Alcoa (NYSE: AA ) , the largest producer of aluminum in the U.S., was once a bellwether with a $40 billion market capitalization whose quarterly performance gave us a real sense of economic conditions at home and abroad.
Today, however, the company's market cap has plummeted to $8.5 billion, and its chief function as an economic gauge relates to its traditional role as the first component of the Dow Jones Industrial Average to tell us about its quarter. Following the market close on Monday it again performed that function, providing some optimism about what may be in the offing for others that will report behind it.
The numbers
Alcoa recorded a quarterly loss of $119 million, or $0.11 a share. However, excluding items, the company earned $0.07 per share, a penny higher than the consensus expectation among the analysts who follow it. Total revenue was $5.85 billion, down slightly from the $5.96 billion for the second quarter of 2012.
A portion of the one-time items -- $62 million -- involved reserves related to Department of Justice and Securities and Exchange Commission investigations into alleged corrupt payments in the sale of alumina in Bahrain. Management noted that a settlement of the Justice Department's charges could cost another $200 million. Beyond that, in an attempt reduce its costs, Alcoa took charges associated with shuttering a smelter in Italy and closing a pair of lines in Quebec.
10 Best Penny Stocks To Invest In 2014: Ever-Glory International Group Inc.(EVK)
Ever-Glory International Group, Inc., together with its subsidiaries, engages in the manufacture, distribution, and sale of apparel for women, men, and children. Its products include coats, jackets, slacks, skirts, shirts, trousers, vests, skiwear, down jackets, knitwear, and jeans. The company offers its products to the casual wear, sportswear, and outerwear brands, as well as retailers, such as department stores, flagship stores, stores-within-a-store, and specialty stores primarily in Europe, the United States, Japan, and the People?s Republic of China. As of December 31, 2010, it operated 293 retail stores in the People?s Republic of China. The company is based in West Covina, California.
10 Best Penny Stocks To Invest In 2014: Cedar Shopping Centers Inc (CDR)
Cedar Shopping Centers, Inc., real estate investment trust, engages in the ownership, operation, development and redevelopment of supermarket-anchored community shopping centers and drug store-anchored convenience centers in the United States. As of December 31, 2007, it owned 118 properties, aggregating approximately 12.0 million square feet of gross leasable area primarily in Pennsylvania, Massachusetts, Virginia, Ohio, Connecticut, New Jersey, Maryland, Michigan, and New York. Cedar Shopping has elected to be treated as a REIT for federal income tax purposes and would not be subject to federal income tax, if it distributes at least 90% of its REIT taxable income to its stockholders. The company was founded in 1984 and is based in Port Washington, New York.
Advisors' Opinion:- [By Bill Smith]
Valuation
Lastly, because of the negative perception the entire industry has received, prices in this sector have been absolutely pummeled. ESI now trades at the lower end of all of its historical valuation bands: P/E, P/B, and P/S.
Bullish Points
Guru ownership and avg price: ESI owned by Hussman ($76.15), Weitz ($75.32), and Greenblatt ($73.29)Over 35% of shares are short, potential short squeezeStock buyback plan: ESI reduced outstanding shares by 19% yoy at the end of the 4th quarter. They repurchased 370K shares in 3Q11.The business model is scalable; the incremental cost to educate each additional student is low, leading to high marginsESI acquired Daniel Webster College, giving them a regional accreditation which they can use to broaden their reach in online classes
Bearish Points
High costs of education, in general, rightly or wrongly attract government intervention and could squeeze margins over time. Total student debt surpassed credit card balances, and sits at $1 Trillion as of the end of 2011.Subject to compliance with Dept of Education's 90/10 rules, which states a college can't collect more than 90% of revenue from students participating in federal loan programs.Cohort Default Rate (CDR): for-profit colleges must monitor the federal loan default rates of students who graduate or leave the school. If a school's CDR exceeds 25% for 3 consecutive years, or 40% in any one year, its students won't be eligible for federal financial aid.ESI competes on quality of product which is measured by graduation rates and ability to secure employment. For 2010, 70% of ESI graduates got employment in positions using skills taught in their program of study within 1 year. As of Oct 2011, this rate was 600 bp higher. The average annual salary reported by employed 2011 grads was $32K, compared to $32.4K for 2010 grads.With an improving economy, there's a potential ESI would see declining new student enrollmentsOver 35% of shares are short
Summary
Hot Value Companies To Own For 2014: Skechers U.S.A. Inc.(SKX)
Skechers U.S.A., Inc. engages in the design, development, marketing, and distribution of footwear for men, women, and children in the United States and internationally. The company offers various products comprising casuals, such as boots, shoes, and sandals for men, as well as slip-ons, lug outsole and fashion boots, and casual sandals for women; dress casuals; relaxed fit for men; sandals; and casual fusion under the Skechers USA brand name. It also provides a line of sport footwear for men and women, including men?s lifestyle athletic footwear, lightweight women?s sneakers, and sport sandals under the Skechers Sport brand name. In addition, the company offers men?s and women?s casuals, field boots, hikers, and athletic shoes under the Skechers Work brand name; and a range of infants, toddlers, boys, and girls? boots, shoes, and sneakers under the Skechers Kids brand name. Further, its product line includes Skechers Active products, such as casual everyday and sport fusi on sneakers for females; Tone-ups and Tone-ups Fitness products comprising casual and athletic-inspired sandals for women, as well as sneakers; Shape-ups toning footwear for men and women; and Skechers Resistance Runner technical shoes for runners. Skechers U.S.A. markets its products through department and specialty stores, athletic and independent retailers, and boutiques, catalog and Internet retailers, as well as through own e-commerce Website and retail stores. As of February 15, 2011, it operated 105 concept stores, 99 factory outlet stores, and 40 warehouse outlet stores in the United States, as well as 28 concept stores and 16 factory outlets internationally. The company was founded in 1992 and is headquartered in Manhattan Beach, California.
Advisors' Opinion:- [By Monica Gerson]
Skechers USA (NYSE: SKX) is expected to post its Q3 earnings at $0.61 per share on revenue of $518.22 million.
Terex (NYSE: TEX) is estimated to post its Q3 earnings at $0.59 per share on revenue of $1.95 billion.
10 Best Penny Stocks To Invest In 2014: China Yida Holding Co.(CNYD)
China Yida Holding, Co. operates as a diversified entertainment company in the People?s Republic of China. The company operates in two segments, Advertisement and Tourism. Its Advertisement segment operates and manages the Fujian Education Television Channel, a television channel in Fujian; and an outdoor on-train programming, including the Journey through China on the Train programming on China?s railway networks. This segment manages the content and re-sells airtime to advertisers and agencies for the television channel, and produces the content for outdoor on-train programming. The Tourism segment develops, operates, manages, and markets tourist destinations comprising natural, cultural, and historical tourist destinations and theme parks. This segment also creates/designs and constructs tourist concepts, attractions, and properties for its tourist destinations. This segment operates the Great Golden Lake tourist destination, Yunding Recreational Park tourist destinatio n, and Hua?An Tulou cluster tourist destination. The company is headquartered in Fuzhou City, the People's Republic of China.
10 Best Penny Stocks To Invest In 2014: Summit State Bank(SSBI)
Summit State Bank operates as a community bank in Sonoma, Napa, San Francisco, and Marin Counties in California. It offers deposit accounts, such as transaction accounts, money market accounts, savings accounts, time deposit accounts, business checking accounts, time certificates of deposit, sweep accounts, and specialized deposit accounts, including professional, small business packaged, and tiered accounts for larger deposits, and Keogh and IRA accounts. The company also provides commercial and industrial lines of credit and term loans, credit lines to individuals, equipment loans, real estate and construction loans, small business loans, and business lines of credit; consumer loans, including auto loans, mortgage loans, home improvement loans, and home equity lines of credit; and loans for accounts receivable and inventory financing, loans to agriculture-related businesses, and equipment and expansion financing programs. In addition, it offers banking by appointment, on line and telephone banking services, direct payroll and social security deposits, letters of credit, access to national automated teller machine networks, courier services, safe deposit boxes, night depository facilities, notary services, travelers? checks, lockbox, and banking by mail. Further, the company, through its subsidiary, Alto Service Corporation, provides deed of trust services. It serves small-to medium-sized businesses, professionals and professional associations, entrepreneurs, high net worth families, foundations, estates, and individual consumers. The company operated five offices in Santa Rosa, Petaluma, Rohnert Park, and Healdsburg. Summit State Bank was founded in 1982 and is headquartered in Santa Rosa, California.
10 Best Penny Stocks To Invest In 2014: Alpha and Omega Semiconductor Limited(AOSL)
Alpha and Omega Semiconductor Limited engages in the design, development, and supply of a range of power semiconductors worldwide. The company offers power discrete product line comprising trench MOSFETs, electrostatic discharge, protected MOSFETs, and SRFETs; and power ICs. Its products are used in notebooks, netbooks, flat panel displays, mobile phone battery packs, set-top boxes, portable media players, and power supplies. The company sells its products to distributors. Alpha and Omega Semiconductor Limited is based in Hamilton, Bermuda.
10 Best Penny Stocks To Invest In 2014: Bristow Group Inc (BRS)
Bristow Group Inc., together with its subsidiaries, provides helicopter services to the offshore energy industry primarily in Europe, West Africa, North America, Australia, and internationally. Its helicopters are used principally to transport personnel between onshore bases and offshore platforms, drilling rigs, and installations, as well as to transport time-sensitive equipment to offshore locations. The company also offers helicopter flight training services to commercial pilots and flight instructors through its Bristow Academy with facilities in Titusville, Florida; Concord, California; New Iberia, Louisiana and Gloucestershire, England. In addition, it provides military training; and helicopter repair, engineering support, aircraft leasing, airport management, and search and rescue services. Bristow Group provides its helicopter services to integrated, national, and independent oil and gas companies. As of March 31, 2011, it operated a fleet of 569 aircraft. The comp any was founded in 1969 and is based in Houston, Texas.
Advisors' Opinion:- [By Seth Jayson]
Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Bristow Group (NYSE: BRS ) , whose recent revenue and earnings are plotted below. - [By Seth Jayson]
Bristow Group (NYSE: BRS ) reported earnings on May 22. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended March 31 (Q4), Bristow Group beat expectations on revenues and met expectations on earnings per share. - [By Chris Hill]
In this installment of Motley Fool Money, our analysts explain why they're watching Buckeye Technologies (NYSE: BKI ) , Bristow Group (NYSE: BRS ) , and Western Union (NYSE: WU ) .
10 Best Penny Stocks To Invest In 2014: Taylor Devices Inc.(TAYD)
Taylor Devices, Inc. engages in the design, development, manufacture, and marketing of shock absorption, rate control, and energy storage devices for use in various types of machinery, equipment, and structures. The company provides seismic dampers that ameliorate the effects of earthquake tremors on structures; Fluidicshoks, which are small and compact shock absorbers for primary use in the defense, aerospace, and commercial industry; and crane and industrial buffers for industrial application on cranes, ships, container ships, railroad cars, truck docks, ladle and ingot cars, ore trolleys, and car stops. It also offers self-adjusting shock absorbers that automatically adjust to different impact conditions for high cycle applications primarily in heavy industries; liquid die springs, which are used as component parts of machinery and equipment used to manufacture tools and dies; and vibration dampers that are primarily used by the aerospace and defense industries to contr ol the response of electronics and optical systems subjected to air, ship, or spacecraft vibration. Taylor Devices, Inc. primarily sells its products through sales representatives and distributors in the United States, Asia, North America, Europe, South America, and Australia. The company was founded in 1955 and is based in North Tonawanda, New York.
10 Best Penny Stocks To Invest In 2014: Safe Bulkers Inc(SB)
Safe Bulkers, Inc. provides marine drybulk transportation services worldwide. The company transports various bulk cargoes, primarily coal, grain, and iron ore. As of July 15, 2011, it had a fleet of 16 drybulk vessels, with an aggregate carrying capacity of 1,443,800 deadweight tons. The company?s fleet consists of Panamax, Kamsarmax, Post-Panamax, and Capesize class vessels, as well as 11 further contracted additional drybulk new build vessels to be delivered at various times through 2014. Safe Bulkers, Inc. was incorporated in 2007 and is based in Athens, Greece.
Advisors' Opinion:- [By Jon C. Ogg]
Safe Bulkers Inc. (NYSE: SB) was raised to Buy all the way up from Underperform for a two-notch upgrade, and the price target was raised to $8 from $6, at BofA/Merrill Lynch.
10 Best Penny Stocks To Invest In 2014: America First Tax Exempt Investors L.P.(ATAX)
America First Tax Exempt Investors, L.P. engages in acquiring, holding, selling, and dealing with a portfolio of federally tax-exempt mortgage revenue bonds. As of March 31, 2011, it held 20 tax-exempt mortgage bonds secured by 20 multifamily apartment properties containing a total of 3,606 rental units. America First Capital Associates Limited Partnership Two serves as the general partner of the company. The company was founded in 1998 and is based in Omaha, Nebraska.
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