Friday, November 21, 2008

Investor Relations and Public Relations

Just thought I would send a shout out to many of you who are investor relations and or public relations practioners. Stop emailing me with interview opportunities that will supposedly provide me with juicy tidbits for the blog. Many of you are border line tippers. A few of you need to talk to your corpoarate counsels.

I write to bite. This blog is consistent in its sketicism. If we had more skepticism a few years ago many would be a whole lot richer. My role is to point out out warts, anomolies and situations where more caveat emptor is called for.

CEO's you should monitor your PR and IR practioners a little bit more carefully as they reach out to the media and blogosphere. Some of you will be hoisted on your own petards. Fair warning given please resume wealth building activities.

Relax Its Fedex

Fedex (FDX) declared the same old dividend at $0.11 per share payable Jan 2 to holders as at close of business Dec 12 which just happens to be a Friday. So let’s see the company is warning of poor economic conditions and strong head winds in revenue growth. But they keep the dividend the same and they let you sell the stock for tax loss purposes after you qualify for the dividend and then re-buy early in the New Year before too much will get going. That’s very well thought out on many levels.

Thursday, November 20, 2008

Barnes & Noble Pussyfoots Around Leases

Barnes & Noble (BKS) reported Q3 results and disappointed investors, if that is possible in todays environment. The one note of hope that management was able to hold out was that many of their stores leases are coming up for renewal. They claim that most of the leases are being negotiated for much less than the existing terms. That’s good, actually very good. But they cannot or will not provide any sort of schedule to show exactly what the impact on EPS will be from leases that have been favourable renegotiated. Also they do not disclose how many leases are coming up for renewal and exactly when we can expect cost reductions.

Cards are too close to the vest on this point. Also in reviewing the transcript of the conference call there was no discussion of the dividend. The yield is in the 8% range. You know that cannot hold. Analysts did not question. Management did not disclose. See no evil, speak no evil but its evil if you do not hear about this one.

Wednesday, November 19, 2008

BJ Engineers Next Years EPS

BJ’s Wholesale Club, Inc (BJ) reported Q3 income. They also came out with their guidance for the next year. Essentially they are telling us that they will make the same amount of money as an enterprise. But the EPS forecast is very interesting. It moves from a range of $2.20 to $2.30 per diluted share for 2008 with three quarters in the bag to $2.27 to $2.39 per diluted share for 2009. In another part of the press release they did mention that “At the end of the third quarter, the Company had approximately $266 million remaining under its buyback authorization.”

The future EPS number will be managed by financial engineering as much as it will be managed by merchandising.

Tuesday, November 18, 2008

PVH Plays Financial Engineering Games

Phillips-Van Heusen (PVH) announced results and essentially earned less money than previous comparable quarters. The economy is tough and all that. So PVH spends approximately $200 million in cash buying back its own stock as the market is diving. To put things in perspective for every dollar they earned this last quarter they spent four buying back their own stock.

Tough economic times present opportunities that those with cash may capitalize on. PVH seems to be out of idea’s and is staying with yesterdays broken strategy. They are short term engineering the eps to make it look good and ignoring enterprise values or concepts.