Friday, August 13, 2010

JCPenney Tops Up Pension Plan

JCPenney (JCP) reported some interested pension plan contributions. On the income statement they show Q2 contributions of $55 million to something called qualified pension plans. In the notes they claim to have made a voluntary contribution of $392 million to the qualified pension plan. The earnings release then goes silent on the financial engineering. Net income for q2 was $14 million. Would have been nice to get more detail and transparency.

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

Thursday, August 12, 2010

Kohl's Spends Profits on Infrastructure?

Kohl’s (KSS) spent their net profits on something called property, equipment and favourable lease rights. No discussion in the earnings release about merchandising, product mix, improving margins or store openings and closings. But then numbers do not lie and they spent shareholder profits on what seems to be the infrastructure.

Management is not very forthcoming in the earnings release.

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

Wednesday, August 11, 2010

Macy's: Torn Silver Lining

Macy’s (M) is leaning on its merchandise payables as it navigates debt repayment. Sure results are improved including huge on line increases. But merchandise payables is up some $400 million, inventories seem flat for the past six months, cash is down for the past six months and we are looking at an inventory build as we enter the back to school and Christmas selling seasons.

Is this the rip in the silver lining?

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

Tuesday, August 10, 2010 Achilles Heel? (HKSA:1688) may have shown it’s Achilles heel. They announced stellar results showing that international customers grew much faster than internal Chinese customers. Check out the Ali-Loan program and this quote “The Ali-Loan program continued to gain traction since it was launched in 2008. As of June 30, 2010, the cumulative number of loans issued by our partner banks to our paying members was more than 5,500, totally amounted to RMB13 billion (US$1.9 billion). The program has catered to the financial needs of small businesses while also increasing our member’s stickiness to our platforms. It brings long-term benefit to the company although it does not serve as a revenue driver. “

No explanation of what is being financed and how. Member banks are not captive finance companies so how do you control the flow of credit. Admittedly they are not experiencing revenues from the program directly. But if they act as an acquisitions marketing agent for other banks why are they not being compensated for the referrals? How do they manage who are member banks and who gets the deal flow?

They have hit USD of $1.9 billion over 5,500 loans. That is an average of $345,000 per loan. So what is being financed and how?

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

Monday, August 09, 2010

Chrysler Quiet on Gov't Liquidity

Chrysler (Fiat:FIA) slipped out some massaged messages on its liquidity. In the headline bullets Chrysler reported flat out they have $10 Billion of liquidity. Its only later deep in the earnings release that investors realize that liquidity from the market place is only $7.4 Billion. The remaining $2.6 Billion is a reliance on government support from the US Treasury, Canada and Ontario. Not a peep about when they will stop relying on the support and actually cut the apron strings. Not a peep about the terms of market place liquidity. How much of it is truly co-dependent? You know how brave lenders can be.

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