Earnings Week: What To Look For In The Next Earnings Report

This is a big week in the stock market. Find out what to look for in the next in your company’s earnings report.

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This week we are having some of the market’s biggest companies presenting their quarterly earnings reports. These billion dollar empires hold up most of the market’s value and investors have high expectations. Here are a few tips to remind you of what to look out for in your company’s report.

Consistency

We all want rapid growth, but the companies that stand the longest have mastered discipline and consistency in every aspect of their corporation. Listen and look for consistent growth in production, financials, or even a decrease in liabilities.

Don’t let one bad quarter determine the value of a great company.

Read: Why You Need To Keep Read SEC Filings

Growth

Along with consistency, investors tend to look for stable growth. Whether you are looking for an increase in gross profit or an increase in production, listen and look for consistent growth from quarter-to-quarter. Yet, depending on the company’s competitive advantage, the company may have slower growth in this quarter from their recent quarters. Don’t let one bad quarter determine the value of a great company.Wheather you should continue to hold, sell, or buy more shares depends entirely on the individual investor.

Minor Details

Perhaps the company you love seems perfect! Too good to be true? Look in their filings to see if they have any unpaid taxes or read if the corporation has any pending lawsuits. Always pay attention to the minor details on the earnings reports (or calls). It’s typical for CEOs to say the wrong thing at the right time and drive down stock prices within minutes.

Earnings reports can be a pivotal moment for your investing journey. Contrast and compare from similar corporations. And if need be, refine your investing strategy. Buy low, sell high, and take your profits.

Please see About Me & Disclaimer for additional information about Black Tea.

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Omnicom Group Inc: Show Me The Money

Will stock investors see better earnings next quarter?

OMC (Omnicom Group Inc., $70.24) is one of the world’s largest advertising, marketing and corporate communication services you can find today. Omnicom also has a healthcare marketing group knowns as Omnicom Health Group.

OMC didn’t beat their earnings last quarter and investors aren’t happy. The worst part is the company is still expecting a decrease in revenue in the next quarter. Investors are also concerned about the money spent with their recent acquisition of Elsevier’s Pharmacy Communication Group located overseas in Japan. This will make another year for less revenue.

(Screenshot from StockTwits Chart IQ)

Last year OMC’s net income decreased by 5.2%, or $60.2 million, SGA costs rose to $6.1 million, and the company confessed on their annual report that revenue decreased by $647.3 million (4.2%). There are a lot of expenses, but not much growth in earnings.

However, does this make Omnicom a bad company? Though investors are concerned about their expensive remodels and acquisitions, stock analysts are suggesting OMC as a Hold investment. A comment shared in their annual report to their investors,

We are driven by out clients’ continuous demand for more effective and efficient marketing activities, we strive to provide an extensive range of advertising, marketing and corporate communication services through various client-centric networks that are organized to meet objectives.

OMC is often compared with NXST (Nexstar Media Group), IPG (Interpublic Group), LAMR (Lamar Advertising Company), CCO (Clear Channel Outdoor) and MCMI (Nationa CineMedia). Yet, despite their poor earnings report, loyal shareholders are holding their investments.

Read: Nexstar Media Groups Takes Action (NXST)

Please see About Me & Disclaimer for additional information about Black Tea.

Information Attainted:

SEC.gov, MSN.com/money, Omnicomgroup.com, TheStreetInsider.com

Opinion| Kylie Jenner: You Should Be Inspired

Who knew a selfie could generate hundreds of millions of dollars?

Kylie Jenner, the youngest daughter of the Kardashian-Jenner Family, is proclaimed to become America’s next youngest billionaire according to Forbes by reaching a total net worth of $900 million.

Kylie Jenner reaching Forbes is more than “status”. When working in any business, it takes hard work. She has utilized SNAP (Snapchat, $12.43) and TWTR (Twitter, $43.64) “tweets” to market her products. According to Insider.com, Kylie Jenner is one of the most influential stars on social media today. Who knew a selfie could bring in hundreds of millions of dollars.

Kylie is mostly known for her “Kylie’s Lip Kit” cosmetic line. According to CNBC.com, she has turned a $29 dual lipstick set into a $420 million dollar empire within 18 months -now that’s impressive.

The Kit is projected to make $1 billion in 2022. But her loyal fans have created a Go Fund Me page to donate to Kylie to reach $1 billion.

In my opinion, STOP IT! Why are we donating money to a businesswoman? She is not a kid (well…yes she is) and the last thing we need to promote is an easy hand-out. Instead of donating your measly Starbucks allowance to help another woman, just buy her products. Her instagram selfie’s have made her more money in a day than what the general hospital physician can make in a year (no offense to my physician friends).

Read our latest: FitBit: How Far Can We Go?

Women control more than half of the costs of beauty purchases. Don’t give up now Kylie, get the job done.

Please see About Me & Disclaimer for additional information about Black Tea.

Information Attained:

CNBC.com, ThisIsInsider.com

FitBit: How Far Can We Go?

FitBit: How long will their business last? Stock investors are watching their every move.

FIT (FitBit Inc., $5.70), headquarters in San Fransisco, CA, is a corporation that provides health and fitness devices with software services to create a health log for their user that pertains to their lifestyle.

FIT created an easy to use, a wearable fitness tracker that not only catered to the gym bodybuilder but to the office worker who wanted to track her steps to lose the high calories he at lunch. FIT has done an excellent job with their marketing and customer relatability. However there is one problem, their biggest competitors have beat them.

These competitors are Apple Inc. (Apple Watch), Garmin (Vivo Fit), Whoop (The Whoop fit tracker Used by LeBron James last season), and With things Go (activity and fit. tracker) and more.

A statement released by FIT on their last annual report,

For the remainder of 2018, we expect our gross margin to trend lower due to our product mix shift from connected health and fitness devices to smartwatches and the absence of the one-time benefit from the release of outstanding product return and rebate reserves related to Wynit…

FIT’s largest customer Wynit Distribution announced bankruptcy last year in September 2017 with bad debt expenses over $30.3 million and FIT has reported a substantial decrease in subscriptions.

According to MSN.com/money, FIT has a negative net income of -277.19 million. With penny stock investors enjoy the volatility of the stock, other see a better investment in related stocks such as APPL, GRMN, KYCCE, FTV, GRMN, and KEYS, since FIT comes in the form of a “product feature” instead of a large services provider. Though FITs presence seems to be strong in the athletic and teach department, how long with this last? Will, they merge with a large corporation or can they come up with a better head-turning product?

Please see About Me & Disclaimer for additional information about Black Tea.

Information Attainted:

SEC.gov, MSN.com/money, Bestreviews.com

Johnson & Johnson: Damaged Goods?

  • Second time this year in 2018, JNJ (Johnson&Johnson) has been targeted for it’s knowledge of asbestos in its world-famous talc baby powder.
  • Will thse issue conintue to occur? Should investors be concerned for the company’s reputation?

JNJ ( Johnson & Johnson, $133.10) stocks tumbled down 10% Friday 14th, 2018 as the company has been handling their pressures of the public knowing of asbestos in it’s baby powder. Some investors are concerned for how the issue is going to be managed and if this will effect their next earnings report. Yet, other investros aren’t concerned sicn the company is vastly know for their award-winnning products and their loyalty to their customers. However, this is not the first time JNJ has been hit with public shame for asbestos this year.

July 12th, 2018, JNJ (Johnson & Johnson, $125.89), is hot on the news for their case of being sued by 22 women for receiving cancer and /or poisoning for asbestos found in their famous talc baby powder. But should JNJ be shamed for this? Does this make JNJ a bad company?

According to mesothelioma.com, Trelomite, also known as amphibole asbestos, is created in the same nature as talc. Tremolite is often found in the same mines as talc and without special quality testing, it can contaminate the talc. However, talc can not only be used in baby powder but chewing gum, oils, makeup cosmetics, hair products, and more.

Read: Tariffs: What Are They? How Are They Affecting My Portfolio?

JNJ’s lead attorney, Bart Williams had more to say today on the issue,

Johnson & Johnson doesn’t believe it should be intimidated into removing a product that’s been out over 100 years, that has diapered hundreds of millions of babies around the world, simply because plaintiff lawyers have put a target on the back of Johnson & Johnson.We believe in the product. The product works. The product is beloved. The best scientists in America have reviewed it again and again.



Does this event make JNJ a bad company? Investors and customers still believe in the company and await its next press release.

Please see About Me & Disclaimer for additional information about Black Tea.

Information Attained:

CNBC.com, Mesothelioma.com, Factsabouttalc.com

Tariffs: What Are They? How Are They Affecting My Portfolio?

What are tariffs? How do they affect the stock market and investors?

It’s important to get a simple understanding of how tariffs are affecting the stock market and our economy. Tariffs are hurting many stock investors and it’s important to get an understanding of what they are doing.

A Tariff is a tax or duty to be paid on a particular class of imports or exports.

Simply put, a tariff is a tax on an import/export. When the money is collected they are known as duties or levies. Tariffs are usually charged as a percentage of a “transaction price”. These percentages vary from country to country. Analysis done by Greg Daco of Oxford University, discovered U.S., Japan, Europe and Canada charge a tariff percentage of 3.1% and below whereas Mexico and China reach to 4%.

Read: How Entrepreneurs Can stay Ahead Of A Slow Growing Economy.

Tariffs raise our government revenue and decrease pressure on our competitors. However, U.S. and China are two of world’s two largest economies and economists are declaring that China can stand to “hold their breath longer” in the trade-off than America.

The biggest concern lies with our fragile economy and corporate businesses. The “tax war” is effecting some of America’s most important businesses; soybeans farms, automobile manufacturers, steel and aluminum shipments, etc.

Rod Sides of Deloitte (U.S.) recently stated,

Consumers are feeling good, but if they see prices start going up, there could be a backlash. The average consumer hasn’t yet internalized what the tariffs mean to them and haven’t seen the prices rise.

Read: Bearish Behavior: How To React When Your Portfolio Is Plunging.

The tariffs can contribute to price changes of imports/exports which may contribute to the delay of corporate investments and new projects. This has investors concerned for price changes on the stock markets and America’s wealth. The tariffs don’t only effect our portfolios as investors, but this also affects the global economy. The world is watching every move President Trump makes and how he responds to China. The pressure is on.

Please see About Me and Disclaimer for additional information about Black Tea.

Information Attained:

Finance.Yahoo.com, InvestingAnswers.com, CBSNews.com

Is Etsy Inc. Making Progress?

ETSY (Etsy Inc.,$42.43) is an e-commerce marketplace that caters to hand-made crafts and gifts for third parties to sell from. Similar to eBay (eBay Inc., $37.56), ETSY has made substantial growth the past few weeks and with a new management team, they are planning to make changes within the company.

Though some long-term investors are not amused by their history of high SGA costs, other investors see a bullish outlook on future gains. ETSY is reaching its 52 weeks high at $44.71.

(Chart screenshot from NASDAQ)

On June 14th, 2017, ETSY added to the revenue by raising their seller transaction fees from 3.5% to 5%. Shareholders are anticipating higher cash flow and more business from this decision. ETSY has also turned heads their way from opening their business to European markets- DaWanda, a company based in Germany. DaWanda is closing their business and passing their current customers to ETSY.

Investors compare ETSY to other, larger corporations such as eBay and Amazon Handmade (AMZN, $1,717.14 ), stock analysts are currently claiming ETSY as a buy.

Please see About Me & Disclaimer for additional information about Black Tea.

Information Attained: Etsy.com, MSN.com/Money, Yahoo!Finance, StockTwits.com,

Why You Need To Keep Reading SEC Filings

SEC stands for Security Exchange Commission, it’s a place where most businesses submit company reports; 10-Ks, 8-Ks, S-1 forums, and etc. It’s often you will find companies praising about the revenue they made in their recent quarter or profits gained from a particular project, but it’s crucial to know the companies overall progress on their balance sheet.

Is the company showing consistency? Are they keeping profits high and production costs low? Are they truthful about their paid taxes? You can find all of this information on the SEC.gov.

Though earnings calls have their own matter of importance, viewing reports on the SEC will give you accurate information you can copy and save for later. You may also find additional background information on the CEO of the company (criminal record or education) on the Schedule 13D forum. Catch up and read our recent post about Investing Secrets here.

 

Investors also visit SEC.gov to view S-1 forums for additional information on IPOs. Don’t invest based on what your friends told you, visit the main source and find out for yourself. Though companies hold their own annual/quarterly statements, these reports can be very “colorful” and have a picture perfect outlook on in future they are expecting. It’s important to read the SEC filings because it will keep you knowledgeable about your investments and the long-term potential the company holds.

Please see About Me & Disclaimer for additional information about Black Tea.

Information Obtained: Investopedia.com, SEC.gov, Fool.com

What about ARLP (Alliance Resource Partners LP)?

ARLP (Alliance Resource Partners LP, $18.00) is amongst the nations leading coal mining corporations in America. If your into the coal/ Basic Materials sector, you may want to look into ARLP.

Investors and analysts have notice their increase in volume.

Due to the recent Tax Cuts and Jobs Act, coal workers have received a substantial tax relief and ARLP plans to reopen a min in Gibson County, Indiana previously closed in late 2014, employed 417 miners.

Though their cashflow fell in 2017 to 20.96%, their GPM (gross profit margin) has remained steady ranging from 40% to 36% (since 2014).

(Screenshot from MSN.com/money)

While many investors compare ARLP to other corporations such as CSUAY (China Shenhua Energy LTD, $10.30) or CLNDY (Coal India LTD), the recent demand for coal overseas will provide more customers and higher revenue. American coal corporations see this as an opportunity to stop the “yearlong drop” in their production. Though investors are wary of their dramatic price drop in (2015, $50.21), analysts see ARLP as a buy and investors are looking to buy closer to their 52-week low at $15.55.

Please see About Me & Disclaimer for additional information about Black Tea.

Information Obtained: WSJ.com, EIA.gov, and Marketwatch.com