Seven of my Benjamin Graham companies reported quarterly financial results or other noteworthy news. Prices appearing after each stock symbol are the closing prices on Thursday, June 9. Reports are for the quarter ended April 30, 2016 unless otherwise noted. Sales and earnings increases and decreases are based on year-ago comparisons.
This update also includes two indexes listing the companies featured in the Cabot Value Model or the Cabot Enterprising Model during the most recent four months and the dates when my summaries of the companies were published.
My next Weekly Update will be sent to you on Friday, June 24, 2016. My schedule for the next four weeks will be:
- Friday, June 17: No Weekly Update due to Canada Conference
- Friday, June 24: Weekly Update
- Tuesday, June 28: Cabot Wealth Advisory
- Thursday, June 30: Cabot Value Model issue 264V
- Friday, July 1: Weekly Update
- Thursday, July 7: Cabot Enterprising Model issue 264E
- Friday, July 8: Weekly Update
- Friday, July 15: Weekly Update
Company Reports
Allergan (AGN 247.40) received a vote of confidence when activist investor Carl Icahn announced that he had added a large position in Allergan. Icahn often advocates for management and strategy changes in companies for which he holds positions.
Mr. Icahn is very supportive of Allergan CEO Brent Saunders. Icahn and Saunders have worked cooperatively and constructively together in the past. Carl Icahn’s investment in Allergan is good news for shareholders. Hold.
Bristow Group (BRS 16.24) Barclays raised its opinion for Bristow to Overweight from Equal Weight, while lowering its price target to $20 from $22. Barclays believes the company has an opportunity to shore up its balance sheet. Hold.
Corning (GLW 21.03) completed its purchase of Alliance Fiber Optic Products for $227.5 million. Alliance will provide new and innovative products that will enhance the company’s optical solutions for network operators. Hold.
Dollar General (DG 91.69) reported excellent results for the quarter ended April 30. Sales rose 7% and EPS surged 23% after increasing 7% and 12% respectively in the prior quarter. Same-store sales climbed 2.2%. Apparel sales increased only 1.5%, but sales growth in all other categories experienced solid gains.
Dollar General opened 249 new stores and remodeled 301 stores during the quarter. The company plans to open about 900 new stores and relocate or remodel about 875 stores during the 12 months ending April 2017. As of April 29, Dollar General operated 12,719 stores in 43 states. Hold.
Synchronoss Technologies (SNCR 36.19) shares have increased noticeably during the past few weeks. EPS estimates for 2016 have risen to $1.94 from $1.73. The company is reportedly up for sale. A sale in the $50 to $60 range is quite possible, and a sale at those levels would provide gains of almost 50%. Seeing is believing, though. Buy at 39.17 or below.
Team Health Holdings (TMH 44.50) is no longer being pursued by AmSurg, which announced plans to purchase Envision Healthcare, a provider of physician services that’s both bigger and arguably better than Team Health. AmSurg bid $71.47 per share for Team Health in October 2015, but Team Health management rejected the offer as too low. More recently, Jana Partners bought 8% of Team Health’s common stock and will likely seek a sale of the company. Hold.
UnitedHealth Group (UNH 140.68) raised its quarterly dividend to $0.625 from $0.50. The resulting yield is now 1.8%. Buy at 135.18 or below.
Index of Latest Summaries – Recommendations featured in recent issues.