Wednesday, June 30, 2010

Monsanto Balance Sheet Worsens!

Monsanto’s (MON) balance sheet worsened. The cash position has decreased substantially. Trade receivables are up significantly. Short term debt including current portion of long term debt has sky rocketed. Long term debt itself has increased.

Management also mentions that much of their R&D pipeline is in the latter stages; which means substantial cash investment before commercial applications are available to the marketplace. The R&D spend will no longer be a percentage of revenues, but will be whatever it takes to get the project done. Valiant words. Very tough on cash flow.

Guidance is not sufficient to understand when the corporate model corrects itself and becomes the shareholder wealth creation machine that it should be.

Disclosure: No position in any stocks mentioned in this post.

Tuesday, June 29, 2010

Barnes & Noble Too Late Too Little

Barnes & Noble (BKS) announced big revenue increases resulting from digital sales. Management has seen the light and is aggressively pursuing the digital option. Read this snippet from the boss.

William Lynch, chief executive officer of Barnes & Noble, Inc. “In light of the exciting digital opportunity before us, we are planning to redirect a significant portion of our financial resources towards investments in technology, sales and marketing. These investments will impact our bottom line in 2011, but we believe they will enable Barnes & Noble to capitalize on the significant mid-to-long-term growth opportunities presented by the digital markets.”

They are promising red ink chasing an opportunity they are ill prepared for. They have substantial bricks and mortar infrastructure and do not break out comparable divisional costs.

Nothing compelling about the too late me too management style.

Disclosure: No position in any stocks mentioned in this post.

Monday, June 28, 2010

Biomet Not IPO Friendly

Biomet (No stock symbol) announced improved results and looked every bit the take over or IPO candidate. They announced that knew replacements and hip replacements are up in almost every part of the world. The presentation is not investor friendly. You need to be an insider in the industry to understand the underlying dynamics of why hip replacement sales are doing better in one market than another. If the investor is to be engaged Biomet will need to talk in terms of markets, regulatory overviews and competing offerings. At the present time they do neither.

Disclosure: No position in any stocks mentioned in this post.