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Bed Bath & Beyond, Nothing beyond Bed and Bat h

Sun, 02 Dec 2007 17:15:56 EST

Bed Bath & Beyond, Nothing beyond Bed and Bat h - by dan

Bed Bath & Beyond Inc (NASDAQ GS:BBBY)

Nothing beyond Bed and Bath.

Analysts lowered industry view of retailers to cautious from in-line, a downgrade aimed mainly at major retailers, on expectations of lower margins in 2008 at a time when the Federal Reserve is unlikely to keep loosening monetary policy. These retailers are expected to be affected by a drop in discretionary spending. Retail is down 11% year-to-date and Street EPS (estimates) remain too high. Analysts expect 60% of major retailers to post lower margins in 2008 with EPS growth of 9% versus Wall Street's 14% mean estimate. Estimates say 2008 sales growth of 2.5%, down from 4% in 2007. Without a recession, the Fed is unlikely to cut key interest rates further. Cuts would have boosted retailer's stock prices during the slow-growth period and credit bubble makes any buyouts difficult.

The Company is a chain of retail stores, sells an assortment of merchandise such as domestic merchandise and home furnishings as well as food, giftware and health and beauty care items. Operating in the highly competitive retail industry, the Company, along with other retail companies, is influenced by a number of factors like consumer preferences and spending habits, general economic conditions, unusual weather patterns, competition from existing and potential competitors and the ability to find suitable locations at acceptable occupancy costs to support the Company’s expansion program.

Steven H. Temares is the Chief Executive Officer of Bed Bath & Beyond Inc. He served as Chief Operating Officer of Bed Bath & Beyond Inc. from 1997 to April 2003, Executive Vice President 1997 to 1999. Prior to 1997, Director of Real Estate and General Counsel.

Its top competitors are Pier 1 Imports Inc., Restoration Hardware Inc and Williams-Sonoma Inc. Net sales for the three months ended September 1, 2007 was $1.77 billion, an increase of $160.5 million or approximately 10.0% in comparison to the corresponding quarter last year. For the six months ended September 1, 2007, net sales were approximately $3.3 billion, an increase of $317.8 million or approximately 10.6% over net sales from the months last year.

For this quarter 55.8% of the increase in net sales was attributed to an increase in the Company’s new store sales, 18.0% of the increase was attributed to buybuy BABY (acquired on March 22, 2007), and the balance of the increase was attributed to the increase in store sales. Sales of domestics merchandise and home furnishings for the Company accounted for approximately 47% and 53% of net sales, respectively and 46% and 54% of net sales, respectively. In comparison the sales of domestics merchandise and home furnishings in 2006 for the same quarter were 48% and 52% of net sales, respectively.

When shares dipped below $30, it was the lowest the stock has been in the last five years. No one I'm not a believer that the housing market is having a severe impact on its business. There is some impact, but it's easy to overstate. The company’s quarterly sales growth numbers have been pretty stable for the past three years, each quarter coming in around 10%-14%. BBBY is a remarkably efficient company. Gross margins usually run in the low 40% range. Operating margins have slipped a bit from 15% to 13%, but that’s to be expected. Net margins are down from 10% to about 8.5%. Both are higher than they were during the run-up in housing prices. Basically, BBBY's return-on-equity has fallen from about 24% to around 20%, yet there shares have fallen by one-third. Compare 20% ROE to the 10-year T-bond that's now paying about 4%.

Bed Bath & Beyond is exposed to the home-related consumer amid headwinds from the housing market slump. I expect shares to suffer without a near-term catalyst. Wall Street's estimates are 8% to 9% too high. The stock was trading at $31.06, down 1.7%. Look beyond Bed and Bath for your investments.

Dell - Stay away "Dude"

Sat, 01 Dec 2007 13:52:11 EST

Dell - Stay away "Dude" - by dan

Dell Inc (NASDAQ GS: DELL)

Don't bell the Dell: Stay away for the moment.

The computer hardware market consists of personal computers, servers, mainframes, workstations, and peripherals. The global computer hardware market generated total revenues of $370 billion which represented a compound annual growth rate of 4.8%. Sales of PCs proved the most lucrative for the global computer hardware market generating total revenues of $208 billion, equivalent to 56.7% of the market's overall value. The performance of the market is forecast to accelerate, with an anticipated CAGR of 5.9% and expected to drive the market to a value of $500 billion by the end of 2010.

Dell designs, develops, manufactures, markets, sells and supports a wide range computer system. These include enterprise systems (servers, storage, workstations and networking products), client systems (notebook and desktop computer systems), printing and imaging systems, software and peripherals, and global services. The company also provides infrastructure consulting services; deployment services; asset recovery and recycling services; training services; enterprise support services; client support services; and managed life cycle services. Dell has a joint venture with CIT Group, Inc. to provide various financing alternatives, asset management services, and other customer financial services. The company sells its products and services directly to large corporate, government, health care, and education accounts, as well as small-to-medium businesses and individual customers. Dell generates revenues through its three business divisions: desktop computer systems (50.1% of total revenues), notebook computers (28.6%), and enterprise systems (21.4%).Foreign markets accounted for 38.3% of the total revenues.

Michael S. Dell is the founder, Chairman and Chief Executive Officer. He founded Dell in 1984. In 1992, Mr. Dell became the youngest Chief Executive Officer of a company ever to earn a ranking on the Fortune 500. Because of the phenomenal success of the company, he has been honored many times for his visionary leadership, earning the titles “Entrepreneur of the Year” from Inc. magazine, “Man of the Year” by PC Magazine, “Top Chief Executive Officer in American Business” from Worth Magazine and “Chief Executive Officer of the Year” by Financial World and Industry Week magazines. In 1997, 1998, and 1999, Mr. Dell was included in Business Week's list of “The Top 25 Managers of the Year”. In addition, executive search firm Heidrick and Struggles named him their “High Impact Chief Executive Officer” for 1996 and 1997. Mr. Dell attended The University of Texas at Austin. He is also a Member of the Computer Systems Policy Project. He is a Member of Foundation Board at World Economic Forum. Mr. Dell also serves on the U.S. President's Council of Advisers on Science and Technology and the governing board of the Indian School of Business in Hyderabad, India.

Donald J. Carty is the Vice Chairman and Chief Financial Officer. He served as Chief Executive Officer and President of AMR Corporation from May 1998 to April 24, 2003. He served as an Executive Vice President of AMR Corp. and its subsidiary, American Airlines Inc. since 1989. He also served as Chief Executive Officer of American Airlines and its President since 1995. He served as Chief Executive Officer and President of CP Air in Canada from 1985 to 1987 and spent several years in various management positions with Celanese Canada Ltd., Air Canada and the Canadian Pacific Railway.

Dell's main Competitors are Hewlett-Packard Company, Cisco Systems, Sun Microsystems, Iomega, Rackable Systems. Dell, the world's second-largest computer manufacturer posted fiscal third-quarter sales results that exceeded Wall Street expectations, but its profit performance and outlook for coming quarters left investors dismayed. Shares tumbled about 10%, to $25.25, in extended trading on Nov. 29, after the results were released, and continued the slide the following day. By late afternoon, Dell stock had lost more than 13% from the previous close.

Analysts say that under the watch of founder Michael Dell who returned as chief executive early this year, the company unnerved shareholders with news it will "continue to incur costs as it restructures" and "these actions may adversely impact the company's performance." Dell's expenses are "still considerably higher than we want," Chief Financial Officer Don Carty said during the company's first conference call with analysts in a year. The results suggest a long-running turnaround attempt may be proceeding more slowly than Wall Street anticipated. The company is struggling to emerge from almost two years of slowing growth and slipping market share. Dell's results contrast sharply with those of key competitor Hewlett-Packard which reported robust quarterly results and issued a rosy forecast. In the quarter ended Nov. 2, Dell recorded sales of $15.65 billion, exceeding Wall Street's estimate by about $300 million and representing a healthy 9% increase from a year earlier. Net income jumped 27%, to $766 million. But expenses as a percentage of revenue, a key measure of how well the company is managing costs, rose noticeably. Selling, general, and administrative expenses rose to 12.2% of revenue from 10.6% a year ago. Total operating expenses rose to 13.2% of revenue, up from 11.5% a year ago. Dell's operating income of $829 million was 5.3% of revenue, well below the 8% level that Dell posted in years past.

Earlier this year, Dell said it wants to reduce its workforce by about 10%, but as of Nov. 2, Dell had cut only about 2.5% of the 84,000 employees it had on Aug. 3. Carty insisted, though, that the company "is still driving to that [10% reduction] number." Carty added: "We've identified a considerable amount of low-value work." The company also is working to automate certain tasks to help it eliminate more employees. "We have more manual work going on than we need," he said. At the same time, he said that other initiatives, such as acquisitions or "new strategies," may mean keeping or hiring certain kinds of employees. Gross margin performance, too, didn't meet some analysts' expectations. Gross margin inched up to 18.5% of revenue, from 16.6% a year ago, but still fell below the 19% analysts were projecting. The company blamed component costs, saying they didn't decline as steeply as the company was projecting. Dell has been struggling with falling market share and profitability problems since 2005. Former CEO Kevin Rollins and other top executives, including many veterans, left this year, and Dell was forced to restate four years of results following a lengthy internal accounting investigation. Over the last six months, the company has hired a raft of outside executives and has begun making acquisitions, a strategy it almost never used in the past. It also has changed its sales model and over the summer began selling PCs in retail outlets around the world, including Wal-Mart Stores in the U.S. and Gome in China. That move has helped to slow the decline in Dell's consumer business. In the most recent quarter, revenue for its U.S. consumer business fell 6%, a smaller decline than in recent quarters. Despite the problems with its expenses, Dell reported some brighter news: It said revenue growth in overseas markets was robust. Combined sales in Brazil, China, Russia, and India, four crucial markets, were 32% of overall revenue. In all, overseas sales accounted for 46% of revenue, up from 44% a year earlier. Dell generated $1 billion in cash for the quarter, which Carty called "the ultimate litmus test" of Dell's performance. This money be partially used to resume the programmed share repurchase program in early December. A 5 year horizon paints a rosy picture for Dell. Wait and keep an eye on the developments before buying this stock.

Ameren Corporation - New Entrants stay away f or others it’s a hold

Thu, 29 Nov 2007 13:52:18 EST

Ameren Corporation - New Entrants stay away f or others it’s a hold - by dan

S&P500 stock - Ameren Corporation - (NYSE: AEE)

New Entrants stay away for others it's a hold.

Ameren Corporation is a downgraded stock by most analysts. Total energy operating revenues of shareholder-owned electric companies were $400 billion in the US. Total capitalization of U.S. shareholder-owned electric companies was $533.4 billion. The average electricity use per customer is 30,000 kilowatt-hours (kWh). Total electric utility revenues from sales to customers equaled $360 billion. The average revenue received per kWh sold was 9 cents. According to the Energy Information Administration, electricity demand is expected to increase 1.9 percent in 2007. The U.S. electric power industry's total installed generating capacity was 1,067,019 megawatts (MW) as of December 31, 2005. U.S. shareholder-owned installed generating capacity was 398,392 MW as of December 31, 2005. This accounts for approximately 37 percent of total electric power industry installed capacity. Non-utility owned installed generating capacity grew from 446,230 MW in 2004 to 446,346 MW in 2005. In 2005, shareholder-owned electric utilities spent $5.8 billion on transmission investment.

Ameren Corporation is a public utility holding company. Ameren's asset is the common stock of its subsidiaries, including Union Electric Company, Central Illinois Public Service Company, Ameren Energy Generating Company, CILCORP Inc. and Illinois Power Company. The company's subsidiaries run rate-regulated electric generation, transmission and distribution businesses, rate-regulated natural gas distribution businesses, and non-rate-regulated electric generation businesses in the states of Missouri and Illinois. Its assets amount to $19 billion. Ameren is the largest electric utility in Missouri and the second largest in Illinois, Ameren companies provide energy services to 2.4 million electric and nearly one million natural gas customers throughout its 64,000-square-mile territory.

Gary L. Rainwater is chairman, chief executive officer and president of Ameren Corporation-a position he assumed Jan. 1, 2004, after serving as president and chief operating officer of Ameren Corporation since September 2001. Mr. Rainwater joined Union Electric Company-now the Ameren utility company, Ameren UE-in 1979. He began his career as an engineer in Electric Transmission and Distribution, where he served for three years before joining Corporate Planning. He headed the company's strategic planning efforts and managed the power generation planning, transmission planning, wholesale power marketing and rate design functions. He also assumed added responsibility for the Transmission Planning and Energy Services departments.

Its major competitors are Aquila Inc, Exelon Corp. Ameren Corp.'s third quarter profit dropped 17 percent and net income from its Illinois regulated operations - AmerenCILCO, AmerenCIPS and AmerenIP - dipped into negative territory, posting a $9 million net loss in the third quarter. The company attributed the decline to the rate relief settlement package for Illinois customers, higher operating costs and the costs of a January ice storm that more than offset the benefits from warmer summer weather. The St. Louis-based electric and gas utility reported a third quarter net income of $244 million, or $1.18 per share, down from the $293 million, or $1.42 per share, result reported the same time last year. Excluding the settlement charge, earnings were $1.36 a share, down from $1.52 a share a year ago. That came in under Wall Street's expectations, as analysts polled by Thomson Financial had expected earnings of $1.56 per share. The loss is a $92 million decrease in earnings compared to the third quarter of 2006, which posted a net income of $83 million. Broken down by utility, AmerenCILCO posted a transmission and design net loss of $4 million, AmerenIP posted a transmission and design net loss of $5 million and AmerenCIPS was flat. For the first nine months of 2007, Ameren Corp.'s net income totaled $510 million, or $2.46 per share, up from the $486 million, or $2.37 per share, in 2006.

The company is expected to move at a healthy pace as the demand for electricity is increasing every year. The growth percentage in the last five years is in the red at 2.04%. But this year the company is expected to grow at 8 %. And by the end of this fiscal year the company might post a small profit leading to an increase in the share prices. All newbies are advised to stay away from the stock.

ACE Limited - An ace stock

Thu, 29 Nov 2007 13:35:03 EST

ACE Limited - An ace stock - by dan

S&P500 stock - ACE Limited (NYSE: ACE)

An ace stock

Web dictionary defines Insurance as "promise of reimbursement in the case of loss". But if the company tanks do investors have insurance to claim a reimbursement to be adjusted against the loss? For the answer an investor needs to understand the fundamentals of insurance business, the continuity and the people who manage the enterprise.

Evan G. Greenberg, age 52, has served as one of the directors since August 2002. He was appointed to the position of President and Chief Executive Officer in May 2004 and he was given the additional responsibility of Chairman of the board of directors in May 2007. Prior to joining the company he was President and Chief Operating Officer of AIG, from 1997 until 2000 and to be fair he moved through the ranks in AIG with his hard work and vision. A mention here, he was with AIG for quite some time, in fact he started his career in the insurance sector with a major spell in AIG. With such a stalwart at the helm, the company at the moment is in good hands. With unquestioned support provided by Philip V. Bancroft, CFO, again with an illustrious work lineage starting with pricewaterhousecooper's insurance business. The team these two have built uses strong analytical skills, breadth of resources and global reach to deliver quality products and exceptional service.

ACE Limited as an entity was established in 1985 by a consortium of 34 Fortune 500 companies. ACE is a major global provider of commercial property and casualty insurance and reinsurance. The company achieved phenomenal growth, so phenomenal that the Institutional investor went on to comment "the biggest event in the insurance business since the great Chicago fire". ACE went public in March 1993 to raise the necessary capital for expansion and acquisition in order to diversify into various segments in the shortest possible time.There are a few significant acquisitions which still holds great value for the company. Its investment in Ockham and Methuen managing agencies in March 1996, has given the company an entry into Lloyd's market. This has given the company an international exposure through Lloyd's global licensing capabilities

ACE expanded its reinsurance business portfolio with its acquisition of Tempest Re, a prominent Bermuda based catastrophe reinsurance company.The licensing of its Dublin insurance subsidiary in 1997 and the acquisition of the Westchester Fire Insurance Company in 1998(Now ACE Westchester) enabled ACE to establish platforms in the European union and the United States. ACE transformed itself into a truly global insurance provider with the purchase of CIGNA global property and casualty insurance business in 1999. To be honest ACE group of companies belong to an elite community of truly global insurance and reinsurance companies.

The insurance business includes Accident & Health, Aerospace, Audit, Captive Programs, Casualty and Liability, Crime/Fidelity, Energy ,Environmental Liability, Inland Marine, Marine, Medical & Health care Liability, Political Risk, Professional Liability and Directors & Officers Liability, Property, Risk Management Services, Surety, Workers Compensation.

ACE Group and the U.S. subsidiaries have received an upgrade in their ratings. The company is well diversified by business segment and geographies. It has a stable balance sheet and well capitalized. The experienced management team has ensured the capacity to generate earnings within a difficult pricing environment in all its markets. ACE's risk and exposures are well managed through comprehensive company-wide risk assessment and catastrophe modeling coupled with good data quality, the use of appropriate policy limits within the company's business model framework, above-average risk appetite and capital position. ACE Limited posted good third-quarter numbers in late October, which helped the insurer secure a spot on the Upgrades and Revisions profit track. Earnings per share of $2.06 beat the consensus by more than 12%. Over the past five years, ACE Ltd. has enjoyed earnings per share growth of more than 27% which is better than the historical growth rate at 17%. The earnings estimates for this year are up approximately 2.8% from one month ago. Given such performance in the present and the past, ACE Ltd. appears to have good momentum moving forward. This is a good stock to own at the current stock price.

Ameriprise Financial, Inc. has potential

Mon, 26 Nov 2007 13:35:26 EST

Ameriprise Financial, Inc. has potential - by dan

S&P500 Stock - Ameriprise Financial, Inc. (NYSE: AMP)

A pricey stock but a good investment

Ameriprise Financial is in the investment services industry. Revenues in the investment services touched nearly $300 billion in 2006. 54 percent of these revenues come from brokering and dealing equities, derivatives, debt instruments. The rest of the income comes from investment advice to individuals and corporations. Since interest rates are high, citizens will get inspired to save and invest. This will enable these investment services firm to earn more money. The US has the largest number of high net worth individuals and their combined assets equal $10 trillion. Investment service providers advise these high net worth individuals and manage this asset. This how all these firms make money. With the ageing population on the rise retirement products are in great demand. M & A activity was on a record high in 2006 and is expected to remain the same this current year as well. Investment service providers involved in such deals will earn mega commissions.

47 percent of the revenues earned by these investment services firms are devoted for salaries and other employee compensation. No company cringes as it is important to retain the talented employees who are responsible for generating their revenues. Hence to reduce other costs, activities like equity research and IT are outsourced from subsidiaries or third parties in lower salary regions such as India. Significant trends from which Ameriprise benefits are Bonus Payments, Outsourcing, Retirement Products.

Ameriprise Financial was founded in 1894 under the name Investors Syndicate and changed its name to Investors Diversified Services, Inc. in 1949. And then changed it twice more to American Express Financial Corporation in 1994 and finally to its present name, Ameriprise Financial, Inc. in 2005. Ameriprise Financial is headquartered in Minneapolis, Minnesota.

Ameriprise Financial targets financial planning, asset management and insurance services to individuals, businesses, and institutions and has condensed its operations to Asset Accumulation and Income, and Protection.

The Asset Accumulation and Income business has its own mutual fund and at the same time offers other companies' mutual funds. Financial advisor network takes care of Annuities and other asset accumulation and income management products and services for its retail client. Outside channels,

Such as banks and broker-dealer networks participate in offering annuities. Institutional clients are given a separate account and are offered sub advisory, and 401(k) markets.

The Protection business offers life insurance, disability income, and brokered insurance products again through financial advisor network. Besides, this personal auto and home insurance products are offered to retail clients through strategic marketing alliances.

The company is present in the banking sector through Ameriprise Bank, FSB in Minneapolis and Phoenix, which offers a suite of products to meet clients' borrowing, cash management, and personal trust needs. The bank offers home lending program such as mortgages, home equity loans, and lines of credit through financial advisor network.

Ameriprise Financial has merged and renamed its five life insurance subsidiaries into two River Source branded entities. American Partners Life Insurance Company and American Enterprise Life Insurance Company have merged into IDS Life Insurance Company, which has been renamed River Source Life Insurance Company.

Cracchiolo, James M. is the Chairman and Chief Executive Officer. He was with American express Bank before assuming charge in his current role.

William F. Truscott is the chief investment officer. He manages retail, institutional and owned asset portfolios. Zurich Scudder Investments, Chemical Bank employed him before he joined Ameriprise Financial.

Walter S. Berman is the Chief Financial Officer. He started his career with American Express Bank with a brief stint with IBM before joining Ameriprise Financial.

Kim M. Sharan is the Chief Marketing Officer. She was with Merrill Lynch and Citibank before joining Ameriprise.

T. Rowe Price Group, Lincoln National, Raymond James Financial, Waddell & Reed Financial. Nationwide Financial Services, Merrill Lynch, MetLife compete with Ameriprise. But Ameriprise has shown consistent performance. There is a continued focus on the mass affluent and affluent market and this group of clients has grown by 11% over the last year. For this quarter revenues grew 11% to $2.2 billion, adjusted earnings per diluted share was up 5%. Beginning with their overall performance, Revenues grew 11%. Adjusted earnings grew 3% to $237 million. Their revenue streams and assets flows are strong. Ameriprise focuses on tightly managing its expenses and expanding their margins. Their client acquisition strategy is showing dividends which is centered on their commitment to serving clients through financial planning relations.

$171 million of share repurchases was completed by buying 2.9 million shares. Year-to-date, they purchased over 11.1 million shares for $665 million. Their remaining authorization at September 30th was $701 million. The pace of share repurchase continues to remain prudent and Ameriprise continues to maintain excess capital of over $1 billion. Their balance sheet remains strong and their asset quality is high.

Performance has strengthened this year and going by the track record, the company will continue to grow. This stock will always remain a good investment.