Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Silicon Motion Technology (NASDAQ: SIMO ) fell as much as 14% today after the company released earnings.
So what: Net sales fell 19% from the fourth quarter to $57.4 million, coming in just ahead of estimates. The real downside was on the bottom line, where earnings per share dropped more than 50%, to $0.17, $0.05 short of estimates.�
Now what: The decline in revenue was driven by mobile storage and mobile communications products, two cores of the company. The stock is trading at just five times forward earnings estimates, but the declining revenue and earnings has a value trap written all over it. I'm staying away from this stock today, and need to see operational improvement to be a buyer.
Interested in more info on Silicon Motion Technology? Add it to your watchlist by clicking here.
Top 5 Value Companies For 2014: Schlumberger N.V.(SLB)
Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.
Advisors' Opinion:- [By Tyler Crowe and Aimee Duffy]
About 1% of all drilling operations are powered by natural gas. By shifting all drilling operations over to natural gas, the industry could save as much as $1.6 billion a year. The idea has such appeal that both Haliburton (NYSE: HAL ) and Schlumberger (NYSE: SLB ) have said that they would be willing to test sites with Apache for free. In this video, Fool.com contributor Tyler Crowe talks about how the industry could convert to natural-gas-powered operations, and highlights companies to look out for that could benefit from this movement.
- [By Taylor Muckerman and Joel South]
Gulf of Mexico delivering boatloads of profit
Already, several companies have spoken glowingly about activity levels in the Gulf of Mexico. Not just drillers like Noble Corp (NYSE: NE ) �but also equipment and service companies like Halliburton (NYSE: HAL ) and Schlumberger (NYSE: SLB ) . What we are seeing here is a steady increase in both dayrates and utilization rates, which are both�very�positive signs for drillship operators. - [By Isac Simon]
Is the stock looking cheap?
To me, Halliburton currently looks cheaper that its bigger cousin Schlumberger (NYSE: SLB ) . While Halliburton is trading at 21 times its earnings, and Schlumberger's trading at only 18 times earnings, the reason I'm not too interested in the P/E multiple is that Halliburton's bottom line doesn't reveal its actual profits. Since April 2010, the company has been making provisions for its part in the Macondo oil spill disaster. This has distorted Halliburton's actual earnings considerably. - [By P.I.A.]
This Libra story only involves one location out of several around the globe that are favorable to offshore drillers. Some say the industry itself is poised to outperform. The Market Vectors Oil Services ETF (OIH) could make sense to investors. The fund tracks 25 international companies, with Schlumberger Ltd (SLB) comprising 20.6% of its holdings, compared to 4.3% SDRL. Even with the heavy weighting toward SLB, diversification provides safety.
Top 5 Value Companies For 2014: Dollar Tree Inc.(DLTR)
Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.
Advisors' Opinion:- [By ANUP SINGH]
Dollar Tree (NASDAQ: DLTR ) is among the most successful single-price-point retailers in the U.S. It operates more than 4,842 stores across 48 states in the U.S. and five Provinces in Canada. The chart below shows that the company has been performing consistently well over the past five years.
5 Best Undervalued Stocks To Invest In 2014: Tupperware Corporation(TUP)
Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.
Advisors' Opinion:- [By Ben Levisohn]
Shares of Herbalife have gained 0.9% to $79.51 this morning in pre-open trading. Its shares have gained 139% this year, a nice gain, but lagging Nu Skin Enterprises 271% rise. Avon Products�(AVP), another multi-level marketer, has gained 21% so far this year, while Tupperware Brands�(TUP) has risen 49%.
Top 5 Value Companies For 2014: Caterpillar Inc.(CAT)
Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.
Advisors' Opinion:- [By Matt Thalman]
Despite my colleague Dan Caplinger's prediction that Caterpillar (NYSE: CAT ) will announce an increase to its dividend on Wednesday, shares of the Cat are down 0.9% today. The company is also one of the Dow's most hated stocks: Short interest in the company is at 4%, and Sean Williams explained over the weekend why investors don't much care for the stock right now, knocking its price down 6.2% year to date to make it the worst-performing component on the blue-chip index. Sean noted that weak coal and precious-metal prices have really hurt the heavy-equipment manufacturer, but Sean feels Caterpillar is a good bet for the long-term investor, and I must agree with him.�
- [By Chris Hill]
Molex (NASDAQ: MOLX ) is up big after Koch Industries agreed to buy the company for $7.2 billion in cash. Yum! Brands' (NYSE: YUM ) same-store sales in China fall 10% in August. Caterpillar (NYSE: CAT ) shares are up on news that China's exports grew more than 7% in August. And Middleby (NASDAQ: MIDD ) closes in on a new all-time high. In this segment, the guys discuss four stocks making big moves.
- [By Jeremy Bowman]
Two industrial powerhouses on the Dow delivered earnings today. First, Caterpillar (NYSE: CAT ) shares finished down 2.4% after missing estimates as many had expected. The slowdown in Chinese construction has hurt demand for materials and thus mining equipment, a key component of Caterpillar's business. The world's largest maker of earth-moving equipment said profits fell 43% as EPS came in at $1.45, down from $2.54 a year ago, and worse than estimates at $1.69. Revenue dropped 15.8% to $14.6 billion, below expectations of $15.1 billion. Management promised cost-cutting to cope with the decrease in demand, and cut its full-year EPS outlook from $7 to $6.50.
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