Friday, October 31, 2008

CVS Short Disclosure

CVS (CVS) Caremark today announced that it has completed its acquisition of Longs Drug Stores Corporation. The acquisition provides CVS Caremark with Longs’ 521 retail drugstores in California, Hawaii, Nevada and Arizona as well as its Rx America subsidiary, which offers pharmacy benefits management ("PBM") services to over 8 million members and prescription drug plan benefits to approximately 450,000 Medicare beneficiaries.

No mention of any closing adjustments or if they still view the acquisition the same way. Just full speed ahead. Meanwhile other retailers and drug stores are experiencing difficulties. Watch for growing commentary about costs of integration to achieve synergies.

Thursday, October 30, 2008

Walgreen’s Strip Tease

Walgreen’s (WAG) has quite the strip tease going on. Many retailers announce monthly sales. If you have the model figured out it’s not a bad way to track the investment. Walgreen’s has chosen its Analysts’ Day Conference today in Chicago to announce preliminary October comparable sales results through Oct. 28. Complete October monthly sales will be announced on Nov. 4.

Through the first 28 days of October, sales in comparable stores (those open at least a year) rose 2.2 percent. Comparable store front-end sales were flat. Comparable pharmacy sales through Oct. 28 increased 3.4 percent.

Here is the kicker the last line of the announcement reads “The company does not anticipate announcing partial-month sales results again in the foreseeable future.”

Heretofore Walgreen’s has religiously announced monthly sales slightly after month end. The information was released consistently. Today without warning 28 out of 30 days was announced. Then the full 30 out of 30 will be announced. Just reminds me of a strip tease.

Wednesday, October 29, 2008

Owens Corning What’s Next?

Owens Corning (OC) reported excellent Q3 results. Net sales were up 28. Earnings almost doubled. The company attributed the very good news primarily to a strong performance in the Roofing and Asphalt and Composites businesses.

According to Mike Thaman, chairman and chief executive officer. "The integration of our composites acquisition is on track. We are exceeding our year-one synergy goals. Our Roofing and Asphalt business has improved performance with a streamlined asset base, significant productivity and an improved product mix.

They claim of course that with the difficult economy any product area driven by housing will face tough times. The question facing shareholders will be how will sales and profits be driven once the roofing and asphalt division has completed its integration. It does sound like the strategic moves have paid off.

But what is next? They cannot continue to rely on integration efforts>

Tuesday, October 28, 2008

Executive Compensation Stock Option

Senior officers and executives will be big winners with falling stock prices as the next year of contracts and compensation plans is put into place. Lower stock prices mean easier hurdles. Watch for sober and negative comments from executives as they talk their stock down in public and reap huge options at great rates in private.

Rogers Communications Derivatives

Rogers (RCI) reported Q3 results profits are up 84% to $495 million. Hey that’s pretty good. But the devil is in the details. The press release provided huge amounts of information. But check out this little quote and the absolute lack of qualitative commentary:

“Two of our swaps mature on December 15, 2008 and, as a result, we will receive US$400 million and pay $475 million on the settlement at maturity. Subsequent to quarter-end, in October 2008, we entered into forward foreign exchange contracts, which will also settle on December 15, 2008, to sell the US$400 million in exchange for $476 million. As a result of the maturity of the swaps, our US$400 million 8.00% Senior Subordinated Notes due 2012 will no longer be hedged subsequent to December 15, 2008.”

I can read the words but no one will be able to truely discern what they are doing. Is Rogers ahead or behind or what ?