Thursday, June 12, 2008

Canaccord Reports But Says Little

Canaccord Capital Inc.'s (TSX & AIM: CCI) reported Q4 results. Poor numbers were expected because of the ABCP debacle that is roiling Canadian Money Markets. Not happy but it was expected under the circumstances. So these guys are responsible for raising money and making it grow. What do they have to say about there own prospects? Precious little. There have been some very major executive appointments.

Changeover in the executive suite is always significant. New capital has been raised which is about equal to what they lost on the ABCP crisis. So therefore the firm is whole and back to where it was before the structured products blew up.

Capital markets are dynamic and these guys are just posturing like its just us chickens in here. Saying that we are waiting for the capital markets to return to normal levels and feeling that you are well positioned to capitalize is a message that this is dead money.

Now if you know anything about Canaccord’s history dead money does not come to mind. Risk yes; losses sometimes; profits the holy grail of course. But just waiting for the market to do something hmmmm.

Wednesday, June 11, 2008

Korn/Ferry High Earnings but Decreased Margins

Korn/Ferry International (KFY) made a big point of announcing historically high revenues and earnings. A 16% increase in Q4 revenues alone was announced. All segments of the business were firing on all cylinders. Here is the key issue. Operating Margin in Q4 dropped to 9.7% from 10.8% in the comparable quarter last year. Annual operating margin dropped to 11.6% from 12.6% last year.

Not a word was spoken or mentioned about worsening profit margins. While its OK to celebrate record revenues and profits this may be the Trojan Horse. If the market is strong margins should be improving not retreating.

Tuesday, June 10, 2008

China Architectural Engineering Needs Lessons in Disclosure

China Architectural Engineering Inc (CAE) issued an interesting press release Tuesday morning before market open. The headline reads “China Architectural Engineering Expects Significant Gains in Revenues and Earnings for Second Quarter 2008” They then amplify the headline with this header “CAE Expects to Report Highest Quarterly Revenue and Earnings in Company's History”

Excuse me. This is not leading edge best practice investor relations. Basically this company is coming out and saying load up we have fantastic numbers coming out. They are saying this three weeks before the quarter that they are in is actually over. This is not guidance. The SEC should look at this one.

Monday, June 09, 2008

Krispy Kreme announces Profits But...?

Krispy Kreme (KKD) did announce profits instead of losses in Q1. Primarily because last year was so abysmal that it was not hard to make this year look better. But what is management communicating. Overall revenues are down. They point this out well into the press release. The only growth is being experienced outside of the US of A. This is not a global demand story. Each store is influenced by local factors such as the desire for a cup of coffee and something insanely sweet and fat. The metrics look poor for Krispy Kreme even if stores have been closed and rationalized.