Alcon Inc. (ALC)| Daily Alert July 13
Alcon (TSINetwork Rating: Extra Risk) is the world’s biggest eye-care company. Specifically, it’s the leader in ocular surgical supplies and No. 2 in contact lenses.
While Alcon is based in Switzerland, it’s headed by an American, reports results in U.S. dollars, and gets 44% of its sales in that market. It also generates 25% of its revenues from emerging markets, one of the highest percentages among competitors in the industry.
In the quarter ended March 31, 2021, Alcon’s revenue rose 4.8%, to $1.91 billion from $1.82 billion. Per-share earnings in the first quarter rose 8.9%, to $0.49 from $0.45. Meanwhile, Alcon spends a high 10% of its sales on research, which makes it appear less profitable than it really is.
The company gives you two exciting ways to profit. First, it offers you exposure to rapidly expanding, worldwide demand for its contact lenses and cataract surgery products; and two, its global operations and technological leadership enhance the possibility of it attracting a lucrative takeover bid from a rival or a global health-care giant.
Alcon is a Power Buy.
Patrick McKeough, Power Growth Investor, www.tsinetwork.ca, 888-292-0296, July 2021
Walmart Inc. (WMT)| Daily Alert July 15
Walmart is the world’s largest bricks and mortar retailer with 11,400 stores in 26 countries, plus a rapidly expanding e-commerce operation. It employs some 2.2 million people worldwide and had revenue in the 2021 fiscal year of $559 billion.
Walmart recently released results for the first quarter of fiscal 2022. Total revenue was $138.3 billion, an increase of $3.7 billion, or 2.7% over the same period last year.
Consolidated operating income was $6.9 billion, an increase of 32.3%. eCommerce sales were up 37% and have doubled in the past two years. Walmart is seeking to expand this part of the business even more through its partnership with DroneUp, a major US drone services provider.
In April, Walmart also announced an investment in Cruise, an all-electric autonomous vehicle company. The goal is to achieve the fastest possible delivery, whether by air or land.
Buy. The shares hit a year-to-date low of $127.33 in early March but have rallied since.
The stock is still trading well below its 52-week high.
Gordon Pape, Internet Wealth Builder, buildingwealth.ca, 1-888-287-8229, July 5, 2021
Tempur Sealy International, Inc. (TPX) | Daily Alert July 21
Tempur Sealy develops, manufactures, and markets mattresses, foundations, pillows, and other bedding products.
The 2021 EPS estimated has lifted from $2.42 to $2.75, while the 2022 estimate has risen to $3.16 from $2.71. The shares have pushed higher since then and are now up 89%. The shares also remain in the IBD- 50. In fact, Investor’s Business Daily gives the stock a highest possible 99 composite rating (the highest in the Furniture industry) as well as 89’s for both relative earnings strength and relative strength (of the stock). The Zacks Rank is 2.
On June 28th, the Company announced that Sealy and Tempur-Pedic were named the #1 and #2 mattress brands in America.
Q2 results are due out around late July with analysts expecting $.56 on sales of $1.14 billion. Hard to believe the shares traded down to $7! last Spring when all the stores were closed and investors did not yet have a clue that the pandemic would be good for mattress sales, and for that matter, almost anything found in a home as people spent more time there. The shares are up almost 500% in the 15 months since then and business is fantastic.
The BI Rank at 10.2 agrees- Buy.
Tom Bishop, BI Research, biresearch.com, July 14, 2021
Quanta Services, Inc. (PWR) | Daily Alert July 28
Quanta Services shares have gained 23% this year but slipped 4% over the past three months. The shares could see room for more price appreciation, as President Biden’s U.S. infrastructure plan appears to be gaining momentum after several months of stalled talks. A bipartisan group of U.S. lawmakers has settled on a plan for about $600 billion on new physical infrastructure, encompassing roads, bridges, railways, and pipes. Biden’s initiatives for investing in human infrastructure—covering areas like public education and health care—is slated to be part of a separate $3.5 trillion budget plan. We might not see a vote on some parts of the plan for several months.
Raising its full-year outlook in May, Quanta noted strong demand even without the U.S. infrastructure plan. Analyst estimates have ticked higher in the past 30 days, with the consensus projecting growth of 16% for earnings per share and 9% for revenue in 2021, followed by 13% higher profits on 7% sales growth in 2022.
For the June quarter, Quanta is expected to report earnings per share of $1.03, up 40%, on revenue of $2.98 billion, up 19%. Quanta has topped the consensus profit estimate in seven straight quarters. But it has struggled to manage analysts’ sales expectations, missing the consensus in three of the past four quarters.
Quanta is a FocusList Buy and a Long-Term Buy.
Richard Moroney, CFA, Dow Theory Forecasts, dowtheory.com, 800-233-5922, July 19, 2021
CRA International, Inc. (CRAI) | Daily Alert August 3
CRA International is expected to report June-quarter results on Aug. 7, with the three-analyst consensus calling for per-share profits of $0.93, up 16%. Revenue is projected to hit $138 million, up 12%. The company has topped consensus profit estimates in seven of the last eight quarters. Notably, March-quarter earnings surged 63% and exceeded Wall Street expectations by 66%—the largest surprise since 2017.
The stock’s Quadrix Overall score is 92, helped by an 88 in Earnings Estimates and 91 in Momentum.
Founded in 1965, CRA specializes in legal, business, and management consulting. The company is primarily retained for mergers and acquisitions, major product launches, capital investments, and complex litigation.
CRA is benefiting from improve operating efficiency and a growing workforce—areas we’ll scrutinize on upcoming earnings releases. In the March quarter, utilization reached 76%, up from 71% a year earlier. The consultant count hit 837, up 5%. The stock is a Best Buy.
Richard J. Moroney, CFA, Upside, upside stocks.com, 800-233-5922, August 2021
*Oxford Industries, Inc. (OXM)
Oxford Industries is an apparel company that designs, sources, markets, and distributes products of lifestyle worldwide. The company’s primary brands are Tommy Bahama, Lilly Pulitzer, and Southern Tide. It also designs, sources, markets, and distributes products through www.thebeaufortbonnetcompany.com, www.duckhead.com and wholesale specialty retailers. In addition, the company licenses the Tommy Bahama brand for various products that include indoor furniture, outdoor furniture, beach chairs, bedding and bath linens, fabrics, leather goods and gifts, headwear, hosiery, sleepwear, shampoo, toiletries, fragrances, cigar accessories, distilled spirits, and other products.
OXM offers products through its retail stores and e-commerce sites, department stores, specialty stores, multi-branded e-commerce retailers, offprice retailers, and other retailers. It operates 187 brand-specific full-price retail stores; 20 Tommy Bahama food and beverage locations; and 35 Tommy Bahama outlet stores.
Kelley Wright, IQ Trends, iqtrends.com, email@example.com, 866.927.5250, First August 2021
*Albemarle Corporation (ALB)
Lithium is the lightest metal on Earth. It is also highly reactive, giving up its electrons easily. Since 1991, researchers have rushed to improve lithium-ion batteries with great success; today’s power packs are far more energy-dense with better longevity.
The problem is mining lithium is messy and requires expertise. Getting enough high-grade lithium to power most of the world’s future vehicles will not be easy.
Albemarle Corp. is a specialty chemical manufacturing company headquartered in Charlotte, North Carolina. The company has lithium mines in U.S., Chile and Australia. It’s ideally positioned to take advantage of the heady expected growth in lithium demand. Albemarle also has the scale, experience and infrastructure to service big customers.
Currently, 60% of the demand for lithium comes from EV companies, phone and wearable manufacturers. Glass, grease and aerospace companies consume 20% of supplies. And the remaining 20% is used in specialty applications like synthetic rubber, pharmaceuticals and agricultural products.
A May filing with the Securities and Exchange Commission (SEC) revealed sales increased to $829.3 million during the first quarter, up 10% year over year. Profitability in the quarter rose 10% to $95.7 million.
An investor presentation, also released in May, showed that managers expect battery-grade lithium demand will increase at a 47% compound annual growth rate (CAGR) from 2020 to 2025.
Lithium is becoming the connective tissue to the global economy. From camcorders to smartphones and now EVs, the lightweight metal is crucial in how we’re building and connecting to our world. Albemarle managers are racing to serve global markets with potential megaprojects in China, Silver Peak, Nevada and Kemerton, Australia.
Companies like Albemarle that extract minerals out of the ground will play a key role. Investors should consider accumulating shares before the real gold rush to EVs begins.
Jon Markman, Pivotal Point, firstname.lastname@example.org, 1-800-291-8545, July 26, 2021