EARNINGS PREVIEWS FOR THE WEEK OF APRIL 25-29

Taking a Look at:

Aetna                               Gilead Sciences
Apple                               GoPro
Barrick Gold                 LinkedIn
CBRE                               PayPal Holdings
Facebook                       United Parcel Service
First Solar

Earnings Previews – Week of April 25-29, 2016

Please Note: All earnings dates are subject to change. We urge you to confirm dates on a company’s investor relations (IR) website if an exact date is important to your investment or trading strategy.

 

AETNA (AET: $115)

Earnings Date: April 28, 6:00AM ET
Consensus: 1Q2016
    Revenues: $15.5 billion
    EPS: $2.22

Year Ago Quarter Results
     Revenues:  $15.1 billion
     EPS: $2.39

EPS Trends	Current Qtr. Mar 16	Next Qtr. Jun 16	Current Year Dec 16	Next Year Dec 17
Current Estimate	2.22	2.13	7.95	8.75
90 Days Ago	2.38	2.12	8.06	8.79

BMR TAKE: There is only one-way to beat the rising cost of health care:  Invest in one of the industry’s leading companies.  If you can find a stock selling at reasonable valuation, the result is even better.   With the proposed merger with Humana, Aetna is attempting to strengthen its second place position in the Healthcare Services industry.  On its own, the company has been growing net income by 13%. Aetna’s stock is selling at only 16 times per share profits of $6.87.  This is a solid value with or without the proposed combination with Humana.

 

APPLE (AAPL: $106)

Earnings Date: April 26, 4:30PM ET
Consensus: 2Q2016
    Revenues: $52.0 billion
    EPS: $2.00

Year Ago Quarter Results
     Revenues:  $58.0 billion
     EPS: $2.33

EPS Trends	Current Qtr. Mar 16	Next Qtr. Jun 16	Current Year Sep 16	Next Year Sep 17
Current Estimate	2.00	1.77	9.05	9.99
90 Days Ago	2.28	1.93	9.58	10.50

 

BMR TAKE: The NBA Champion Golden State Warriors opened their 2015-2016 basketball season by going undefeated in the first 23 games.  After the first loss, everyone wanted to know: What went wrong?  There was a simple answer. They are human beings.

Apple is the champion of technology based consumer products.  Year in and year out, they are the most admired company in the world.  The new iPhone SE may not be a blockbuster when it comes to innovation, but it is selling far better than Wall Street expected.  Coming up in September will be the new iPhone 7 and we look for some exciting new features in ApplePay, as well as for the Apple Watch.  While investors wait for the next major wave of growth, they are comforted by the $42 per share in cash and a generous dividend that will grow further.

 

BARRICK GOLD (ABX: $16.12)

Earnings Date: April 26, 6:35 PM ET
Consensus: 1Q2016
    Revenues: $1.95 billion
    EPS: $0.09

Year Ago Quarter Results
     Revenues:  $2.25 billion
     EPS: $0.05

EPS Trends	Current Qtr. Mar 16	Next Qtr. Jun 16	Current Year Dec 16	Next Year Dec 17
Current Estimate	0.09	0.11	0.43	0.56
90 Days Ago	0.09	0.09	0.43	0.51

 

BMR TAKE: In times of global turbulence, gold offers a safe haven.  The financial crisis of 2008 caused gold to triple in price.  Barrick Gold is a conservative way of investing in the upside for gold.  Non-core assets of the company have been sold off and debt substantially reduced.  At the current price of gold at $1235 an oz., Barrick Gold earnings and cash flow are surging.  

 

CBRE (CBG: $31)

Earnings Date: April 27, 6:30AM ET
Consensus: 1Q2016
    Revenues: $2.8 billion
    EPS: $0.35

Year Ago Quarter Results
     Revenues:  $2.1 billion
    EPS: $0.32

EPS Trends	Current Qtr. Mar 16	Next Qtr. Jun 16	Current Year Dec 16	Next Year Dec 17
Current Estimate	0.35	0.52	2.29	2.45
90 Days Ago	0.35	0.52	2.32	2.56

 

BMR TAKE: We are a big fan of the quality and growth that CBRE represents as a company and a big a fan of the stock of course.  Selling at just a bit more than 10 times current year earnings this is a compelling value.  This is the type of stock that institutional value investors consider a great stock.  Here is what we mean.  ValueAct Capital run by billionaire investor Jeffery Ubben recently filed SEC form 4 showing their purchase of 980,000 shares at an average of about $23.50 per share, well below the current price.  ValueAct sees so much value in CBRE that they own 10% of the outstanding shares and it is their largest single holding.  We’ve never met Mr. Ubben and have no affiliation in anyway, but we do have a healthy respect for his investment decisions.

 

FACEBOOK (FB: $111)

Earnings Date: April 27, 4:00PM ET
Consensus: 1Q2016
    Revenues: $5.25 billion
    EPS: $0.62

Year Ago Quarter Results
     Revenues:  $3.55 billion
     EPS: $0.42

EPS Trends	Current Qtr. Mar 16	Next Qtr. Jun 16	Current Year Dec 16	Next Year Dec 17
Current Estimate	0.62	0.72	3.15	4.15
90 Days Ago	0.58	0.68	2.86	3.77

 

BMR TAKE: There is a reason why Facebook is one of our favorite stocks to own today and in the years ahead.  Growth in users is a cultural phenomenon and thus immune to economic forces.  Online advertising demand is forecast to grow 10% annually over the next five years.  This is three times the rate of growth for the global economy and reflects the shift from traditional television advertising to the Internet.  Facebook is still growing sharply and with its dynamic management team, led by Mark Zuckerberg, we believe they’re in the 4th inning of a 9 inning game.

 

FIRST SOLAR (FSLR: $62)

Earnings Date: April 28, 4:50PM ET
Consensus: 1Q2016
    Revenues: $965 million
    EPS: $0.88

Year Ago Quarter Results
     Revenues:  $470 million
     EPS: ($0.62)

EPS Trends	Current Qtr. Mar 16	Next Qtr. Jun 16	Current Year Dec 16	Next Year Dec 17
Current Estimate	0.88	0.82	4.30	3.53
90 Days Ago	0.82	0.72	4.15	3.62

 

BMR TAKE: First Solar represents one of the few value plays in the solar energy space.  The stock is selling at a 40% discount to its peer group and even less than the S&P 500.  We think the market views and values First Solar as a pure utility company with limited growth prospects.  We strenuously disagree. We see huge growth opportunities.  Importantly, the company has the financial flexibility built into its liquid balance sheet.

 

GILEAD SCIENCES (GILD: $102)

Earnings Date: April 28, 4:00PM ET
Consensus: 1Q2016
    Revenues: $8.0 billion
    EPS: $3.13

Year Ago Quarter Results
   Revenues:  $ 7.6 billion
   EPS: $2.94

EPS Trends	Current Qtr. Mar 16	Next Qtr. Jun 16	Current Year Dec 16	Next Year Dec 17
Current Estimate	3.12	3.07	12.29	12.48
90 Days Ago	2.97	3.02	12.06	12.36

 

BMR TAKE: Gilead is the research leader in human immunodeficiency virus (HIV) liver diseases like chronic hepatitis virus C and B virus. Harvoni and Sovaldi are blockbuster drugs that are financing a bright future in drugs aimed at liver cancer.  Gilead has produced an impressive record for over 20 years with drugs in large and diverse categories.  This is a key player in the Healthcare industry.  We love this core long term investment in Healthcare and Biotechnology.

 

GOPRO (GPRO: $13.98)

Earnings Date: April 28, 4:05PM ET
Consensus: 1Q2016
    Revenues: $170 million
    EPS: ($0.60)

Year Ago Quarter Results
     Revenues:  $360 million
     EPS: $0.24

EPS Trends	Current Qtr. Mar 16	Next Qtr. Jun 16	Current Year Dec 16	Next Year Dec 17
Current Estimate	-0.59	-0.41	-0.75	-0.03
90 Days Ago	0.06	0.19	1.14	1.53

 

BMR TAKE: Oh how the mighty have fallen.  The stock has been a disaster.  From a $98 high in October of 2014, it has dropped 90%.  Is this once highflying maker of the amazing HERO line of high performance mountable cameras headed for the junk pile?  We doubt it.  Yes, GoPro is pretty much a one-product company.  Yes, its latest super compact HERO Session camera, has been a dud so far.  However, 2016 is a turnaround opportunity.  The planned entry into the  $1.5 billion quad copter market could bring needed diversification along with substantial new demand for the HERO Session.  No question, the stock is seriously depressed. But we sense the tide is turning. The recent hire of a major hardware designer from Apple is sending a signal to Wall Street that the company is aiming for a big future.  These factors combined with $475 million in cash and no debt also makes GoPro a possible takeover possibility.

 

LINKEDIN (LNKD: $119)

Earnings Date: April 28, 4:00PM ET
Consensus: 1Q2016
    Revenues: $830 million
    EPS: $0.60

Year Ago Quarter Results
     Revenues:  $ 640 billion
     EPS: $0.57

EPS Trends	Current Qtr. Mar 16	Next Qtr. Jun 16	Current Year Dec 16	Next Year Dec 17
Current Estimate	0.60	0.71	3.20	4.13
90 Days Ago	0.78	0.87	3.73	5.00

 

BMR TAKE: The stock has been hammered this year as growth expectations have been lowered.  Business conditions became more challenging as unemployment has come down and advertising and related services have weakened.   Past growth has been a sizzling 55%. That has come to an end but there is nothing wrong with a growth rate of 25%.  From its all-time high of $276 early last year, the stock has fallen more than 55%.  This was a painful adjustment but a major investment opportunity.  We added the stock at $101 in February as LinkedIn remains a key force in Social Media. We believe there is much more upside potential in this stock.

 

PAYPAL HOLDINGS (PYPL: $40)

Earnings Date: April 27, 4:30PM ET
Consensus: 1Q2016
    Revenues: $2.5 billion
    EPS: $0.35

Year Ago Quarter Results
     Revenues:  $ N/A
     EPS: $ N/A

EPS Trends	Current Qtr. Mar 16	Next Qtr. Jun 16	Current Year Dec 16	Next Year Dec 17
Current Estimate	0.35	0.36	1.49	1.75
90 Days Ago	0.35	0.38	1.50	1.78

 

BMR TAKE:  We love the prospects for PayPal.  In a world shifting to digital and mobile banking, the company has critical mass, a wide breadth of services, global reach, outstanding management and financial strength.  Importantly the stock is well off its $48 high.  PayPal has the size and strength to belong in a core holding of Financial Service investments.

 

UPS (UPS: $106)

Earnings Date: April 28, 7:35AM ET
Consensus: 1Q2016
      Revenues: $14.6 billion
      EPS: $1.22
Year Ago Quarter Results
       Revenues:  $ 14 billion
       EPS: $1.12

EPS Trends	Current Qtr. Mar 16	Next Qtr. Jun 16	Current Year Dec 16	Next Year Dec 17
Current Estimate	1.22	1.43	5.77	6.24
90 Days Ago	1.25	1.44	5.77	6.33

 

BMR TAKE: UPS is a rock solid investment, especially with the fast growing pearl called eCommerce locked inside.  While we wait with excitement for the oyster to open, the stock offers an excellent total return.  Selling for 18 times forecast 2016 profits, the stock is below the overall market of 21.  There is nothing whatsoever wrong with that.  In addition the $2.92 dividend provides a solid 2.75% yield.   All together UPS truly delivers.