Fingad.com

Anheuser-Busch Companies, Inc. - I like it

Sun, 25 Nov 2007 14:45:01 EST

Anheuser-Busch Companies, Inc. - I like it - by bobj

S&P500 stock - Anheuser-Busch Companies, Inc. (NYSE:BUD)

Beer and a stock bull (Slurp!!)

Recognize "bud"? It comes from Anheuser-Busch's stable. Anheuser-Busch produces and distributes beer. Domestic Beer, International Beer, Packaging, and Entertainment forms its core activites. The Domestic Beer segment offers beer under the Budweiser, Michelob, Busch, and Natural brand names. Specialty beers, non-alcohol brews,malt liquors, specialty malt beverages, energy drinks, ale, and malt-based products, such as caffeine, gingseng, and guarana also comes from its stable. The International Beer segment takes care of marketing and sells Budweiser and various brands outside the United States and operates breweries in the United Kingdom and China. International operations negotiates and administers license and contract brewing agreements with various foreign brewers and manages equity investments in foreign brewing partners. It also owns and sells beer under the Harbin brand name.

The Packaging unit manufactures beverage cans and beverage can lids, pressure sensitive cans, metalized cans, plastics and paper labels, crown and closure liner materials and glass bottles. This segment also engages in buying, recycling, and selling aluminum and plastic beverage containers. The Entertainment segment owns and operates theme parks in Tampa and Orlando, Florida; Williamsburg, Virginia; San Antonio, Texas; Langhorne, Pennsylvania; and San Diego, California. Anheuser-Busch is involved in real estate development. It owns and operates The Kingsmill Resort and Conference Center in Williamsburg, Virginia. The company also owns and operates transportation service businesses. Anheuser-Busch Companies was founded in 1852 and is based in St. Louis, Missouri.

August A. Busch IV is the Chief Executive Officer, President, Executive Director. He was the Vice President and Group Executive of Anheuser-Busch Companies Inc. since 2000. Mr. Busch has been the President of the Anheuser-Busch Inc., a subsidiary of Anheuser-Busch Companies Inc., since 2002. He served as Group Vice President, Marketing and Wholesale Operations of Anheuser-Busch Inc. from 2000 to 2002 and its Vice President, Marketing from 1996 to 2000. He has been a Director of FedEx Corp., since June 9, 2003 and is a Member of its Compensation Committee. He serves as Alternate Director of Grupo Modelo Sa De Cv.

W. Randolph Baker is the Chief Financial Officer, Vice President, Member of Strategy Committee, Chairman of the Board of Busch Properties Inc. and President of Busch Properties Inc.,

He has been in the current position since 1996 and also serves as President for its subsidiary, Busch Properties, Inc. Mr. Baker also serves as Chairman of Busch Properties, Inc.

Net sales increased 2.7 percent, driven primarily by increased U.S. beer sales and an 8.5 percent increase in international beer segment. Anheuser-Busch Companies for the second half of 2007, it continues to expect accelerated sales and earnings growth. For fiscal 2007, the Company expects earnings per share (EPS) growth to exceed its 7%-10% long-term objective.

The Company has also has declared a regular quarterly dividend of $0.33 on shares of the Company's outstanding common stock, payable on December 10, 2007, to shareholders of record November 9, 2007. Domestic beer, international beer, packaging, and entertainment contributed 74.7%, 6.6%, 10.9% and 7.8%, respectively of the its net sales, during the year ended December 31, 2006. Approximately 93% of Anheuser-Busch's net sales are generated in the United States. Worldwide sales of the Company's beer brands aggregated 125 million barrels in 2006, which comprises domestic and international volume.

Molson Coors Brewing Company, Six Flags, Constellation Brands, Boston Beer Company, Cedar Fair, Walt Disney Company and Crown Cork & Seal Company are its competitors in the alcoholic drink industry. Most stocks in the alcoholic drinks industry have seen steadily growing revenue and earnings over the past three years. The company's stock has also seen steady revenue growth over the past three years. Unlike its peers, this stock's earnings per share fallen over the past three years. According to analysts, The Company expected to report revenues of $4.5 billion for the third quarter and $3.6 billion for the fourth quarter of 2007; EPS of $2.82 for fiscal 2007. This stock is in an industry with a healthy number of competitors, and looking at its sales, it is one of the largest players. Most companies in the alcoholic drinks industry have generated very Low returns on assets over the past five years. This company, however, has posted results that are the Industry's best. Company has had very strong profit Margins for a long time.

This stock's forward earnings yield of 6.17% is the annual return it would generate if its profits remained fixed and it paid out all of its earnings as dividends. Not only is this much higher than the earnings yields of other stocks in its industry, it is also healthy in absolute terms. Add this to your investment portfolio. As long as there are beer drinkers around the world, i see no reason to worry. Money will keep pouring in.

Titan Machinery looks interesting

Thu, 22 Nov 2007 11:29:46 EST

Titan Machinery looks interesting - by bobj

An Evergreen Company

Titan owns 34 agricultural and construction equipment stores and 2 outlet stores in the upper Midwest. It sells its equipment to farmers and to the construction industry. It also targets its machinery to residential users for their homes and gardens. Close to 80 percent of its equipment is sourced from CNH Global NV, a Netherlands-based agricultural and construction equipment and parts manufacturing company. Titan's stores are the largest networks of full service agricultural and construction equipment stores in North America. It is also the world's largest retail dealer of Case IH Agriculture equipment and a major retail dealer of New Holland Agriculture, Case Construction and New Holland Construction equipment in the U.S. Apart from selling Titan rents agricultural and construction equipment, sell parts, and services the equipment in the areas surrounding its stores. Its business activity can be broadly classified as 1.new and used equipment sales 2.parts sales 3.repair and maintenance services 3.equipment rental and 4. other activities such insurance and loans.

IBISWorld found through its study that farm and garden equipment dealers earned $55.4 billion in the year 2006. After adjusting to inflation it estimates by 2012 these dealers will earn $58.2 billion. The major influencing factor for this growth is Government subsidies. U.S. Farm Bill and the Farm Security and Rural Investment Act of 2002 has spurred growth in the agriculture industry through USDA subsidies. For information, USDA subsidies include commodity price support payments to farmers, conservation programs and disaster relief programs. Of the $21.1 billion paid to farmers in 2005, $5.2 billion covered all the farmers located in the states that Titan operates in. Since these subsidies offer a stabilising factor, farmers are not effected by an economic slowdown and hence will continue to buy the equipments, replacement parts and repair and maintenance services. For the moment U.S. farmers are enjoying historically strong economic fundamentals. Developing economies have shown a thirst for ethanol and biodiesel, notably India and China. In 2006, 20.4 percent of the total U.S. corn crop was used for used for ethanol production. In 2007 this percentage is expected to grow by 27 percent. Titan is positioned to supply the equipment and necessary ancillary services needed to cultivate this corn crop.

For Construction equipment business IBISWorld says dealers earned $72.4 billion in the year 2006. And it projects an increase in revenues to $78.3 billion by 2012. The market for construction equipment is larger than the market for agricultural equipment. Construction equipment is needed for earth moving, lifting, light industrial, asphalt and paving, and concrete and aggregate equipment. Machinery for construction is divided as Heavy and light. Wheel loaders, large tracked excavators, crawler dozers, motor graders and articulated haul trucks are classified as heavy machinery. These are purchased by construction companies, municipalities, local governments, rental fleet owners, quarrying and mining companies, waste management companies and forestry-related organizations. Backhoe landscape tractors, forklifts, compact excavators and skid steers are classified as light machinery and these are purchased by contractors, rental fleet owners, landscapers, logistics companies, farmers and recreational users.

Titan has a good business Model. The profitability and efficiency of its business revolves around its stores and the employees in these stores.Each store is independently managed supported by a centralized, shared resources group. Local business relationships are handled exclusively by individual stores.

Each store has a store manager. A parts manager, A service manager and field marketers work under him. The manager is compensated based on the store's achievement of revenue, profitability and market share. Decision-making is decentralized for all the stores, hence the store manager takes a call on the type of equipment to stock, equipment pricing, customer credit approvals, staffing levels and customer satisfaction. This enables the manager to stay tuned with the customer needs and take quick informed decisions. Customers generally regard the store managers and sales and service personnel as their partners and hence this de centralized model helps achieve these objectives.

Shared resources group manages the administrative functions of the store such as warranty and service administration, information technology support, marketing campaigns, human resources management, finance and insurance, central purchasing, accounting, data administration and cash management. Accountability is maintained on a daily basis through management information systems, which provide real time data on key operational and financial metrics, as well as monthly reviews of financial performance. This set up ensures that the store staff can concentrate on customer needs and acquisitions as they are relived from the mundane administrative activities.

Titan sponsors a program with Minnesota State Technical College that offers scholarships to students who will ultimately work for the company in various capacities. This program was the first of its kind among CNH dealers and is now being replicated elsewhere in the CNH network. Every month Titan conducts formal store manager meetings to assess operational and financial objectives. This helps the store managers to stay focused on the company's objectives and also help each store managers to grow up the ladder in the organisation.

Titan's top competitors are John Deere, Caterpillar and the AGCO family of brands, as well as other dealers and distributors of the CNH family of brands. Competition among equipment dealers is primarily based on the price, quality and design of the products offered by the dealer, the customer service and repair and maintenance service provided by the dealer, the availability of equipment and parts and the accessibility of stores. The number of agricultural and construction equipment dealers operating on a regional scale is limited. Amongst the regional-scale equipment dealers with whom Titan competes with include RDO Equipment Co., Butler Machinery and Brandt Holdings Co. RDO Equipment Co. is a John Deere agricultural and construction equipment dealer.

Chairman and Chief Executive Officer David Meyer founded the company in 1980. Prior to this he was a partner in Case and New Holland dealerships.

Peter Christianson is the Chief Financial Officer. He was acquired by Titan with its acquisition of Fargo Farm Power, Inc., as he was the partner and owner.

For the six months ended July 31, Titan increased its earnings to $2.2 million. The company increased its revenue to $165.6. Industry reports show demand for construction equipments driven by public infrastructure spending, including roads and highways, sewer and water. An investment in Titan is an evergreen venture with a possibility of Titan starting or acquiring a equipment manufacturing company in the foreseeable future.

AMERICAN PUBLIC EDUCATION INC - An opportunity

Tue, 20 Nov 2007 12:58:20 EST

AMERICAN PUBLIC EDUCATION INC - An opportunity - by bobj

AMERICAN PUBLIC EDUCATION INC

Don't want to miss out

Last Friday, APEI listed with 80% gains on the issue price, a grand debut in a volatile market. It is trading at a higher valuation compared to its peer group but I think it's completely justified. Justified because of its business model.

American Public Education promotes military intelligence. The company offers online post secondary education to those in the military and public service sector through the American Military University and American Public University. Together these two schools make up the American Public University System which offers degree programs and certificate programs in such disciplines as business, criminal justice, intelligence, liberal arts, military studies, and national security. Enrollment consists of about 25,000 part-time students hailing from all 50 states and about 135 foreign countries, more than 80% of whom serve in the US military. Both universities share a common faculty and curriculum that includes 57 degree programs and 49 certificate programs in disciplines related to national security, military studies, intelligence, homeland security, criminal justice, technology, business administration and liberal arts.

Over 80% of students currently serve in the United States military on active duty, as reserves, as National Guard or are veterans. Public service professionals form the other section of students who are from federal, national and local law enforcement personnel. All programs are designed to help these working adult students advance in their current professions and or prepare for their next career. Online method of instruction is well-suited to these students as many of them serve in positions requiring extended and irregular schedules, are on-call for rapid response missions, participate in extended deployments and exercises, travel or relocate frequently and have limited financial resources.

There seems to be a tremendous vote of confidence from the faculty for this unique system devoted to a niche segment. 95 full-time and over 300 adjunct faculty, virtually all of whom have advanced degrees and many of whom are former or current leading practitioners in their fields work for the university. I think quality faculty members are attracted to the university because of the high percentage of military and public service professionals in the student body who can immediately apply lessons learned in classroom to their daily work. The flexible nature of teaching online, the numerous support services that the university provides them is a couple of other reasons for the faculty to opt for work in this university. I have half a mind to approach this entity for work, at least the flexible hours will take care of my sleep and will allow me to pursue other dormant passions!!

Opportunity for online programs within the post secondary education market is huge particularly when attention is solely given to a niche segment. In 2006, Eduventures, LLC, an education consulting and research firm, estimated that there would be 1.5 million students enrolled in online programs at the end of 2006, representing approximately 8.6% of all students enrolled at U.S. degree-granting, Title IV eligible institutions. In December 2006, Eduventures estimated that by the end of 2008 online students will number around 2.1 million and that based on middle projections for higher education enrollments as a whole by the National Center for Education Statistics, online students will account for approximately 11.5% of all students in degree-granting institutions by 2008. In 2006, Eduventures also projected that annual revenues generated from students enrolled in fully-online programs at Title IV eligible, degree-granting institutions would increase by more than 30% to reach approximately $8.1 billion in that year. I included these stats to drive home the seriousness of online degree programs. There are more than 2.1 million active and reserve military professionals in the United States Armed Forces. Each year, approximately 300,000 new service members are enlisted or commissioned to replace retiring and separating members. The unpredictable and demanding work schedules of military personnel and their geographic distribution make online learning and asynchronous teaching particularly attractive to them. Active duty and reserve component military personnel are eligible for tuition assistance through the Uniform Tuition Assistance Program of the Department of Defense, or DoD. Which in other words mean they get this degree without spending a dime of their own money (drooool! high time i start thinking about a career change, and i heard one gets posted to exotic locations too.) the U.S. Bureau of Labor Statistics estimated that at the end of 2004 over 750,000 persons were employed in law enforcement at the state and local levels, and in 2004 they estimated that through 2014 the number of persons employed would continue to increase between 9% and 17%.

Their highly profitable and scalable business model revolves on exclusively online education model, proprietary management information systems, low student acquisition costs, and variable faculty cost model have enabled them to expand operating margins. Operating margins grew to 19.8% for the first six months of 2007 from 11.0% for the corresponding period in 2006, on revenue that increased to $30.3 million from $17.0 million over the same period. For an organisation to be dependant exclusively on students to generate their revenues, the university has established a unique methodology in acquiring students, referrals. Satisfied students have been a significant source of referrals, reducing the marketing costs per new student. Over 50% of new students in 2007 who responded to the university's survey say they inquired about enrolling in either AMU or APU as the result of a personal referral.

This is not an empty claim, This "company" has experienced significant growth in revenues. From 2002 to 2006, total revenue increased from $10.7 million to $40.0 million, a compounded annual growth rate (CAGR) of 39%, while total revenue increased 78% to $30.3 million for the first six months of 2007 from $17.0 million for the corresponding period in 2006. The company attributes recent acceleration in growth to: (i) high student satisfaction and referral rates; (ii) achieving regional accreditation (iii) increasing acceptance of distance learning within targeted markets; and (iv) achieving certification to participate in federal student aid programs under Title IV of the Higher Education Act of 1965 beginning with classes starting in November 2006. Net income attributable to common stockholders improved to $3.6 million for the first six months of 2007 from $933,000 for the corresponding period in 2006 and improved to $1.8 million in 2006 from a loss of $473,000 in 2002.

Talking about accreditation, University system achieved regional accreditation in May 2006 with The Higher Learning Commission of the North Central Association of Colleges and Schools, or The Higher Learning Commission. University system has been nationally accredited by the accrediting commission of the Distance Education and Training Council, or DETC, since 1995. In September 2007, approval from the Higher Learning Commission and DETC to offer seven new degree programs in Education and Information Technology added another feather in the university's cap. Provisional certification was given to participate in federal student aid programs under Title IV of the Higher Education Act of 1965, or Title IV programs, in 2006. Provisional certification allows us to participate in Title IV programs but with certain limitations.The university says "We do not believe that these limitations have a material effect on our current operations".

Significant amounts of capital and resources has been invested on developing proprietary information systems and processes to support what the university refers to as Partnership At a Distance, or PAD. PAD can be regarded as a communication tool between the university and the students. This system allows all interactions online and on student's schedule. The PAD system also allows us to manage on an automated and cost-effective basis the complex administrative tasks resulting from offering monthly semester starts for over 600 classes in over 350 unique courses to approximately 25,000 students taught by over 400 faculty members. These systems and processes also help to measure and manage the activities of faculty, student support personnel, and prospective and active students, allowing to continuously improve the academic quality, student support services and marketing efficiency.

As is obvious, outlined is the competitive strengths :exclusively online education, targeted military and public services communities, affordable tuition, commitment to academic excellence, proprietary information systems and processes, profitable business model, experienced and accomplished management team :-

CEO, Wallace E. Boston, Jr., was previously a senior executive officer of several publicly-traded companies. Provost, Dr. Frank B. McCluskey, led successful distance learning programs at Mercy College in New York and has more than 18 years of higher education distance learning experience. CFO, Harry T. Wilkins, served previously as the chief financial officer for Strayer Education, Inc. from 1992 until 2001, leading Strayer through its IPO in 1996. Four members of senior management are retired military officers who served in the U.S. Army or Air Force for a combined period of over 100 years.

The corporation has everything going good for them. It just needs to stay focused its core military market, capitalize on Title IV Availability to Penetrate the Public Service and Civilian Markets, focus on improving student retention, add new degree programs. With this the corporation might break the $100 million mark and might be the first in the highly fragmented education business. There are more than 4,000 U.S. colleges and universities serving traditional college age students and adult students. Competition is also highly fragmented and varies by geography, program offerings, delivery method, ownership, quality level, and selectivity of admissions. No one institution has a significant share of the total post secondary market. The corporation competes with not-for-profit public and private two-year and four-year colleges as well as other for-profit schools, particularly those that offer online learning programs. Public and private colleges and universities, as well as other for-profit schools, offer similar programs. Public institutions receive substantial government subsidies, and public and private institutions have access to government and foundation grants, tax-deductible contributions and other financial resources generally not available to for-profit schools. Accordingly, public and private institutions may have instructional and support resources that are superior to those in the for-profit sector. In addition, some of the competitors, including both traditional colleges and universities and other for-profit schools, have substantially greater name recognition and financial and other resources, which may enable them to compete more effectively for potential students. Online education is a very lucrative business model hence increased competition as a result of new entrants to the online education market, including established colleges and universities that had not previously offered online education programs is bound to snatch a few percentage of market share.

Offer price of the common stock was $18.50, and the company raised $78.9 million from sale of 4,687,500 shares. Markes gave it thumbs up and took the price to $35.92 on the debut day. It is going to be a bit volatile due to valuation concerns. But online education is a fantastic business to be in. I foresee a lot of universities and students, particularly those who are working to migrate towards online education to enhance their skills. The area of business has a huge potential and company will beat its on forecast year on year. I propose a toast to this IPO for just two reasons, 1. Online education 2. Niche Military market. The rest as most say will be history shortly.

Watch out, Creditcards.com

Mon, 19 Nov 2007 14:03:21 EST

Watch out, Creditcards.com - by bobj

Creditcards.com

For most people, credit card means money. For others it means debt. CreditCards.com has turned into a bazaar where one can compare and apply for credit cards. Given that the whole of US runs on credit cards, citizens are flooded with loads of offers. Significant resources are devoted to marketing the cards to new and existing cardholders. An overview of such initiative gives us an idea as to just how useful this site is in terms of cost savings. Synovate's Mail Monitor® says only 0.3% of U.S. consumers succumbed to temptations out of 6 billion direct mail credit card offers that were mailed in the year 2005. Internet has become the alternate marketing strategy to generate business. Internet now represents a small portion of the total marketing expenditures by credit card issuers. TNS Media Intelligence says approximately $106.5 million was spent on the Internet marketing credit cards to U.S. consumers. With the outsourcing wave focused on reducing costs, Internet will offer a cost effective marketing channel.

CreditCards.com Inc is in the business of online credit card activities. Essentially provides a vast database of all kinds of credit cards like low interest cards, balance transfer cards, instant approval cards, reward credit cards, cash back cards, business card, student credit card, prepaid & debit cards, charge cards, and specials. For the discerning customer it has a listing based on issuer as well. Two significant goals are achieved- one, consumers can compare and search for credit cards online and issuers find an online medium for customer acquisition. Credit card issuers can now solicit and receive credit card applications and save money in comparison to expenditures in offline solicitation. Each time an application is completed or approved, the website earns money from the card issuers or from their affiliate marketing agents. And because of this consumers are not charged by the website. This incidentally happens to be the company's business model.

Economists now state that after sub prime mess, credit card mess is next. This has caused the credit card issuers to tighten the preliminary screening, increase the interest charged and reduce credit limit. This might have a short term effect on the growth of CreditCards.com. Since credit card is a global phenomenon, the company is now evaluating various geographic market to increase its revenues. But the relationship it has with the card issuers seems to be fragile. If the website fails to attract the right kind of crowd, then the reputation is hampered leading to loss of business. In this era of dot com business search engine ranking is another strategy all companies need to stay focused on and if this falters, it might lead to loss of website traffic. The industry as a whole might enter a phase of recession. These are some of the fears the company should shudder with and hence the stock, after listing. The business is interesting, considering the card issuers themselves maintain their websites. And when i browsed the site, i found it informative and a useful tool to search and compare cards. Competition is limited at the moment, and the company will definitely see a period of growth and slack which anyway is part of all business lore.

An MBA from HBS, a vetern from Bloomberg and Citibank, Elisabeth DeMarse, heads the company as president and CEO. Christopher J. Speltz is VP and CFO was with Societe Generale and Comerica Bank before taking charge at CreditCards.com. Jeff Whitmire takes care of Operations. He was with Capstar Broadcasting and Ernst & Young LLP.

CreditCards.com proposes to issue 10,725,000 of its common stock in the price range of $13- $15 and expects to use the proceeds to clear debts of approximately $79 million and use the rest for capital expenditure. When i read the risk factors in their SEC filings, the company seems to be clear on how they intend to utilize the money, but was unclear on how they intend to grow the business to generate revenues. I suggest caution before investment is made. And since all the credit card companies and the card issuers have their own website selling their product, traffic to creditcards website will be skewed. The company needs to think of some earth shattering product/ services to remain in focus for the next decade.