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>>> Philip Morris hopes smokeless is the new smoking
By Saabira Chaudhuri
Nov 6, 2017
https://www.marketwatch.com/story/philip-morris-hopes-smokeless-is-the-new-smoking-2017-11-06?siteid=bigcharts&dist=bigcharts
‘Heat not burn’ products have become an obsession for the company’s CEO
Bloomberg
Philip Morris International is hoping smokers will prefer IQOS, which heats tobacco, instead of existing e-cigarette options that heat a nicotine-laced liquid but contain no tobacco.
Cigarette maker Philip Morris International Inc. PM, +0.55% is betting big on smokeless products with a device called IQOS that heats but doesn’t burn tobacco.
The number of cigarettes big companies sell is declining and, with regulations continuing to tighten, the companies are focused on future-proofing their business, investing in e-cigarettes and “heat not burn” products that they say are less harmful than traditional cigarettes. Philip Morris has joined with Altria Group Inc. MO, +0.79% to apply for Food and Drug Administration approval to market IQOS in the U.S. as a less risky alternative to cigarettes.
Philip Morris, spun off from Altria in 2008, sells cigarettes only outside the U.S.; Altria sells cigarettes only in the U.S. If Philip Morris’s IQOS wins FDA approval, it will be sold in the U.S. by Altria in a licensing agreement with Philip Morris, which will receive royalties from U.S. sales.
Making IQOS—pronounced eye-koss—a success has become an obsession for the company’s chief executive, André Calantzopoulos.
A tobacco industry lifer and former smoker, Calantzopoulos is a walking advertisement for his new product, puffing away on the cigarette-shaped device through the day. He’s counting on lower taxes and looser marketing restrictions than those levied on traditional cigarettes to push smokers to switch to these new, higher-margin products.
He’s also betting many smokers will prefer IQOS, which heats tobacco, to existing e-cigarette options that heat a nicotine-laced liquid but contain no tobacco, making for an experience that’s less like traditional smoking.
Philip Morris has poured money into clinical trials that have shown IQOS is safer than smoking. The company maintains that combustion, rather than the tobacco or nicotine in cigarettes, is what’s harmful. Critics say more long-term studies and independent research are needed to evaluate IQOS’s health effects.
The company in January relaunched its website, stripping away prominent mentions of big moneymakers like Marlboro and Benson & Hedges cigarettes and touting its decision to “develop, market, and sell smoke-free alternatives, and switch our adult smokers to these alternatives, as quickly as possible around the world.” In September, Philip Morris pledged $1 billion to create a foundation to encourage people to switch to smoke-free alternatives.
Critics note the company is still aggressively selling traditional cigarettes while challenging display bans and rules in some places that require plain packaging with graphic health warnings.
“I don’t see any sign at all they’re backing off the very aggressive effort to sell as many traditional Marlboros to as many people as they can,” says Matthew Myers, head of the Campaign for Tobacco-Free Kids.
In an interview with The Wall Street Journal, Calantzopoulos discussed how Philip Morris sees the future of smoking and why he thinks IQOS is the key to the company’s success. Edited excerpts follow.
Filling a gap
WSJ: With e-cigarettes already available in so many markets, why do we need IQOS?
Calantzopoulos: The problem we had with electronic cigarettes since the beginning of development was the satisfaction of the smoker. Because the taste is dramatically different and, at the initial stages, the nicotine pharmacokinetics were very slow. You could not get the satisfaction. It’s not so easy to crack this code.
The taste satisfaction is very important. The closest you are to this, the more chances you have to switch people. It’s very nice to have a zero-risk product, but if nobody uses it, you don’t have any reduction in public health risk.
Which markets are likely to be the biggest ones for these new, alternative products?
Calantzopoulos: When you look at the potential of these products you need to understand what is the readiness of smokers to switch. That relates to public-health concerns, social pressure, concern for people around you and many other more subtle things. You cannot say that Indonesia is at the same level of readiness as the U.K, Western Europe or the U.S.
The potential is in every market, because eventually I think people will switch to these products as they become available. There are two unmet needs in smokers: something that is much better for my health and something that bothers others much less or doesn’t bother them. These are things cigarettes can’t resolve. These new products are developed to address these needs.
What’s more profitable for you, IQOS or traditional cigarettes?
Calantzopoulos: Today it’s IQOS because of the lower taxes.
You say you don’t want to encourage new cigarette smokers. If that’s true, will you have a business in 40 years? What’s the long-term plan?
Calantzopoulos: First, I don’t think it’s 40 years we’re talking about here. It’s much longer. Second, we only have, if you include China, a 15.4% share of the world [cigarette market outside the U.S.] With [alternatives to traditional cigarettes] we have seen we can grow our market share even if the market reduces. Plus we’ve started introducing accessories for the product.
At over $100 for the starter kit, IQOS isn’t cheap. Can you explain your pricing strategy?
Calantzopoulos: Innovation, in the minds of people, cannot be something extremely cheap. If you are an average person and you hear that something that is much better than cigarettes comes to the market at the cheapest possible price, you’ll not trust it. This is the reason we didn’t initially manufacture in China, because you need to create that credibility.
Over time you need to make the products available and affordable to different categories of people.
The big shift
You redesigned your website recently to describe yourself as “committed to a smoke-free future” even though most of your business is still in traditional cigarettes. Why?
Calantzopoulos: We developed the website because we needed to make clear to our own stakeholders and employees here that this is the direction of the company.
This is not an easy thing, because we are entering into a territory that is very unknown. It’s not your traditional competitors.
Our industry has been a fairly linear and predictable industry. You know what’s going to happen every year. You know from time to time you are going to have a tax increase, you are going to have regulatory restriction, but, as it applies to everybody, I think we are doing very well.
But now you move to a model that from linear can become exponential for a period of time. It’s much more technology-driven, much more digital-driven. Competitors other than our traditional competitors can come in, whether legitimate or fly-by-night ones, and you have to anticipate all those things. We are the first ones to be in the category, so we anticipated quite a lot. We are learning every day. The whole organization has to gear up to this new reality and these new competitive rules around it.
There are still many regions of the world where you’re actively trying to grow revenues in your traditional cigarette business. How do you reconcile those actions with your mission statement of switching adult smokers to alternatives as quickly as possible?
Calantzopoulos: Shifting the company to these products doesn’t mean that I will give market share to my competitors free of charge. In the markets where we are not present with IQOS yet or the other reduced-risk products, you still need to defend your share of the market.
They still represent the bulk of our income, and so far they have financed the billions of dollars we have put behind these new products. But once we go national in a market, and absent capacity constraints, then you shift your resources and your focus to these new products.
But isn’t there an inherent contradiction here? Your new efforts are being funded by your traditional cigarette business, so it’s important that you keep that going.
Calantzopoulos: Take a market like Indonesia as an example. If I just take my foot off the pedal completely, nothing is going to happen to the total market except that I lose share.
The logic says you don’t do this until you go with IQOS.
We are focusing the organization much more on the new business. We will have very few new traditional product introductions, and as markets switch to IQOS we would remove resources [from the old business] completely.
Next year IQOS becomes profitable, so even the financing from these traditional businesses isn’t necessary anymore, because it becomes fully self-sustaining.
What should the regulatory environment look like for cigarettes and these new products?
Calantzopoulos: It’s pretty clear that we will need measures to accelerate the conversion to new products. Governments can either make measures even worse for cigarettes or do something different on these [new] products to show consumers they are different. I think they should do both.
I think over time the fiscal environment on cigarettes will become different, and the regulatory environment has to differentiate the products. If that is at the expense of cigarettes, so be it—it’s not a problem for me. But we need some logical forum where we don’t talk ideology but rather we talk about what can really accelerate the conversion. If you do display bans everywhere in the world on cigarettes but you can display IQOS, that’s a differentiating measure for me. Then I’m more than willing to accept these measures because they are really conducive to make people switch.
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>>> Warren Buffett defends Berkshire's conglomerate structure — and fires a huge shot at private equity
by Myles Udland
Feb. 28, 2015
http://www.businessinsider.com/warren-buffett-on-conglomerates-and-private-equity-2015-2
Berkshire Hathaway is a massive conglomerate.
With a market cap over $300 billion, the company directly owns dozens of businesses and holds huge stakes in many more, some of which include America's largest companies like Coca-Cola, IBM, Wells Fargo, and American Express.
In his 50th letter to Berkshire Hathaway shareholders, Buffett addresses this structure, which he says has a terrible reputation with investors, which it "richly deserves."
But of course, it could probably be worse: Berkshire could be a private-equity firm.
In his letter, Buffett writes that the bad reputation for conglomerates is mostly owing to the problems this structure had in the 1960s, when companies were acquiring any and all other businesses in an effort to boost per-share earnings. Eventually this scheme fell apart and the conglomerate structure — which often involved a holding company owning disparate businesses under one roof — became out of fashion.
But the conglomerate structure, Buffett argues, also gives the current iteration of Berkshire Hathaway a kind of flexibility for acquisitions that you can't get just anywhere. "To put the case simply: If the conglomerate is used judiciously, it is an ideal structure for maximizing long-term capital growth," Buffett writes.
And because Berkshire is a conglomerate, Buffett says the company doesn't have an affiliation to any particular business or line of work, with Buffett writing, "That’s important: If horses had controlled investment decisions, there would have been no auto industry."
This structure has also allowed Berkshire, in Buffett's estimation, to becomes the "home of choice for the owners and managers of many outstanding businesses."
"Families that own successful businesses have multiple options when they contemplate sale," Buffett writes. "Frequently, the best decision is to do nothing. There are worse things in life than having a prosperous business that one understands well. But sitting tight is seldom recommended by Wall Street. (Don’t ask the barber whether you need a haircut.)"
Buffett says that companies looking to sell are often then left with two types of buyers: competitors and private equity firms ("Wall Street buyers," Buffett calls them).
And it is the latter that can be most unpleasant.
Here's Buffett:
For some years, these purchasers accurately called themselves "leveraged buyout firms." When that term got a bad name in the early 1990s – remember RJR and Barbarians at the Gate? – these buyers hastily relabeled themselves "private-equity."
The name may have changed but that was all: Equity is dramatically reduced and debt is piled on in virtually all private-equity purchases. Indeed, the amount that a private-equity purchaser offers to the seller is in part determined by the buyer assessing the maximum amount of debt that can be placed on the acquired company.
Later, if things go well and equity begins to build, leveraged buy-out shops will often seek to re-leverage with new borrowings. They then typically use part of the proceeds to pay a huge dividend that drives equity sharply downward, sometimes even to a negative figure.
In truth, "equity" is a dirty word for many private-equity buyers; what they love is debt. And, because debt is currently so inexpensive, these buyers can frequently pay top dollar. Later, the business will be resold, often to another leveraged buyer. In effect, the business becomes a piece of merchandise.
Berkshire offers a third choice to the business owner who wishes to sell: a permanent home, in which the company’s people and culture will be retained (though, occasionally, management changes will be needed). Beyond that, any business we acquire dramatically increases its financial strength and ability to grow. Its days of dealing with banks and Wall Street analysts are also forever ended.
Some sellers don’t care about these matters. But, when sellers do, Berkshire does not have a lot of competition.
To Buffett, Berkshire offers a third, more friendly choice for sellers.
In 2014, Berkshire contracted for 31 "bolt-on" acquisitions worth $7.8 billion in all. The company also closed on its acquisition of Van Tuyl Automotive, which has $9 billion in annual sales and brings Berkshire's ownership of companies that would be independently listed in the Fortune 500 to 9.5 (Heinz is the 0.5).
And the company seems ready to find more things to buy. As Buffett writes: "Our lines are out."
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>>> Fiserv, Inc., together with its subsidiaries, provides financial services technology worldwide. The company?s Payments and Industry Products segment provides debit and credit card processing and services; electronic bill payment and presentment services; Internet and mobile banking software and services; person-to-person payment services; and other electronic payments software and services. This segment also offers card and print personalization services; investment account processing services for separately managed accounts; and fraud and risk management products and services. Its Financial Institution Services segment provides account processing services, item processing and source capture services, loan origination and servicing products, cash management and consulting services, and other products and services that support various types of financial transactions. This segment also offers a range of services, such as customization, business process outsourcing, education, consulting, and implementation services; and ACH, treasury management, source capture optimization, and enterprise cash and content management solutions, as well as case management and resolution services to the financial services industry. The company also provides document and payment card production and distribution, check processing and imaging, source capture systems, and lending and risk management products and services. Fiserv, Inc. serves banks, thrifts, credit unions, investment management firms, leasing and finance companies, retailers, merchants, mutual savings banks, and building societies. The company was founded in 1984 and is headquartered in Brookfield, Wisconsin. <<<
>>> ProAssurance Corporation, through its subsidiaries, provides property and casualty insurance, and reinsurance products in the United States. The company operates through Specialty Property and Casualty, Workers' Compensation, and Lloyd's Syndicate segments. It offers professional liability insurance for healthcare professionals and facilities; professional liability insurance for attorneys; liability insurance for medical technology and life sciences risks; and workers' compensation insurance for employers, groups, and associations. The company markets its products through independent agencies and brokers, as well as an internal sales force. ProAssurance Corporation was founded in 1976 and is headquartered in Birmingham, Alabama. <<<
>>> Syntel's Repatriation Plan For Foreign Earnings Cashes Out At $15/Share Special Dividend
Jayson Derrick
Benzinga
September 13, 2016
https://www.benzinga.com/analyst-ratings/analyst-color/16/09/8453180/syntels-repatriation-plan-for-foreign-earnings-cashes-ou
Syntel, Inc.
SYNT's decision to give shareholders a one-time special dividend of $15 per share by repatriating cash held by its foreign subsidies isn't enough to turn Joseph Foresi of Cantor Fitzgerald bullish.
In a research report on Tuesday, Foresi noted that Syntel will repatriate approximately $1.24 billion in cash and will incur a one-time tax expense of $264 million.
The company also lowered its earnings guidance to reflect the charge and costs for the special dividend. Specifically, the company's project earnings per share range is ($0.60) to ($0.75) from a prior $2.55 to $2.70. Accordingly, the analyst lowered his third-quarter earnings per share estimate from $0.62 to ($2.60) but maintains his revenue estimate of $245.20 million.
Related Link: What Do Corporate Credit Ratings Mean For Investors?
Foresi continued that his Hold rating, which he reiterated, is based on the fact that he is looking for a catalyst to drive revenue growth above industry rates.
Looking forward, the analyst also lowered his 2017 earnings per share estimate to $2.56 from $2.70 due to a "projected reduction in annual other income." Nevertheless, his $43 price target remains unchanged and his based on a 17x multiple to his 2017 earnings per share estimate
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Align Technology - >>> 3 Top Stocks You've Been Overlooking
Don't let these underappreciated businesses pass you by.
by Steve Symington, Rich Smith, and Keith Speights
https://www.fool.com/investing/2017/03/08/3-top-stocks-youve-been-overlooking.aspx
Mar 8, 2017
Align Technology: Dental patients using products made by Align Technology have been smiling for years. Align's Invisalign clear aligners are practically invisible and eliminate the need to wear awkward metal braces. The company's shareholders have been smiling, too: Align Technology stock has nearly quadrupled over the last five years.
But as a mid-cap stock, Align hasn't gotten the attention that larger stocks get. It deserves consideration from investors, though. Align has consistently grown revenue and earnings. The company has made some smart acquisitions -- especially the 2011 purchase of Cadent, which brought the iTero intraoral scanner into Align's product lineup.
Align has a clear pathway for future growth. The company already receives around 35% of its revenue from international sales. Further international expansion should drive sales and earnings higher, particularly in highly populated countries with growing middle classes like China and India.
Not every example of malocclusion (misalignment of teeth) is a fit for Invisalign right now. However, Align is working hard to change that by introducing new clear aligner versions that address more complex cases.
Align has also ventured into new territory by expanding beyond the Invisalign brand. The company forged a deal with SmileDirectClub in June 2016 to supply non-Invisalign clear aligners. SmileDirectClub ships aligners directly to customers' homes. Align gained a 17% equity stake in SmileDirectClub as part of the transaction.
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>>> Align Technology, Inc. designs, manufactures, and markets a system of clear aligner therapy, intra-oral scanners, and computer-aided design and computer-aided manufacturing (CAD/CAM) digital services. The company?s Clear Aligner segment offers Invisalign Full, a treatment used for a range of malocclusion; Invisalign Teen treatment that addresses orthodontic needs of teenage patients, such as compliance indicators, compensation for tooth eruption, and six free single arch replacement aligners; and Invisalign Assist treatment for anterior alignment and aesthetically-oriented cases. It also provides Invisalign Express (10 and 5) and Invisalign Lite/i7 treatments for orthodontic cases, non-comprehensive treatment relapse cases, or straightening prior to restorative or cosmetic treatments; Invisalign Go, a solution for general practitioner dentists (GPs) to identify and treat patients with mild malocclusion; SmileDirectClub aligners for minor tooth movement; custom clear aligner retainers used to maintain tooth position and correct minor relapse; and SmartTrack, a custom-engineered material that delivers force for orthodontic tooth movements. The company?s Scanners and Services segment offers iTero Scanner, a single hardware platform with software options for restorative or orthodontic procedures; and Restorative software for iTero, a software for GPs, prosthodontists, periodontists, and oral surgeons. It also provides Orthodontic software for iTero, a software for orthodontists for digital records storage, orthodontic diagnosis, Invisalign digital impression submission, and for the fabrication of printed models and retainers; CAD/CAM services, such as iTero Models and Dies, OrthoCAD iCast, and OrthoCAD iRecord; and Invisalign outcome simulator, a chair-side and cloud-based application for the iTero scanner, as well as third party scanners and digital scans for Invisalign treatment submission. The company was founded in 1997 and is headquartered in San Jose, California. <<<
>>> The Year That Was: Dr Pepper Snapple
http://www.forbes.com/sites/greatspeculations/2017/01/13/the-year-that-was-dr-pepper-snapple-2/?utm_source=yahoo&utm_medium=partner&utm_campaign=yahootix&partner=yahootix#6da2a2743508
Forbes
1-13-17
The perpetual third behind Coca-Cola and PepsiCo in the U.S. carbonated soft drinks market, Dr Pepper Snapple had a solid 2016. Steady organic growth even in the declining segment of U.S. CSDs, coupled with a strong non-carbonated portfolio, has resulted in the company beating consensus estimates for five consecutive quarters now. Solid operating performance, leading to an increase in margins despite a decline in the top line, pushed up estimates for the full-year earnings for Dr Pepper. This occurred both after the announcement of Q2 results, and then again after the announcement of Q3 results. The company now expects full-year core EPS to be in the $4.32-$4.40 range, up from the updated estimate of $4.27-$4.35 after the second quarter results.
Dr Pepper Has Been Able To Grow Its CSD Volume
The U.S. CSD market is expected to have declined for the twelfth consecutive year in 2016. The per capita consumption was already down to 154 liters last year— the lowest since 1985. Now, Dr Pepper’s growth is heavily dependent on the U.S. CSD market, with around 82% of the company’s net volume in this category and ~90% of the company’s net revenue coming from the U.S. itself. Despite a portfolio heavily skewed towards a low-growth category, Dr Pepper has managed to grow its CSD volume in North America.
DPS Q&A 24
Dr Pepper has managed to extract growth in this segment despite both the mature nature of the U.S. CSD market and strong market position of both Coca-Cola and PepsiCo, which together hold close to 70% of the market. Why Dr Pepper has managed to grow is also because of its relatively small market share. Dr Pepper is taking away share from other companies, especially PepsiCo, which has lost share continuously in the last few years. But mostly, Dr Pepper has been able to grow its revenue per case due to positive package and price mix, which has boosted its CSD revenue in North America, which formed 92% of the company’s net sales in 2015. Favorable package and price mix helped increase CSD sales by 2% in Q3, 2.5% in Q2 and 3% in Q1. Companies are moving to single-serves, which have higher price per unit, thus boosting the revenue per case. Although Coca-Cola and PepsiCo emphasized smaller packs before Dr Pepper did, the latter is catching up, and could continue to see growth in CSDs due to the expected rise in its revenue per unit volume. The company has closed approximately 98% voids on its regular smaller CSD packages.
Allied Brands Contribute Big To Dr Pepper’s Growth
Dr Pepper is deriving high volume growth from its allied brands, which although together form roughly 5% of the company’s net volume, form ~50% of the top-line growth. The allied brands growth is included in the packaged beverage volumes for Dr Pepper, which is the distribution wing for these small but fast growing brands, such as Bai 5, Vita Coco, etc. Certain allied brands are experiencing both double- and triple-digit growth rates partially as a result of Dr Pepper’s specific focus on allied brand distribution and availability. At the gross margin line, the allied brands tend to carry lower gross margin because they have somebody else’s manufacturing profit in there, but are good contributors to Dr Pepper’s operating profitability. Allied brands are an important factor of growth, and Dr Pepper has continued to strengthen this segment.
In 2016, Dr Pepper bought Bai Brands, maker of antioxidant and other health-oriented beverages, for $1.7 billion, strengthening its portfolio of fast-growing beverage segments and moving slightly away from the slower-growth CSD category. Dr Pepper has remained formidable during tough times in the core CSD category and is also growing strongly in the faster-growing beverage categories in the non-carbonated drinks segment, which seemingly puts the company in good stead for another solid year in 2017.
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Cal-Maine - >>> Brittle egg prices plague Cal-Maine on Wall Street
September 22, 2016
http://finance.yahoo.com/news/brittle-egg-prices-plague-cal-173652794.html
By Noel Randewich
SAN FRANCISCO, Sept 22 (Reuters) - Wall Street will closely watch Cal-Maine Foods' quarterly report on Monday as the largest U.S. egg producer struggles with too much production and uncertainty about consumer demand for cage-free eggs.
The Jackson, Mississippi-based company has been targeted by short sellers since 2015, when avian flu ravaged U.S. flocks and producers over-reacted to losses by adding more new hens than demand warranted, causing a slump in egg prices.
Accounting for around a quarter of U.S. egg sales, Cal-Maine is expected on average to post its second straight quarterly loss and a 53 percent drop in revenue, according to Thomson Reuters data. The company does not provide revenue projections because egg prices are typically highly unpredictable.
Part of the difficulty in predicting egg prices is that when they rise, processed food makers sometimes increase their use of substitutes and do not always switch back to eggs when prices fall, said Eric Gottlieb, analyst at D.A. Davidson.
"Maybe at this very moment it's easier to use eggs, but you can't change your formulation constantly," Gottlieb said.
Going against that trend in a bid to appeal to customers craving more authentic foods, Dunkin' Brands Group in July said it was working on higher-quality egg products, which also include soybean oil and corn starch.
Shares of Cal-Maine have fallen 25 percent in the past year. Cal-Maine rose 1.3 percent on Thursday ahead of its report on Monday.
The company has continued to lose favor on Wall Street. In the last quarter, 80 institutional investors, like hedge funds and pension funds, sold their stakes in Cal-Maine, a 74 percent increase from the previous quarter, according to Morningstar. In the same period, 58 institutional investors became new owners of Cal-Maine, a 15 percent decrease.
Short interest peaked at $900 million in February, and has since fallen to $584 million, equivalent to a quarter of Cal-Maine's market capitalization, according to S3 Partners, a financial analytics firm.
Complicating matters in the egg industry is growing demand from consumers and animal welfare groups that hens be allowed to live outside of cramped cages and given free run in barns, a change meant to reduce the animals' suffering but which increases costs.
Companies including Wal-Mart Stores, Target, McDonald's, General Mills Inc and Kellogg Co have committed to stop using eggs laid by caged hens within the next several years. But with cage-free eggs up to twice as expensive as normal eggs in supermarkets, it remains unclear how quickly consumers will make the shift.
Specialty eggs, a category including cage free, accounted for 23 percent of Cal-Maine's sales volume in the May quarter, up from 21 percent a year before. But the company also warned that low prices for regular eggs were pressuring demand for its specialty eggs.
Cal-Maine and its smaller rivals are adding cage-free hens at a pace outstripping demand for their eggs, according to CJS Securities analyst Craig Bibb.
"If you're standing in the grocery store, and the cage-free eggs are $2 and the regular eggs are 79 cents, most people are taking 79 cents," Bibb said.
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>>> Scotts Miracle-Gro Company manufactures, markets, and sells consumer lawn and garden products worldwide. The company's Global Consumer segment offers lawn fertilizers, grass seed products, spreaders, other durable products, and outdoor cleaners, as well as lawn-related weed, pest, and disease control products; water soluble and continuous-release plant foods, potting mixes, garden soils, mulch and decorative groundcover products, landscape weed prevention products, plant-related pest and disease control products, organic garden products, live goods and seeding solutions, and hydroponic gardening products; and insect and rodent control products, and selective and non-selective weed control products to protect homes and maintain external home areas. This segment provides its products primarily under the Scotts, Turf Builder, EZ Seed, Water Smart, PatchMaster, EverGreen, Fertiligène, Substral, Miracle-Gro Patch Magic, Weedol, Pathclear, KB, Celaflor, EdgeGuard, Snap, Handy Green II, OxiClean, Miracle-Gro, Osmocote, Hyponex, Earthgro, SuperSoil, Ortho, Miracle-Gro Organic Choice, Nature's Care, Whitney Farms, EcoScraps, General Hydroponics, AeroGarden, Substral, ASEF, Scotts EcoSense, Naturen, Fafard, Tomcat, Roundup, Groundclear, Nexa Lotte, and Home Defence brand names. Its Scotts LawnService segment offers residential and commercial lawn care, tree and shrub care, and pest control services through the periodic applications of fertilizer and control products. As of September 30, 2015, this segment had 88 company-operated locations; and 94 independent franchisees operated locations. The company primarily serves home centers, mass merchandisers, warehouse clubs, large hardware chains, independent hardware stores, nurseries, garden centers, food and drug stores, and indoor gardening and hydroponic stores through a direct sales force and network of brokers and distributors. The Scotts Miracle-Gro Company was founded in 1868 and is headquartered in Marysville, Ohio.
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Visa -- >>> Consumers win as Visa and PayPal go from enemies to ... frenemies?
By Therese Poletti
July 21, 2016
PayPal users will be able to link their account directly to a Visa debit card thanks to a deal the two companies announced Thursday.
http://www.marketwatch.com/story/consumers-win-as-visa-and-paypal-go-from-enemies-to-frenemies-2016-07-21?siteid=yhoof2
Visa Inc. and PayPal Holdings Inc. have signed a deal that might be the perfect example of what Michael Corleone said in “The Godfather Part II”—“Keep your friends close but your enemies closer.”
One of the most important aspects of the deal Visa and PayPal announced Thursday along with their quarterly earnings is that it will now be easier for consumers to use a Visa credit or debit card when paying with PayPal PYPL, +0.20% which currently defaults to a user’s PayPal account or their bank account. Any PayPal user who has had a payment default to a checking account, as opposed to the credit card that they thought they were using, can understand a rant two months ago by the CEO of Visa V, -0.72% in which he went after PayPal.
“They drive a lot of business our way. That’s supposedly the friend part of it,” Visa Chief Executive Charles Scharf said in May at the J.P. Morgan Technology Conference. “The foe part is where ... we and our clients get disintermediated from the transaction, the entire experience, and it causes tremendous customer service problems for the bank specifically.”
He added that he would love to figure out a different model that put consumer choice first, but was willing to declare war on PayPal if needed.
“The other door is where we go full steam and compete with them in ways that people have never seen before,” he said.
Instead, PayPal appears to have reached out with an olive branch, though the former eBay Inc. EBAY, +10.89% subsidiary did mention “threats of a targeted pricing action” from Visa in a conference call Thursday. The two companies forged a deal that will make it easier for consumers to use their Visa cards for payment on PayPal. In addition, Visa debit card customers can move money instantly via PayPal and its fast-growing Venmo unit, a digital wallet service for smartphones. Previously, there has been a waiting time for funds to clear in those transactions. PayPal also joins the Visa mobile payments framework and will provide more data to credit card companies on transactions.
“It is a fantastic thing for both companies,” said Michael Moeser, director of payments at Javelin Strategy & Research in Pleasanton, Calif., adding that the recent escalation of their rivalry had an impact on PayPal’s stock in late May. “When (PayPal CEO) Dan (Schulman) responded, Wall Street didn’t buy it that it was water under the bridge.”
The effects may not all be positive, however. The deal is likely to have some impact on PayPal’s profit margins, even if it drives higher volumes with more transactions.
“We expect the agreement could drive higher payment volumes for PayPal, but with lower transaction margins (higher mix of credit-card transactions),” said Colin Sebastian, an analyst with Robert W. Baird & Co., in a note to clients.
On its call with investors, PayPal executives said there may be a short-term rise in its expenses, similar to an acquisition, but of long-term benefit. The company also said the deal also opens up the door to more “new partnerships.”
PayPal no longer has the specter of a full-frontal attack from a payments giant hanging over its head and could even see better headway in physical payments, because the deal also opens up access to Visa mobile-payment stations in stores. Meanwhile, Visa is likely to experience a boost in online transaction volume.
The deal does not make the two companies best buddies, however: Visa still has a competing option in Visa Checkout, and PayPal seems to be accepting this change to its longtime practices only after threat of a corporate assault. Neither company saw big boosts in late trading after the deal, showing investors consider the effects to be rather neutral.
The big winner, for once, is consumers, who will receive easier transactions using two things most already have: A Visa card and PayPal account.
“Consumer choice is an important point of the discussion in the press release,” Scharf said in a conference call with analysts on Thursday. “What we have done in this agreement, we have tried to work with PayPay to take away the things that discourage people from working together and take away the bad customer experience.”
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American Water Works, NextEra Energy ->>> 3 Top Stocks to Buy Your Grandkids
If you want to give your grandkids a head start in life, consider giving them shares of these three stocks. Our choices might surprise you.
Beth McKenna
Apr 3, 2016
http://www.fool.com/investing/general/2016/04/03/3-top-stocks-to-buy-your-grandkids.aspx?source=yahoo-2&utm_campaign=article&utm_medium=feed&utm_source=yahoo-2
The amazing power of compounding makes it easier to grow wealth the earlier in life you start investing. So, perhaps you want to help give your grandkids the financial leg up in life that you wish someone had given you, by buying stocks for them.
We asked three of our contributors to name a stock that he or she believes would make a great investment for a child. Find out below why American Water Works (NYSE:AWK), Synaptics (NASDAQ:SYNA), and NextEra Energy (NYSE:NEE) could be tickets to your grandkids' financial head start in life.
Beth McKenna
American Water Works, the largest investor-owned water and wastewater utility in the United States, would make a great stock to buy for a child if your goals are:
•Buying an "autopilot"-type stock
•Generating superior long-term gains
•Igniting an interest in investing
American Water Works is not a stock you or your grandchild will have to closely monitor. While many things will change in the decades to come, it's a certainty that your grandkid will grow up in a world where water remains the most essential commodity on the planet.
You'll be hard-pressed to find a stock that offers this type of stability while generating superior long-term gains. Since its April 2008 IPO, American Water Works stock has returned (including dividends) 320% through March 29, crushing the S&P 500's return of 77%. Moreover, this so-called "stodgy" utility also beat the returns of many stocks commonly recommended for kids, such as Walt Disney (245%), McDonald's (173%), Mattel (144%), and Coca-Cola (96%) over this period. There are some potentially attractive stocks among this bunch (I'm partial to Disney), but none of them sell a product guaranteed to be in demand -- or even in existence -- decades from now.
American Water Works has solid future growth potential, which should lead to continued market-beating long-term returns. It's the 800-pound gorilla in a very fragmented industry, which provides it with the resources to continue to grow through acquisitions. Moreover, it has pricing power in its nonregulated business.
Choosing a stock your grandchild can relate to should go a long way in sparking his or her interest in investing. All kids can highly relate to a water company -- just turn on your tap and tell your grandchild that whenever one of an estimated 15 million people in more than 45 states and parts of Canada does the same, his or her company makes money.
Tim Brugger
A great stock to take advantage of your grandkids' long time horizon for investing, and to get in on the Internet of Things (IoT) -- a multitrillion-dollar market opportunity -- is Synaptics.
Synaptics develops displays, touchscreens, and fingerprint security solutions primarily for mobile devices. Of last quarter's record $471 million in revenue, approximately 87% was mobile-related, and the balance was from Synaptics' PC-related products. Now, Synaptics is ready to grow its mobility business via one of the fastest-growing areas of IoT: connected cars.
How big is in-car technology? According to a recent study, new car buyers are more interested in an automobile's infotainment system than actual driving performance. Synaptics boasts a suite of solutions to win the connected-car wars, and it has already inked deals with some of the world's largest auto parts manufacturers. Better still, despite Synaptics' early wins, it's only scratched the surface of a market that will become as commonplace as a radio by the time today's grandkids become adults.
Synaptics was recently the recipient of a rumored $110 buyout offer earlier this year, its second in four months. The inquiry was notable because Synaptics was trading at just $62.05 a share at the time. It may fly under many investors' radars, but pundits certainly recognize the potential Synaptics offers.
Synaptics is an absolute bargain, too. Trading at just 10 times future earnings compared to its current 23, the Street clearly expects Synaptics' impressive revenue growth to continue. The grandkids of today already live in an IoT world, and Synaptics gives them an opportunity to grow their portfolios right along with the next trillion-dollar market.
Sean Williams
If you're looking for a "set it and forget it"-type stock for your grandchildren, my suggestion would be to consider utility giant NextEra Energy.
NextEra Energy supplies power to more than 4.8 million residents in Florida and is best known for its subsidiary Florida Power & Light Company, or FPL. What makes FPL unique is that it's one of the largest rate-regulated utilities in the country. While rate regulation might give shareholders the desire to pull their hair out from time to time since rate hikes require permission from regulators, it also means less exposure to wholesale electricity cost fluctuations, and very predictable cash flow.
More important, NextEra Energy is the United States' utility kingpin when it comes to alternative energy investments. Although investing in wind and solar isn't cheap -- through 2014, NextEra had shelled out $20 billion to develop its wind business -- the long-term rewards could be huge. As the U.S. government begins pushing cleaner emissions standards on electric utilities, NextEra looks primed to be in great shape, with 32 million megawatt-hours of wind generation and approximately 700 MW of solar-power generation in 2014. Both figures are tops in the country for electric utilities. As the cost to provide alternative energy drops, it means NextEra could have a clear cost advantage over its peers. As a bonus, it also means FPL's customers could see smaller price hikes since FPL's costs remain under control.
Despite its heavy investment in alternative energy, the company is also paying out a market-topping 3% yield. With EPS growth looking to remain steady in the 4%-7% range for the foreseeable future, and NextEra selling a basic-need product (electricity), investing in this stock could be a smart way to give your grandkids' savings accounts a jolt.
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>>> Balchem Corporation develops, manufactures, and markets specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, and medical sterilization industries in the United States and internationally.
The company's SensoryEffects segment offers creamer systems, dairy replacers, powdered fats, nutritional beverage bases, beverages, juice and dairy bases, chocolate systems, ice cream bases and variegates, cereals, grain based snacks, and cereal based ingredients; and microencapsulation solutions for various applications, including food, pharmaceutical, and nutritional ingredients. It also provides human grade choline nutrient products for use in wellness applications.
Its Animal Nutrition & Health segment offers microencapsulated products that enhance health and milk production in ruminant animals; chelation technology, which provides enhanced nutrient absorption for species; and choline chloride, an essential nutrient for monogastric animal health.
The company's Specialty Products segment offers ethylene oxide primarily for use in the health care industry; and single use canisters with ethylene oxide for sterilizing re-usable devices. It also sells propylene oxide, a fumigant to aid in the control of insects and microbiological spoilage; to reduce bacterial and mold contamination in shell and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs, and prunes; and to customers seeking smaller quantities and whose requirements include utilization in various chemical synthesis applications.
Its Industrial Products segment provides derivatives of choline chloride for use in industrial applications; and methylamines, which acts as a building block for the manufacture of choline products, as well as used in industrial applications. The company sells its products through its sales force, independent distributors, and sales agents. Balchem Corporation was founded in 1967 and is headquartered in New Hampton, New York. <<<
Sector: Basic Materials
Industry: Chemicals - Major Diversified
>>> American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States and Canada. The company offers water and wastewater services to approximately 1,600 communities in 16 states. It operates approximately 81 surface water treatment plants with approximately 500 groundwater treatment plants and 1,000 groundwater wells; 100 wastewater treatment facilities, 1,200 treated water storage facilities, 1,400 pumping stations, 81 dams, and 49,000 miles of mains and collection pipes. The company also undertakes contracts to design, build, operate, and maintain water and wastewater facilities for military bases, municipalities, the food and beverage industry, and other customers. In addition, it provides warranty-type services to homeowners and smaller commercial customers to protect against the cost of repairing broken or leaking water pipes or clogged or blocked sewer pipes, as well as interior electric line repairs; and water sourcing, transfer services, pipeline construction, water and equipment hauling, and water storage solutions for natural gas exploration and production companies. The company serves residential customers; commercial customers, such as offices, retail stores, and restaurants; industrial customers, including manufacturing and production operations; public authorities, which comprise government buildings and other public sector facilities; and other water utilities, as well as supplies water to public fire hydrants for firefighting purposes, and private fire customers for use in fire suppression systems in office buildings and other facilities, as well as to other water utilities. American Water Works Company, Inc. serves approximately 15 million people with drinking water, wastewater, and other water-related services in 47 states, the District of Columbia, and Ontario, Canada. The company was founded in 1886 and is headquartered in Voorhees, New Jersey. <<<
Sector: Utilities
Industry: Water Utilities
Full Time Employees: 6,700
>>> ResMed Inc. develops, manufactures, distributes, and markets medical equipment for the diagnosis, treatment, and management of respiratory disorders with a focus on sleep-disordered breathing (SDB). Its products include airflow generators, such as CPAP, VPAP and AutoSet systems for the titration and treatment of SBD; and masks, motors, and diagnostic products. The company also offers accessories and other products, such as humidifiers, carry bags, and breathing circuits, as well as data communications and control products, including EasyCare, ResLink, ResControl, ResControl II, TxControl, ResScan, and ResTraxx modules that facilitate the transfer of data and other information to and from the flow generators. ResMed Inc. markets its products to sleep clinics, hospitals, home healthcare dealers, and third-party payers. The company sells its products through a network of distributors and direct sales force in approximately 100 countries internationally. ResMed Inc. was founded in 1989 and is headquartered in San Diego, California <<<
Sector: Healthcare
Industry: Medical Appliances & Equipment
Full Time Employees: 4,340
>>> IDEXX Laboratories, Inc., together with its subsidiaries, develops, manufactures, and distributes products and services primarily for the companion animal veterinary, livestock and poultry, water testing, and dairy markets worldwide. It operates through Companion Animal Group; Water Quality Products; Livestock, Poultry and Dairy; and Other segments. The company provides point-of-care veterinary diagnostic products, including instruments, consumables, and rapid assays; veterinary reference laboratory diagnostic and consulting services; practice management systems and services, and digital imaging systems for veterinarians; and biological materials testing and laboratory animal diagnostic instruments and services for biomedical research community. It also offers diagnostic, health-monitoring, and food safety testing products for livestock, poultry, and dairy; products that test water for certain microbiological contaminants; and point-of-care electrolytes and blood gas analyzers that are used in the human point-of-care medical diagnostics market. The company markets its products through marketing, customer service, sales, and technical service groups, as well as through independent distributors and other resellers. IDEXX Laboratories, Inc. was founded in 1983 and is headquartered in Westbrook, Maine. <<<
Sector: Healthcare
Industry: Diagnostic Substances
Full Time Employees: 6,800
>>> Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments to nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. It operates through two segments, Housekeeping and Dietary.
The Housekeeping segment engages in the cleaning, disinfecting, and sanitizing of patient rooms and common areas of client?s facility, as well as laundering and processing of the personal clothing belonging to the facility's patients. This segment also provides laundry and linen services; maintenance services comprising repair and maintenance of laundry equipment, plumbing, and electrical systems, as well as carpentry and painting services; and distributes laundry equipment.
The Dietary segment is involved in the food purchasing; meal preparation; and the provision of dietician consulting services, which include development of a menu that meets the patient'?s dietary needs. As of December 31, 2015, the company provided its services to 3,500 facilities in 48 states. Healthcare Services Group, Inc. was founded in 1976 and is based in Bensalem, Pennsylvania. <<<
Sector: Services
Industry: Business Services
Full Time Employees: 45,900
>>> Gartner, Inc., an information technology research and advisory company, provides independent and objective research and analysis on the information technology (IT), computer hardware, software, communications, and related technology industries. It operates through three segments: Research, Consulting, and Events.
The Research segment offers objective insight on critical and timely technology and supply chain initiatives for CIOs, other IT professionals, supply chain leaders, digital marketing and other business professionals, technology companies, and the institutional investment community through reports, briefings, and proprietary tools, as well as access to analysts, peer networking services, and membership programs. It also provides analysis on various aspects of technology, including hardware, software and systems, services, IT management, market data and forecasts, and vertical-industry issues. This segment delivers its IT research and insight primarily through a subscription-based digital media service.
The Consulting segment offers consulting, measurement engagements, and strategic advisory services, as well as proprietary tools for measuring and improving IT performance. This segment provides solutions to CIOs, IT executives, and other professionals; targeted consulting services to professionals in specific industries; and actionable solutions for IT cost optimization, technology modernization, and IT sourcing optimization initiatives.
The Events segment provides IT, supply chain, digital marketing, and business professionals the opportunity to attend various symposia, conferences, and exhibitions to learn, contribute, and network with their peers on specific topics, technologies, and industries. The company has operations in the United States, Canada, Europe, the Middle East, Africa, and internationally. Gartner, Inc. was founded in 1979 and is headquartered in Stamford, Connecticut. <<<
Sector: Technology
Industry: Information Technology Services
Full Time Employees: 7,834
>>> CGI Group Inc. provides information technology and business process services. The company offers business intelligence and transformation, change management, cyber security, CIO advisory, digital enterprise, project management, and industry-specific business consulting services; and business intelligence, data management, enterprise application integration, enterprise architecture and content management, enterprise resource planning (ERP), and geospatial solutions. It also provides application development and maintenance, portfolio management, quality assurance and testing, modernization, and migration services; and infrastructure services, such as data center facilities and management, technical service desk, printing and document management, remote infrastructure, transformation, storage as a service, data vaulting, disaster recovery and archiving as a service, bottomless edge-to-core storage, and file sync and share as a service. In addition, the company offers infrastructure solutions and consulting services; and Asset & Resource Management, a solution suite for the utilities industry; Atlas360, a customer relationship management and business process solution; Collections360, a collections and debt management solution; Trade360, a trade solution; and CommunityCare360. Further, it offers FlexProperty, an ERP solution for property management; Payments360; mobile workforce and outage management solutions, such as PragmaCAD and PragmaLINE; Ratabase, a solution for insurance companies; Sm@rtering, a meter infrastructure management solution; and Unify360. The company serves communications, financial services, health, manufacturing, oil and gas, post and logistics, retail and consumer services, transportation, and utilities industries, as well as government. It operates in the United States; Nordics; Canada; France; the United Kingdom; Eastern, Central, and Southern Europe; and the Asia Pacific. The company was founded in 1976 and is headquartered in Montreal, Canada. <<<
Sector: Technology
Industry: Internet Software & Services
Full Time Employees: 65,000
>>> Exponent, Inc., together with its subsidiaries, operates as a science and engineering consulting company worldwide. It operates in two segments, Engineering and Other Scientific; and Environmental and Health.
The Engineering and Other Scientific segment provides services in the areas of biomechanics, biomedical engineering, buildings and structures, civil engineering, construction consulting, electrical engineering and computer science, engineering management consulting, human factors, industrial structures, materials and corrosion engineering, mechanical engineering, polymer science and materials chemistry, statistical and data sciences, technology development, thermal sciences, and vehicle analysis.
The Environmental and Health segment offers services in the areas of chemical regulation and food safety, ecological and biological sciences, environmental and earth sciences, occupational and environmental health risk assessment, and toxicology and mechanistic biology, as well as epidemiology, biostatistics, and computational biology. The company offers approximately 90 different technical disciplines to solve complicated issues facing industry and government. It serves clients in automotive, aviation, chemical, construction, consumer products, energy, government, health, insurance, manufacturing, technology, and other sectors. The company was formerly known as The Failure Group, Inc. and changed its name to Exponent, Inc. in 1998. Exponent, Inc. was founded in 1967 and is headquartered in Menlo Park, California. <<<
Sector: Services
Industry: Management Services
Full Time Employees: 999
>>> Danaher Corporation designs, manufactures, and markets professional, medical, industrial, and commercial products and services worldwide.
Its Test & Measurement segment provides instruments products; services and products that help to convert concepts into finished products; professional tools; and wheel service equipment.
The company's Environmental segment provides instrumentation and disinfection systems; and solutions and services focused on fuel dispensing, remote fuel management, point-of-sale and payment system, environmental compliance, vehicle tracking, and fleet management.
Its Life Sciences & Diagnostics segment offers chemistry systems, immunoassay systems, hematology and flow cytometry products, microbiology systems, and systems and workflow automations solutions. This segment also provides professional microscopes; mass spectrometers; bioanalytical measurement systems; workflow instruments and consumables; and filtration products, which are used to remove solid, liquid, and gaseous contaminants.
The company's Dental segment offers consumables, equipment, and services to diagnose, treat, and prevent disease and ailments of the teeth, gums, and supporting bone.
The company's Industrial Technologies segment provides equipment, consumables, and software for various printing, marking, coding, packaging, design, and color management applications; and a range of electromechanical and electronic motion control products. This segment also offers devices that sense, monitor and control operational or manufacturing variables; instruments, controls, and monitoring systems used in electric utilities and industrial facilities; engineered energetic materials components; and supplemental braking systems for commercial vehicles. The company was formerly known as Diversified Mortgage Investors, Inc. and changed its name to Danaher Corporation in 1984. Danaher Corporation was founded in 1969 and is headquartered in Washington, the District of Columbia. <<<
Sector: Industrial Goods
Industry: Diversified Machinery
Full Time Employees: 81,000
>>> Automatic Data Processing, Inc., together with its subsidiaries, provides business process outsourcing services worldwide. The company operates through two segments, Employer Services and Professional Employer Organization (PEO) Services.
The Employer Services segment offers a range of business outsourcing and technology-enabled human capital management (HCM) solutions, including payroll services, benefits administration services, recruiting and talent management solutions, human resources management solutions, time and attendance management solutions, insurance services, retirement services, and payment and compliance solutions. This segment?s integrated HCM solutions include RUN Powered by ADP, ADP Workforce Now, ADP Vantage HCM, ADP GlobalView, and ADP Streamline, which assist employers of all sizes in all stages of the employment cycle from recruitment to retirement; and ADP SmartCompliance and ADP Health Compliance.
The PEO Services segment provides a human resources outsourcing solution through a co-employment model to small and mid-sized businesses. This segment offers ADP TotalSource that provides integrated human resources management services, as well as integrates key HR management and employee benefits functions, including HR administration, employee benefits, and employer liability management into a single-source solution. The company was founded in 1949 and is headquartered in Roseland, New Jersey. <<<
Sector: Technology
Industry: Business Software & Services
Full Time Employees: 55,000
>>> Accenture plc provides management consulting, technology, and outsourcing services worldwide.
Its Communications, Media & Technology segment provides professional services that help clients accelerate and deliver digital transformation, and enhance business results through industry-specific solutions; and serves clients in communications, electronics, high technology, media, and entertainment industries.
The company's Financial Services segment offers services that help clients enhance cost efficiency, grow their customer base, manage risk, and transform their operations; and serves clients in banking, capital markets, and insurance industries.
Its Health & Public Service segment provides research-based insights and offerings, including digital solutions to help clients deliver better social, economic, and health outcomes; and serves healthcare payers and providers, as well as government departments and agencies, public service organizations, educational institutions, and non-profit organizations.
Its Products segment helps clients enhance their performance in distribution, sales, and marketing; in research and development, and manufacturing; and in business functions, such as finance, human resources, procurement, and supply chain. This segment serves clients in consumer goods, retail, and travel services industries; automotive manufacturers and suppliers, freight and logistics companies, industrial and electrical equipment, consumer durable and heavy equipment companies, and construction and infrastructure management companies; and pharmaceutical, medical technology, and biotechnology companies.
Its Resources segment enables clients to develop and implement new business strategies, improve operations, manage complex change initiatives, and integrate digital technologies; and serves clients in chemicals, energy, forest products, metals and mining, and utilities and related industries. Accenture plc was founded in 1989 and is based in Dublin, Ireland. <<<
Sector: Technology
Industry: Information Technology Services
Full Time Employees: 373,000
Syngenta ->>> ChemChina close to striking deal for Syngenta: sources
Reuters
By Arno Schuetze and Pamela Barbaglia
http://news.yahoo.com/chemchina-close-deal-buy-syngenta-bloomberg-125152887--finance.html
(Reuters) - China's state-owned ChemChina is nearing a deal to buy Swiss seeds and pesticides group Syngenta for around 43 billion Swiss francs ($42.2 billion), two people familiar with the matter said on Tuesday.
The deal, for roughly 470 Swiss francs per share, would be the biggest cross-border deal involving a Chinese buyer and mark an acceleration of a shakeup in the global agrochemicals industry.
It will likely be announced on Wednesday, when Syngenta is scheduled to release its 2015 results, the people said.
One source said minor adjustments to the price were still being discussed.
Syngenta's shares jumped as much 8.4 percent and were 5.7 percent higher at 400 francs at 1352 GMT in Zurich.
ChemChina's offer would be at a premium of about 24 percent to Syngenta's Monday close of 378.40 francs.
Syngenta declined to comment. ChemChina was not immediately available for comment outside regular business hours.
Bloomberg had reported earlier on Tuesday that the deal worth 43.7 billion Swiss francs was near.
Syngenta last year spurned takeover approaches from U.S. seeds giant Monsanto , arguing it can create value on its own.
But as agricultural markets deteriorated and major rivals DuPont and Dow Chemical Co agreed to combine their seeds and pesticides businesses, Syngenta Chairman Michel Demare recently conceded that "going it alone is hardly possible", given what shareholders were expecting.
The likely takeover price would nominally match Monsanto's revised cash-and-stock bid made last August but the value of that offer would have fallen along with Monsanto's share price.
ChemChina's move marks another instance of the country's quest for Western technology and distribution networks.
Similar transactions include last year's buyout of Italian tyre maker Pirelli by ChemChina. In January, ChemChina announced the acquisition of German industrial machinery maker KraussMaffei Group for about $1 billion.
The Chinese government is keen to boost farming productivity as it seeks to cut reliance on food imports amid limited farm land, a growing population and higher meat consumption.
A group of Syngenta shareholders said last month it opposed selling the company to ChemChina and called for the ousting of the Swiss group's leadership.
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Synchrony Financial - >>> More Growth Is in the Cards for Synchrony
By James Passeri
Jan 08, 2016
http://realmoney.thestreet.com/articles/01/08/2016/more-growth-cards-synchrony?puc=yahoo&cm_ven=YAHOO
When General Electric (GE) needed help offloading its appliances to cash-strapped customers during the Great Depression, it created Synchrony Financial (SYF).
The credit arm, which started as a lender for ovens and refrigerators, has since sprawled into the biggest private-label credit card in the country.
But as GE's CEO, Jeff Immelt, spent 2015 throwing out just about every GE finance business save the kitchen sink, more than $20 billion in Synchrony shares were added to the public market. And analysts say it's time to start buying them.
Last year alone, Immelt sold off more than $100 billion of assets that were tied to GE Capital, its longtime lending arm that, among other things, contributed to GE's ensnarement in the 2008 financial crisis as well as its slow recovery. His vision is to get GE back to its core industrial businesses, from manufacturing jet engines to railcars.
Immelt's ambitious effort, which launched in April, includes hiking GE's industrial share of total earnings to 90% by 2018 (from a mere 58% in 2014). And his shareholders appear ready to say goodbye to GE Capital and its stake in Synchrony (GE shares climbed 23% last year throughout the unwinding).
After first spinning Synchrony off in its own initial public offering in the summer of 2014, GE offloaded its remaining 85% equity stake for $20.4 billion last November, marking the biggest share exchange in history. (Immelt was simultaneously wrapping up the largest acquisition in GE's history -- $10 billion for French turbine-maker Alstom's energy businesses in Europe.)
At this point, it should be clear to investors that it's going to be difficult to recognize GE this year from, say, 2008, but the more difficult (and important) question is what investors should be thinking about Synchrony Financial.
In short, Wall Street appears to love Synchrony.
With an average price target of $38.89 (35% above where Synchrony closed Friday), 22 of Synchrony's 24 listed analysts recommend buying the stock, while the other two say hold, according to consensus data compiled by Bloomberg.
And as the company finds its balance without the backing of GE, the word is that Synchrony is going to be an agile competitor with plenty of room to outperform rivals like Discover (DFS) and American Express (AXP) through new partnerships.
American Express was plagued in 2015 by the loss of longtime partner Costco (COST), the sudden death of its president, Ed Gilligan, and unfavorable litigation that will allow AmEx's retailers the freedom to "steer" customers to rival cards.
Synchrony, on the other hand, has recently partnered with refiner Citgo, a deal that will become effective this quarter, which is just one of many healthy growth signs, Jefferies analyst John Hecht wrote in a recent note. Jefferies maintains a Buy position on Synchrony with a $42 price target.
"We believe Synchrony is one of the best-positioned players in the industry as it continues to benefit from strong loan growth as well as continued credit tailwinds," Hecht wrote. "We favor Synchrony into the quarter and expect American Express to continue to face headwinds."
Keefe, Bruyette & Woods is also among the most bullish, setting a $40 price target on Synchrony, and Nomura analysts have labeled Synchrony "our top pick in the cards."
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General Electric - >>> Spinning off segments can unlock value, reduce risk or both. General Electric Co. GE, -1.96% for example, has been working for years to reduce the size of its finance arm, GE Capital. The company completed an initial offering of its U.S. credit-card business, Synchrony Financial SYF, -1.92% in July. That move followed GE’s sale of its 51% stake in NBC Universal to Comcast Corp. CMCSA, -2.11% in 2013. The company also agreed in September to sell its appliances division to Electrolux AB ELUXB, -4.50% in a deal expected to close in 2015.
GE still has quite a diverse set of businesses, with six industrial segments — Power and Water, Oil and Gas, Energy Management, Aviation, Health Care and Transportation — in addition to GE Capital.
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http://www.marketwatch.com/story/maybe-carl-icahn-should-try-to-break-up-these-companies-too-2014-12-30?siteid=bigcharts&dist=bigcharts
>>> Plum Creek (PCL) Inks Big Merger Deal: Should You Hold?
By Zacks Equity Research
December 30, 2015
http://finance.yahoo.com/news/plum-creek-pcl-inks-big-200508825.html
We have issued an updated research report on Plum Creek Timber Co. Inc. PCL on Dec 29, 2015.
Recently, Plum Creek and Weyerhaeuser Co. WY inked a merger deal to create a $23-billion timber, land and forest products company, the largest in the U.S. The combined entity will own over 13 million acres of productive timberland, which will help it reap economies of scale and capitalize on housing recovery.
Plum Creek’s diversified private timberland portfolio enables it to offset several negative effects of cyclical commodity pricing. Further, the Seattle, WA-based timberland real estate investment trust’s (“REIT”) strong balance sheet positions it well to meet the commitments made to its shareholders.
Notably, last October, Plum Creek had announced third-quarter 2015 earnings per share of 58 cents, comfortably beating the Zacks Consensus Estimate of 51 cents as well as improving from the prior-year quarter figure of 34 cents.
However, Plum Creek’s business continues to face adverse effect from seasonality of the forest products industry and high volatility in price of logs and manufactured wood products. Further, increasingly strict environmental policies and cut-throat competition with national and local players pose concerns before the company.
Over the past one month, consensus estimates for the stock for 2015 and 2016 have remained unchanged at $1.09 and $1.37, respectively. Both Plum Creek and Weyerhaeuser currently carry a Zacks Rank #3 (Hold).
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American Tower -- >>> This Cell Phone Tower REIT Is a Strong Buy Now
http://www.thestreet.com/story/13413037/1/this-cell-phone-tower-reit-is-a-strong-buy-now.html?puc=yahoo&cm_ven=YAHOO
By Devesh Kumar Follow
01/05/16
American Tower Corp. (AMT - Get Report) is among certain dividend-paying stocks that should offer a great combination of growth and income in the new year.
Based in Boston, AMT is a real estate investment trust (REIT) that essentially serves as a landlord for wireless companies, by leasing space on its towers for their communications equipment.
Most service operators prefer this model, because they don't need to exhaust cash resources or wait to utilize the towers. American Tower on the other hand strives to put the most number of tenants in each tower.
It's a smart business blueprint that offers a strong play on scale and profitability (12.3% net margin for trailing twelve months). Trading at 33.6 times forward earnings, American Tower is actually available at a steep discount to peers like Crown Castle International Corp. (nearly 45 times) and SBA Communications Corp. (123.7 times).
While Crown Castle and SBA Communications have faster growth metrics, we believe American Tower is a more firmly shaped and reinforced entity with its diversified structure (domestic and global) and large exposure to the industry.
The company is one of the largest global REITs by virtue of being owner, operator and developer of multi-tenant communications properties with a portfolio of over 99,000 communications sites. With the recently announced Viom transaction, its global tower count would be nearly 140,000 towers with almost two tenants per tower.
The company has clearly outperformed the industry by a wide margin, with three-year average revenue growth at 18.8%, trumping the snail-like 1.7% by the industry. On its topline, the company has logged a 27.7%, three-year average upswing vs. the 3.8% managed by its core sector.
Analysts expect the company to maintain the growth momentum. American Tower finished the December-15 fiscal year with an earnings-per-share (EPS) growth of 11.20% backed by a 15.6% revenue upswing. Next year, EPS growth should stay at similar levels (10.10%) and topline rise is expected to clock in 12%.
Over the next five years, American Tower is slated to post an EPS growth of 12.53% every year (which is slightly higher than the sector).
Investment experts offering 12-month price targets for AMT have a median target of $115 -- implying a 19% increase from its last price. Most have a "buy or out-perform" ratings on the stock.
Must Read: PHI, SKM And VIV, 3 Telecommunications Stocks Pushing The Industry Lower
Another metric to help appreciate the impact of American Tower's financial landscape is Adjusted Funds From Operations, or AFFO. This in the third quarter increased by 21.4% to $558 million. American Tower expects its full year 2015 AFFO to come in between $2.115 billion-$2.135 billion, signifying a 17.1% mid-point growth year on year.
With mobile data growth finding its feet, American Tower offers an inside opportunity to be a part of the widespread proliferation that's right around the corner.
And finally, American Tower is also an active M&A player, which allows it to locate and grab fresh, new assets and strengthen its portfolio.
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>>> Reed's Holds Talks to Get Into Restaurant Chains' Soda Fountains
by Jennifer Kaplan
December 15, 2015
http://www.bloomberg.com/news/articles/2015-12-15/reed-s-holds-talks-to-get-into-restaurant-chains-soda-fountains
Maker of Original Ginger Brew talking to three national chains
One deal could almost double the company's sales, CEO says
Reed’s Inc. is in discussions to get its natural beverages into soda fountains in major restaurant chains, aiming to capitalize on a shift by companies like Panera Bread Co. away from fare with artificial ingredients.
Reed’s is in talks with three different fast-casual restaurants that aim to end or lessen their dependence on the industry’s Big Two -- Coca-Cola Co. and PepsiCo Inc. -- for soft-drink service, Chief Executive Officer Christopher Reed said in an interview. One of those deals, worth $40 million, would almost double the company’s sales, he said. Reed declined to name the potential partners, beyond saying they were national brands.
The restaurants want to replicate their existing soda flavors, though without the artificial ingredients, Reed said. His company, which is known for its Original Ginger Brew, has been experimenting with “knocking off” other flavors for years, he said.
“What we’re trying to do is say, ‘We’re taking what you like to eat and making it healthier,’” Reed said.
Reed’s shares jumped 11 percent to $5.90 after Bloomberg reported on the discussions. The stock had been down 10 percent this year before the rally.
Panera’s Plans
Beverages are seen as the next battlefield for fast-casual companies such as Panera and Chipotle Mexican Grill Inc., which have already stripped chemicals and other additives from the food on their menus. Panera said in August that it was offering more beverages without artificial flavors, colors, sweeteners and preservatives. At the time, Panera said it was trying out different bottled drinks but hadn’t yet altered its fountain sodas.
Panera declined to comment on a potential partnership with Reed’s, which is based in Los Angeles.
Chipotle has removed all genetically modified organisms from its food menu, but it hasn’t taken a stance on beverages. Other companies also have made a push toward more natural menus. Papa John’s International Inc. eliminated additives from the chain’s pizza, and Starbucks Corp. removed artificial ingredients from its pumpkin spice latte.
Reed’s makes traditional colas as well as drinks customized for specific menus. For example, the company is working with a restaurant that sells a Thanksgiving-style turkey sandwich and has offered to make it a cranberry soda, Reed said. The company also can make his drinks low-calorie without artificial ingredients, he said.
“We are the most disruptive beverage company out there,” he said.
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>>> 13 companies can't afford their big dividends
Matt Krantz, USA TODAY
December 11, 2015
http://www.usatoday.com/story/money/markets/2015/12/11/payout-ratio-big-dividends-afford/77115700/
Dividends are far from guaranteed - and they certainly aren't forever. Investors are finding this out the hard way this year - and wondering which dividends could be in trouble next.
There are 13 companies in the Standard & Poor's 500, including Frontier Communications (FTR), ConocoPhillips (COP) and casino operator Wynn Resorts (WYNN), that have paid out more in dividends than they've earned in profit over the past 12 months, according to a USA TODAY analysis of data from S&P Capital IQ. Each of these companies have dividend yields of 6% or higher - making them pretty expensive dividends to keep relative to the market as a whole, which is yielding about 2%.
When dividends rise over what a company has earned, its so-called payout ratio tops 100% and that gets investors' attention. If the situation continues, a company might need to scale back spending in other areas such as on new equipment, use up cash reserves or cut the dividend. One of the companies with a lofty payout ratio, pipeline operator Kinder Morgan (KMI), already announced this week a 75% reduction in its dividend for next year.
Investors are getting sensitive about the security of dividends since they're being cut at a rapid pace this year. So far this year, there have been 15 cuts to dividends by S&P 500 companies, an increase of 88% from last year, says Howard Silverblatt of S&P Dow Jones Indices. Two S&P 500 companies have eliminated their dividends this year, while none did so in the past two years.
Now investors are wisely watching and worrying what other companies might be paying more dividends than they can afford from their earnings.
Take Frontier Communications - a provider of telecom services based in Norwalk, Conn. The company's 8.5% dividend yield has made it a darling with income investors for years. Here's the issue, though, The company has paid dividends of $500 million over the past 12 months - a period during which it reported a net loss of $79 million. Some might argue the payout ratio is too simplistic since the company generated $1.3 billion in cash from operations during the past 12 months. Still, the company's heavy capital investment needs totaled $819 million during that time, meaning that its free cash flow is just $504 million or just about the same as what it is paying out in dividends. Frontier hasn't cut its dividend since 2011, says S&P Capital IQ.
Energy companies have dividend-dependent investors worried, for good reason. A number of energy companies have already cut their dividends this year. Crashing oil prices have made dividend payments much more onerous. ConocoPhillips' annual dividend now yields 6.1%. But the company has made dividend payments of $3.6 billion even as it's posted a net loss of $1 billion over the past 12 months. ConocoPhillips appears willing to defend the dividend by taking an ax to capital spending instead of the dividend. The company cut its capital spending by a quarter to $12.3 billion over the past twelve months from the 2014 level. It also announced this week plans to cut capital spending again in 2016.
No one benefits from Wynn Resorts' 7.2% yield more than Steven Wynn, who is the largest individual owner of the company's stock with a 10.9% stake. But the company's dividend payments are nearly four times greater than what the company earned the past 12 months.
It's important to stress while these companies' dividends outstripped profit the past 12 months, that doesn't mean the dividends will be cut. Companies can trim other costs in order to protect their dividends. The companies also have cash and short-term investments they can tap to keep a dividend going. If profits bounce back, the dividends could be no big sweat.
But such unaffordable dividends will only become more onerous the longer they outstrip profit.
S&P 500 COMPANIES PAYING OUT MORE IN DIVIDENDS THAN THEY'VE EARNED *
Company, Symbol, Dividend yield, payout ratio
Kinder Morgan, KMI, 12.1%, 329.6%
ONEOK, OKE, 11.1%, 160.3%
Williams, WMB, 8.85%, 528.8%
Frontier Communications, FTR, 8.54%, NM **
CenturyLink, CTL, 8.19%, 166.1%
Iron Mountain, IRM, 7.17%, 421.4%
Wynn Resort, WYNN, 7.15%, 359.1%
HCP, HCP, 6.29%, 437.9%
Spectra Energy, SE, 6.18%, 128.4%
Murphy Oil, MUR, 6.13%, NM
ConocoPhillips, COP, 6.11%, NM
CenterPoint Energy, CNP, 6.03%, NM
Mattel, MAT, 6.01, 169.2%
* Based on dividends and net income the past 12 months
** Company posted net loss the past 12 months
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>>> Retail Opportunity Investments Corp., a real estate investment trust (REIT), engages in the acquisition, ownership, and management of necessity-based community and neighborhood shopping centers in the eastern and western regions of the United States. As of December 31, 2011, its portfolio consisted of 30 owned retail properties totaling approximately 3.2 million square feet of gross leasable area. The company has elected to be taxed as a REIT, for U.S. federal income tax purposes. The company is based in San Diego, California with additional offices in New York City; Rancho Cordova, California; West Linn, Oregon; and Federal Way, Washington. <<<
Exxon, Verizon -- >>> 3 Top Stocks for Low-Risk Investors
Here are three stocks that won't keep you up at night.
Timothy Green
Nov 13, 2015
http://www.fool.com/investing/general/2015/11/13/3-top-stocks-for-low-risk-investors.aspx?source=eogyholnk0000001&utm_source=yahoo&utm_medium=feed&utm_campaign=article
While the riskiest of stocks are often the ones that provide investors with amazing returns, the downside is the very real possibility of a permanent loss of capital. For every high-flying growth stock, there are many more that collapse, wiping out investors in the process.
For investors unwilling or unable to stomach this risk, there are still a few options that will allow for sound sleep in lieu of the potential for massive gains. Verizon (NYSE: VZ), Pfizer (NYSE: PFE), and ExxonMobil (NYSE: XOM) are three stocks that our Foolish contributors believe are well-suited for low-risk investors.
Tim Green (Verizon): While there are no guarantees in the world of investing, Verizon is a good option for those averse to risk. The company is the largest wireless carrier in the country, with 110.8 million wireless connections at the end of the third quarter, and its wireless service is routinely rated as the highest-quality option.
AT&T is the only other major player, with Sprint and T-Mobile having smaller subscriber bases. Building out and maintaining a wireless network is extremely capital-intensive: Verizon has spent $27 billion on capital expenditures over the past 12 months, for example. This enormous cost makes scale a big advantage in this business.
While the U.S. smartphone market is mostly saturated, meaning growth from Verizon's wireless business will be fairly muted going forward, the company is investing in new initiatives. Verizon recently launched an ad-supported mobile video service, Go90, with the ultimate goal of leveraging the vast amount of subscriber data maintained by the company. Advertising and data will be the drivers of growth for Verizon in the future.
Verizon's growth will likely be slow going forward, but the company's dominance in the wireless business makes the stock a fairly safe bet. The stock isn't all that expensive, with analysts expecting nearly $4 per share in earnings in both 2015 and 2016. This puts the P/E ratio at roughly 11, and with a dividend yield just shy of 5%, low-risk investors are getting a pretty good deal.
George Budwell (Pfizer): Among healthcare stocks in general, and pharma stocks in particular, there are few rock-solid safe havens for investors these days.
I think Pfizer is probably your best bet if you're looking to capitalize on the trend of aging America and increased spending on healthcare. I like the stock right now because the company's innovative products business has been posting impressive levels of growth, driven by newer medicines like the breast cancer drug Ibrance, the blood thinner Eliquis, and the pneumonia vaccine Prevnar 13.
Although the drugmaker's established products business continues to act like an anchor on its earnings, management's desire to pair up with the specialty pharma Allergan (NYSE: AGN) could change this situation in a hurry.
What we are likely to see is Pfizer break off its innovative products into the Allergan family of products, and subsequently launch a generic drug business. Presumably, current shareholders would receive a stake in both businesses, but the one that's most attractive would obviously be the combined Allergan-Pfizer entity. Based on how Pfizer's innovative business is performing so far, I believe the Allergan-Pfizer business could realistically post 20%-plus growth on its top line for several years moving forward.
But even if this merger doesn't come to pass, Pfizer still offers investors one of the highest dividend yields in the sector and a projected 5-year CAGR for its EPS of nearly 8%. So, I find this Big Pharma to be one of the more attractive stocks in the healthcare sector, and perhaps one of the safest investments as well.
Matt DiLallo (ExxonMobil): Warren Buffett famously quipped that it is "only when the tide goes out do you discover who's been swimming naked." In the energy industry, that tide was the price of oil. In falling from its peak north of $100 a barrel to recent lows in the $40 per barrel range, it has exposed a number of oil companies that were overexposed to debt.
That said, it has also made it pretty clear that ExxonMobil is a picture of modesty. Exxon has the best balance sheet in the entire energy space, with a Triple-A credit rating and low leverage.
Because of this low leverage the company hasn't been scrambling to sell assets to pay down debt. Instead, Exxon built up a war chest of cash, which could be used to take advantage of the situation.
The other factor that really makes Exxon a low-risk stock compared to the rest of the industry is its focus on driving peer-leading returns, even if the upside is a little more limited.
Because of this focus, Exxon has avoided investing in borderline projects just to drive growth, which has really paid off, as those projects would have been under a lot of pressure now that prices have plunged.
Exxon knows the oil and gas business is risky enough; that's why it only uses a modest amount of debt and focuses on returns over growth. These two factors are what make Exxon a great stock for investors who don't like risk, but still want some energy in their portfolios.
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>>> 8 Great Dividend Stocks You Never Heard Of
http://m.kiplinger.com/slideshow/investing/T018-S003-8-great-dividend-stocks-you-never-heard-of/index.html?page=2
Aqua America
Headquarters: Bryn Mawr, Pa.
Share price: $24.37
Market capitalization: $4.3 billion
Dividend yield: 2.7%
Years of consecutive dividend increases: 23
It may not be surprising to find a utility on a list of dividend payers. But Aqua America (WTR), a holding company for water and wastewater utilities, stands out for its potential to keep raising its payout.
Aqua America already serves nearly 3 million people in eight states, including North Carolina, Ohio and Pennsylvania. But with close to 53,000 water systems in the U.S., expansion opportunities abound. In 2013, Aqua America bought 15 operations, and so far this year it has completed another eight acquisitions.
The purchases are helping pump up earnings, which increased at a strong annualized rate of 15% from 2009 through 2013. In addition, Aqua America plans to spend roughly $1 billion on system upgrades from now through 2016, much of which will be paid for by state-approved surcharges and rate increases. That should bolster earnings, according to a report from Robert W. Baird, a Milwaukee-based investment firm. It will also help fuel dividend growth. Aqua America lifted its payout by 9% earlier this year, and over the past decade, it has boosted the dividend by an average of 8% per year.
The stock has returned just 5.3% so far this year, compared with 9.0% for the S&P 500. Aqua America looks pricey, trading at 20 times forecasted earnings for the next 12 months. But that’s slightly below its average forward price-earnings ratio of 21 for the past five years.
BD (Becton, Dickinson)
Headquarters: Franklin Lakes, N.J.
Share price: $116.97
Market capitalization: $22.4 billion
Dividend yield: 1.9%
Years of consecutive dividend increases: 42
BD (Becton, Dickinson) (BDX) makes syringes, IV catheters and other run-of-the-mill medical supplies that most of us barely notice. But these tools are health care essentials, and the 117-year-old company continues to find sources of growth. The biggest driver: overseas sales. BD now has operations in more than 50 countries, with about 60% of sales coming from abroad. And in the company’s latest quarterly statement, overseas revenues increased 6% (adjusted for currency fluctuations) from the same period a year earlier. U.S. revenues rose only 2.8%.
Based on the strength of BD’s foreign operations, analysts believe earnings will rise 9% in both 2015 and 2016. That should provide ample space to increase the dividend, which currently accounts for only 35% of estimated 2014 earnings. Indeed, over the past five years, BD has ratcheted up its dividend at an average rate of 11% annually. That growth rate may justify a higher P/E than its competitors have. The stock, which has gained 6.9% so far this year, trades at 18 times estimated year-ahead earnings, compared with 17 for the average health care company in the S&P 500.
Dover
Headquarters: Downers Grove, Ill.
Share price: $88.88
Market capitalization: $14.8 billion
Dividend yield: 1.8%
Years of consecutive dividend increases: 59
Dover (DOV) produces industrial components that consumers rarely encounter, such as oil and gas drilling equipment and plastic tube connectors. But the manufacturer, which has consistently hiked its dividend for more than half a century, is worth getting to know. Case in point: Despite the global economy’s uneven growth so far in 2014, Dover’s sales are improving. Orders across the firm’s four main segments—energy, engineered systems, fluids, and refrigeration and food equipment—have been strong, climbing by an average of 8% in the first six months of 2014 from the same period the year before. “Dover’s results stand out,” writes Nicholas Heymann, an analyst at William Blair, a Chicago-based investment bank.
Meanwhile, the company continues to raise its dividend at a healthy clip. Over the past five years, the payout has moved up at an annualized rate of 9%. Dover’s stock trades at 17 times estimated year-ahead earnings, a slight premium to the average industrial-stock P/E of 16. But analysts expect Dover’s earnings to rise 12% next year, compared with 11% for its average competitor. So far this year, the stock has returned 11.9%.
Genuine Parts Company
Headquarters: Atlanta
Share price: $87.85
Market capitalization: $13.4 billion
Dividend yield: 2.6%
Years of consecutive dividend increases: 58
During the recession, Genuine Parts (GPC) survived better than most. That’s because the company’s main business segment is the wholesale distribution of car replacement parts through NAPA auto stores, and during tough economic times consumers often opt to repair old cars rather than buy new ones. So although Genuine Parts’ earnings fell in both 2008 and 2009, they did not collapse. The stock lost only 16.3% in 2008, much better than the S&P 500’s plunge of 37%.
Since then, Genuine Parts’ results have improved steadily. Sales in the first half of 2014 for the entire company, which includes Genuine Parts’ three other business lines—wholesale distribution of electrical materials, industrial replacement parts and office supplies—rose 10% from the same period the year before. The company’s S.P. Richards subsidiary was named as the primary wholesaler for the newly merged Office Depot and OfficeMax stores. And Genuine Parts is expanding overseas as well. Last year, it bought Exego Group (now GPC Asia Pacific), an auto-parts distributor in Australia.
All of that has made it possible for the company to continue to increase its dividend, this year by 7%. The stock trades at 18 times estimated year-ahead earnings, on par with the average for its sector (companies that make non-essential consumer goods).
V.F. Corporation
Headquarters: Greensboro, N.C.
Share price: $63.87
Market capitalization: $27.5 billion
Dividend yield: 1.6%
Years of consecutive dividend increases: 41
You may have never heard of V.F. Corporation (VFC), but you probably wear some of its products. The apparel manufacturer owns more than 30 brands, including The North Face, Timberland and Wrangler. Lately, the company has benefited from rising consumer demand for activewear. In fact, sales of activewear were up 9% across the industry last year, compared with 2% for the total apparel market, according to the NPD Group, which tracks consumer trends. (Raise your hand if you’ve worn yoga pants or a running jacket to the grocery store.)
With its top activewear brands, VF is doing a good job of riding the trend. Revenues in the second quarter were up 8% from the same quarter the year before, and earnings per share were up 16%. VF’s global reach is also an advantage. A little more than one-third of the company’s sales come from overseas. In the latest quarter, international sales grew 14%.
The momentum is likely to continue. Analysts expect VF’s earnings to expand 14% this year and 13% next year. That may enable the company to continue to deliver impressive dividend increases (it boosted the payout by 21% last year). After soaring 68% last year, VF shares are essentially flat so far in 2014. But the breather may be a good thing: The stock trades at 20 times forecasted year-ahead earnings, compared with 18 for the average company that makes non-essential consumer goods.
>>> 10 Companies Benjamin Graham Would Invest in Today - September 2015
By GuruFocus.com
September 9, 2015
http://finance.yahoo.com/news/10-companies-benjamin-graham-invest-194003479.html
Out of the multitude of companies, which ones would legendary value investor Benjamin Graham buy today? I've compiled 10 great companies that fit the ModernGraham criteria, based on Benjamin Graham's methods. The companies in this list pass the rigorous requirements of either the Defensive Investor or the Enterprising Investor and are undervalued by the market.
Here are the ten companies Benjamin Graham would invest in today:
Aflac Inc.
Aflac (AFL) passes the initial requirements of both the Defensive Investor and the Enterprising Investor. In fact, the company passes every requirement of both investor types, which is a rare accomplishment indicative of the company's strong financial position. As a result, all value investors should feel very comfortable proceeding to the next part of the analysis, which is a determination of the company's intrinsic value.
When it comes to that valuation, it is critical to consider the company's earnings history. In this case, it has grown its EPSmg (normalized earnings) from $3.89 in 2011 to an estimated $6.13 for 2015. This is a fairly strong level of demonstrated growth, and outpaces the market's implied estimate for annual earnings growth of only 0.87% over the next 7-10 years.
In recent years, the company's actual growth in EPSmg has averaged around 11.5% annually, and while the ModernGraham valuation model reduces the actual growth to a more conservative figure when making an estimate, the model still returns an estimate of intrinsic value well above the current price, indicating that Aflac is significantly undervalued at the present time. (See the full valuation)
CF Industries Holdings
CF Industries (CF) passes the initial requirements of both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only concerned by the low current ratio, while the Enterprising Investor's only concern is the level of debt relative to the net current assets. As a result, all value investors should feel very comfortable proceeding to the next part of the analysis, which is a determination of the company's intrinsic value.
When it comes to that valuation, it is critical to consider the company's earnings history. In this case, it has grown its EPSmg (normalized earnings) from $2.46 in 2011 to an estimated $4.82 for 2015. This is a fairly strong level of demonstrated growth and outpaces the market's implied estimate for annual earnings growth of only 2.33% over the next 7-10 years.
In recent years, the company's actual growth in EPSmg has averaged around 19.25% annually, and while the ModernGraham valuation model reduces the actual growth to a more conservative figure when making an estimate, the model still returns an estimate of intrinsic value well above the current price, indicating that CF Industries is significantly undervalued at the present time. (See the full valuation)
Discover Financial Services
Discover Financial Services (DFS) qualifies for the Enterprising Investor but not the Defensive Investor. The Defensive Investor is concerned by the short dividend history, while the company passes all of the Enterprising Investor's requirements. As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham's methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.
As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $2.49 in 2011 to an estimated $4.87 for 2015. This level of demonstrated growth is greater than the market's implied estimate of 1.25% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham's formula, to return an estimate of intrinsic value above the market price. (See the full valuation)
Eastman Chemical Co.
Eastman Chemical Company (EMN) qualifies for either the Defensive Investor or the Enterprising Investor. The Defensive Investor is only initially concerned with the low current ratio, while the Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all value investors following the ModernGraham approach based on Benjamin Graham's methods should feel comfortable proceeding with the next stage of the analysis.
As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $2.88 in 2011 to an estimated $5.62 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 2% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham's formula, returns an estimate of intrinsic value well above the price. (See the full valuation)
KKR & Co. LP
KKR & Co. LP (KKR) qualifies for the Enterprising Investor but not the Defensive Investor. The Defensive Investor is concerned by the short history as a publicly traded company, while the company passes all of the Enterprising Investor's requirements. As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham's methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.
As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $0.44 in 2011 to an estimated $1.83 for 2015. This level of demonstrated growth is greater than the market's implied estimate of 2.32% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham's formula, to return an estimate of intrinsic value above the market price. (See the full valuation)
LyondellBasell Industries
LyondellBasell Industries (LYB) qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the short history post bankruptcy, and the high PB ratio. The Enterprising Investor is only initially concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham's methods should feel comfortable proceeding with further research into the company.
As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) post bankruptcy to an estimated $7.50 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 1.28% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham's formula, returns an estimate of intrinsic value above the price. (See the full valuation)
PulteGroup Inc.
PulteGroup (PHM) is not suitable for Defensive Investors but it does pass the initial requirements of the Enterprising Investor. The Defensive Investor is concerned with the insufficient earnings growth or stability over the last 10 years, and the unstable dividend history, while the Enterprising Investor's only concern is the lack of earnings stability over the last five years. As a result, all Enterprising Investors should feel very comfortable proceeding to the next part of the analysis, which is a determination of the company's intrinsic value.
When it comes to that valuation, it is critical to consider the company's earnings history. In this case, it has grown its EPSmg (normalized earnings) from a loss of $3.12 in 2011 to an estimated gain of $2.11 for 2015. This is a fairly strong level of demonstrated growth, and outpaces the market's implied estimate for annual earnings growth of only 0.61% over the next 7-10 years.
In recent years, the company's actual growth in EPSmg has averaged considerably more than the market's estimate annually, and while the ModernGraham valuation model reduces the actual growth to a more conservative figure when making an estimate, the model still returns an estimate of intrinsic value well above the current price, indicating that PulteGroup is significantly undervalued at the present time. (See the full valuation)
Valero Energy Corporation
Valero Energy Corporation (VLO) qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, and the insufficient earnings growth or stability over the last 10 years. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham's methods should feel comfortable proceeding with the evaluation.
As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $0.95 in 2011 to an estimated $5.66 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 1.58% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham's formula, returns an estimate of intrinsic value above the price. (See the full valuation)
Western Refining Inc.
Western Refining Inc. (WNR) qualifies for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability over the last 10 years as well as the inconsistent dividend record over that period. The Enterprising Investor is only initially concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham's methods should feel comfortable proceeding with the evaluation.
As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from a loss of $0.13 in 2011 to a gain of $3.97 for 2015. This level of demonstrated earnings growth surpasses the market's implied estimate of 1.35% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham's formula, returns an estimate of intrinsic value above the price. (See the full valuation)
Weyerhaeuser Company
Weyerhaeuser Company (WY) qualifies for the Enterprising Investor but is not suitable for the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth or stability over the last 10 years, and the high PEmg and PB ratios. The Enterprising Investor is only initially concerned by the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham's methods should feel comfortable proceeding with further research into the company.
As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $0.89 in 2011 to an estimated $1.49 for 2015. This level of demonstrated earnings growth outpaces the market's implied estimate of 6.24% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham's formula, returns an estimate of intrinsic value above the price.
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>>> The Kraft-Heinz merger & the monopoly on food
By Frank J. Maduri
March 26, 2015
http://www.upi.com/Top_News/Analysis/2015/03/26/The-Kraft-Heinz-merger-the-monopoly-on-food/UPI-4591427324041/?st_rec=3061435878398
The merger between Kraft Foods and H.G. Heinz further consolidates the global food production into the hands of about a half dozen companies. These six multinational powerhouse corporations can exert enormous power over the retail grocery channel, and by extension control the dynamics of a necessary area for all people: the access to food. These corporations represent an emerging monopoly in an area where competition is needed, arguably, more than just about any other industry in the world.
The merger between these two U.S. based food industry giants, each with a collective stable of some of the most revered and iconic branded food product lines in the industry, is just the latest in a wave of M&A activity to strike the industry over the past several years. It is, however, a huge transaction involving stock and a special cash dividend financed by a $10 billion investment by 3G Capital and Berkshire Hathaway, which are the two firms who combined forces to purchase Heinz in 2013 and transition it into a privately held company.
Under the terms of the merger agreement, Heinz will return to being a public traded entity with a 51% ownership stake in Kraft. The owners of Kraft stock will control a 49% portion of the new combined food industry titan. The prognosis for the future is interesting because while the magnitude of this merger transaction will preclude Heinz-Kraft from completing any further brand purchases in the near term; the newly minted company upon completion of the regulatory process will be well positioned to be able to make additional acquisitions of other competing food brands in the future.
Going Rogue
The rise of celiac disease and heightened awareness regarding food allergens combined with the wellness trends in the industry have given windows of opportunity to privately owned companies, especially in the natural foods area, to challenge the large scale food manufacturing companies.
A few examples of this scenario would be Chobani, Food for Life, Nature's Path, and until recently Enjoy Life. The Enjoy Life brands were purchased by Mondelez International (formerly Kraft's snack foods division) in a deal which demonstrates the value of allergen free product lines in the new American consumer consciousness.
These privately owned companies have entered the grocery store channel and competed rather well with the more established players evidenced in Chobani's ability to take market share from yogurt heavyweights Dannon and Yoplait (a General Mills business unit) which is not easy to do given the costs of refrigerated shelf space.
The exponential increase in gluten free food offerings will lead to more food industry consolidation as well as the approach used by General Mills. In order to compete with the smaller companies making high quality gluten free and allergen free products, General Mills launched their own offerings in those areas or rolled out line extensions of existing brands to include a gluten free option for the consumer. This method allows them to compete and capitalize on an emerging food industry trend without having to commit resources to an acquisition which is costly both in terms of time and financially.
Skyrocketing Costs
The skyrocketing costs for staple food products coupled with a shrinking middle class and further food industry consolidation is the formula for a very combustible situation. The average worker also has seen flat wages with little to no cost of living increases factored in, and the increased cost for even basic food items let alone the organic or health food options will lead to a rise in food insecurity. Many regions of the U.S. have already witnessed an increase in the demand for services from food pantries and other forms of assistance.
Moreover, the alarming component of the merger between Kraft and Heinz is the potential for their combined expertise as well as access to capital which will create conditions where these "rogue" privately owned companies will find it increasingly difficult to survive. The acquisition potential for Heinz-Kraft extends even to larger companies which are struggling such as Campbell's Soup Company, ConAgra, and cereal giant Kellogg.
The high costs associated with shelf space in the grocery store channel as well as the fact that the premium space is controlled by the big industry players means that a monopoly is not just likely, it is inevitable. The Federal Trade Commission was concerned decades ago with the Bell Telephone monopoly leading of course to the famous creation of the "baby Bells". More recently the anti-trust movement has been focused on airlines and the energy industry. However, a monopoly when it comes to the access to food products can be a dangerous scenario with far-reaching consequences.
The reliance of the food industry on globally sourced commodity products gives me pause when I realize that six or seven conglomerates will control the supply of finished products available to the masses. This is an area of self-interest for every American, and one in which I think our national, as well as global, discourse will be focused upon in the months ahead.
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American Tower, Verizon -- >>> Verizon’s Transaction with American Tower: What You Need to Know
Market Realist
By Ray Sheffer
April 2, 2015
http://finance.yahoo.com/news/verizon-transaction-american-tower-know-200553576.html
Verizon Reports Growing Wireless Segment Revenues in 2014
Verizon’s tower transaction
Verizon (VZ) signed an agreement with American Tower (AMT) for a wireless tower portfolio transaction on February 5, 2015. According to the agreement, American Tower will have sole rights to lease and operate ~11,324 wireless towers—owned by Verizon—for an initial payment of ~$5 billion. American Tower will also buy 165 Verizon towers for $0.1 billion. Verizon’s tower transaction is expected complete by the end of 1H15. American Tower will make an initial payment of ~$5.1 billion for this transaction.
Verizon has been interested in rationalizing its asset base and tower sales for some time now. The company was looking for favorable terms and pricing to monetize its tower base. AT&T (T) had beaten Verizon in tower monetization in 2013. AT&T entered into a similar tower transaction agreement with Crown Castle (CCI) for ~9,700 wireless towers in October 2013.
American Tower takes over the majority of Verizon’s towers
This tower transaction covers the majority of Verizon’s towers in the 50 united states. According to American Tower’s press release, it can lease and operate these towers for an average tenure of ~28 years. At the end of the tenure, it can also buy these towers from Verizon for ~$5 billion. The company will have to make payments during the 2034–47 period.
According to American Tower, Verizon will sublease capacity on these towers from American Tower for a monthly cost of $1,900 per tower for at least ten years. However, the tenure can be extended. Nonetheless, there is a 2% per annum escalator clause on the monthly rent.
If you want to take on diversified exposure to Verizon, you can invest in the Technology Select Sector SPDR Fund (XLK). The ETF held ~5% in the company on March 19, 2015.
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>>> How the Kinder Morgan Deal Affects Investors’ Taxes
http://blogs.wsj.com/totalreturn/2014/08/12/qa-how-the-kinder-morgan-deal-affects-investors-taxes/
Aug 2014
By Laura Saunders
—Bloomberg News
Note: This post has been updated to answer additional questions from readers.
Tax advisers say some individual investors in Kinder Morgan’s two master limited partnerships could face an unwelcome tax bill as a result of the reorganization announced by the company.
A spokesman for company says it believes that “a KMP unitholder will be substantially better off on both a pretax and an after-tax basis versus the status quo when all aspects are taken into consideration.”
Here are answers to investors’ tax questions about the deal.
Q: I own Kinder Morgan MLP units, and I have been receiving tax-free payouts. Why would I owe a tax on the exchange of my units for cash and stock?
A: The MLPs are organized as partnerships that benefit from substantial tax deductions, and the taxes on the payouts aren’t eliminated but rather deferred. When the units, as shares in an MLP are called, are sold or exchanged—as they will be in the reorganization—the deferred taxes come due.
Q: What’s the tax rate on the exchange of units for cash and shares?
According to Bob Gordon, a tax strategist who heads Twenty-First Securities in New York, that depends on an individual’s overall income. But most of the gains on this transaction will probably be taxed at higher rates for ordinary income, rather than at lower long-term capital-gain rates.
Q: Could I have skipped the tax by holding the MLP units until my death?
A: Yes, says Mr. Gordon, because at that point the deferred taxes would no longer be due. The exchange proposed by Kinder Morgan, however, makes this strategy unavailable.
Q: How much tax per unit will an investor owe on the proposed transaction?
A: According to estimates released by the company, the tax owed by an average investor in KMP units could range from $12.39 to $18.16 per unit, depending on the individual’s tax rate. The estimates also assume that passive losses haven’t already been used by the investor and that the KMI price per share is between $36.12 and $44.44, the company said.
Mr. Gordon expects the impact on individuals to vary widely, depending on when the units were bought and other factors. The company has said it expects to distribute $10.77 of cash per unit of KMP, which wouldn’t cover the tax bill for an average investor cited above.
Q: Could I avoid the tax by making a charitable gift of some MLP units?
A: MLP unit holders won’t be able to mitigate taxes by using the units to make their charitable gifts, says Mr. Gordon. While donations of appreciated stock shares are often deductible at full market value, donations of partnership units are not, he says.
Q:What about giving units away to a friend or relative in a lower tax bracket?
A: MLP unit holders who already intend to make gifts to individuals in a lower bracket could minimize taxes by giving away units, says Robert Willens, an independent tax adviser based in New York. The recipient would owe the tax on the exchange of units for shares, but at a lower rate. The recipient would then own shares in KMI going forward.
Q: What will be the tax effect of the exchange if I invest in a fund holding Kinder Morgan’s MLP units?
A: Mr. Gordon says the tax effect on funds that are “closed-end” or organized as C-corporations should be minimal, because they already have set aside money for the deferred taxes.
However, mutual funds that are “registered investment companies” will realize taxable income if they hold the affected MLP units. They will pass this income through to their investors unless the fund has losses to offset it, says Mr. Gordon. In these mutual funds, the MLP units typically make up less than 25% of total assets.
Q: What if I hold shares in KMR, a Kinder Morgan limited-liability company?
A: A much smaller group of investors hold shares in KMR. These investors will have no tax due on the exchange of their shares for shares in KMI. They are slated to receive no cash, and the tax cost of their original shares will “carry over” and become the tax cost of the shares they receive from the exchange, according to Mr. Willens.
Q: What if an investor holds Kinder Morgan MLP units in an Individual Retirement Account or Roth IRA?
A: Experts say it usually isn’t a good idea to hold MLP units in a tax-deferred retirement account, because if a taxpayer has more than $1,000 of certain MLP income, it’s subject to current tax even though the account itself is tax-deferred.
This income is known as UBTI, for Unrelated Business Taxable Income, and typically the MLP’s K-1 statement lists the amount of UBTI per unit.
According to Mr. Willens, the sale or exchange of MLP units held within an IRA or Roth IRA is likely to generate taxable income as well.
Q: Would the tax be lower if I sold my MLP units now?
Mr. Willens says the tax will likely be lower, but only because the investor will receive less. The current exchange offer contains a premium that will become more certain as the exchange date approaches. (Kinder Morgan has said it expects the deal to close in the fourth quarter, but it hasn’t specified a date.)
Selling units now doesn’t avoid triggering deferred taxes, Mr. Willens adds.
Q: Which unit holders will owe the most taxes—those who bought years ago or those who bought recently?
Experts say that the longer an investor has held MLP units, the higher the taxes are likely to be.
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>>> First Punic War
March 10, 241 BC
By Zachary Beasley
First Punic War”
The Romans and Carthaginians were engaged in what was called the First Punic War, beginning in 264 BC. Carthage was the superior force at the beginning of the conflict and the term “Punic” is Latin for the Carthaginians as it began as a Phoenician colony in North Africa. The conflict between the two powers was for control of the western Mediterranean Sea and began when they clashed in Messana, the closest city to the Italian peninsula, in Sicily.
In 288 BC, Messana had been captured by the Mamertines, a group of mercenaries originally hired by Agathocles of Syracuse. While that was going on, rebel Campanian Romans took Rhegium. In 271-270 BC, Roman Republicans retook Rhegium and punished the rebels who still lived there. Meanwhile, the Mamertines were marauding across the countryside, until they collided with Syracuse. Hieron II of Syracuse defeated the Mamertines, who were forced to retreat back to Messana and appeal to Carthage and Rome for protection. The Carthaginians replied first, offering protection as long as a garrison would be installed in Messana. The Mamertines balked at the idea and petitioned Rome for an alliance. The Romans debated whether to get involved, since they were recovering from the retaking of Rhegium, as well as the moral decision of helping mercenaries who invaded someone else. However, to deny the petition would mean to allow the Carthaginians a solid foothold in Sicily to keep expanding and eventually challenge Syracuse. The Romans put it up for a vote and decided it was in their best interest to help the Mamertines, and sent Appius Claudius Caudex and a military expedition to Messana.
Since neither Carthage nor Rome had a strong base in Sicily, both forces needed constant supplies to engage there. The Romans were superior on land, while the Carthaginians had naval prowess from having been a sea-faring trade society for centuries. The land war began in 264 BC and the Romans quickly set up in Messana, where the Mamertines had already expelled the Carthaginian garrison. After securing Messana, the Romans advanced on Syracuse with two legions led by Caudex. A brief siege ensued and when it was obvious no help was coming from Carthage, Syracuse signed a treaty with Rome to be an ally and paid a mere 100 talents of silver for their previous opposition. With Syracuse defecting to the Romans, several other Carthaginian properties in Sicily turned sides as well.
Carthage didn’t take this sitting down and began to build an army in North Africa – 50,000 mercenaries, 6,000 cavalry and 60 war elephants – to be deployed to Sicily. Rome continued their takeover of the island while Carthage was building. In 262 BC, Rome besieged Agrigentum (Greek, Acragas) with four legions, which took months. The forces at Agrigentum were able to stall long enough for reinforcements to arrive from Carthage, which destroyed the Roman base at Erbessus. Supplies were running low in Agrigentum, but the Roman army was now dealing with disease. Both sides decided open battle in the field was the best way to resolve the siege, and the Romans won handily. The Carthaginians defending the city fled back home and the city fell to Rome.
Rome knew they were behind in the naval department, so after the Battle of Agrigentum in 261 BC, they began to build a strategic navy, employing a new feature on their ships called a corvus. It was essentially a bridge that was used as a boarding device so their troops could take on the Carthaginians in hand-to-hand combat, as the Carthaginians had superior ships. In 260 BC, the Romans had the opportunity to try out their new feature at the Battle of Mylae. The corvus was resoundingly successful and the first 30 Carthaginian ships to get close enough were grappled, boarded and seized. An additional 20 ships were taken by the Romans before the Carthaginians retreated.
Over the next 20 years, the Romans and Carthaginians fought on land and sea, on Sicily and North Africa, culminating in the Battle of Aegusa on March 10, 241 BC, where the Roman fleet sank 50 Carthaginian ships and brought to end the First Punic War. The Carthaginians were forced to sign the Treaty of Lutatius, which included heavy punitive fines. The 2,200 talents of silver to be paid to Rome, in ten equal annual payments, along with an immediate 1,000 talents (211,000 total pounds of silver) was more than Carthage could provide, forcing them to look for a source of silver. They invaded the Iberian Peninsula, which would eventually lead to the Second Punic War. <<<
>>> American Tower Corporation is a real estate investment trust. It invests in the real estate markets across the globe. The firm through its subsidiaries owns, operates and develops wireless and broadcast communications real estate. Through its subsidiaries it leases antenna space on multi-tenant communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities and tenants in a number of other industries. American Tower Corporation was founded in 1995 and is headquartered in Boston, Massachusetts. <<<
>>> Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, provides rail transportation services in the United States. The company offers freight transportation services for agricultural products, including grains, commodities produced from grains, food, and beverage products; automotive products, such as imported and exported shipments, finished vehicles, and automotive parts; and chemicals consisting of industrial chemicals, plastics, crude oil, liquid petroleum gases, fertilizers, soda ash, sodium products, and phosphorus rock and sulfur products. It also provides transportation services for coal and petroleum coke; industrial products comprising construction products, metals, minerals, consumer goods, lumber, paper, and other miscellaneous products, as well as steel, aggregate, cement, and wood products; and intermodal import and export containers and trailers. Its rail network includes 31,838 route miles linking the Pacific Coast and Gulf Coast ports with the Midwest and eastern United States gateways. Union Pacific Corporation was founded in 1862 and is headquartered in Omaha, Nebraska. <<<
STEV - Stevia Corp. It's an early call, but with the recent OTCQB uplist and the stellar financials released yesterday. This one is slated to be a winner into 2016.
You should do some DD as I have on the company and see what they are all about. The PRs from years past are being executed in the right order and with success.
>>> Companies that control the world's food
The agriculture and food production industry employed more than 1 billion people as of last year, or a third of the global workforce. Here's a look at the most influential food companies and how the impact they have on consumers.
Alexander E.M. Hess
24/7 Wall St
August 16, 2014
http://www.usatoday.com/story/money/business/2014/08/16/companies-that-control-the-worlds-food/14056133/
The agriculture and food production industry employed more than one billion people as of last year, or a third of the global workforce. While the industry is substantial, a relatively small number of companies wield an enormous amount of influence.
In its 2013 report, "Behind the Brands," Oxfam International focused on 10 of the world's biggest and most influential food and beverage companies. These corporations are so powerful that their policies can have a major impact on the diets and working conditions of people worldwide, as well as on the environment. Based on the report, these are the 10 companies that control the world's food.
In an interview with 24/7 Wall St., Chris Jochnick, director of the private sector department at Oxfam America, discussed the impact that these 10 companies have on the world. "If you look at the massive global food system, it's hard to get your head around. Just a handful of companies can dictate food choices, supplier terms and consumer variety," Jochnick said.
These 10 companies are among the largest in the world by a number of measures. All of them had revenues in the tens of billions of dollars in 2013. Five of these companies had at least $50 billion in assets, while four had more than $6 billion in profits last year. Additionally, these 10 companies directly employed more than 1.5 million people combined — and contracted with far more.
Nestle is the largest of these 10 companies. Converted into dollars, Nestle had more than $100 billion in sales and more than $11 billion in profits in 2013. The Switzerland food giant alone employed roughly 333,000 people.
Many of these companies and their brands are extremely well known. One reason is that they often spend huge sums on advertising. Nine of these 10 companies were among the 100 largest media spenders in the world in 2012. Coca-Cola (KO), the world's sixth largest advertiser, spent more than $3 billion in 2012 on advertising. Unilever's media expenditure, at $7.4 billion, was the second-highest worldwide.
With such scale, many of these companies' policies — including advertising, food ingredients, environmental impact, and labor practices — have an significant impact on millions of lives. Often, these companies have been reluctant to address issues related to their environmental impact and the quality of life of workers in their supply chain. According to Jochnick, many of these companies are "unaware of the social and environmental impact that they are creating or facilitating."
However, not all the companies are reluctant to address these problems. None of the 10 companies was better-rated by Oxfam than Nestle, which was closely followed by Unilever. Still, even these companies had problems, according to Oxfam's 2013 report. In 2011, Nestle discovered cases of children working in its cocoa supply chain, as well as instances of forced labor. A supplier of palm oil for Unilever was accused of illegal deforestation and forcible land grabs.
A strong public profile, as well as consumer awareness, may lead these companies to address issues of concern. "A company that is good and trusted ought to be a company that is aware of, and taking steps to avoid, serious human rights or social or environmental problems that it is part of," Jochnick said.
Some companies have taken steps towards becoming better corporate citizens. General Mills and Kellogg, which have been among the 10 companies Oxfam studied, have implemented new policies to address important issues such as climate change. Both companies recently committed to disclosing and reducing greenhouse gas emissions in the coming years.
Based on Oxfam International's 2013 report, "Behind the Brands: Food justice and the 'Big 10' food and beverage companies," 24/7 Wall St. reviewed the 10 companies that control the world's food. We also added information on each company's revenue, net profit, total assets, and employee count from their most recent annual report. Data were translated from foreign currencies based on the exchange rate on the final date of each company's reporting period. Information on companies' brands come from corporate websites and Oxfam. Data on 2012 advertising expenditures are from Advertising Age's report, "Global Marketers 2013," and are estimates. Estimates for Mars Incorporated, which is privately held, are from Forbes' report "America's Largest Private Companies 2013."
These are the companies that control the world's food.
Associated British Foods
> Revenue: $21.1 billion
> Advertising spending: N/A
> Profits: $837 million
> Employees: 112,652
Associated British Foods is a U.K. food manufacturer that has built out a global presence largely through acquisitions. Associated British Foods operates sugar factories, sells food ingredients to wholesale and industry customers, and manufactures consumer products such as Mazola corn oil and Twinings tea. According to Oxfam, the company received low marks for its practices in water use, having failed to conduct impact assessments, while also failing to adopt strong practices in managing its water supply chain.
Coca-Cola
> Revenue: $46.9 billion
> Advertising spending: $3.0 billion
> Profits: $8.6 billion
> Employees: 130,600
Coca-Cola is among the most valuable brands in the world. In total, Coca-Cola and its bottlers sold sold 28.2 billion cases worth of drinks, of which 47% were "trademark Coca-Cola." In total, sales for The Coca-Cola Company were nearly $47 billion in its latest fiscal year. Overall, The Coca-Cola Company scores well for a number of practices, including addressing inequality for women working in production and supporting female empowerment for workers in its supply chain. The company is also well-rated for its land-management practices.
Groupe Danone
> Revenue: $29.3 billion
> Advertising spending: $1.2 billion
> Profits: $2.0 billion
> Employees: 104,642
France's Groupe Danone has a truly global presence. Its largest market, by sales, is Russia, followed by France, the U.S., China, and Indonesia. According to the company, Danone is the world's largest seller of fresh dairy products, which accounted for 11.8 billion euros in revenue, or over half of the company's total sales in 2013. Danone is also among the world's largest sellers of early life nutrition products and bottled waters. Danone received high scores for its policies in a number of major issues, including transparency and managing water resources. However, the company also received low scores in other policies, including its handling of land and farming issues. Danone received the lowest score of any company from Oxfam for its policies regarding women's issues in agricultural production.
General Mills (GIS)
> Revenue: $17.9 billion
> Advertising spending: $1.1 billion
> Profits: $1.8 billion
> Employees: 43,000
General Mills owns a number of America's best-known brands, including Betty Crocker, Green Giant, and Pillsbury. No company received a lower rating from Oxfam for its overall approach to major policy issues. General Mills had the lowest scores in awareness and policies regarding climate change. Recently, however, General Mills announced new initiatives designed to reduce greenhouse gas emissions in its supply chain. As part of the announcement, General Mills also pledged to implement specific emissions targets, to review supplier practices, and to name its largest suppliers of palm oil and sugar in order to improve transparency.
Kellogg (K)
> Revenue: $14.8 billion
> Advertising spending: $1.1 billion
> Profits: $1.8 billion
> Employees: 30,277
Among the top food companies, Kellogg is the smallest by revenue. Still, as of 2013, the company had nearly $15 billion in sales, a similar amount in total assets, and more than 30,000 employees. Kellogg also owns a large number of very well-known brands, including Kellogg's cereal, Keebler, and Pringles, which it acquired in 2012 for $2.7 billion. According to Kellogg, it is the world's leading cereal company and the second-largest maker of cookies. In all, Kellogg makes 1,600 different foods, which it sells in more than 180 different countries. Kellogg received a lower overall rating from Oxfam for its practices than all but two of the other 10 companies. However, in a recent release, Oxfam praised Kellogg for its pledge to cut greenhouse emissions in its supply chain.
Mars
> Revenue: $33.0 billion
> Advertising spending: $2.2 billion
> Profits: N/A
> Employees: 60,000
Mars is the the only one of the world's 10 largest food companies that is privately owned. Mars owns several well-known chocolate brands, such as M&Ms, Milky Way, Snickers and Twix. Mars also owns a range of food brands such as Uncle Ben's rice, as well as chewing gum and candy-maker Wrigley. Among the big 10 global food companies, Mars received the lowest policy ratings for water and land issues. In both cases, Oxfam penalized the company for its lack of knowledge of its environmental impact, as well as for its supplier policies.
Mondelez International (MDLZ)
> Revenue: $35.3 billion
> Advertising spending: $1.9 billion
> Profits: $3.9 billion
> Employees: 107,000
In 2012, Kraft Foods split into two separate companies, Kraft Foods Group and Mondelez. While Kraft Foods Group took North American grocery brands, Mondelez took its snacks and candies brands, which include Cadbury, Nabisco, Oreo, and Trident, among many others. The company had over $35 billion in revenue and more than $72 billion in assets as of last year. It also employed 100,000 workers worldwide. According to Oxfam, Mondelez received low marks for its transparency, as well as for its handling of issues related to climate change and workers.
Nestle
> Revenue: $103.5 billion
> Advertising spending: $3.0 billion
> Profits: $11.2 billion
> Employees: 333,000
By many measures, Nestle is the largest of the 10 food companies, with more than 92 billion Swiss francs in revenue last year — net profit and total asset figures that dwarf other food companies — and roughly 333,000 employees. Nestle is also the top-rated company by Oxfam for its approach to major policy issues. It received the highest scores for addressing transparency, water use, and climate change of any major food company. In its 2013 report, Oxfam highlighted Nestle's efforts in addressing labor abuses the company discovered in its cocoa supply chain in the Ivory Coast.
PepsiCo (PEP)
> Revenue: $66.4 billion
> Advertising spending: $2.5 billion
> Profits: $6.7 billion
> Employees: 274,000
In addition to owning famous soda brands such as Pepsi, Mountain Dew, and Gatorade, PepsiCo also controls food brands such as Tostitos, Doritos, and Quaker. PepsiCo also employed nearly a quarter of a million people worldwide at the end of 2013. Pepsi was among the world's biggest advertisers. Advertising Age estimates that PepsiCo's worldwide media spending totalled $2.5 billion in 2012. According to three groups that measure brand value — Interbrand, BrandZ, and CoreBrand — Pepsi is one of the world's most valuable brands in any industry. While PepsiCo received a lower score on policy issues than three other companies reviewed by Oxfam, it has developed a reputation for company responsibility in at least one area. CEO Indra Nooyi has pushed for healthier products in her time at the helm of the company.
Unilever Group
> Revenue: $68.5 billion
> Advertising spending: $7.4 billion
> Profits: $6.7 billion
> Employees: 174,381
Unilever products are hardly limited to food and drinks. The U.K.- and Netherlands-based group also makes personal care and home care products. Still, its foods and refreshments businesses accounted for almost 23 billion euros of the company's nearly 50 billion euros in revenue last year. Brands owned by Unilever include Lipton tea, Hellmann's mayonnaise, and Ben & Jerry's ice cream, to name only a few. Unilever generally scores fairly well for its efforts in addressing policy issues. Oxfam rated it above all other companies for its worker and farming policies. Only Nestle received a higher overall rating for its handling of the issues highlighted by Oxfam.
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Kinder Morgan -- >>> Kinder Merger Drives $16 Billion Market Boost, More Deals
By Joe Carroll and Tara Lachapelle
Aug 11, 2014
http://www.bloomberg.com/news/2014-08-11/kinder-merger-drives-16-billion-market-boost-more-deals.html?cmpid=yhoo
Why Billionaire Kinder Is Streamlining His Empire
Pipeline companies listen up. Richard Kinder wants you.
The Texas pipeline billionaire, having freed up billions of dollars to spend in an audacious $71 billion consolidation within his Kinder Morgan Inc. unit, suggested his immediate targets will be rival pipeline operators.
Booming exploration and production in shale formations across North America have spurred demand for pipelines, storage terminals and other infrastructure to process and carry crude and natural gas. “I think it’s a fertile field to do a little grazing,” the 69-year-old University of Missouri trained lawyer said.
There are more than $875 billion of targets to choose from, he said. MarkWest Energy Partners LP (MWE) and Targa Resources Corp. (TRGP) may be prime buyout candidates.
“There are a lot of growth opportunities,” Sunil Sibal, an analyst at Global Hunter Securities LLC in New York, said in a phone interview. MarkWest and Targa are “probably the best ways to play it,” he said. Energy Transfer Equity LP also may be on the hunt after its plan to buy Targa broke down in June.
MarkWest processes and transports natural gas from U.S. shale basins including the Marcellus and Utica. Targa has a footprint in the Permian and Bakken, as well as one of the Gulf Coast’s two commercial export terminals for natural-gas liquids.
“They’ve got assets which are very desirable in the current production growth environment,” Sibal said.
Representatives for Denver-based MarkWest and Houston-based Targa didn’t respond to phone calls seeking comment.
Market Response
All but one stock in the 50-member Alerian MLP Index of pipeline and storage operators climbed yesterday, creating $16 billion of shareholder value in a single day, in part because of takeover speculation. MarkWest’s shares gained 7.4 percent, giving it a market value of $14 billion. Targa Resources and Targa Resources Partners LP, its operating unit, both rose more than 2 percent for a combined market value of almost $14 billion.
The Kinder Morgan transactions add fuel to a flurry of pipeline mergers and acquisitions, boosting overall deal activity in the energy sector to the busiest in more than a decade. Mergers and acquisitions of North American energy companies surged to about $211 billion, the highest volume for a 12-month period since at least 2002, according to data compiled by Bloomberg.
‘Active Space’
“This has been a very active space and it’s likely to continue,” Shneur Gershuni, an analyst at UBS AG in New York, said in a phone interview. “Sometimes it’s about synergies and making assets attach to each other that make sense. Sometimes you’re buying growth. In this scenario here, it’s to uncomplicate the structure, and more importantly to bring down the cost of capital.”
Kinder is consolidating Kinder Morgan Energy Partners LP (KMP), Kinder Morgan Management LLC and El Paso Pipeline Partners LP (EPB), bringing together four entities that together control a pipeline network long enough to circle the Earth three times. The move creates the biggest energy infrastructure company in North America. Kinder personally netted an $800 million gain yesterday in the value of his holdings in the companies.
The transactions will free up billions of dollars for expansion projects and dividend payouts, while unifying operations under a single stock that can be used as currency in acquisitions, Kinder told investors yesterday. Transactions that he skipped in the past because he couldn’t make money on them now may be desirable to pursue, he said.
Missed Opportunities
“There are certainly a number of opportunities where we haven’t been able to play in the past because we just couldn’t make our hurdle rate for making a successful investment,” Kinder said during yesterday’s conference call. “When you lower the hurdle rate significantly, yeah, that gives you opportunity to make more investment.”
The combination will restore investor faith in the Kinder Morgan family after three years of lagging performance and stalling growth, Jason Stevens, an analyst at Morningstar Morningstar Investment Services Inc., said in a phone interview. A cumbersome aggregation of inter-related entities will become streamlined, focused unit with plenty of cash to grow and reward investors, he said.
“The math works and it’s actually a pretty savvy deal,” Stevens said. “Once again, Rich Kinder pulls a rabbit out of a hat.”
Deal Value
Kinder, who already owns 24 percent of Kinder Morgan Inc., plans to take stock in lieu of cash for his stakes in the sister companies that are being merged in the transactions, which includes $40 billion in stock, $4 billion in cash and $27 billion in assumed debt. The deal is expected to be completed by the end of this year.
Kinder said potential acquisition targets include more than 120 energy-focused master limited partnerships, or MLPs, that have a combined enterprise value of $875 billion. There also is ample room to grow through new projects as expanding shale exploration and production spurs the need for $640 billion in new pipelines and storage tanks through 2035, according to a presentation published on the company’s website when the consolidation was announced on Aug. 10.
“The shale plays are creating tremendous opportunities” for pipeline and storage operators, said Kevin McCarthy, managing partner at Kayne Anderson Capital Advisors LP, which owned more than $1.75 billion worth of shares in Kinder Morgan companies based on closing prices on Aug. 8. “Rich is at the forefront of the midstream players and it was just hard for us to imagine that Rich would sit on the sidelines” and let those investments pass by.
MLP Trend
Kinder declined through a spokesman to be interviewed.
The consolidation runs counter to the industry trend of spinning off pipelines and oil terminals into tax-advantaged partnerships that funnel cash to investors. Kinder told investors and analysts yesterday that his move was in no way a “verdict” against the so-called MLP model and that the combination was driven by circumstances unique to Kinder Morgan.
The transactions are the latest evolution in Kinder’s odyssey that began 18 years ago when he quit Enron Corp. to strike out on his own. The company’s rapid expansion and splintering into multiple entities had become more of a burden than a boon in recent years as the partnership structure siphoned off cash for investors that the company needed to grow.
Pipeline companies are spending on both organic growth and acquisitions to take advantage of the shale boom. Kinder Morgan referred to it as a toll road-like model in which it charges fees for usage of its pipeline network in transporting fuel to markets.
“The next four years, we’ll see a lot of robust organic spending,” said Morningstar’s Stevens. “But as we step beyond that, you’re looking at an investment opportunity set that begins to slowly diminish year over year, so consolidation will be key.”
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Storage REITS -- >>> An alternative place to store your money with a 483% return...
By Nicole Goodkind
Yahoo Finance
http://finance.yahoo.com/news/the-number-one-alternative-investment--storage-space-164102530.html
The number one alternative investment according to Bloomberg Markets is … storage space. Yes, you read that correctly.
According to the magazine’s annual ranking of alternative and exotic investments, storage units (specifically storage facility REITs) have been having a great few years.
Storage REITs such as Extra Space (EXR), Public Storage (PSA), CubeSmart (CUBE) and Sovran Self Storage (SSS) have seen gains between 142% and 483% in the past five years. Storage as a category has returned 101% from 2008 through 2011, outperforming all other REIT categories. There are now 52,000 storage properties in the United States, up from just under 20,000 in 1990. Nearly 11 million Americans rent storage units each year.
“Homeownership in the U.S. is at its lowest point in 19 years,” says Devin Banerjee, U.S. investing reporter at Bloomberg News, "and people aren’t upsizing [moving into larger homes] as much as they used to. if you’re not upsizing, then you need a place to put all of that stuff. You’re going into storage.”
Now that the economy seems headed toward recovery, however, it may be too late to get in on these gains.
“There are some warnings signs across the markets," he says. “The industry is consolidating, these large players are going into small towns, trying to expand geographically and acquiring local players."
“There’s a lack of new supply,” when it comes to storage space, Banerjee adds.
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>>>Reed's, Inc. Launches 25th Anniversary Sweepstakes.
Reed’s offers a chance to win 2,500 shares of NYSE MKT: REED common stock plus hundreds of prizes; Everyone who enters wins something
Reed's, Inc.
July 8, 2014
LOS ANGELES--(BUSINESS WIRE)--
http://finance.yahoo.com/news/reeds-inc-launches-25th-anniversary-155900511.html
Reed’s, Inc. (NYSE MKT: REED) today announces the launch of “25 Years of Ginger Love” to celebrate a quarter century of making Reed’s Ginger Brew, being the top-selling natural sodas in the country and selling their 400th million bottle. Through the sweepstake, the grand prize winner will win the current cash value of 2,500 shares (as of December 8, 2014) of Reed’s common stock (NYSE MKT: REED). Additionally, Reed’s will give away hundreds of 25th anniversary t-shirts, Moscow Mule mugs, Reed’s Ginger Brew packs and coupons to the company’s online store. Everyone wins!
In 1989, Founder and CEO Chris Reed had a vision to dose the world with ginger. “I strongly believe in the healing power of ginger. People have been using ginger for at least 40 centuries according to the first written records on the use of medicinal herbs,” he said. “During our 25 years of pushing ginger, there has been acceleration in the number of medical research studies on ginger showing new uses besides the traditional ones for digestive complaints, nausea and soreness in general. I bet my career that people would switch to more healthy foods and grow more conscious of what they are putting into their bodies. I see this trend continuing without stop into the future with ginger becoming increasingly more important. It has been fulfilling to be part of this huge shift.”
Reed’s vision became reality by pioneering many products with ginger, resulting in 10 million pounds of ginger in the U.S. diet.
Fans can “like” the Reed’s Facebook page to enter to win shares of the Reed’s NYSE MKT stock.1 Winners will be randomly selected in the beginning of December. The first place winner will receive a prize with a current approximate value of $13,000 that will include:
• The cash value of 2,500 common stock shares of Reed’s (NYSE MKT: REED)
• A case of Reed’s Ginger Brew
• 2 Moscow Mules mugs and a t-shirt
A second place winner will receive a prize with an approximate value of $5,000 and will include:
• The cash value of 1,000 common stock shares of Reed’s (NYSE MKT: REED)
• A case of Reed’s Ginger Brew
• Other company merchandise
A third place winner will receive a prize with an approximate value of $2,500 and will include:
• The cash value of 500 common stock shares of Reed’s (NYSE MKT: REED)
• A case of Reed’s Ginger Brew
• Other company merchandise
Everyone wins a $5 off coupon on the Reed’s online e-commerce store. Reed’s will also hold other contests throughout the year, with giveaways like Reed’s copper mule mugs, which are best paired with a Moscow Mule cocktail using one of Reed’s Ginger Brews and a favorite vodka.
Just in time for summer, Reed’s is also dressing up its top-selling products with new bottleneck labels to promote the sweepstakes. The 25th anniversary bottleneck label will start to appear on shelves in July.
“So much has changed since June 1989, like the price of a stamp and a Volkswagen Beetle – my first delivery ‘truck,’” said Reed. “We’re looking forward to what the next 25 years holds for us.”
About Reed's, Inc.
Reed’s, Inc. makes the top-selling natural sodas in the natural foods industry and is sold in over 15,000 natural and mainstream supermarkets nationwide. In addition, Reed’s products are sold through specialty gourmet, natural food stores, retail stores, convenience stores and restaurants nationwide and select international markets. Its six award-winning non-alcoholic Ginger Brews are unique in the beverage industry, being brewed, not manufactured and using fresh ginger, spices and fruits in a brewing process that predates commercial soft drinks. The Company owns the top-selling root beer line in natural foods, the Virgil’s Root Beer product line, and a top-selling cola line in natural foods, the China Cola product line. In 2012, the Company launched Reed’s Culture Club Kombucha line of organic live beverages. Other product lines include: Reed’s Ginger Candies and Reed’s Ginger Ice Creams. In 2014, the company is celebrating 25 years of hand crafting the best sodas in the world, naturally.
Follow Reed’s on Instagram, Twitter and Facebook.
Suggested Tweets:
• Celebrate #gingerlove with @reedsgingerbrew. Go to Facebook and win Reed’s common stock.
• @reedsgingerbrew is giving away common stock to celebrate 25 years of #gingerlove. Enter to win on Facebook.
• How do you celebrate #gingerlove? A Moscow Mule and @reedsgingerbrew common stock! Learn more on Facebook.
1 See official rules for details.
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J&J Snack Foods -- >>> Are These Snack Companies Wise Investments?
By Kyle Colona
July 11, 2014
http://www.fool.com/investing/general/2014/07/11/are-these-snack-companies-wise-investments.aspx
Snack companies design good brands to create consumer demand for their products, which grows their revenue and earnings and results in shareholder returns. But consumers are becoming more health-conscious. So snack and beverage companies need to offer healthier items to ensure their future growth. This includes companies like PepsiCo (NYSE: PEP ) , J&J Snack Foods (NASDAQ: JJSF ) , and Snyder's-Lance (NASDAQ: LNCE ) .
PepsiCo's growing organic revenue
PepsiCo owns a well-known portfolio of brands including Pepsi, Frito Lay, Quaker, and Gatorade. Its beverage business has struggled, however, in comparison with that of Coca-Cola (NYSE: KO ) . Furthermore, as has previously been reported, Coke is responding to growing consumer health concerns.
The company announced that it will cut a controversial ingredient, brominated vegetable oil, or BVO, from all of its drinks. Coca-Cola believes BVO is safe, but consumer groups have been pressuring the beverage company to eliminate its use. In short, this will allow the company to avert a potential controversy and support its iconic brand name.
While soft drink sales are being challenged over unwanted ingredients like BVO and artificial sweeteners like corn syrup, PepsiCo gets its strength from its well-known snacks that include Lay's, Doritos, and Cheetos. But consumers also have health concerns about salty snacks. And there is the unknown risk of action by health advocates and lawmakers looming large on the horizon.
PepsiCo, however, is taking proactive steps to mitigate these risk factors in its Americas foods division, where organic revenue is growing. In fact, the company reported that the division's organic revenue grew 5% in the first quarter. Going forward, PepsiCo anticipates organic revenue growth in the mid-single digits for 2014.
J&J Snack Foods' nutritional snacks and beverages
J&J Snack Foods manufactures and distributes "nutritional" snack foods and frozen beverages to the food service and retail supermarket industries. The company's products include soft pretzels marketed under the brand name SuperPretzel, as well as frozen juice treats and desserts such as Luigi's, Icee, and Minute Maid.
While determining the difference between unhealthy and nutritional items is ultimately in the eye of the consumer, J&J last month announced the launch of Minute Maid 100% Frozen Juice Bars.
The company said the frozen treats are naturally flavored and the Juice Bars are the "only frozen juice novelty made with 100% juice in mainstream retail." Finally, the gluten- and nut-free frozen juice bars are only sweetened with fruit juice and processed in a peanut-free facility. "The Minute Maid 100% Juice Bars are unique to the frozen aisle," said Alissa Davis, Director of Marketing for J&J Snack Foods.
Furthermore, Minute Maid is a registered trademark of Coca-Cola. As Davis notes in the press release, J&J and Minute Maid have built a 15-year partnership. So not only is this a win for J&J, but Coke will also be the beneficiary of a larger market share in the frozen aisle carved out by the Minute Maid frozen fruit bars. In addition to offering consumers healthier items like these, J&J is strong in a number of ways.
The company has a solid track record of revenue and net income growth while maintaining low debt levels. J&J Snack Foods also pays a modest dividend. Earlier this spring the snack food maker declared a regular quarterly cash dividend of $0.32 per share on its common stock payable on July 2, 2014, to shareholders of record as of the close of business on June 13, 2014.
Snyder's-Lance sells Private Brands to get Baptista's baking
Snyder's-Lance just announced the completion of the sale of its Private Brands business for $430 million. This came on the heels of the company's acquisition of Baptista's Bakery. The company expects its annual net revenue to decrease by about $250 million after the sale.
Some observers may question the wisdom of this bake-off, so to speak. But the play here appears to be an effort to steer the company away from crackers and chips toward the healthier products already offered by Baptista's. "This is an important step forward for Snyder's-Lance as we dedicate our attention to our branded portfolio," said Carl E. Lee, Jr., president and chief executive officer.
In sum, the company believes its future growth lies in its branded products and "better-for-you" snacks. It also has the goals of increasing margins and offsetting costs by selling Private Brands. The company also intends to focus on expanding the distribution of its core brands.
Final Foolish takeaway
PepsiCo's strong portfolio of brands and growing organic revenue stream have positioned the company to meet the current appeal of its snacks and shift toward healthier snack items. Furthermore, J&J Snack Foods will continue to capitalize on brand recognition for well-known names such as Icee and Luigi while launching healthier frozen Minute Maid treats.
Finally, the new focus of Snyder's-Lance on "better-for-you" snacks via the Baptista acquisition will help the company offer healthier options to consumers. Ultimately, each of these companies is poised to meet growing consumer health concerns. But investors should always choose wisely by focusing on healthy revenue and earnings growth over the long run.
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>>> Flowers Foods: Achieving Excellence for Investors
By Jacob Meredith
June 28, 2014
http://www.fool.com/investing/general/2014/06/28/flowers-foods-achieving-excellence-for-investors.aspx
Over the last several years, Flowers Foods (NYSE: FLO ) has offered investors security, stable operations, and steady returns that handily outpaced the market. Over the last 10 years, investors in Flowers Foods have gained a total of 434% compared to investors of the S&P 500, who earned a total of 112%.
Taking a look into a few different financial metrics along with comparisons to industry peers such as ConAgra (NYSE: CAG ) , JM Smucker (NYSE: SJM ) , and Kellogg (NYSE: K ) , we can conclude that Flowers Foods is a very well-run company and in a strong position in its market.
Return on equity
Return on equity, or ROE, is an important measure of management's competence in running the business. Measured as net profit divided by total shareholders' equity, ROE tells us how well the company is reinvesting earnings. It is important to look at ROE in conjunction with the company's capitalization; if a company is funded heavily with debt, then ROE may be very high, but it won't show you the financial risk the debt presents.
As you can see in the chart, over the last five years Flowers Foods' ROE has been, for the most part, higher than both ConAgra's and Smucker's, telling us that dollars reinvested in the firm by management are earning higher returns.
Kellogg appears to be putting all three to shame; however, on the bottom half of the above chart, you can also see that Kellogg is financed very heavily with debt, having a debt to equity ratio of over 2.1.
Effects of debt
As we said earlier, a high ROE is typically a good thing, but too high could mean a high debt load, and could be cause for alarm. Flowers Foods has a high ROE and a debt to equity ratio of 0.74 as of the end of the last quarter, which isn't too much of a concern. Over the last five fiscal years, Flowers Foods has averaged interest coverage, or operating profit divided by interest expense, of over 17.4.
Flowers Foods' interest coverage averaged over the last five years is favorable compared with ConAgra's 5.9, Smucker's 10.9, and Kellogg's 8.2, all averaged over the same five-year period.
When the economy is moving in the right direction as it is now, companies typically won't feel the effects of a heavy debt load. However, during the next unexpected economic downturn, such as the one that hit us in 2008, Flowers Foods appears to be much better positioned to weather the storm.
Flowers Foods marketplace advantage
High debt levels aren't uncommon in the packaged food industry as firms seek to grow by acquisition, which is funded by debt many times. Companies are often so concerned to grow the number of brands and the scope of their products that they venture outside of their "bread and butter" and do not always make reasonable acquisitions. This can cause long-term return on equity to decline as a company grows.
Compared with all three of the other companies, Flowers Foods offers products in a relatively narrow scope. The company earned 73% of revenues in 2013 from bread, buns, rolls, and tortillas, then earned another 16% from snack cakes and pastries.
Keeping a narrow scope and investing wisely has helped Flowers Foods grow revenues quickly but also realize the synergies needed to grow income even faster. This can be seen through the company's average revenue growth of 9.2% per year, annually compounded over the last 10 years, as earnings have grown at a blistering 16.3% per year over the same time frame.
On the other hand, over the same time period ConAgra has grown revenues 0.7% per year, and earnings have declined 1.3% per year. Kellogg has grown revenues by 4.4% and earnings by 7.3%, per year. Lastly, Smucker has performed better than Flowers Foods' other peers, seeing revenue growth of 10.6% and earnings growth of 15.9% per year.
A Fool's take on Flowers Foods
Compared to industry peers, Flowers Foods has a high return on equity, and has for several years. If the company can keep up this pace of ROE, investors will be able to collect a dividend that is currently yielding 2.3% as management reinvests other earnings at 15%-20%.
A high and steady ROE along with a low debt to equity ratio proves Flowers Foods' management is committed to only placing funds in high-quality investment opportunities, which will help this company move forward with its outstanding progress. I believe investors will be handsomely rewarded by holding this company for many, many years.
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>>> The Highest-Yielding Dividends That Are Safe to Hold
By Jon C. Ogg and Thomas C. Frohlich
May 31, 2014
http://247wallst.com/investing/2014/05/31/the-highest-yielding-dividends-that-are-safe-to-hold-2/3/
5. Chevron
> Dividend yield: 3.5%
> Annualized dividend: $4.28
> Share price: $122.65
> P/E ratio: 11.4
Chevron Corp. (NYSE: CVX) is one of the nation’s largest energy companies with operations throughout the globe. Chevron reported more than $220 billion in operating revenue last year, with earnings exceeding $21 billion, and cash from operations surpassing $35 billion. Its dividend payments totaled $7.5 billion. The highly profitable company has benefited from a growing U.S. energy industry. With the rise of unconventional drilling, the company has announced plans to expand its production in Texas’s oil-rich Permian shale, and it is also active in Pennsylvania’s Marcellus shale, which is a major source of natural gas. The dividend yield of Chevron shares is currently 3.5%, and it looks as though Chevron has the means to keep increasing its dividend for years.
6. Kraft Foods
> Dividend yield: 3.6%
> Annualized dividend: $2.10
> Share price: $58.99
> P/E ratio: 18.5
Shares of Kraft Foods Group Inc. (NASDAQ: KRFT) — owner of well-known American brands such as Jell-O, Kool-Aid, and Planters — currently yield 3.6%. According to Morningstar, the average dividend yield among Kraft’s peers is far lower at 2.2%. The company earned $2.7 billion and paid $1.2 billion in dividends last year. Unlike many other companies with high-yielding and reliable dividends, Kraft Foods is technically a very young company. It was formed in 2012 when Kraft Foods split its grocery business from its snack food operations, now called Mondelez International.
7. Procter & Gamble
> Dividend yield: 3.2%
> Annualized dividend: $2.57
> Share price: $80.69
> P/E ratio: 19.2
Procter & Gamble Co. (NYSE: PG) provides consumer packaged goods through a variety of consumer-facing retail outlets such as drugstores and grocery chains. The company has increased its annual dividend each year in the past 58 years. P&G returned $12.5 billion to shareholders last year. With both dividends and share repurchases, shareholders received 110% of the company’s earnings in 2013. Its dividend payout ratio is only about 61% for 2014. However, the company has struggled with less than stellar sales growth and slumping returns in recent years, and it brought back former CEO A.G. Lafley last year to help boost growth. Currently, the company’s shares yield 3.2%. P&G currently has a massive $220 billion market cap, which dominates its peer group.
8. Intel
> Dividend yield: 3.3%
> Annualized dividend: $0.90
> Share price: $27.10
> P/E ratio: 14.3
Intel Corp. (NASDAQ: INTC) has been criticized for missing the emergence of the smartphone and tablet markets, where it currently holds a small market share relative to rivals NVIDIA and Qualcomm. Intel CEO Brian Krzanich has stated the company hopes to have its chips in 40 million tablets by year-end. As a result of its struggles, Intel investors have had to deal with several years of lower revenue and shrinking margins. Still, the company remains a major player in the PC market, and it generated $9.6 billion in profits last year. The company’s $2.4 billion share buyback was offset by the shares issued to employees under various compensation and incentive plans. Intel still pays less than half of its earnings per share as dividends.
9. Eli Lilly
> Dividend yield: 3.3%
> Annualized dividend: $1.96
> Share price: $59.69
> P/E ratio: 21.5
Currently, Eli Lilly and Co. (NYSE: LLY) shares change hands at $59.86, up roughly 11% from a year ago but still nowhere near all-time highs set at the beginning of the previous decade. Additionally, revenue growth over the past three years was considerably lower than most other pharmaceutical companies, according to Morningstar. Among the problems the pharmaceutical giant faced have been the expiration of a number of key drug patents in recent years. Eli Lilly has not increased its annual dividend of $1.96 per share since 2009. In late 2013, Eli Lilly’s management outlined steps to maintain its dividend payout while simultaneously announcing a $5 billion share buyback plan.
10. Lockheed Martin
> Dividend yield: 3.3%
> Annualized dividend: $5.32
> Share price: $163.13
> P/E ratio: 14.9
Lockheed Martin’s stock price skyrocketed from $91.34 at the end of 2012 to $163.13 as of May 30. Despite this run up, Lockheed Martin Corp. (NYSE: LMT) still carries Buy recommendations from numerous ratings firms. The company earned $2.87 per share in its most recent quarter, exceeding Wall Street’s expectations and its reported earnings from a year ago. As the world’s largest defense contracting company, with $36 billion in arms sales as of 2012 according to the Stockholm International Peace Research Institute, perhaps it is no surprise Lockheed Martin stock is high yielding and relatively safe. The company’s market cap is more than $52 billion.
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>>> 6 stocks with big, safe dividends
Shares with the highest payouts sometimes come with similarly lofty risks. These high-yielding names, for the most part, do not.
By Jon C. Ogg and Thomas C. Frohlich
24/7 Wall St.
http://money.msn.com/how-to-invest/c_galleryregular.aspx?cp-documentid=253818886
Get higher yields, not blood pressure
Dividend payments by S&P 500 ($INX) companies reached an all-time high last year, totaling some $330.8 billion, according to FactSet. As of this March, 418 of the 500 companies in the index paid a dividend.
However, not all dividends are created equal. Of the 500 companies in the index, 96 pay their shareholders a dividend of 3 percent or more. As a rough comparison, a 10-year Treasury note yields close to 2.5 percent. While Treasury securities come with a virtual guarantee of a return of principal, share price appreciation is generally expected to provide higher returns. Dividends are intended to make those returns even better over time.
Dividends are considered among the most straightforward ways for a company to reward investors. After all, they represent a direct transfer of cash from the company back to its shareholders. However, a high dividend yield alone does not give a complete picture of the value of an investment. The financial health and business prospects of the company have to be considered as well. Investors need to be able to differentiate a high dividend from a safe dividend.
Surprisingly, some companies pay dividends even when they lose money. For example, Windstream Holdings (WIN), with a 10.4 percent dividend yield, actually pays out three times its trailing 12-month earnings in dividends. However, such a combination of high payouts and unprofitability is not sustainable.
To identify the highest-yielding S&P 500 stocks that are safe for investors, 24/7 Wall St. reviewed the companies that are currently paying dividends of 3 percent or more. We excluded any company with a market capitalization of less than $10 billion. We also eliminated companies that we believe cannot afford to maintain their dividends or for which a net loss is expected. Many of the dividends and earnings figures are based on forward-looking analyst estimates.
We generally put a limit on the income payout rate at 80 percent, meaning that companies must retain 20 percent of their expected earnings this year and next year for other uses, such as share buybacks and growth opportunities. This excluded the real estate investment trusts (REITs), which pay out almost all income to maintain their special tax structures.
Companies involved in transformative mergers or acquisitions were excluded if the combination could potentially place the dividend at risk. We also only included only two utility companies, which typically pay very high dividends, since this would have otherwise skewed our results largely toward that sector.
AT&T
Dividend yield: 5.2 percent
Annualized dividend: $1.84
Share price: $35
P/E ratio: 13.2
AT&T (T) is one of the nation's leading telecommunications companies. It is the highest-yielding stock in the Dow Jones Industrial Average ($INDU), with a dividend yield of 5.2 percent.
AT&T recently agreed to acquire satellite television provider DirecTV (DTV) for $48.5 billion. While this may seem like a large amount, the company had more than $18 billion in earnings last year alone. While we excluded many companies in the midst of mergers or acquisitions, we made an exception for AT&T, as we determined at the time of the deal's announcement that it was unlikely the dividend would be affected by the transaction.
Many of AT&T's businesses are cash cows, allowing the company to spend roughly $21 billion in cash last year on capital expenditures, while paying nearly $10 billion in dividends and spending more than $13 billion on share buybacks.
Southern Company
Dividend yield: 4.8 percent
Annualized dividend: $2.10
Share price: $44
P/E ratio: 15.7
Southern Company (SO), based in Atlanta, is a utilities holding company operating in four southeastern states. It currently has a 4.8 percent dividend yield and a market cap of about $39 billion. Southern Company has a track record of consistently growing its dividend, which now pays out $2.10 per share on an annualized basis.
Recently, the company has experienced delays and cost overruns in the construction of its Kemper County, Miss., coal facility. This, along with other issues, prompted investment bank UBS to issue a "Sell" rating on the stock. The Kemper plant is designed to produce energy from coal in a more environmentally friendly manner by implementing carbon capture and storage technology. Despite the cost, Moody's maintained the company's credit rating for its senior unsecured debt at an investment grade Baa1 with a stable outlook.
Consolidated Edison
Dividend yield: 4.5 percent
Annualized dividend: $2.52
Share price: $55
P/E ratio: 14.7
Consolidated Edison (ED) is a utility company supplying electricity and gas to much of New York City and nearby Westchester County. Because ConEd is a regulated utility, it has to gain approval from the state to increase charges to customers for parts of their monthly bills. The company's most recent efforts to increase rates were rejected by the state.
Despite this, the company has long been considered relatively safe and stable. It currently offers a dividend yield of 4.5 percent, with a payout ratio of only about 67 percent, which is very safe for a utility.
Altria
Dividend yield: 4.7 percent
Annualized dividend: $1.92
Share price: $42
P/E ratio: 16.4
Altria Group (MO) is one of the largest tobacco companies in the world, with a market capitalization of $82.5 billion. Currently, the company's shares trade at $41.56, with a dividend yield of 4.7 percent.
The company has been operating in a shrinking industry as U.S. adult smoking rates have been declining for decades, from 42.4 percent in 1965 to just 19 percent in 2011, according to the most recent data from the Centers for Disease Control and Prevention.
Its closest competitor, Reynolds American (RAI), was excluded from the list this year despite offering a 4.6 percent dividend yield. This was largely because Reynolds is said to be in talks to acquire rival Lorillard (LO). Until a deal is reached, it is not possible to determine what the company's combined balance sheet would look like.
Chevron
Dividend yield: 3.5 percent
Annualized dividend: $4.28
Share price: $125
P/E ratio: 11.7
Chevron (CVX) is one of the nation's largest energy companies with operations throughout the globe. Chevron reported more than $220 billion in operating revenue last year, with earnings exceeding $21 billion, and cash from operations surpassing $35 billion. Its dividend payments totaled $7.5 billion.
The highly profitable company has benefited from a growing U.S. energy industry. With the rise of unconventional drilling, the company has announced plans to expand its production in Texas's oil-rich Permian shale, and it is also active in Pennsylvania's Marcellus shale, which is a major source of natural gas. The dividend yield of Chevron shares is currently 3.5 percent, and it looks as though Chevron has the means to keep increasing its dividend for years.
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>>> J & J Snack Foods Acquires PHILLY SWIRL
https://finance.yahoo.com/news/j-j-snack-foods-acquires-200000006.html
PENNSAUKEN, N.J., May 1, 2014 (GLOBE NEWSWIRE) -- J & J Snack Foods Corp. (JJSF) announced today that it has acquired the stock of Philly's Famous Water Ice, Inc. (PHILLY SWIRL). PHILLY SWIRL, located in Tampa, FL, produces frozen novelty products sold to both retail and food service locations throughout the United States and to Canada. Philly Swirl's distinctive product offerings ( www.phillyswirl.com ) include fun & unique kid friendly items, as well as better for you products. The Company said that revenues of PHILLY SWIRL are approximately $25 million annually, but did not disclose the purchase price.
Gerald B. Shreiber, J & J's President and Chief Executive Officer, commented, "SWIRL has a unique product line and complements the frozen novelty section with popular niche products."
J&J Snack Foods Corp. is a leader and innovator in the snack food industry, providing nutritional and affordable branded niche snack foods and beverages to foodservice and retail supermarket outlets. Manufactured and distributed nationwide, our principal products include SUPERPRETZEL, BAVARIAN BAKERY and other soft pretzels, ICEE and SLUSH PUPPIE frozen beverages, LUIGI'S, MINUTE MAID* frozen juice bars and ices, WHOLE FRUIT sorbet and frozen fruit bars, MARY B'S biscuits and dumplings, DADDY RAY'S fig and fruit bars, CALIFORNIA CHURROS and TIO PEPE'S churros, PATIO Burritos and other handheld sandwiches, THE FUNNEL CAKE FACTORY funnel cakes, and several cookie brands within COUNTRY HOME BAKERS. For more information, please visit us at www.jjsnack.com.
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