Other Woes

  By Tom Gibbs - August 30, 2012 | Tickers: BAMXY, F, GM, TM, VLKAY

  Ford (NYSE: F) may be the latest, but will not be the last, to announce an expanded production initiative in China, the world’s largest auto market.  The automaker, which recently opened its fourth plant in the nation in February – a $490 million, 150,000 units per year factory in Chongqing – has announced a new cash infusion of an additional $600 million to further expand production.  Now with over $4 more »

• FedEx and Amazon Take Pointers from One Another

  By Tom Gibbs - August 29, 2012 | Tickers: AMZN, FDX, GOOG

  More intense competition that is increasingly attacking from multiple angles is making some of the world’s leading product and service providers expand their operations beyond their traditional core businesses. Google (NASDAQ: GOOG), which has historically controlled the lion’s share of the online search market, has continually expanded into the world of social media, tablet hardware retailing, and digital content distribution to boost the relevancy of its multi-faceted advertising more »

• The Auto Market is Increasingly Dynamic

  By Tom Gibbs - August 29, 2012 | Tickers: F, GM, HMC, TM, VLKAY

  The worldwide auto industry is increasingly becoming one of the most dynamic markets in the discretionary consumer goods sector. Detroit’s Big Three automakers, including General Motors (NYSE: GM), Ford (NYSE: F), and Chrysler have made huge strides from their 2009 restructurings, and have been praised for their ability to adapt to the smaller and more fuel efficient compact vehicle market. 

  Foreign automakers, including Germany-based BMW, Mercedes and Volkswagen, have more »

• Automakers Consider Indonesia as BRICs Moderate Growth

  By Tom Gibbs - August 24, 2012 | Tickers: GM, HMC, NSANY.PK, TM |

  Those analyzing the growth projections for nearly any international company in any industry tend to focus on the United States and the swiftly growing BRIC nations as a guideline as to where the most favorable future growth will come.  The model not only takes into account the growing populations of Brazil, Russia, India, and China, but also the relatively higher wealth these nations are experiencing compared to their third world more »

• Jeeps to Traverse Russian Terrain

  By Tom Gibbs - August 20, 2012 | Tickers: BAMXY, FIATY.PK, F, GM, VLKAY |

  One can tune-in to any 1980s or early 1990s program with a Cold War-era Russia setting (I recommend anything MacGyver) to catch a quick glimpse of the output of the nation’s uninspired automotive industry.  Following a sub-utilitarianism approach – striving for overall adequacy as opposed to maximizing the happiness of the population – Russian autos were poorly designed, inefficient, and built solely to reach production goals.  Russian native Lada – “Lada” translates more »

• This Apparel Retailer is in Value Territory

  By Tom Gibbs - August 20, 2012 | Tickers: ANF, GPS, GES, RL |

  The apparel retailing sector is becoming increasingly dynamic in 2012 as discretionary consumer dollars continue to return. Emerging markets including China are getting their first taste of certain prestigious foreign brands, and historically high cotton prices are putting a strain on industry margins and therefore masking the effect of generally growing top lines.  Guess Inc. (NYSE: GES), with its stock price falling nearly 15% since mid-March, has recently appeared to more »

• The True Value Ceators of the DJIA Part VI

  By Tom Gibbs - August 14, 2012 | Tickers: CSCO, INTC, IBM, MCD, WMT

  In a previous five article series (this link to article 5 contains links to the first four), we took a close look at four DJIA firms for their higher-than-average residual earnings generating ability.  As the series explained, McDonald's (NYSE: MCD), Wal-Mart (NYSE: WMT), IBM (NYSE: IBM), and Intel (NASDAQ: INTC) were not only able to create value through the growth in residual earnings over the past five years, but more »

• The True Value Ceators of the DJIA Part V

  By Tom Gibbs - August 14, 2012 | Tickers: INTC, IBM, MCD, WMT

  In this fifth and last article in a series of five, a closer look will be taken at McDonald’s (NYSE: MCD) residual earnings generation ability.  Thus far in the series, it has been discovered that a positive correlation seems to exist between an investor’s long term returns and their ability to actively locate firms that can consistently grow their residual earnings on common equity.

  The following value creation more »

• The True Value Ceators of the DJIA Part IV

  By Tom Gibbs - August 6, 2012 | Tickers: INTC, IBM, MCD, WMT

  In this fourth article in a series of five (see the first three installments here, here, and here), a closer look will be taken at IBM's (NYSE: IBM) higher-than-average residual earnings generation ability.  As hypothesized from findings discussed in the series' first article, there appears to be a positive correlation between long term investment returns and the active search for and purchase of firms that can consistently grow the more »

• The True Value Ceators of the DJIA Part III

  By Tom Gibbs - August 6, 2012 | Tickers: DELL, INTC, IBM, MCD, WMT

  In this third article in a series of five (the previous two are here and here), a closer look will be taken at Wal-Mart's (NYSE: WMT) higher-than-average residual earnings generation ability. As hypothesized in the series' first article, there appears to be a positive correlation between the active search for and purchase of firms that can consistently grow the earnings above and beyond their cost of capital, and long more »

• Ultra Violet or Ultra Flop?

  By Tom Gibbs - August 6, 2012 | Tickers: AMZN, AAPL, CSTR, NFLX, WMT

  With the explosion in the number of ways individuals can view digital video content online – a Netflix (NASDAQ: NFLX) monthly streaming account, Amazon.com’s (NASDAQ: AMZN) Instant Video streaming, Apple (NASDAQ: AAPL) iTunes movie rentals/purchases, the list goes on – the major movie studios have quickly been pushed to an unattractive position in the industry’s distribution chain.  Prior to these very recent innovations (we somehow lived through the more »

• Coffee Wars Have Fruity Undertones

  By Tom Gibbs - August 2, 2012 | Tickers: KO, JMBA, MCD, PEP, SBUX

  “Premium” is likely to be the most widely marketed buzzword in the quick service restaurant sector in the 2010s thus far.  McDonald’s (NYSE: MCD) expanded its McCafe line to include premium iced and frozen coffee drinks to compete head-to-head with the more entrenched players in the space, including Starbucks (NASDAQ: SBUX) and Dunkin’ Donuts.  Likewise, all three of the burger giants have recently revamped their premium burger menu items more »

• Ford's Core Product Goes on Weight Loss Program

  By Tom Gibbs - August 2, 2012 | Tickers: FIATY.PK, F, GM, TM, VLKAY

  Following the rather lackluster Q2 results that the automaker released in the middle of the trading week of July 23^rd, Ford (NYSE: F) went on to announce one of the single biggest product changes it has made to a core product over its 100+ year operating history.  The Ford F-Series line of trucks, which have been in production since the late 1940s, will soon be constructed with a largely more »

• Coinstar Falls, But Isn't Broken

  By Tom Gibbs - July 28, 2012 | Tickers: AAPL, CSTR, NFLX, VZ |

  Coinstar (NASDAQ: CSTR) has taken a big hit late in the trading week of July 23 following the release of its second quarter 2012 financial results.  With the shares falling by more than 25% during this month alone, could they possibly be ripe for the picking?

  What has Happened?

  Although the kiosk-operating corporation was slightly shy of average analyst expectations, the Q2 results were not shockingly negative on the surface more »

• Hasbro's Q2 Shows Mixed Results, but with Upcoming Positive Upside

  By Tom Gibbs - July 27, 2012 | Tickers: DISCA, HAS, DIS

  The worldwide children’s/family leisure products (i.e. toys and games) industry has been a mixed bag thus far in 2012.  On one hand, investors are experiencing an exciting shift within the industry, as a new generation of entertainment options is available due to the widespread adoption of smartphone and mobile device technologies.  Similarly, the increased production of exciting blockbuster movie hits over the past several years allows for more »

• Netflix Plummets, Still Not Investment-Worthy

  By Tom Gibbs - July 26, 2012 | Tickers: CSTR, CMCSA, FB, NFLX, VZ

  One does not need to take an extremely close look at Netflix’s (NASDAQ: NFLX) Q2 2012 earnings release to see that something is not working out as expected in its current plan to push its streaming services into the international space.  Shares were hit by as much as $16/share (almost 20%) in pre-market trading on July 25, and shares today hit fresh 52-week lows.  After gaining quite a more »

• The True Value Creators of the DJIA Part II

  By Tom Gibbs - July 25, 2012 | Tickers: AMD, INTC, IBM, MCD, WMT

  In a previous article, I selected four DJIA firms -- Intel (NASDAQ: INTC), IBM (NYSE: IBM), Wal-Mart (NYSE: WMT), and McDonald's (NYSE: MCD) -- for their higher-than-average residual earnings generation ability. As shown in this first article in the series, these firms not only grew their residual earnings nearly seven times as fast as all firms in the group collectively over the five-year test period, but they also generated significantly higher more »

• The True Value Ceators of the DJIA

  By Tom Gibbs - July 25, 2012 | Tickers: INTC, IBM, MCD, TYC, WMT

  The term "growth" is often used in the investment community, although it is generally thrown around rather vaguely or with a variety of possible meanings. The term can appropriately describe a firm that has experienced meaningful increases in sales volumes, earnings, or shareholders' equity balances over a particular period, or even a firm that has made strides in expanding its worldwide footprint through the construction of additional foreign operations bases more »

• DreamWorks' Acquisition Shows Huge Future Potential

  By Tom Gibbs - July 24, 2012 | Tickers: DWA, DIS

  Disney (NYSE: DIS) received a considerable amount of criticism following its $4.2 billion acquisition of Marvel Entertainment in 2009.  Although the purchase did grant the entertainment conglomerate access to a huge vault of some of the most famous characters in the comic book world, the acquisition was, well, expensive.  With 2012’s release of Marvel’s The Avengers, an immediate blockbuster hit that has brought in close to $1 more »

• ATS Represents Cadillac's Make or Break Moment

  By Tom Gibbs - July 21, 2012 | Tickers: BAMXY, DDAIF.PK, F, GM, TM, VLKAY |

  The automotive industry has been quite a mixed bag thus far in 2012.  Strong sales gains in the United States market have accelerated volume to a 14.1 million seasonally adjusted annualized rate in the first half of the year, which topped average analyst estimates of 13.8 million.  The positive news coming from the U.S., however, have been severely downplayed due to continued troubles that all automakers are more »

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