Apple Reports Q3 EPS – Reiterating Buy Here

mkaminis By Markos Kaminis (Wall St. Greek):

Apple (NASDAQ: AAPL) earned $ 7.7 billion or $ 1.28 per share, which was better than analyst expectations for $ 1.23, based on Factset data. It marked the best pace of EPS growth in seven quarters, however, the hard-to-please will note the result was only about in line with the whisper number. The shares were off fractionally heading into the conference call, but the after-hour loss dwindled as traders listened in and contemplated on what is to come later this year. I’m reiterating my buy call.

Apple’s earnings grew 12% year-to-year in Q3, mainly on strong iPhone sales into emerging markets including China. The company also noted strong Mac sales, but iPad sales faded year-to-year more than analysts expected. Gross margin expanded to 39.4% against last year’s 36.9% profit, which served as a positive surprise to a market that is paranoid and concerned about the risk of narrowing margins over the longer

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GuruFocus Names Five Dividend Growers

By Monica Wolfe. Read more » »
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Building A Snowball

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Today’s After Hours Earnings: Texas Instruments Incorporated and Zions Bancorporation (TXN, ZION)

After the bell on Monday, a few big name, dividend paying companies announced their quarterly earnings. Below, we look at these earnings reports and break down the important points for investors.

Texas Instruments

Texas Instruments (TXN) reported second quarter revenues of $ 3.29 billion, up from last year’s Q2 revenues of $ 3.05 billion. Net income for the quarter came in at $ 683 million, or 62 cents per diluted share, which is up slightly from last year’s Q2 earnings of $ 660 million, or 58 cents per share. TXN beat analysts’ estimates of 59 cents EPS on revenues of $ 3.27 billion. Looking ahead, TXN sees Q3 EPS in the range of 66 cents to 76 cents on revenues in the range of $ 3.31 billion to $ 3.59 billion; analysts expect EPS of 68 cents on revenues of $ 3.44 billion.

Zions Bancorp Beats Q2 Estimates

Zions Bancorp (ZION) reported second quarter earnings of $ 104.5 million, or 56 cents per share, almost double last year’s Q2 earnings of $ 55.4 million, or 30 cents per share. Zions’ Q2 earnings results beat analysts’ estimates of 45 cents.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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Breast Milk: The New Steroid for Body Builders

Breast Milk: The New Steroid for Body Builders

Staying fit comes with a price: Eat right, exercise on a regular basis, drink plenty of water, and don’t drink too much alcohol (if any).

The list of dos and don’ts is infinite…

But as we know, not everyone shares the same fitness goals.

For some, being fit means running a marathon – while for others, the focus could be on building muscle mass and strength.

But a new fad has just hit the athletic community. And it’s not only bizarre, but also lethal!

The “Perfect” Supplement

Before you hit the locker room after your workout, don’t be shocked when you see your buddies guzzling down a nice big cup of breast milk. Seriously.

I’ll give you a moment to let that digest, if you will…

Why on Earth would grown men be sipping on something that we’ve left behind with infancy?

Well, many athletes are using this new “energy drink” to keep their stamina up.

For Anthony, an athlete in Queens, New York, steroids and other energy supplements are “garbage.” So milk from a random woman’s breast seems to be the most logical next step?


Anthony claims that “it gives me incredible energy [that] I don’t get from other food and drinks.”

This young athlete loads up on breast milk by purchasing it online for about $ 2.50 an ounce, which isn’t too shabby for the steroid alternative.

That’s right, you can purchase your own share of random ladies’ breast milk right on your laptop, iPad, or iPhone! Indeed, according to the online platform, Only the Breast, its motto is: “A Community for Moms to Buy, Sell & Donate Natural Breast Milk.”

The site boasts a classified ads section, which is essentially like Craig’s List… only for breast milk. See for yourself. I guess it’s true… you really can buy anything on the internet.

Anthony certainly isn’t alone in his nutritional supplement choice, either. This new trend has spread throughout the athletic community – and now even body builders are touting it as “the perfect supplement.”

They claim that the nutrients and proteins in the milk not only provide energy, but also allow the athletes to build muscle in a natural way.

Now, we’re not getting into whether or not that’s true. But we have discovered some troubling side effects you should be aware of – just in case you were thinking of trying it for yourself…

The Elixir of Death

Grown men consuming breast milk isn’t just strange, it can be dangerous, too.

In fact, it could very well kill someone…

Just like you wouldn’t purchase food from a stranger online, health experts are (understandably) discouraging people from doing the same with breast milk…

The donation of baby milk isn’t regulated like other body fluids. So there’s an obvious risk of contamination.

Consider these frightening statistics…

Just last October, “64% of samples from milk-sharing sites were contaminated with staph, 36% with strep, and almost three-quarters with other bacterial species,” as reported in The New York Times.

If the milk was government regulated, 74% of the samples would have bombed milk bank criteria.

So while some believe that breast milk gives that “natural boost” needed in the gym, if patrons aren’t careful, that first sip may also be their last.

At the intersection of health and wealth,

Nikia Wade

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Netflix: Q2 Earnings Fall Shy Of Expectations, Will A Sell-Off Ensue?

By Shock Exchange:

Picture: Cast from Netflix’s “Orange Is The New Black”

Netflix, Inc. (NASDAQ:NFLX) reported its Q2 earnings after-hours today and there were hits and misses. Subscribers of the company’s streaming segments grew 33% from Q2 2013 to Q2 2014, exceeding 50 million; subscribers of the domestic streaming and international streaming segments grew 22% and 78%, respectively. Subscribers of the domestic DVD segment declined 17% during that same period. Annual revenue and net income growth were 25% and 141%, respectively. Below are the historical financial results for Netflix:

(click to enlarge)

  • Cost of sales declined to 68% of revenue in Q2 2014 from 71% over the same period last year. Its operating expenses (marketing, technology & development, and general and administrative) also declined to about 22% in Q2 2014 versus 24% in Q2 2013.
  • Though its earnings growth was impressive, its $ 1.15 per share during the quarter were a penny shy of

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Did Obama’s Nightmare Become Reality?

Did Obama’s Immigration Nightmare Become Reality?

Under Obama’s Dream Act, he declared that he wouldn’t deport underage illegal immigrants already living in the United States.

Of course, the illegal immigrants in the United States were elated by the news. Many of them phoned home requesting for friends and family to join them.

Well, hundreds of thousands answered the call and are now swarming across the border. And the surge has completely overwhelmed America’s child welfare and foster care system.

In response, Obama – believing he would face less opposition by shipping these immigrants to big cities – turned nearly the entire country into pseudo border states.

So what was once a problem in Arizona and Texas is now also a problem in Illinois, California, and New York.

Indeed, Obama’s “dream” has quickly become a nightmare. And his strongest supporters are now turning their backs on him.

Lies, Lies, Lies

The political left has claimed that these children are leaving Central America because of violence.

Don’t believe it…

A recent government intelligence assessment compiled via interviews with detained illegals concludes that 95% “cited the primary reason for migrating to the United States was the perception of U.S. immigration laws granting free passes or ‘permisos’ to UAC (unaccompanied children).”

By comparison, the violence affecting black children in America’s inner cities is far worse than anything being faced by these children from Central America.

On such merits, black leaders across the country are actually denouncing Obama as a result of the ongoing immigration crisis. They believe that if Obama can find money to spend on the child immigration crisis, he should also be able to find more room in the budget for helping at-risk children who are here legally.

Speaking from Chicago, Reverend Jesse Jackson said, “If we can find $ 4 billion for those children – and we should – we can find $ 2 billion for Chicago. There are more children involved, and more have been killed, and more have been shot.”

Just over the Fourth of July weekend, nine people were killed – and 60 injured – in the ongoing eruption of violence in Chicago.

And it’s not just the black community that’s feeling shunned. A coalition of homeless activists in Los Angeles are also upset – feeling neglected as city officials rush to find housing for illegal immigrants.

Before we start taking in “refugees” from other countries, maybe we should start focusing on the refugees in our own backyard.

Free Immigration and a Welfare State?

Many on the left continue to quote the words inscribed on the Statue of Liberty, “Give me your tired, your poor, your huddled masses yearning to breathe free…”

The problem with open borders today is that the system has dramatically changed.

In 1886 when the Statue of Liberty was gifted to the United States, we had no welfare system. Immigrants knew they had to work to make it in America, and they certainly did!

Today, we have a highly developed welfare system that gives these children money we cannot afford.

As America’s brilliant economist, Milton Friedman, once postulated: “It’s just obvious you can’t have free immigration and a welfare state.” The immigrants coming today are an immediate cash drain on an already-overtaxed welfare system – shoving American children out of the way to make more room for them.

Protests in Murrieta, California last week may have received limited mainstream news coverage, but more are cropping up around the country. Last week, protests were held in Arizona, Illinois, Connecticut, Maryland, New York, Michigan, and Pennsylvania. And 250 more protests were scheduled for this past weekend.

This movement could end up bigger than the Tea Party. Mostly because the Tea Party didn’t cross party lines, yet this protest is often led by left-wing activists.

So, for once, it’s not just the right wing that’s fed up… Even Obama’s own have had enough of his antics.

Your eyes on the Hill,

Floyd Brown

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Trading Radar for 07/21: Halliburton (HAL), Netflix (NFLX), Chipotle Mexican Grill (CMG), TI (TXN), Rambus (RMBS) Report

The Trading Radar highlights key earnings and economic announcements for the next trading session:

Before Markets Open:

BB&T Corp. (NYSE: BBT) – consensus EPS $ 0.74
Bank Of Marin Bancorp (Nasdaq: BMRC) – consensus EPS $ 0.80
Genuine Parts Co. (NYSE: GPC) – consensus EPS $ 1.26
Halliburton Co. (NYSE: HAL) – consensus EPS $ 0.91
Hasbro, Inc. (Nasdaq: HAS) – consensus EPS $ 0.36
Lennox International, Inc. (NYSE: LII) – consensus EPS $ 1.51
Manpowergroup (NYSE: MAN) – consensus EPS $ 1.33
PetMed Express, Inc. (Nasdaq: PETS) – consensus EPS $ 0.25
Six Flags Entertainment Corp. (NYSE: SIX) – consensus EPS $ 0.65
SunTrust Banks, Inc. (NYSE: STI) - News Articles

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Why Google Is Easily 15% Undervalued

By Giorgio Galvan:

In this article I will provide you with a very conservative DCF analysis of Google (NASDAQ:GOOG) and a short commentary on the company, explaining why it is undervalued and why it will keep improving in the future.

DCF Valuation

First, I would like to show you the assumptions and computations I made to come up with this model. To compute the cost of debt, the cost of equity and then the WACC, I used the general formulas:

Cost of debt (R Debt) = Corporate Bond rate of company’s bond rating= 2.125%

Current tax rate= 16.11%

  1. Risk Free Rate = U.S. 10-year bond = 2.48%
  2. Average Market Return 1950 – 2014 = 7.5%
  3. Beta = Google’s Beta = 1.14

Cost of Equity or R Equity = Risk Free Rate + Beta Equity (Average Market Return – Risk Free Rate) = 8.2%

Debt (Total Liabilities) or D = $ 23,611 million

Stock Price

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A Cheap, High-Yielding Apartment REIT

A Cheap, High-Yielding Apartment REIT

I recently discussed one of the most significant problems facing our economy – a massive debt load.

The aggregate debt level, relative to economic output, has not materially declined since the apex of the credit expansion in 2008.

To be sure, the situation has improved somewhat. Pockets of deleveraging have occurred.

However, there’s one crucial area that’s accumulating debt at a frightening pace…

Outstanding student loan debt has surged to an astounding $ 1.26 trillion from $ 637 billion at the end of 2007.

The Class of 2014 is the most indebted ever, with an average of $ 33,000 in student loan debt per graduate.

This is particularly troublesome because these young adults are the next generation of consumers and homeowners. College graduates are becoming increasingly burdened with student loan payments well into their adult lives.

According to the National Association of Realtors, student loan debt is hampering the household formation process. In a recent survey, among first-time buyers who said it was difficult to save for a down payment, 54% said student loans made it tough to save money.

The Federal Reserve is even noticing the impact of these trends on the housing market. Below is an excerpt from the latest Federal Open Market Committee meeting minutes (emphasis added):

“Despite attractive mortgage rates, housing demand was seen as being damped by such factors as restrictive credit conditions, particularly for households with low credit scores; high down payments; or low demand among younger homebuyers, due in part to the burden of student loan debt.”

Whether it’s due to student loan debt, stagnant wages, economic hardship, or even personal preferences, homeownership among young adults is in a startling decline.

The homeownership rate in the first quarter of 2014 for Americans 35 and under fell to 36.2%, the lowest level since the U.S. Census Bureau started tracking home ownership by age in 1982.

But the Millennials have to live somewhere. If they don’t own a house – and they aren’t living with Mom and Dad – then they’re probably renting.

Ultimately, those who own and manage apartment complexes and multifamily communities stand to benefit from a nation of renters.

Cashing in on a Nation of Renters

There’s reason to believe that residential real estate investment trusts (REITs) are going to be the beneficiaries of these secular, macro tailwinds.

As we’ve been saying all year, though, the larger REITs tend to be expensive.

But a small-cap REIT, Independence Realty Trust (IRT), has caught my attention this week.

Independence Realty Trust owns and operates garden-style and mid-rise apartment properties in Arizona, Colorado, Georgia, Indiana, Texas, and Virginia. The company just priced a secondary offering (or additional issuance of shares), and it intends to use the net proceeds from the offering primarily to acquire additional apartment properties.

In the past week, IRT’s stock price has declined from over $ 10.50 down to around the offering price of $ 9.50. Secondaries are often good buying opportunities for astute investors, and from an investment standpoint, its valuation is very attractive.

The table below compares IRT with a few of the big boys: Equity Residential (EQR), AvalonBay Communities (AVB), and Essex Property Trust (ESS).

As you can see, IRT is far cheaper than these larger REITs based on its price to 2014 estimated funds from operations (FFO).

The new price-to-FFO ratio for IRT may change, depending on how much cash flow per dollar the new assets produce relative to the company’s existing apartment portfolio.

However, I don’t think the firm would be raising funds unless it and the external manager, a wholly owned subsidiary of RAIT Financial Trust (RAS), are confident that there are attractive acquisition opportunities out there.

Yield-starved investors will also love IRT’s 7.6% annualized dividend yield, as well as its monthly dividend payout.

Bottom line: Independence Realty Trust is a cheap, high-yielding REIT that’s positioned to benefit from our nation’s shift towards renting.

Safe (and high-yield) investing,

Alan Gula, CFA

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