Update Maxwell Technologies (MXWL)
So how do you miss earnings estimates by 36 cents a share, reporting as Maxwell Technologies (MXL) did on February 18 after the stock market closed a loss of 39 cents a share for the fourth quarter, and yet miss revenue projections of $28.8 million by just $800,000? (Revenue actually grew by 22.3% from the fourth quarter of 2008.)
Part of the reason is that Maxwell had a large number of non-cash losses (including a big set-aside against the results of an investigation into a former sales agent in China) and gains this quarter. Using GAAP accounting (Generally Accepted Accounting Principles) the company lost 39 cents a share in the period. Excluding those non-cash gains and losses, the company broke even for the quarter. Wall Street had projected a loss of 3 cents a share.
But more importantly for long-term investors, the quarter’s results reflect that Maxwell is still essentially two companies.
Update Johnson Controls (JCI)
Shares of Johnson Controls (JCI) were up more than 2% yesterday, February 3, on news that Wal-Mart (WMT) had named Johnson Controls as its sole source provider for its U.S. stores for automotive, marine, motor sport, and lawn and garden batteries Goldman Sachs also upgraded the stock yesterday to neutral from sell.
For after the correction, think industrial stocks: Market history says this is their time
Are you in the right sectors of the stock market for this point in the economic recovery? (Yes, despite the stock market correction, we are still in an economic recovery.)
Solid data stretching back to 1945 argues that certain industries and sectors outperform during specific stages of any economic recovery. (The best work on this subject comes from Sam Stovall, the chief investment strategist for Standard & Poor’s Equity Research Services. His 1996 book Sector Investing is still the best resource on the subject to my mind.)
My first rule of investing is “Put every trend you can on your side.” Neglecting what we know about what sectors thrive when is in my opinion wasting an asset that could help you make bigger profits.
Stovall divides the economic cycle into four stages.
Update Johnson Controls (JCI)
I’m actually surprised (and maybe a little disappointed since I’m still building my position in these shares) that Johnson Controls (JCI) fell only 2.4% after issuing disappointing guidance on October 13.
The company told Wall Street analysts that it will earn 40 to 42 cents for the fiscal fourth quarter that ended on September 30. Sales will come to $7.9 billion. The earnings number was a scant one to three cents above analyst expectations.
But it was the guidance for fiscal 2010 that was most disappointing. The company said sales will climb just 9% to $31 billion and earnings to $1.45 a share. Analysts had been expecting numbers only slightly below those figures at $30.2 billion and $1.44 a share.
Those numbers aren’t what analysts who are expecting an economic turnaround in 2010 wanted to hear.
The problem seems to be in the company’s automotive interiors business. (Johnson Controls is the world’s largest maker of automotive interiors.)The company said revenue there will climb 13% in fiscal 2010 but margins will be just 1.3% to 1.6% instead of the 3% to 4% expected.
The IPO window opens and battery maker A123 Systems gets set to jump through
The financial crisis has been hard on IPOs, the initial public offerings that young companies use to start tapping the public stock markets for capital.
In the six months after Lehman Brothers went into bankruptcy, a grand total of two companies managed to go public. In December 2007, before the financial market meltdown, nine companies went public in a single week alone.
Right now, though there are five companies lined up to test the market for new stock offerings: Artio Global Investors (an asset management company), Seclect Medical Holdings (a hospital operator), Vitacost.com (an online vitamin retailer), Shanda Games a Chinese online computer game company), and A123 Systems.
