Stocks

C.H. Robinson Worldwide (CHRW)

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Source: Company Annual Report (2010)

C.H. Robinson Worldwide (CHRW) is a service company, which provides freight transportation services and logistics solutions to companies. It is a multimodal transportation services and logistics solutions, operates through a network of branch offices in North America, Europe, Asia, South America, and the Middle East. C.H. Robinson Worldwide services include supply chain consulting and analysis, freight consolidation, core carrier program management and information reporting. The company’s other services include sourcing services, contract Warehousing and fee-based information services. The Sourcing services business is primarily the buying, selling, and marketing of fresh produce. It also provides Transportation and Logistics Services: Truckload, less than Truckload, Intermodal, Ocean, Air and Other Logistics Services. C.H. Robinson Worldwide was founded by Charles Henry Robinson in 1905 and is headquartered in Eden Prairie, MN.

Business Model Analysis

The long-term growth trend is 10%. And we could pretty much set our watch to it … with allowances for recessions now and then. (If you squint, you can see a recessionary gulp in 2012. See the blip in the EPS plot for 2012 vs. the trend.)

The price bars are drifting ever closer to the long-term EPS trend, underscoring the potential buying opportunity.

Chronicle

Points of View

There’s a few chinks in the armor for CHRW, but no deal breakers. The “bearish sentiment” and negative price pressure is probably reflective short-term recessionary concerns — but we’re in this for the long haul. (Yes, an economic recession will deliver a dent much like it did in 2008-2009.)

Overall sentiment is a little weak. Note the Motley Fools CAPS all-stars are not all that high on CHRW (34th percentile).

Chipotle Mexican Grill (CMG)

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Benzinga’s Tim Parker asks the best questions.

See: Chipotle, Buy Sell or Hold — Order Up!

As Tim points out, noted and notable investing celebrities David Einhorn and Jeff Gundlach both have questioned the future of Chipotle. In fact, they diss the burrito bonanza and compare Chipotle to Taco Bell, hissing a little while they nudge the guacamole around on their plates.

I question whether either of them have ever been to a Chipotle. The restaurants are pretty spartan … and last time I checked, there wasn’t any sign of wait staff adorned with towel over arm, refilling my water glass every time I take a sip. Maybe it’s the styrofoam vs. glass which makes it a little more challenging to detect water level?

Nothing against either one of these guys … not at all. They’re both great sources of ideas and inspiration and they both have a 3-taco plate full of notable achievements. But here I have to go with the college students and long lines forming at Chipotle to think that perhaps — just maybe — they’re a smidge wrong about this one.

Our take: Hold with a return forecast that’s pretty close to the average return for all stocks. (6-7%). And given the Speedy Gonzalez behavior and life cycle position of Chipotle, we’ll expect a siesta or two going forward… and yes, things will calm down over time. It’s a natural thing. And when it does, the stock price gets adjusted like a palate recovering from a hot sauce barrage from time to time.

Technical Analysis

As Tim suggests, the technical rendition looks pretty good. Here’s the really long-term look, focusing on monthly characteristics. There’s no clear and present danger of an RSI break (unlike the previous chapters) right now.

Shopping By Sector: Technology En Fuego

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Photo Credit: Tc Morgan via Compfight cc

Where to shop these days?

Start by recognizing where NOT to shop and that’s probably the utility sector. The utility stocks have been en fuego. Don’t shop among the ashes of a bonfire, shop where a flammable pile is smoldering — but distinguish ashes from ignition.

The accompanying table has been sorted from highest potential to lowest potential based on projected annual return (PAR) — the return forecast for the ten traditional sectors from S&P.

Technology stocks worth a closer look: Apple (AAPL), Cognizant Technology (CTSH), Google (GOOG), EMC (EMC), Oracle (ORCL), Qualcomm (QCOM) and Intel (INTC).

Keep in mind that the smoldering might take a while as the often unfriendly (to Tech stocks) days of summer swoop in — for investing for the long term …

Sector gps 20130411

Fastenal (FAST): Look Out Below?

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Fastenal (FAST) has broken below a relative strength index of 70 recently — and bears watching.

A little weakness in today’s earnings report could  go a long ways (price swoon) as the conditions are a little more vulnerable than usual to a price correction.  As Dan Hess pointed out, other companies (e.g. MSC Industrial) are displaying similar fundamental weakness in their operating results.

As always, this long-term community favorite should have plenty of leash when it comes to portfolio-centered decisions.  Treat it as core and hold unless Fastenal (FAST) is your best challenge candidate for your portfolio.

Fast 10yr 20130410

Point of View: Update

Fast pov 20130410

Danaher (DHR): Look Out Below?

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Danaher (DHR) nudged up to a relative strength of 70+ but has subsided back to 66.7.

The following analyses suggest a higher potential/probability of some short- and intermediate-term price disturbance … but depending on portfolio-centered decisions, likely a hold in most portfolios.

But a stock price speed bump wouldn’t surprise us.

Dhr 10yr 20130410

Danaher (DHR) is a consensus hold based on the following perspectives:

Dhr pov 20130410

Business Model Analysis

It’s pretty clear why Danaher (DHR) has been a long-time community favorite and charter member (since 9/30/2005) of the MANIFEST 40.

Say it with me: “Up, Straight and Parallel”

The analysis supports a sales growth forecast of 7-10%, consistent with the opinions of Value Line, Morningstar and S&P.

Dhr model 20130410

Chronicle: Return Forecast and Quality EKG

Dhr chronicle 20130410

Fusion Screen (4/9/2013)

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By Deglr6328 (Wikimedia Commons)

Infosys Tech (INFY) remains among the more interesting stocks in our Fusion Screen.

Recent Solomon Select feature Atwood Oceanics (ATW) continues to represent the Energy sector. Apple (AAPL) may have more short-term downside when it comes to price, but is a solid selection for committed long-term investors.

Screening Criteria:

1. Fusion Ranking = 100. (Combination of Fundamental and Technical Factors)
2. Quality Ranking greater than 60.
3. Bullish Point-and-Figure Sentiment. (Source: Stockcharts.com)
4. Price-to-Fair Value less than 100%. (Sources: Morningstar and S&P)

Fusion screen 20130409

Look Out Below: MYL, NVO & RHI

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Lookout Below

During the weekly update, the following stocks were flagged based on a decline from RSI greater than 70 (potentially overbought) to less than 70. Reminder: We use a long-term chart (monthly) for this analysis.

All of these companies should be subjected to an assertive portfolio-centered selling analysis.

  • Mylan Labs (MYL)
  • Novo Nordisk (NVO)
  • Robert Half (RHI)

Lob dash 20130412

Mylan Labs (MYL)

Myl 10yr 20130412

Novo Nordisk (NVO)

Love the company … would probably want to wait for a slightly higher PAR and a clear reversal in the RSI trend.

Nvo 10yr 20130412

Robert Half (RHI)

This community favorite has had a heckuva run over the last several months. With a PAR (5.9%) less than the market average (MIPAR = 7.0%) and relatively rare RSI breaks and excursions over the last ten years, if you’re holding this high-quality (Quality Rank = 88th percentile) career and employment leader, your recent gains may be worth capturing/protecting.

Check overall portfolio return forecasts and this RSI break condition could be a tiebreaker when pondering selling candidates.

Rhi 10yr 20130412

Value Line Low Total Return Screen (4/12/2013)

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Photo Credit: bayat via Compfight cc

Companies of Interest

This week’s short list is the type of list we start to see near market tops. Several of the companies fail to reach the top quality quintile (Quality Ranking > 80) and we included AFLAC (AFL) although it’s on the edge.

We’ll be spending more time this month with Teva Pharma (TEVA) and the generic pharma industry to examine the bigger picture and longer term expectations. It will be part of the agenda for the Round Table on April 30.

We’ll also take a look at Robert Half (RHI) as a study candidate — but from the perspective of “traps” as community favorite RHI ends up in the “Look Out Below” roster this week along with Mylan Labs (MYL) and Novo Nordisk (NVO).

Materially Stronger: Biogen Idec (BIIB), Bristol-Myers Squibb (BMY), Kelly Services (KELYA), Albany Molecular (AMRI), BRE Properties (BRE), Public Storage (PSA), Investors Banc (ISBC)

Materially Weaker: Alcoa (AA), Anglogold Ashanti (AU), People’s United Financial (PBCT)

Market Barometers

The median Value Line low total return forecast is 6.7%, compared to 6.7% last week.

MANIFEST 40 (March 2013)

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The Stocks You Follow: March 2013 Update

We’ve always believed that the collective decisions made by our community of long-term investors is worth huddling over … a place where ideas are born.

Apple (AAPL) continues at the top of the leader board, a position the company has held for several months. AAPL first appeared on this listing on 9/24/2009 and proceeded to ascend to the summit.

Performance Results

It’s here that your favorites shine. The average annualized RELATIVE return for the current tracking portfolio is +4.2%. (The absolute return for the tracking portfolio since inception is 6.4%.)

The accuracy rating (% of outperforming entries) of the current selections is 59.0%.

Including all selections since inception (7.5 years) the annualized relative return of the MANIFEST 40 is +3.0%.

The figures in parentheses are the position of the company during the December 2012 listing of the MANIFEST 40. For example, FactSet Research (FDS) advanced from #17 to #13 over the last three months.

Chargers

What companies are making the strongest gains among the consensus collection? This may be indicative of strong fundamentals (combined with attractive prices and return forecasts) and probably warrants further study.

The stocks making the largest advances (by % of dashboards) since 12/31/2012 are: QUALCOMM (QCOM), Coach (COH) and Bio-Reference Labs (BRLI).

The newcomer this quarter is Coca-Cola (KO).

Strongest Performers

The top performers in the MANIFEST 40 tracking portfolio are:

National Oilwell Varco (NOV)

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We selected National Oilwell Varco (NOV) from the following short list of Solomon Select candidates (screening results)  for the April feature:

Solomon short list 20130403

National Oilwell Varco (NOV): Business Model Analysis

Energy. Jeremy Grantham covered the subject well during his recent interview with Charlie Rose. Our selection of National Oilwell Varco (NOV) comes closely on the heels of Atwood Oceanics (ATW) a few months ago. The energy and energy-related stocks (i.e. Schlumberger) keep appearing at the top of our screens — and we’re wary to ignore this condition. EMC Corp (EMC) and Apple (AAPL) were honorable mention candidates and accounted for the other half of Grantham’s core message for long-term investors.

The company is the largest provider of equipment for oil and gas drilling.

The long-term outlook is bright for National Oilwell Varco.

From North Dakota to Pennsylvania to the Gulf waters off the coast of Brazil … the global need for energy is a compelling driver.

Growth, Profitability, Valuation

The Manifest Investing sales growth forecast for NOV is 10.5%. (Keep in mind that any historical data prior to 2009 is disrupted by the GrantPrideCo acquisition.) We’re using 12.8% for the projected net margin. The median P/E for the period 2006-2016 is 12.8×. We’re using 12x for the projected average P/E.

At the time of selection (4/3/2013), the stock price is $67.98, the projected annual return is 14%. The quality RANKING is 80 (Good) and the financial strength rating is 92 (A+).

The company has less long-term debt than cash assets and has an effective interest rate of 3.35%.

S&P views NOV as an attractive play on the need for new rig equipment, particularly for deepwater and unconventional natural gas projects.

Profitability Analysis (NOV)

Projected Average P/E Ratio

Equity Analysis Guide (NOV) (Spreadsheet version)