Archive for May, 2014

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Dow – Lots of Talk – But Good Topics

In our recent research comparing the opportunity at DOW versus LYB we talked about the number of levers that DOW has available – other than the US ethylene margin – to add to earnings and value.  Yesterday we saw another

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SSR Index of Current-Quarter Healthcare Demand Growth: Initial 2Q14 Estimates

We expect 7.1% (nominal) y/y growth in US health services demand during 2Q14, the product of 5.5% growth in demand intensity and 1.5% growth in price. Our estimate of demand intensity are sharply higher in 2Q14, and reflect an expectation

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May 21, 2014 – TMT: “Culture Eats Strategy for Breakfast!”

TMT: “Culture Eats Strategy for Breakfast!” Culture matters. It biases a company’s world-view, it shapes institutional skill sets, and dictates management decisions. When it is aligned with a company’s strategy and the opportunities created by the market, it is a

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Quick Thoughts – WFC Investor Day: Shift to Mobile Creates Advantage for Large Banks

Beyond financial housekeeping (increasing the target payout ratio to 55-70% from 50-65%), an expression of confidence in the economy, and an intriguing glimpse into how the configuration of a branch network (siting, density, and layout) impacts the relative share of

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Quick Thoughts – Retail

Retail earnings this morning are a bit dicey, with notable weakness from a number of different companies – SPLS, HD, TJX, URBN and DKS. We see these results as consistent with our commentary last week where we laid out (again?

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Quick Thoughts: AT&T makes its TV move

–          T’s DTV deal is old paradigm thinking in the long term, but adds near term upselling opportunities for existing subs, leverage w/ content nets, and an intriguing LatAm play. –          “Triple Play” may be played out – the DTV

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JPM: Earnings Power and Buyback Capacity Under-Estimated

With declining Treasury rates over the last few months and a first-quarter earnings miss, consensus 2015 EPS for JPM has fallen to just above $6.00 from $6.35 in March. This is overdone, and we expect the bank to beat comfortably

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Natural Gas – Chance of a Price Spike?

Natural gas pricing has come off a bit as we have moved through May, but has been volatile around the weekly inventory figures, moving up again yesterday.  While inventories have begun to be replenished, they remain well below the seasonal

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Quick Thoughts – AXP: Releasing the Distribution Bottleneck will Lift ROE

Our thesis is that in 2016 Amex will raise its ROE target (currently 25% or more) as the Global Network and Merchant Services or GNMS business grows relative to the proprietary issuing business. Presently GNMS, which includes earnings from network

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Quick Thoughts – KSS and WMT

Both KSS ($0.60 versus consensus of $0.63) and WMT ($1.10 versus consensus of $1.15) reported weak EPS results and lackluster comps.  WMT is a name that remains among our least preferred, while KSS is a name that we haven’t commented

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