BetterTrades looks at Lindsay Corporation

Lindsay Corporation (LNN) a leading provider of irrigation systems and infrastructure products, announced results for its fiscal 2008 1Q ending November 30th, 2007. 1Q fiscal 2008 total revenues increased 47% to $75.9M from $51.5M for the year-ago period. Net earnings were $4.4M or $0.36 per diluted share, compared with $1.8M or $0.15 per diluted share, in the prior year’s 1Q. Total irrigation equipment revenues increased 49% to $56.5M from $38.0M in the prior fiscal year’s 1Q. Domestic irrigation revenues increased 34%, while international irrigation revenues improved 79% from the prior year’s quarter. Infrastructure revenues were $19.4M compared, with $13.6M in the prior year period, an increase of 43%. Gross margin improved to 25.4% from 24.2% a year ago due to higher irrigation margins. Operating expenses of $12.8M, an increase of $2.9M in the 1Q, were 16.8% of sales, compared with 19.1% of sales in the prior year period. The increased spending was primarily due to the inclusion of personnel related expenses. Operating income during the quarter was $6.5M, compared with $2.6M in the prior year period. Lindsay’s backlog of unshipped orders on November 30th was $51.2M compared, with $24.6M on November 30th, 2006. Irrigation backlog increased $16.3M, while infrastructure backlog increased $10.3M primarily on higher Barrier Systems backlog. Shareholders’ equity on November 30th was $147.5M or $12.50 per outstanding common share, compared with $123.7M or $10.64 per outstanding common share on November 30th, 2006.

Lindsay Corporation manufactures and sells automated agricultural irrigation systems that enhance or stabilize crop production while conserving water, energy, and labor. It operates in two segments, Irrigation and Infrastructure. The Irrigation segment offers center pivot and lateral move irrigation systems, as well as hose reel travelers and mini-pivots. It also produces irrigation controls, chemical injection systems, and remote monitoring and control systems; manufactures and markets repair and replacement parts for its irrigation systems and controls; and markets pivot monitoring and control systems, which include remote telemetry and a Web or personal computer hosted data acquisition and monitoring application. The Infrastructure segment offers Quickchange Moveable Barrier system that comprises T-shaped concrete barriers that are connected to form a continuous wall, a barrier transfer machine capable of moving the barrier laterally across the pavement, and the variable length barriers for accommodating curves. This system has applications in highway reconstruction, paving and resurfacing, road widening, median and shoulder construction, and tunnels and bridges repair. Lindsay also provides various equipment lease options for the moveable barrier and transfer machine used in construction applications; and outsourced manufacturing and production services, including the production of large diameter steel tubing for other companies. Further, it offers a line of redirective and non-redirective crash cushions used to enhance highway safety at locations, such as toll booths, freeway off-ramps, medians and roadside barrier ends, bridge supports, utility poles, and other fixed roadway hazards; specialty barrier products; and preformed tape and a line of road safety accessory products.

Over the past several months, since the beginning of June, LNN has been able to put together a strong run in the company’s stock price. In June, the stock was trading in the low-to-mid 30s before the stock leaped up in price. This jump was based on the company reporting earnings of $0.62 a share, up 12.7% from last year, on 24.2% higher operating revenue at $93.1 million. Shares jumped 12.9%, or $5.08, to $44.33 that day. The following five months, through November, LNN would trade much like a channeling stock. Its price would range mainly between $40 and $50 through much of this time frame. In addition, LNN would report 4Q earnings in early October, which benefited to company’s stock price again. 4Q fiscal 2007 total Revenues were $73.5M, a 30% increase from $56.6M for the year-ago period. Net earnings were $3.8M, or $0.32 per share, compared with $3.1, or $0.26 per share, in the prior year's fiscal 4Q. The stock jumped 7.6% that day in trading.

While the company continues to show steady strides financially and within the market place, Lindsay Corp. has maintained a strong business structure that has helped the company through tough market conditions. LNN has been able to generate outstanding quarterly Revenue growth, 47.3%, along with quarterly Earnings growth of 145% that has helped propel their market position over the past twelve months. Within that time, the company’s stock price has increased more than 110%. With these facts and figures, it seems apparent that LNN has the potential to make great strides in the near future. In fact, with the USDA forecast of record net farm income in 2007, LNN believes that domestic demand for irrigation products will be higher during this irrigation selling season. International demand is also expected to increase on the strength of higher agricultural commodity prices. LNN is focused on achieving growth in each of their segments organically and through acquisitions. During the most recent period they acquired a product line which complements the Barrier Systems portfolio of infrastructure products. LNN will continue to leverage their financial flexibility to create shareholder value through a balance of organic growth opportunities, strategic acquisitions, share repurchases, and dividend payments.

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BetterTrades looks at General Electric Co.

General Electric Co. said Tuesday it will invest $54M in and arrange for $259M in debt financing for a deepwater drilling ship to be used for oil exploration offshore Brazil. The investment is GE's first in offshore drilling. Affiliates of the Fairfield, Conn.-based industrial conglomerate will serve as lead arranger and underwriters for $259 million in senior debt for the vessel's acquisition. WestLB AG will serve as the agent and other lead arranger. Mike Mullen and Pareto World Wide Offshore, a Norwegian private-equity fund, will also invest funds in the ship, which can drill in 5,200 feet of water to a depth of 25,000 feet. Etesco Construcoes E Comercio Ltd., a Brazilian offshore rig operator, will operate the vessel. The Peregrine I ship is currently under contract with Petrobras, Brazil's state oil company. Mike Mullen Energy Equipment Resource Inc., a Dallas-based offshore assets investor, will acquire the ship from Houston-based oil services company Transocean Inc.

General Electric Company (GE) is a diversified industrial corporation. Its Infrastructure segment produces jet engines, turboprop and turbo shaft engines, and related replacement parts for use in military and commercial aircraft; wind turbines; aircraft engine derivatives; gas and steam turbines, and generators; oil and natural gas compressors and turbines; diesel-electric locomotives and parts; and productivity solutions for industrial and municipal water systems. It offers various financial products and services aviation and energy sectors. The company's Commercial Finance segment provides loans, leases, and other financial services to manufacturers, distributors, and end-users for various equipment and capital assets. Its GE Money segment offers credit cards, loans, mortgages, and deposit and savings products to consumers and retailers. GE's Healthcare segment manufactures equipment for magnetic resonance, computed tomography, positron emission tomography imaging, X-ray, patient monitoring, diagnostic cardiology, nuclear imaging, ultrasound, bone densitometry, anesthesiology and oxygen therapy, and neonatal and critical care and therapy. Its NBC Universal segment provides network television services; produces television programs and motion pictures; operates television broadcasting stations; owns various cable/satellite networks; and operates theme parks. GE's Industrial segment offers home appliances; lamp products; electrical distribution and control products; motors and control systems used in end-industrial and consumer products; commercial lighting systems; protection and productivity solutions; handheld and portable field calibrators; equipment for detection of material defects; stand-alone measurement instrumentation; and systems for validating or certifying commercial and industrial processes. GE was founded in 1892, is headquartered in Fairfield, Connecticut, and currently employs more than 300,000 employees.

For much of 2007, GE has had a tumultuous ride in their stock’s price. From the beginning of the year, GE shares had taken a nosedive, losing more than 11% in price up until the middle of March. Much of this downturn can be attributed to SEC’s ruling that GE had to restate earnings reported between 2001 and 2006. With the stock hitting its yearly low of $34 a share, the stock would rebound in March on analyst’s projections that the company, despite a poor performance for the first three months of the year, still outperformed the S&P 500 and that GE was unaffected by the mass concern of the subprime mortgage industry. April would bring a channeling pattern to the stock, while May would bring the start of a strong run in price by the stock. From May, until the latter-half of July, GE’s stock would gain nearly 21% in price and set a then new 52-week high of $40.98. Much of the stock’s success for these two-and-a-half months was in direct correlation with the company’s earnings release in early July in which the company posted earnings of $5.4B, or $0.52 a share, up from $4.9B, or $0.47 a share, for the year ago period. Also at this time, GE announced that it would increase its share repurchase program $2B, to $14B, for 2007.

The following months would bring new highs along with sharp drops in the company’s stock price. Due to the high volatility of the markets in late July and through much of August, GE shares would drop to around $36 a share, before gaining their foothold and marching upwards to setting a new 52-week high of $42.15 in early October. Once the new high was set, it seemed to mark the demise on the company’s performance. Since November, the stock has dropped more than 13%, despite the company receiving numerous, lucrative deals involving a wind farm in Texas and worldwide, contracts for a new Dubai engine order, along with adding jobs in various sectors. While the company is able to maintain above-industry-averages within their margins, 15% Operating, 13% Profit, and 39% Gross, GE has the ability to post quarterly Earning growth, 13.8%, and Revenue growth of 13% based on total Revenues of $174B over the past twelve months. As the year comes to a close, look for the new-year to bring prosperity to much of GE’s subsidiaries while being able to provide 3% dividend yields.


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BetterTrades looks at Costco Wholesale Corp.

Shares of Costco Wholesale Corp. (COST) fell late in the week, as analysts said the warehouse retailer's profit margins in the fiscal first quarter were not as strong as they expected. Costco reported earnings of $0.59 per share in the period ending Nov. 25th, which met analyst expectations. However, analysts said falling margins on gasoline sales cost the company several cents per share in profit. JPMorgan analyst Charles Grom estimated the effect at $0.03 to $0.05 per share and added that general expenses were also higher than he expected. He described the quarter as "good, not great." Banc of America Securities analyst David Strasser said Costco's U.S. same-store sales are not strong enough to counteract high gas prices. He expects those prices will get worse and said the price of Costco shares is high.

Costco Wholesale Corporation operates membership warehouses, which offer a selection of branded and private label products in a range of merchandise categories in no-frills, self-service warehouse facilities. The company's product categories include candy, snack foods, tobacco, alcoholic and nonalcoholic beverages, and cleaning and institutional supplies; appliances, electronics, health and beauty aids, hardware, office supplies, garden and patio, sporting goods, furniture, and automotive supplies; dry and institutionally packaged foods; apparel, domestics, jewelry, housewares, media, home furnishings, cameras, and small appliances; meat, bakery, deli, and produce; and gas stations, pharmacy, food court, optical, one-hour photo, hearing aid, and travel. It offers Business, Gold Star (individual), and Executive Memberships. Costco was founded in 1976 and was formerly known as Price/Costco, Inc. but changed its name to Costco Companies, Inc. in 1997. Further, the company changed its name to Costco Wholesale Corporation in 1999 while being based in Issaquah, Washington, and currently employs more than 70,000 employees.

Over the past several months, Costco has been able to make a steady run in the company’s stock price. Since the beginning of the year, COST has increased their price by nearly 30%. January and February both brought prosperity to the company’s stock. During this time, the stock was able to gain 10% in price based on sales figured that had increased 9% domestically, and 10% internationally. Over the following four months, March, April, May and June, Costco shares would trade within a modest $5 channel. The end of June, leading into July would show solid gains in the stock’s price as the company released figures that stated that the company’s membership had increased to more than 22.5M members with each individual averaging $100 per transaction. June and July also brought another 14.5% increase in the stock’s price. August would bring another story for COST shares. The high volatility of the markets would dictate the stock’s performance, but Costco proved resilient in that the company was able to regain their footing by early September.

September’s increase would be solely based on the company’s pervious monthly sales. Reported from August sales, COST posted Net Sales of $4.84B, an increase of 6% from the same period a year ago. Net Sales for the fiscal 4Q, which ended in August, netted $20B, a 3% increase year-over-year, while full-year Sales figured in at $63B, a 7% increase from 2006’s numbers. After reporting 4Q and 2007 financial figures, COST shares would gain 26% in price, including a 9% gap-up in mid-October. Leading up to present time, Costco’s stock would channel trade again before making big stride in the first two weeks of trading in December, including setting a new 52-week high of $72.68 a week ago. Although Costco lags behind industry leaders Wal-Mart and Target, Costco is still able to post above average margins along with steady growth in quarterly Earnings, 4.7%, and Revenue, 3%. In addition, COST carries little debt, keeps plenty of cash on the books, and continues to use the successful formula of opening new stores with outstanding results. If the company can maintain their current business practice, there will be a strong possibility for the stock to advance well into the mid-to-upper $70 price range.


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BetterTrades looks at ITT Educational Services Inc.

Shares of ITT Educational Services (ESI) rallied on Monday after an analyst upgraded the stock, saying a recent a sell-off related to the education company's exposure to private loans presents a buying opportunity. Lehman Brothers analyst Gary Bisbee upgraded the stock to "Overweight" from "Equal Weight" and raised his share price target to $128 from $121. Concerns related to the company's exposure to private loans have caused shares to decline 21% in the past month. Given the company's strong execution history and ability to consistently meet or exceed its guidance and long-term growth goals over the last five years, many believe that management's statements are reasonable. ITT management believes the impact on its business in 2008 from a lending agreement with Sallie Mae will be minimal and easily absorbed given its strong fundamentals, Shares gained $9.03, or 8.8%, to $112.03 in trading, with the stock ranging from $66.26 to $131.82 over the past year.

ITT Educational Services, Inc. provides postsecondary degree programs in the United States. It offers diploma, associate, bachelor, and master degree programs in the fields of information technology, electronics technology, drafting and design, business, criminal justice, and health sciences. As of September 27, 2007, the company owned and operated 94 ITT Technical Institutes in 34 states, which primarily offered career-focused degree programs of study to approximately 47,000 students. ITT Educational Services was founded in 1946 and is headquartered in Carmel, Indiana.

From the beginning of 2007, ESI was trading in the mid-$60’s, but with a strong financial standing, the company was able to make a run in price that would last for the first five-and-a-half months of the year. During this time, ESI made tremendous strides in the performance of their stock. In January, ESI’s stock gained 17% in price. February through the end of April saw ESI trade in a channel of $8, between $77 and $85 until a breakout occurred at the end of the month. The breakout, which included a one-day jump of 15% in the stock’s price, was in direct correlation of the company reporting 1Q earnings for fiscal 2007 which included a 46.7% increase in EPS, of $0.66 from $0.45, while Revenues increased 15.8%, from $176.3M to $204.2M. The increase in both EPS and Revenues can be attributed to the increase in new student enrollment of 13% in the 1Q. From the release of the company’s earnings, the stock climbed another 42% in price before retreating. Up until August, ESI was trading a feverous pace, and at one time, reach a new 52-week high of $121.35 before the volatility of the markets affected much of the company’s success. From that 52-week high, the stock’s price would slid more than 29% to trade as low as $93.35.

By the end of August, ESI’s shares would recover enough to make another run through September to achieve another new 52-week high of $127.62. From then on, the stock would fluctuate through October and into November, while setting another new 52-week high of $131.82. Much of November would bring a downturn for ESI, as 3Q earnings would come in basically flat from the 2Q which would be reflected in the stock’s price. Since establishing their 52-week high, ESI shares would decline by 31% leading up to today’s news and new analyst ranking. In addition to the nearly 50% increase in the stock’s price over the past twelve months, ESI has also been able to establish other outstanding financial figures, including above industry averages in Gross Margin, 57.5%, Operating Margins, 27%, and Profit Margins, 17%. Also included, are quarterly Revenue growth of 15% and Earnings growth of 20%. These figures are based on the company’s ability to generate more than $845M in Revenues and to keep more than $272M of cash on the Balance Sheet. The one drawback that the company has incurred is that of debt, which is 3x that of equity. With all that being said, ESI has the financial backing, good management practices, and a strong history of performance that may carry the company to new heights within the coming months and years.


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BetterTrades looks at Coca-Cola Co.

In a surprise move, the chief executive of The Coca-Cola Co. (KO) will step down after four years as head of the world's largest beverage maker and be succeeded by his second-in-command. Neville Isdell, 64, will step down as CEO on July 1st, and will be succeeded by the company's president and chief operating officer, Muhtar Kent, 55. During Isdell's tenure as CEO, company profits steadily rose, particularly on the international side. Also during his tenure, a Justice Department investigation of business practices at the company concluded with a settlement, and the final chapter of a nearly $200 million discrimination settlement involving the company closed.

The Coca-Cola Company engages in the manufacture, distribution, and marketing of nonalcoholic beverage concentrates and syrups worldwide. The company offers nonalcoholic beverages, principally carbonated soft drinks, as well as noncarbonated beverages. Its beverage products comprise bottled and canned soft drinks and beverages products. The company's products also include beverage concentrates, such as flavoring ingredients and sweeteners; syrups, the beverage ingredients produced by combining concentrates, sweeteners, and added water; and fountain syrups that use equipment for mixing the syrups with carbonated or noncarbonated water for immediate consumption, and are sold to fountain retailers, such as restaurants. The Coca-Cola Company also produces and markets noncarbonated beverages, including waters and flavored waters, juice and juice drinks, energy and sports drinks, teas, and coffees. The company markets its nonalcoholic beverages under various brand names, including Coca-Cola, Diet Coke, Fanta, and Sprite. It sells its finished beverage products primarily to distributors. The company sells its beverage concentrates and syrups to bottling and canning operators, distributors, fountain wholesalers, and fountain retailers. The Coca-Cola Company was founded in 1886, is headquartered in Atlanta, Georgia, and currently employs more than 71,000 workers.

During trading of KO last year, you can see on the company’s chart that the stock was a channeling stock. It wasn’t until the last half of the year that KO began to breakout from the channel. March of this year, confirmed the move upwards for Coca-Cola. At that time, KO was trading just below $46 a share. The upcoming price spurt through the beginning of May was attributed to the company 1Q earning report that was released mid-April. KO posted a 9% increase in Revenues from the same quarter a year ago, while also increasing Net Income 16% as EPS went from $0.56 to $0.65 per share year-over-year. Because of the strong earnings report, KO stock went from $50.23 a share to $53.55 in May, solely based on earnings. Over the next three months, KO would fall back into another channel, this time between $51 and $56 a share. September would begin the company’s 17% increase in price as the stock would hit $62.15, a 52-week high at that time.

November would bring on a slight retreat in the stock’s price, but KO would rebound through the remainder of the month to hit another new 52-week high of $63.45.for Coca-Cola to reach such an increase in their stock’s price, much of their success can be directly attributed to the company’s strong financial standing. Coke has been able to maintain well-above industry averages in Profit Margin, 19.8%, and Operating Margins, 26%, which help attribute to the company’s performance. KO has also been able to post quarterly Revenue growth, year-over-year, of 19.2% and Earnings growth of 13.3%. This is in direct correlation with the company generating over $27B in Revenues over the past twelve months. Coke has also been able to maintain almost $5B in cash for the most recent quarter, which allows the company to pay-down debt, and invest in other capital ventures along with increasing their R&D department.


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BetterTrades looks at Oracle Corp.

Earlier today, an analyst downgraded shares of Oracle Corp.(ORCL) saying a slowdown in spending on software by companies may pressure its earnings. JMP Securities analyst Patrick Walravens downgraded the business-software maker to "Market Outperform" from "Strong Buy" and lowered his price target to $23 from $24. JMP conducted a survey of 38 businesses across the economy and 61 percent said their software spending would stay the same or fall in 2008. This survey result is the worst since 2001 and is similar to the result in May 2003, which marked the beginning of a two- to three-year choppy period for Oracle's business.

Oracle Corporation, an enterprise software company, engages in the development, manufacture, distribution, servicing, and marketing of database, middleware, and application software. The company operates in five segments: New Software Licenses, Software License Updates and Products Support, Consulting, On Demand, and Education. The New Software Licenses segment provides licenses for database and middleware software, including database management software, application server software, analytics, development tools, and collaboration software and applications software, which provides enterprise information for the financials, human resources, maintenance management, manufacturing, marketing, product lifecycle management, procurement, projects, and supply chain planning sectors. The Software License Updates and Products Support segment provides customers with rights to unspecified software product upgrades and maintenance releases, and Internet access to technical content, as well as Internet and telephone access to technical support personnel. The Consulting segment designs, implements, deploys, and upgrades database, middleware, and applications software. The On Demand segment provides multi-featured software and hardware management, and maintenance services for clients deploying its database, middleware, and applications software. This segment also provides support centers, assistance, technical account management, configuration and performance analysis, personalized support, annual on-site technical services, and other related services. The Education segment offers online courses and self paced media training on CD-ROMs. ORCL was founded in 1977, headquartered in Redwood City, California and currently employs over 74,000 workers.

Over the past several months, ORCL has been a channel trading stock. Since May, the stock was trading as low as $18.50, and as high as $23 in mid-October. During this time, the stock fluctuated between those two prices with regularity, until the market’s high volatility in August, October and November. Once the markets began to settle in late-August, ORCL started to make a run in price that lasted to the middle of October. At which time, the stock’s price increased nearly 22.5%, from $18.79 to almost $23 a share. Some of the company’s success during which time was attributed to ORCL and SAP battling over legal issues in that ORCL alleged that SAP illegally downloaded more than 10,000 copyrighted materials from Oracle servers to use with its customers and to recruit new ones. Despite pending litigation, ORCL stocks continued a small gain in price. Another contributing factor to the company rise in price was the acquisition of Bridgestream Inc., a provider of enterprise role management software. The addition will enable the next generation of integration between security and business process controls by delivering a closed-loop solution that combines role discovery, modeling, enforcement, attestation and audit in a single integrated solution.

In September, a huge boost to the company was Oracle's fiscal first-quarter results which included a 26% gain in sales, a 25% jump in profit, and the largest advance in new order bookings in a decade. Based on their earnings report, the stock was able to continue upwards through October, until it reached its 52-week high of $23 a share. Second-quarter earnings will be released the third week in December in which expectations will be that the company's software sales will rise 15% to 25% in the three months ending in November to produce earnings of $0.26 or $0.27 per share, excluding stock option expenses. For the most recent quarter, ORCL was able to produce strong financial figures. The company has posted above industry averages in Gross Margins, 77%, Operating Margins, 34%, and Profit Margins, 23%. In addition, ORCL has also generated almost $19B in Revenues over the past twelve months while amassing more than $7.7B in cash which help the company pay down debt. ORCL has also been able to increase quarterly Revenue growth, 26%, and Earnings growth, 25%, year-over-year. While many still believe Oracle will outperform the software industry, due diligence suggests Oracle's business is slowing along with enterprise software spending but mainly in the US, as the company’s performance should be helped by businesses in Europe, the Middle East and Africa.


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