By Jon Ogg
Costco Wholesale (COST) reported earnings this morning the same day as BJ’s Wholesale (BJ). Even Big Lots (BIG) got in on the earnings game. Considering that we are in the midst of an economic recovery, the winner was actually surprising. Very surprising.
Costco (COST) has built its revenue over the years by selling quality goods for low prices. That is in contrast to Target (TGT) and Walmart (WMT) which have reputations for selling cheap products at a low prices. Costco parking lots often have as many Mercedes and BMWs in them as Subarus and Nissans. Upscale consumers like bargains just as well as those less money.
Costco’s sales over the last month took a big jump, up 11% to $5.61 billion. Same-store sales for the period which ended February 28 were up 9%.
This coming week we have many key issues coming front and center in our list of “Unusual Suspects.” Some are ongoing issues with mergers and the waves of earnings reports seem to be quieting down considerably. We had big news from Berkshire Hathaway Inc. (NYSE: BRK-B, BRK-B) this weekend and expect more coverage Monday on this. We are also watching The Chile Fund Inc. (NYSE: CH), iShares MSCI Chile Investable Market Index (NYSE: ECH), and National Bank of Greece SA (NYSE: NBG) for international macroeconomic and social events. We also have coming events this week in CombinatoRx, Incorporated (NASDAQ: CRXX), Costco Wholesale Corporation (NASDAQ: COST), Toyota Motor Corp. (NYSE: TM) and Ford Motor (NYSE: F). Other issues to watch closely this week are Dr. Reddy’s Laboratories Ltd. (NYSE: RDY), Millipore Inc. (NYSE: MIL), Palm Inc. (NASDAQ: PALM) and SIRIUS XM Radio Inc. (NASDAQ: SIRI).
We have given some wide expectations, issues to watch, and background data on each stock for this coming week.
Earnings season has mostly wound down. We have many key business events and key economic events scheduled for next week. In asset sales and merger land, we will be paying close attention to American International Group Inc. (NYSE: AIG) and Millipore Inc. (NYSE: MIL). For earnings we have Costco Wholesale Corporation (NASDAQ: COST) and VeriFone Holdings, Inc. (NYSE: PAY); while Verifone also joins SIRIUS XM Radio Inc. (NASDAQ: SIRI) on mere price-watch or chart-watch alerts, but both are at critical junctions. CombinatoRx, Incorporated (NASDAQ: CRXX) is up for an FDA event and Berkshire Hathaway Inc. (NYSE: BRK-B) has its annual letter being sent out. We’ll also be watching sales data from both Ford Motor Co. (NYSE: F) and Toyota Motor Corp. (NYSE: TM).
On the macro-economic front, watch for the Beige Book and then unemployment data. We have given preliminary previews for each along with relevant comparable data.
Short selling is seen for many reasons, but universally traders tend to track short selling to track the biggest changes in the short interest twice each month. Whether these are hedges, forward delivery trades, or just raw short sales, the trend is generally viewed as a bet against the overall market. During the month of February, we saw short selling increase at both the NASDAQ and at the NYSE. And it turns out that the short selling increased against more Berkshire Hathaway Inc. (NYSE: BRK-B, BRK-A) stocks than those short positions which were lightened up.
The total NYSE short interest rose by 3.78% to 14,002,613,200 shares versus 13,492,652,518 shares in the period ending January 29, 2010. NASDAQ short interest was up 4.75% to 7,019,657,092 shares versus 6,701,137,021 shares ending January 29, 2010. It turns out that the best against Warren Buffett’s core holdings were frequently far higher than these short interest averages.
The bets against Buffet’s Berkshire Hathaway were likely left over arbitrage plays or more importantly were index addition bets that the stock would drop after it was added to the S&P 500 index. We took a look here at the few first that actually saw a decrease in the short selling. These are Buffett stocks which saw traders making lower bets against his portfolio stocks as follows:
Berkshire Hathaway Inc. (NYSE: BRK-B, BRK-A) has shown its holdings as of the close of business for December 31, 2009, so that being said these are Warren Buffett’s most recent holdings going into 2010. We have already seen how some holdings have been trimmed, and some of these holdings will have been further cut even since the end of the year. These have been broken down into 3 groups of ‘A to F’ and ‘G to P’ and ‘R to Z’ so it is more concise and clear. Here are Warren Buffett’s holdings and accompanying notes for the group ‘A ot F.’
Burlington Northern Santa Fe (NYSE: BNI) was of course still a holding, but this no longer matters as it has been acquired in a deal which was completed Friday.
You can join our open email distribution list to hear more news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, key analyst calls, and more.
JON C. OGG
It is cause for worry when the world’s largest retailer cuts 11,200 people right after a rough holiday sales season. Wal-Mart will fire that many people at its Sam’s Club division.
The warehouse club says it will hire an outside firm, Shopper Events, to handle product demonstrations in the stores. Many of the people who will be fired are part-time workers. Read More
CostCo’s (NASDAQ:COST) December numbers look like a strong sign that retail sales are recovering, at least in the affluent end of the warehould sales business.
CostCo reported net sales of $8.26 billion for the month of December, the five weeks ended January 3, 2010, an increase of 11 percent from $7.41 billion in the same five-week period last year.
During the five weeks, same-store sales were up 9%, with a 5% increase in the US and a 25% improvement in the firm’s international division.
Douglas A. McIntyre
The Coca-Cola Company (NYSE: KO) rose over 1.8% to a yearly high of $58.92 after it was announced that drinks made by the company will be sold again by Costco Wholesale Corp (NASDAQ: COST) following a pricing dispute between the two companies.
Oxford Industries (NYSE: OXM) surged over 16.5% to a yearly high of $24.55 after the maker of Tommy Bahama clothing increased its forecast for the current fiscal year to earnings of $1.20 per share.
Garrett W. McIntyre
This was a wild week, and perhaps a disappointment that the news did not propel stocks even higher. There were many key movers though, and we have a very active panel of very active and widely held shares for traders and investors to keep an eagle eye on in the coming week. This coming week’s unusual suspects are Amazon.com Inc. (NASDAQ: AMZN), Apple Inc. (NASDAQ: AAPL), Costco Wholesale Corporation (NASDAQ: COST), Frontier Communications Corp (NYSE: FTR), Huntsman Corporation (NYSE: HUN), Somaxon Pharmaceuticals (NASDAQ: SOMX), Sprint Nextel Corp. (NYSE: S), Take-Two Interactive Software Inc. (NASDAQ: TTWO), Wells Fargo & Co. (NYSE: WFC), Bank of America Corporation (NYSE: BAC), Berkshire Hathaway Inc. (NYSE: BRK-A), and Yahoo! Inc. (NASDAQ: YHOO).
We have given a full run down on each company and links to even more detailed data where appropriate.
A new survey from ChangeWave shows that holiday spending has improved in 2009 compared with 2008 and purchasing activity at Amazon (NASDAQ:AMZN) is soaring.
The study of 2,954 consumers was completed on November 10. Read More
Black Friday is under 48 hours away. We have seen much data and much analysis out there on the topic, but there are two fairly easy conclusions here…. well, make it three. First is that consumers are going to get deals galore. The add-in third notion, or the second, is that inventories at stores will be very low and many items may have to be bought online (with free or low-priced shipping to boot). But the big conclusion here is that it seems a foregone conclusion that the great deals and (quasi-) price matching and free shipping offered by retailers are still likely to create margin pressure for the retailers even if they have strong sales.
This is a sampling review of some of the promotions from major retailers. No particular order has been given. Apple, Inc. (NASDAQ: AAPL) and Amazon.com Inc. (NASDAQ: AMZN) are worth noting, but the major retailers featured are Wal-Mart Stores Inc. (NYSE: WMT), Best Buy Co. (NYSE: BBY), Costco Wholesale Corporation (NASDAQ: COST), Target Corp. (NYSE: TGT), Kohl’s Corp. (NYSE: KSS), Macy’s, Inc. (NYSE: M), and Nordstrom Inc. (NYSE: JWN).
Read More
We are right at a week away from the highly awaited Black Friday for 2009’s holiday and Christmas season. As you likely know, this is THE day that retailers look forward to all year and critically depend upon as an anchor to how each retailer’s full year earnings results turn out. You may already be tired of Christmas ads and the holidays haven’t even arrived yet. With over 10% unemployment, a recession-end that doesn’t feel like a recession-end, a very tight discretionary spending budget, and a general lack of consumer confidence, it is no surprise at all that the focus for the Holiday Season in 2009 is one of deals and thrift.
These are not in any particular order, but the promotions have been reviewed at Wal-Mart Stores Inc. (NYSE: WMT), Best Buy Co. (NYSE: BBY), Costco Wholesale Corporation (NASDAQ: COST), Target Corp. (NYSE: TGT), Kohl’s Corp. (NYSE: KSS), Gap Inc. (NYSE: GPS), Macy’s, Inc. (NYSE: M), and Nordstrom Inc. (NYSE: JWN). There is also already promotion between MasterCard Incorporated (NYSE: MA) and Amazon.com Inc. (NASDAQ: AMZN). Admittedly, this is just a sampling of major outlets.
What is amazing is just how much of the deal-making is already out before the holiday season starts as retailers key off of each other. It is almost impossible to avoid thinking how such a promotional Christmas and Holiday Season in 2009 is going to add pressure to margins at almost all the first-line retailers.
Read More
Berkshire Hathaway Inc. (NYSE: BRK-A)(BRK-B) has shown its Q3-2009 holdings as of September 30, 2009. We had already seen how his securities holdings were up on the books in the holdings with earnings. There are also some portfolio changes that have taken place since the September 30 cut-off date. These have been broken down into 3 groups of ‘A to F’ and ‘G to O’ and ‘P to Z’ so it is more concise and clear. Here are Warren Buffett’s holdings and accompanying notes for the group ‘A ot F.’
Eaton Corp. (NYSE: ETN) was NOT LISTED ANY LONGER, so sold from holdings.
You can join our open email distribution list to hear more news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, key analyst calls, and more.
JON C. OGG
Reuters: House Democrats unveiled their healthcare bill.
Reuters: Senators may extend home purchase credits until April.
Reuters: China will launch a case against The Big Three auto companies.
Reuters: Galleon paid Wall St. bankers millions to give data that would allow a trading “edge.” Read More
Costco (NASDAQ:COST) announced earnings that beat Wall St. expectations.
Net sales for the fiscal 2009 fourth quarter ended August 30, 2009 were $21.89 billion, a drop from $22.63 billion in the same period a year ago. Net income for the fourth quarter of fiscal year 2009 was $374 million, or $.85 per share, compared to $398 million, or $.90 per share, in the same quarter last year. Analysts expected EPS of $.77. Read More
The Motley Fool is one of the twenty most visited financial sites in the US according to comScore with monthly unique visitors of 1.536 million last month, making it slightly bigger than Google (GOOG) Finance.
The Motley Fool has developed a very unfortunate habit of running advertising which is not terribly credible. Maybe it does not matter if they pull well.
One of the most recent campaigns has an ad which says “Why Wal-Mart Is Doomed.” The message goes on to say that an expanding rival is forcing Wal-Mart to “revamp its stores or face extinction.” Not likely. The Fool also says that the stock in this mystery company is up 435% since they recommended it.
Once a reader has given The Fool his e-mail address, the site tells him that the mystery company is Costco (COST). The stock performances of Wal-Mart and Costco over the last few years are close to same.
Douglas A. McIntyre
These are the early morning analyst upgrades and positive research calls we have seen from Wall Street analysts this Tuesday morning:
Coinstar (CSTR) Started as Overweight at Thomas Weisel.
Costco (COST) raised to Market Perform at William Blair.
GOL Linhas Areas Inteligentes S.A. (GOL) Raised to Buy at Argus.
Google (GOOG) Raised to Buy at ThinkEquity.
Harman (HAR) Started as Overweight at JPMorgan.
Lowe’s (LOW) Raised to Overweight at Morgan Stanley.
Mastercard (MA) Started as Buy at Jefferies.
Time Warner (TWX) Started as Outperform at Wells Fargo.
Visa (V) Started as Buy at Jefferies.
Warner Chilcott (WCRX) Raised to Buy at Jefferies.
JON C. OGG
Berkshire Hathaway Inc. (NYSE: BRK-A)(BRK-B) has shown its Q2-2009 holdings as of June 30, 2009. There are some portfolio changes that have been seen here from the end of Q1 and we have broken these down into 3 groups of ‘A to F’ and ‘G to O’ and ‘P to Z’ so these are easier to see on one page. Here are Warren Buffett’s holdings and accompanying notes for the group ‘A ot F.’
You can join our open email distribution list to hear more news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, key analyst calls, and more.
JON C. OGG
AUGUST 14, 2009
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Reuters: US business investment is rising.
