Best Buy Earnings Are Good, But Buyout Talks Are Officially Dead
Best Buy reported better-than-expected numbers for its fourth quarter, but CEO Hubert Joly also confirmed that buyout talks with founder Richard Schulze have failed.
Best Buy reported better-than-expected numbers for its fourth quarter, but CEO Hubert Joly also confirmed that buyout talks with founder Richard Schulze have failed.
Now that earnings season is winding down, we can direct our attention to other measures of a company's worth -- things like having boatloads of cash on hand, good free cash flow, and strong earnings per share growth. Here are five companies that look great based on those criteria.
Martin Zweig%u2019s unique, earnings-oriented approach to stock picking has produced consistently outstanding returns over a 15-year period, writes John Reese, who explains the growth and value components of Zweig%u2019s strategy and reviews some of his current holdings.
There was a time when RadioShack mattered -- it was the easiest place to pick up those tech items you had to have, from odd-sized batteries to coaxial cables. Now you can get that stuff everywhere, and RadioShack is dying so fast that even Wall Street's analysts can't keep up with its decline.
Apple shares are trading near their all-time high of $422.86, but most analysts expect them to go much higher. Forty-six analysts tracked by Thomson/First Call have a median price target of $500 -- an approximately 20% rise -- and the most optimistic among them forecasts the stock will hit $666 -- about 60% higher than it trades now.
For many companies, meeting or beating quarterly earnings estimates matters more than anything else. All too often, the drive to perform bleeds into a temptation to cook the books. But astute investors can see behind the numbers to glimpse the truth. Here are a few of the major red flags.
Earnings season unofficially kicks off today, but 26 companies have already reported for the second quarter of this year. According to institutional data provider Capital IQ, here are some of the highlights so far:
Investors have abandoned Research In Motion, which may finally make it a good investment again. Twenty months ago, the smartphone company's shares traded at $85. The stock now changes hands at around $49. But there are good reasons to expect that it won't stay that low for long.
Last year saw a surge in stock repurchases -- companies like ExxonMobil, Walmart and Microsoft bought back shares at record levels. Buybacks can be seen as a cash giveaway to investors, and they boost earnings per share. But there's a strong reason to be wary of companies that do buybacks.
So far in 2010, U.S. companies have announced stock buybacks totaling more than five times as much as they had at this time last year. But evidence suggests that such buybacks a more likely to be money losing propositions -- except for the CEOs whose bonuses they artificially inflate.
U.S. automaker Ford drove to a $2.6 billion profit in the second quarter, zooming past analyst expectations. Looking forward, CEO Alan Mulally said that he expects "even better financial results in 2011."
Ford Motor is set to deliver strong earnings when it reports second-quarter results Friday. After disastrously low sales in 2009, the auto industry as a whole has been in recovery mode this year -- and Ford has been one of the biggest beneficiaries of the revival.











