JBHT out with earnings today.
Q3 EPS of $0.43 misses by $0.01. Revenue of $986M (+18.2%) in-line. Shares -1.1% AH.
Shares down, a penny light - not good, right?
What I found interesting in the release:
Though freight volumes backed off from the torrid pace we saw in June, demand remained steady across all segments. In Intermodal, we continued to see record numbers of loads and double digit increases compared to prior periods despite the fact that, unlike most of the intermodal industry, we were growing last year, making the comparables more difficult for us. September 30th was an all-time high in load count for a single day in Intermodal and we expect to surpass one million loads for the first time later this year.
“Load volume in our DCS segment, which we believe is a strong indicator of current customer demand and the general direction of the freight economy, continues to point toward steady business activity. Contract pricing, reflecting improvement in supply and demand balance, in both Intermodal and Truck, rose sequentially from this year’s second quarter and from the same period a year ago. Assuming demand remains near current levels, we expect to see freight rates continue to rebound from the unsustainable lows we saw during the recession.
JBI load count was up 17% in the current quarter compared to a year ago. Demand was generally strong across the country as our eastern network grew 26% and transcontinental business grew 13% over the same period 2009.
Considering that stuff has to be moved before it can be either made or sold, increases in freight (rail, truck, intermodal) is a good indicator of future activity. Does this mean everything is peachy? Absolutely not, but puzzle pieces come in all shapes and sizes, we are just trying to put them together.
This is my effort to help fit the pieces together to get a better picture of the capital markets.
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
Thursday, October 14, 2010
Mobile Home or Primary Home?
WSJ reports:
Winnebago Industries Inc. reported a profit for the fiscal fourth quarter as revenue surged and cost-cutting continued to pay off.
The recreational-vehicle maker has returned to profitability in recent quarters, recovering from an industry crisis that caused competitors to file for bankruptcy and leave the business. Still, Winnebago's backlog as of Aug. 28 slid 13% from a year earlier, a potentially troubling sign for investors who have fretted over future sales prospects as economic uncertainty and high unemployment persist.
"We remain cautious until we see continued retail growth," Chairman and Chief Executive Bob Olson said.
For the quarter ended Aug. 28, Winnebago reported a profit of $4.9 million, or 17 cents a share, compared with a year-earlier loss of $50.2 million, or $1.73 a share, which included a $1.41-a-share charge related to the write-down of deferred tax assets.
Revenue more than doubled to $123.1 million. Gross margin turned positive, In the year-earlier period, manufacturing costs exceeded revenue.
Motor home shipments nearly doubled and Winnebago dealer inventory rose up 21%.
Larger rival Thor Industries earlier this month said its fourth-quarter profit surged 64% amid a sharp rebound in sales.
I am thinking that these are no longer recreational vehicles, but primary addresses. Financing is probably easier and property taxes are far lower. Oh yeah, how can they foreclose on that which they cannot find?
Winnebago Industries Inc. reported a profit for the fiscal fourth quarter as revenue surged and cost-cutting continued to pay off.
The recreational-vehicle maker has returned to profitability in recent quarters, recovering from an industry crisis that caused competitors to file for bankruptcy and leave the business. Still, Winnebago's backlog as of Aug. 28 slid 13% from a year earlier, a potentially troubling sign for investors who have fretted over future sales prospects as economic uncertainty and high unemployment persist.
"We remain cautious until we see continued retail growth," Chairman and Chief Executive Bob Olson said.
For the quarter ended Aug. 28, Winnebago reported a profit of $4.9 million, or 17 cents a share, compared with a year-earlier loss of $50.2 million, or $1.73 a share, which included a $1.41-a-share charge related to the write-down of deferred tax assets.
Revenue more than doubled to $123.1 million. Gross margin turned positive, In the year-earlier period, manufacturing costs exceeded revenue.
Motor home shipments nearly doubled and Winnebago dealer inventory rose up 21%.
Larger rival Thor Industries earlier this month said its fourth-quarter profit surged 64% amid a sharp rebound in sales.
I am thinking that these are no longer recreational vehicles, but primary addresses. Financing is probably easier and property taxes are far lower. Oh yeah, how can they foreclose on that which they cannot find?
Greece - Calls for a General Strike
Greece's main private sector union called a 24-hour strike against austerity for Dec. 15 to demand the government protects jobs and gives back pension benefits scrapped under an EU/IMF bailout plan.
"GSEE calls on all citizens to mobilise to defend basic and fundamental rights," the union, which represents about 2 million workers, said in a statement. "We send a message to all that workers have reached their tolerance limits and will not accept new cuts."
Best of luck with that. How much better will you fare as a bankrupt nation? You might be able to raise some $$$ by selling some islands to Turkey.
"GSEE calls on all citizens to mobilise to defend basic and fundamental rights," the union, which represents about 2 million workers, said in a statement. "We send a message to all that workers have reached their tolerance limits and will not accept new cuts."
Best of luck with that. How much better will you fare as a bankrupt nation? You might be able to raise some $$$ by selling some islands to Turkey.
Change You Can Believe In
Steven Rattner, the Wall Street financier and Democratic donor who oversaw the Obama administration's auto-industry restructuring, is finalizing a deal with the Securities and Exchange Commission staff to resolve his role in a "pay to play" scandal involving New York state's public pension fund, people familiar with the matter said Wednesday.
Mr. Rattner would pay roughly $6 million and agree to a two-year ban from the securities industry, the people said. SEC commissioners are expected to vote on the deal with Mr. Rattner on Thursday. Until then, terms could change, and the deal could even fall apart. An SEC spokesman declined to comment. Through a representative, Mr. Rattner declined to comment.
A settlement with the federal securities regulator and a ban on his participation in the securities business would represent a significant comedown for Mr. Rattner, who rose to the No. 2 spot at top mergers and acquisitions firm Lazard Freres & Co. before leaving to co-found in March 2000 a private-equity firm that ended up ensnared in the pay-to-play probe.
Karma - Stick it to the bondholders of GM in favor of the unions. Hmmmm, wonder who paid for that?
Mr. Rattner would pay roughly $6 million and agree to a two-year ban from the securities industry, the people said. SEC commissioners are expected to vote on the deal with Mr. Rattner on Thursday. Until then, terms could change, and the deal could even fall apart. An SEC spokesman declined to comment. Through a representative, Mr. Rattner declined to comment.
A settlement with the federal securities regulator and a ban on his participation in the securities business would represent a significant comedown for Mr. Rattner, who rose to the No. 2 spot at top mergers and acquisitions firm Lazard Freres & Co. before leaving to co-found in March 2000 a private-equity firm that ended up ensnared in the pay-to-play probe.
Karma - Stick it to the bondholders of GM in favor of the unions. Hmmmm, wonder who paid for that?
Citi CDS Trading Tighter Than BAC
Citigroup’s rate fell below Bank of America’s this week for the first time since September 2007.
The five-year swap rate for Bank of America rose today to 200 basis points, according to Phoenix Partners. The rate stood at 180.5 basis points yesterday, based on Bloomberg data. Each basis point equals 0.01 percentage point and amounts to $1,000 a year on a contract protecting $10 million of debt. Citigroup’s rate was 165.4 basis points yesterday.
Lets not forget that Citi disposed of the majority of their toxic assets to the govt and wrote down a massive amount of the rest. I have long said that Citi's books are cleaner.
Disclosure: Long C equity and preferreds.
The five-year swap rate for Bank of America rose today to 200 basis points, according to Phoenix Partners. The rate stood at 180.5 basis points yesterday, based on Bloomberg data. Each basis point equals 0.01 percentage point and amounts to $1,000 a year on a contract protecting $10 million of debt. Citigroup’s rate was 165.4 basis points yesterday.
Lets not forget that Citi disposed of the majority of their toxic assets to the govt and wrote down a massive amount of the rest. I have long said that Citi's books are cleaner.
Disclosure: Long C equity and preferreds.
Bank Asset Slight of Hand
On the wire:
Bank of America Corp., seeking to reduce risk and meet new capital standards, upgraded billions of dollars of distressed mortgage bonds by repackaging them into new securities using a variation of a Wall Street technique that failed during the credit crisis.
The transactions, known as re-remics, are designed to add a layer of protection to residential mortgage-backed securities that sustained losses, enabling them to regain investment-grade ratings. The strategy helped the bank pare its RMBS holdings by $5.2 billion in the second quarter, or about 15 percent, according to a company filing.
Article here: Re-remic capital magic
Seriously? This is what got us here. I wonder if investors believe they can understand the movement of these securities with housing price depreciation and artificial interest rates? Yeah, sure they can. the Marquis de Sade of markets.
Bank of America Corp., seeking to reduce risk and meet new capital standards, upgraded billions of dollars of distressed mortgage bonds by repackaging them into new securities using a variation of a Wall Street technique that failed during the credit crisis.
The transactions, known as re-remics, are designed to add a layer of protection to residential mortgage-backed securities that sustained losses, enabling them to regain investment-grade ratings. The strategy helped the bank pare its RMBS holdings by $5.2 billion in the second quarter, or about 15 percent, according to a company filing.
Article here: Re-remic capital magic
Seriously? This is what got us here. I wonder if investors believe they can understand the movement of these securities with housing price depreciation and artificial interest rates? Yeah, sure they can. the Marquis de Sade of markets.
Wednesday, October 13, 2010
Wednesday Market Recap
Another day, another dollar (or two). Equities better, short/intermediate treasuries better, credit better - its all good.
Fixed Income:
Secondary volume increased today in both IG and HY space. Decliners lead advancers in IG space with a 0.87x ratio and the unstoppable HY advancers lead decliners by 1.55x. WaMu had a decent gain on the news of the tax payment (see earlier post) and Harrahs had decent returns today as well. All financials in the most active in the IG arena.
Decent new issue calendar today, with Raytheon leading the charge with $2B across 5s,10s and 30s - personally thought it was kinda tight. Post Properties priced $150MM of 7yr paper at +300 - Decent value here, a nice steep credit curve.
From Bloomberg: Companies are selling debt that protects bondholders against credit-damaging mergers at a record pace as Blackstone Group LP, Bain Capital LLC and other buyout firms announce takeovers at the fastest rate since 2007.
Forty-five percent of bonds sold in the U.S. and Europe by investment-grade non-financial companies last quarter contained a so-called poison put, compared with 40 percent in the three months ended in June, according to data compiled by Bloomberg. Use of the provision, which lets investors sell debt back to the issuer at a premium in an acquisition, has doubled since 2008.The covenant they are talking about is the change of control covenant which requires the issuer to purchase the debt at $101 if there is a change of control that leads to non-investment grade ratings (gotta watch the verbiage in the COC - any of the agencies vs. each of the agencies for a downgrade below IG). Funny, but the market doesn't seem to price in a premium for the covenant until the sh#t hits the fan, then look at the difference in Px - example is SLE where COC bonds came to rest around $101 while non-COC bonds got cracked around 20pts.
Story here: Bloomberg COC
Treasuries muted. Rally still has legs though, IMHO.
Equities:
Energy, Materials and Industrials clear winners in the S&P500.
Interesting fact (from S&P): Standard & Poor’s, the world’s leading index provider, announced today that of the approximately 7,000 publicly owned companies that report dividend information to Standard & Poor’s, only 35 decreased their dividend payment during the third quarter of 2010 marking a continued, dramatic improvement from the 135 that lowered their dividend payment during the third quarter of 2009. Dividend increases rose 56.4% during the third quarter to 299 from the 191 recorded during the third quarter of 2009. Year-to-date, 117 have decreased their dividend payment compared to 730 for the corresponding period last year, representing an 84% decline in negative news. 1033 issues have increased their rate so far this year, a 46% gain over the 707 issues that did so last year.
Howzabout a little growth vs Value?
Currencies:
Another day, another kick in the teeth for the dollar (well deserved and policy intended). The headines today:
Canadian Dollar Climbs To New Multi-month Highs Against Greenback;
Australian Dollar Jumps To New Multi-year High Against Greenback
Dollar Plunges To Fresh 15-year Low Against Yen
Now, have I been saying to get a little loonie? Go down under?
Errata:
Fixed Income:
Decent new issue calendar today, with Raytheon leading the charge with $2B across 5s,10s and 30s - personally thought it was kinda tight. Post Properties priced $150MM of 7yr paper at +300 - Decent value here, a nice steep credit curve.
From Bloomberg: Companies are selling debt that protects bondholders against credit-damaging mergers at a record pace as Blackstone Group LP, Bain Capital LLC and other buyout firms announce takeovers at the fastest rate since 2007.
Forty-five percent of bonds sold in the U.S. and Europe by investment-grade non-financial companies last quarter contained a so-called poison put, compared with 40 percent in the three months ended in June, according to data compiled by Bloomberg. Use of the provision, which lets investors sell debt back to the issuer at a premium in an acquisition, has doubled since 2008.The covenant they are talking about is the change of control covenant which requires the issuer to purchase the debt at $101 if there is a change of control that leads to non-investment grade ratings (gotta watch the verbiage in the COC - any of the agencies vs. each of the agencies for a downgrade below IG). Funny, but the market doesn't seem to price in a premium for the covenant until the sh#t hits the fan, then look at the difference in Px - example is SLE where COC bonds came to rest around $101 while non-COC bonds got cracked around 20pts.
Story here: Bloomberg COC
Equities:
Interesting fact (from S&P): Standard & Poor’s, the world’s leading index provider, announced today that of the approximately 7,000 publicly owned companies that report dividend information to Standard & Poor’s, only 35 decreased their dividend payment during the third quarter of 2010 marking a continued, dramatic improvement from the 135 that lowered their dividend payment during the third quarter of 2009. Dividend increases rose 56.4% during the third quarter to 299 from the 191 recorded during the third quarter of 2009. Year-to-date, 117 have decreased their dividend payment compared to 730 for the corresponding period last year, representing an 84% decline in negative news. 1033 issues have increased their rate so far this year, a 46% gain over the 707 issues that did so last year.
Howzabout a little growth vs Value?
Yeah, didn't surprise me either.
Little market cap action?
Difference between the two narrowed, but not enough to make me want to swap into small caps.
Currencies:
Canadian Dollar Climbs To New Multi-month Highs Against Greenback;
Australian Dollar Jumps To New Multi-year High Against Greenback
Dollar Plunges To Fresh 15-year Low Against Yen
Now, have I been saying to get a little loonie? Go down under?
Errata:
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