HOUSTON, Sept. 12, 2024 (GLOBE NEWSWIRE) — KOIL Energy Solutions, Inc.KLNG, today announced Erik Wiik, President and CEO, will present and host one-on-one meetings with investors at the Sidoti September Virtual Investor Conference, taking place on September 18-19, 2024.
The presentation will begin at 10:45 AM ET on Wednesday, September 18, 2024 and can be accessed live here:
KOIL will also host virtual one-on-ones with investors on Wednesday and Thursday, September 18-19, 2024. To register for the presentation or one-on-ones, visit www.sidoti.com/events. Registration is free and you don’t need to be a Sidoti client.
About Sidoti Events, LLC (“Events”) and Sidoti & Company, LLC (“Sidoti”)
In 2023, Sidoti & Company, LLC , Sidoti & Company, LLC (www.sidoti.com) formed an affiliate company, Sidoti Events, LLC in order to focus exclusively on its rapidly growing conference business and to more directly serve the needs of presenters and attendees. The relationship allows Events to draw on the 25 years of experience Sidoti has as a premier provider of independent securities research focused specifically on small and microcap companies and the institutions that invest in their securities, with most of its coverage in the $200 million-$5 billion market cap range. Sidoti’s coverage universe comprises approximately 160 equities, of which 50 percent participate in the firm’s rapidly growing Company Sponsored Research (“CSR”) program. Events is a leading provider of corporate access through the eight investor conferences it hosts each year. By virtue of its direct ties to Sidoti, Events benefits from Sidoti’s small- and microcap-focused nationwide sales force, which has connections with approximately 2,500 institutional relationships in North America. This enables Events to provide multiple forums for meaningful interaction for small and microcap issuers and investors specifically interested in companies in the sector.
About KOIL
KOIL is a leading energy services company offering subsea equipment and support services to the world’s energy and offshore industries. Founded in 1997, the Houston-based company is comprised of world-class experts in engineering and manufacturing who provide innovative solutions to complex customer challenges with a fearless commitment to Energizing the Future. Koil Energy’s highly experienced team can support subsea engineering, manufacturing, installation, commissioning, and maintenance projects located anywhere in the world. Visit www.koilenergy.com to learn more.
Investor Relations Contact: Trevor Ashurst VP of Finance ir@koilenergy.com
This press release was published by a CLEAR® Verified individual.
WARRENVILLE, Ill., Sept. 12, 2024 /PRNewswire/ — Guard Home Warranty, one of the fastest-growing home warranty companies in the United States, is excited to announce its recent national expansion. The company now operates in every state except California, offering its comprehensive home protection plans to millions of homeowners nationwide. This expansion is a significant milestone in the company’s growth and positions Guard Home Warranty as a leader in the home warranty industry.
“Our expansion into 49 states is a reflection of the trust homeowners have placed in us,” said Sergey Spisovskiy, CEO of Guard Home Warranty. “We are committed to providing homeowners with exceptional protection for their appliances and home systems, offering fast claims processing, and giving them the freedom to choose their own contractors. As we continue to grow, we remain focused on maintaining the high level of service and reliability that has defined our success.”
Founded in 2018, Guard Home Warranty has quickly risen to prominence by offering homeowners an unparalleled combination of value and flexibility. Key benefits that have contributed to the company’s rapid growth include:
Choose your own contractor: Homeowners are not limited to a network but can select their own trusted professionals for repairs.
Industry-leading claim turnaround time: Guard Home Warranty is known for processing claims faster than many competitors.
$25,000 in aggregate coverage: This robust coverage provides financial protection for homeowners, reducing the stress of expensive repairs.
No service claim fee unless approved: A significant cost-saving feature that sets Guard apart from other home warranty providers.
Free listing policy: For homeowners selling their homes, this feature ensures coverage continues during the sales process.
Guard Home Warranty is also proud to hold an A rating from the Better Business Bureau (BBB), reflecting its dedication to customer satisfaction and trustworthiness. Homeowners can choose from three main coverage plans:
Appliance Package: Coverage for major household appliances like refrigerators, washers, and dryers.
Systems Package: Protection for vital home systems including HVAC, plumbing, and electrical systems.
VIP Package: A comprehensive plan that combines coverage for both appliances and home systems, offering maximum peace of mind.
Additionally, Guard Home Warranty offers optional coverage for items like pools, spas, and septic systems, allowing homeowners to customize their plans based on their specific needs.
As Guard Home Warranty continues its upward trajectory, Spisovskiy emphasized that the company’s core mission remains the same: “We strive to provide our customers with affordable and flexible solutions to protect their homes.”
For more information on Guard Home Warranty’s plans and services, visit www.guardhomewarranty.com or contact their customer support at 1-800-600-5129.
About Guard Home Warranty: Guard Home Warranty provides home warranty services across 49 states, offering protection against costly repairs and replacements of home systems and appliances. Headquartered in Warrenville, IL, the company is accredited by the BBB with an A rating and is known for its industry-leading claims turnaround times and flexible coverage options.
Media Contact: Sergey Spisovskiy CEO, Guard Home Warranty 1-800-600-5129 383132@email4pr.com
Sirius XM Holdings SIRI has outperformed the market over the past 10 years by 11.09% on an annualized basis producing an average annual return of 21.82%. Currently, Sirius XM Holdings has a market capitalization of $9.24 billion.
Buying $1000 In SIRI: If an investor had bought $1000 of SIRI stock 10 years ago, it would be worth $7,248.27 today based on a price of $28.28 for SIRI at the time of writing.
Sirius XM Holdings’s Performance Over Last 10 Years
Finally — what’s the point of all this? The key insight to take from this article is to note how much of a difference compounded returns can make in your cash growth over a period of time.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
Dividend stocks may not offer the exciting return prospects of growth stocks, but when stock market volatility returns, it is always nice to have extra cash automatically deposited in your account. That is the value of holding shares of strong companies with a long record of paying dividends to shareholders. It’s even better when those companies regularly increase their dividends on top of already high yields.
Here are two rock-solid dividend stocks that you can buy and hold for years to come.
1. Coca-Cola
Shares of Coca-Cola(NYSE: KO) reached new highs this year following a string of strong earnings reports. Many consumer goods companies report sluggish sales growth right now, but Coke’s focus on improving margins and earnings growth has bucked the trend and make it a great dividend stock to buy in 2024.
Despite a challenging macroeconomic environment, Coca-Cola’s unit case volume grew 2% year over year in the second quarter. Management now expects full-year comparable currency-neutral earnings per share to be up between 13% and 15% over 2023. The company pays out over half of its adjusted earnings in dividends, so strong earnings growth bodes well for further dividend increases.
Coca-Cola has increased its dividend annually for 62 consecutive years. Double-digit earnings growth prospects in the near term should make it 63 and counting. The company currently pays a quarterly dividend of $0.485 per share, bringing the forward dividend yield to an above-average 2.69%, compared to the S&P 500 average yield of 1.32%.
Coke not only has attractive growth prospects in international markets, but management continues to allocate capital to maximize profitable growth. For example, its recent bottler refranchising efforts helped increase the company’s return on invested capital — a key measure of profitability — to 24%, up 5 percentage points over the last three years.
The stock is up 21% year to date but still trades at a fair forward price-to-earnings ratio of 25. Its high dividend yield and future dividend increases should reward Coca-Cola shareholders for years to come.
2. Realty Income
Investing in real estate investment trusts (REITs) can be a great way to boost your portfolio’s yield. That’s because the tax structure REITs operate under requires them to distribute at least 90% of their taxable income to shareholders in dividends. That is part of why Realty Income(NYSE: O) is a quality REIT to hold for the long term.
Realty Income has a time-tested investment strategy. In fact, it has paid a monthly dividend for 55 years. In July, it increased its monthly payment to $0.263 per share, which brings the forward yield to 5.01%.
Investors can depend on Realty Income to pay dividends for years because of the company’s low-risk investment strategy. It signs long-term net lease agreements with corporate clients that lead their markets. Some of its largest clients include stalwarts like Walmart, FedEx, and Dollar General.
Its largest client, Dollar General, only makes up 3.4% of its property portfolio. This diversification across rock-solid businesses provides high visibility into future revenue and monthly dividend payments.
Realty Income’s share price tanked over the last few years as inflation pressured retail sales and rising interest rates weighed on real estate values. But its efforts to manage these headwinds mean the company will emerge in a stronger position than before. In the second quarter, the company deployed $805 million in new investments across retail, industrial, and data center real estate markets.
The stock has already started to rebound, up 18% over the last three months. A more stable interest rate environment could send the stock back toward its previous highs over the next year, but investors are certainly being well rewarded for waiting.
Should you invest $1,000 in Coca-Cola right now?
Before you buy stock in Coca-Cola, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Coca-Cola wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $662,392!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. TheStock Advisorservice has more than quadrupled the return of S&P 500 since 2002*.
John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends FedEx, Realty Income, and Walmart. The Motley Fool has a disclosure policy.
(Bloomberg) — China has strongly advised its carmakers to make sure advanced electric vehicle technology stays in the country, people familiar with the matter said, even as they build factories around the world to escape punitive tariffs on Chinese exports.
Most Read from Bloomberg
Beijing is encouraging Chinese automakers to export so-called knock-down kits to their foreign plants, the people said, meaning key parts of a vehicle would be produced domestically and then sent for final assembly in their destination market.
The instructions come as companies from BYD Co. to Chery Automobile Co. firm up plans to build factories in Spain to Thailand and Hungary as their innovative and affordable EVs make inroads in foreign markets.
China’s Ministry of Commerce held a meeting in July with more than a dozen automakers, who were also told they shouldn’t make any auto-related investments in India, the people said asking not to be identified discussing matters that are private, in another attempt to safeguard the know-how of China’s EV industry and mitigate regulatory risks.
In addition, carmakers wanting to invest in Turkey should first notify the Ministry of Industry and Information Technology, which oversees China’s EV industry, and the local Chinese embassy in Turkey.
Representatives from the Ministry of Commerce, or MOFCOM, didn’t respond to a request for comment.
China’s directive comes at a time most major Chinese carmakers are looking to localize manufacturing so as to avoid tariffs on Chinese-made EVs. MOFCOM guidelines that demand key production should remain within China could hurt automakers’ efforts to globalize as they search for new customers to offset fierce competition and sluggish sales at home that are cutting into their bottom lines.
It could also come as a blow to those European nations wooing Chinese carmakers in the hopes their presence will bring jobs and a local economic boost. BYD is planning on building a factory in Turkey, for example, that’s expected to have an annual capacity of 150,000 cars and employ up to 5,000 people.
During the meeting, MOFCOM noted that the countries inviting Chinese automakers to build factories are usually those enacting or considering trade barriers against Chinese vehicles. Officials told attendees that manufacturers shouldn’t blindly follow trends or believe such calls for investment from foreign governments, according to the people.
Several Chinese companies have already begun opening plants in the European Union to avoid duties. But Valdis Dombrovskis, an executive vice president of the European Commission, warned recently that such moves would only work if the firms meet rules-of-origin requirements that dictate a minimum level of value must be created in the EU.
“How much of the value added is going to be created in the EU, how much of the know-how is going to be in the EU? Is it just an assembly plant or a car manufacturing plant? It’s quite a substantial difference,” Dombrovskis told the Financial Times last month.
Brazil, Spain
In Brazil, BYD and Great Wall Motor Co. have said explicitly they aim to increase the share of locally produced and locally sourced components in coming years. That’s aimed at meeting local component requirements of roughly 50% of a product in order to export to other Latin American countries without tariffs, based on Brazil’s trade agreements with them.
Turkish politicians said in July that BYD has agreed to construct a $1 billion plant in the west of the country. Any new factory is expected to improve BYD’s access to the European Union, because Turkey has a customs-union agreement with the bloc. Turkey in June introduced a 40% tariff on vehicle imports from China.
BYD declined to comment.
In Spain, Chery Automobile has a partnership with a local firm to reopen a former Nissan Motor Co. plant in Barcelona. The Spanish plant will assemble cars from kits that have been partially “knocked down,” according to Chery.
Tensions between China and India meanwhile have remained elevated since a deadly clash broke out over a stretch of border in the Himalayas between the two nuclear-armed neighbors in 2020.
Chinese state-owned manufacturer SAIC Motor Corp., which controlled MG Motor India, was investigated over financial irregularities in 2022, Bloomberg reported. Last year, SAIC diluted its stake in the Indian MG operation, with its ownership forecast to be trimmed to 38-40% over time, according to one local media report.
Chinese EV stocks pared early gains Thursday with SAIC Motor falling more than 1% in Shanghai and Geely Automobile Holdings Ltd. and BYD slightly down in Hong Kong.
–With assistance from Danny Lee, Ocean Hou, James Mayger, Anthony Palazzo, Charlotte Yang and Yujing Liu.
Palantir Technologies, Inc.PLTR shares are trading mostly flat as the company prepares to host its fifth AIPCon on Thursday.
The Details:
Palantir describes its AIPCon events as conferences where customers participating in Palantir AIP Bootcamps showcase their work in Palantir’s Artificial Intelligence Platform (AIP). The company said more than 100 organizations will be at the latest AIPCon, including The National Geospatial-Intelligence Agency, Aramark, Bp, Associated Materials and more. AIPCon will be available via live stream on Thursday, beginning at 12:40 p.m. ET.
Palantir shares have climbed more than 15% this week after it was announced last Friday that the company will be included in the S&P 500 index beginning on Sept. 23.
B of A Securities analyst Mariana Perez maintained a Buy rating on the stock Buy and raised the price target from $30 to $50 on Tuesday.
“We think that becoming a member of the S&P 500 could be highly beneficial to PLTR’s stock volatility. We think that the inclusion would attract more institutional investors, both passive and active,” wrote Perez.
PLTR Stock Prediction 2024:
Equity research analysts on and off Wall Street typically use earnings growth and fundamental research as a form of valuation and forecasting. But many in trading turn to technical analysis as a way to form predictive models for share price trajectory.
Some investors look to trends to help forecast where they believe a stock could trade at a certain point in the future. Looking at Palantir Technologies, an investor could make an assessment about a stock’s long term prospects using a moving average and trend line. If they believe a stock will remain above the moving average, which many believe is a bullish signal, they can extrapolate that trend into the future using a trend line. For Palantir Technologies, the 200-day moving average sits at $23.38, according to Benzinga Pro, which is below the current price of $34.94. For more on charts and trend lines, see a description here.
Traders believe that when a stock is above its moving average, it is a generally bullish signal, and when it crosses below, it is a more negative signal. Investors could use trend lines to make an educated guess about where a stock could trade at a later date if conditions remain stable.
PLTR Price Action: According to Benzinga Pro, Palantir Technologies shares are up 0.24% at $34.92 at the time of publication Thursday.
Brian Niccol, who has drawn criticism over plans to commute 1,000 miles on a private jet from his home in Newport Beach, California to Starbucks’ headquarters in Seattle, Washington, said the chain was not “always delivering”, in an open letter posted on the company website.
From his experience of Starbucks stores, he said: “It can feel transactional, menus can feel overwhelming, the product is inconsistent, the wait too long or the hand-off too hectic. These moments are opportunities for us to do better.”
It comes after Mr Niccol, the former boss of Mexican food chain Chipotle, was parachuted into the top job at Starbucks to replace ousted chief executive Laxman Narasimhan, who left with immediate effect last month less than two years into the role.
In his letter, Mr Niccol pledged to “refocus” Starbucks, turning it back into what he called a “community coffeehouse”.
Brian Niccol will commute from California to Washington in his new role – Mark Lennihan/AP
He said: “People start their day with us, and we need to meet their expectations. This means delivering outstanding drinks and food, on time, every time.”
Shares in the company soared by 25pc following Mr Niccol’s appointment in August, as investors welcomed his previous turnaround record at Chipotle.
However, he has since been subject to an environmental backlash over his super-commute, as critics argue it clashes with Starbucks’ commitment to reduce carbon emissions.
A Starbucks spokesman said last month: “Brian’s schedule will meet or exceed the hybrid work guidelines and workplace expectations we have for all partners. He will also have a residence in Seattle.”
In recent months, Starbucks has been grappling with a combination of falling sales, boycotts over a perceived link with Israel amid the conflict in Gaza, and pressure from activist investors.
Revenues have fallen for two consecutive quarters, by 4pc in the first three months of 2023 and 3pc in the quarter that followed.
In his open letter, Mr Niccol promised to challenge perceptions of the company in the Middle East, where he said it would “work to dispel misconceptions about our brand” in the wake of the conflict in Gaza.
Controversy over Israel arose after Starbucks sued the Starbucks Workers United (SWU) union for trademark infringement last year after the union expressed “solidarity with Palestine” in a social media post.
While the company says it has never given money to Israel or its military, allegations of support on social media have fuelled boycotts and protests. In March, its Middle Eastern franchisee said it would have to sack thousands of workers owing to a downturn in sales.
Starbucks’ shares rose by more than 1pc on Wednesday.
Sanara MedTech Inc. SMTI, along with InfuSystem Inc., recently entered into an exclusive U.S. distribution agreement with ChemoMouthpiece, LLC. Sanara will execute the terms of the agreement with the help of SI Healthcare Technologies (SI Technologies), which is a 50/50 joint venture between SMTI and InfuSystem.
ChemoMouthpiece owns and manufactures a clinically validated product named Chemo Mouthpiece — an oral cryotherapy device that brings relief to oral mucositis-affected patients. This device perfectly aligns with Sanara’s skincare strategy. The company further aims to provide the device to oncology patients undergoing chemotherapy.
Following the announcement, shares of Sanara rose 0.5% to $33.51 yesterday. With the company gaining a high level of synergies from its collaborations within the skincare market, we expect market sentiment to remain positive around this development.
About Sanara’s Distribution Agreement With ChemoMouthpiece
Under the agreement, SI Technologies will be the exclusive distributor of ChemoMouthpiece’s kits in the United States. SI Technologies plans to market and distribute the product to approximately 3,000 cancer centers through InfuSystem’s existing sales team. It will purchase the product kits from ChemoMouthpiece at a fixed price and pay a royalty on net revenues for the use of the product’s intellectual property.
For investors’ note, the Chemo Mouthpiece is FDA 501(k) approved.
Financial Details
Sanara invested $5 million for a 6.6% ownership in ChemoMouthpiece. Sanara has drawn $15.5 million on its term loan with CRG Servicing, LLC and will fund this investment as part of that draw.
SI Technologies will have the option to purchase the U.S. business of ChemoMouthpiece, including all U.S. intellectual property related to the product. The purchase option will expire on Jan. 31, 2029.
More on the News
Oral mucositis causes painful mouth ulcers, which are a common complication of chemotherapy and radiation. The oral cryotherapy device is expected to reduce material costs for oncology treatment centers, improve patient quality of life and allow for continued treatment of cancer therapy for patients. ChemoMouthpiece is planning to publish studies in the future to reinforce the efficacy of the device.
Pickwick Capital Partners, LLC, served as the exclusive advisor to ChemoMouthpiece on this transaction.
Recent Development by Sanara
Earlier this year, Sanara signed an exclusive license agreement with Tufts University (Tufts) to develop and commercialize patented technology covering 18 unique collagen peptides.
Although Sanara has established itself as a leader in bioactive collagen peptides with CellerateRX Surgical Powder, the company expects to expand the CellerateRX product line and develop new bioactive collagen peptide-based applications. The recently licensed technology from Tufts helped the company to expand its offering of collagen products.
Image Source: Zacks Investment Research
Industry Prospects Favor Sanara
Per a Global Market Insights report, the oral mucositis treatment market was valued at $1.6 billion in 2023 and is expected to witness a CAGR of 7.1% from 2024 to 2032.
Market growth can be attributed to the ongoing advancements in cancer therapy and the increasing prevalence of cancer. Moreover, the rising geriatric population, along with the growing demand for targeted therapies, helps the market surge.
Price Performance by Sanara
In the past year, shares of SMTI have lost 5.8% against the industry’s 18.4% growth.
SMTI’s Zacks Rank and Key Picks
Sanara currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space are Intuitive SurgicalISRG, TransMedics Group TMDX and Boston Scientific. While Intuitive Surgical and TransMedics currently sport a Zacks Rank #1 (Strong Buy) each, Boston Scientificcarries a Zacks Rank #2 (Buy).
Intuitive Surgical’s shares have surged 62.2% in the past year. Estimates for the company’s earnings have moved north 5.1% to $1.65 per share for 2024 in the past 30 days.
ISRG’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 8.97%. In the last reported quarter, it posted an earnings surprise of 16.34%.
Estimates for TransMedics’ 2024 EPS have moved up 125% to 27 cents in the past 30 days. Shares of the company have soared 143.8% in the past year compared with the industry’s 15.8% growth.
TMDX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 287.50%. In the last reported quarter, it delivered an earnings surprise of 66.67%.
Estimates for Boston Scientific’s 2024 EPS have increased 1.7% to $2.40 in the past 30 days. In the past year, shares of BSX have risen 55.9% compared with the industry’s 18.3% growth.
In the last reported quarter, BSX delivered an earnings surprise of 6.90%. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.18%.
WASHINGTON, Sept. 12, 2024 /PRNewswire/ — The U.S. Department of Housing and Urban Development (“HUD”) has announced HUD-Held Vacant Loan Sales (“HVLS 2025-1”):
On October 16, 2024, HUD will offer multiple residential mortgage loans consisting of approximately 2,700 mortgage loans with an updated loan balance of approximately $746 million.
The sale will consist of due and payable HUD-Held loans. The loans are first liens secured by home equity conversion mortgages (HECM’s) securing 1- to 4-unit, vacant residential properties where all borrowers and any non-borrowing spouses are deceased.
Eligible Bidder types for the HVLS 2025-1 loan sale auction are nonprofits, nonprofit joint ventures, nonprofit instrumentalities of government, governmental entities or instrumentalities of government, governmental entity joint ventures, or for-profits.
Entities interested in participating can contact the Office of Asset Sales’ Single Family Transaction Specialist at 1-844-709-0763 or email HUDSales@falconassetsales.com for more information.
Warren Buffett built Berkshire Hathaway into one of the largest companies in the world through intelligent acquisitions and prudent investments.
After famously eschewing technology stocks for years, Berkshire surprised Wall Street in 2016 when it reported a stake in Apple(NASDAQ: AAPL). Even more surprising were the subsequent share purchases that eventually made Apple its largest holding.
Last year, Buffett referred to Apple as being a “better business” than any other Berkshire owned, but great businesses are not necessarily smart investments. Berkshire sold 389 million shares of Apple in the second quarter, cutting its stake in half, and the company started a small position in the lesser-known Ulta Beauty(NASDAQ: ULTA).
To be clear, Berkshire still has 30% of its stock portfolio invested in Apple, but that represents a substantial reduction from 51% in the same quarter last year. Also noteworthy, Berkshire has allocated less than 1% of its portfolio to Ulta, but its novelty sets it apart from long-standing positions.
Here’s what investors should know about these stocks.
1. Apple
Apple reported solid financial results in the third quarter of fiscal 2024 (ended June 29). The company not only beat overall sales and earnings estimates, but also its sales exceeded expectations across every major product category except Macs. Revenue increased 5% to $85.8 billion, gross profit margin expanded 174 basis points, and GAAP net income increased 11% to $1.40 per diluted share.
Looking ahead, Apple is well positioned to maintain similar momentum. The company has a strong presence in several consumer electronics markets, including personal computers and smartphones. It also has a strong presence in several service verticals. Apple has one of the fastest-growing advertising businesses and it operates the leading mobile app store. Last year, the App Store earned more than twice as much revenue as Alphabet‘s Google Play Store.
However, Apple is also facing several headwinds. First, the Digital Markets Act in Europe forced the company to support third-party app stores on its devices, which could erode its dominance in the space. Second, Apple has lost so much smartphone share in China (its third largest market) that it no longer ranks among the top five vendors. Third, iPhones account for 45% of total revenue, but the company has yet to eclipse the iPhone sales record set in the first quarter of 2022.
Building on that, Apple possesses tremendous brand authority in consumer electronics, but the company has not launched a new viral product since AirPods in 2017. If that continues, Apple will struggle to exceed mid-single digit sales growth. Earnings may grow faster because the company has historically spent heavily on stock buybacks. But earnings growth that is largely dependent on share repurchases is a sign of a company with limited prospects.
Nothing I’ve mentioned so far is a deal-breaker, per se. The real problem lies in the disconnect between Apple’s growth prospects and its current valuation. Wall Street expects earnings to grow at 8.6% annually over the next three years, which makes its valuation of 33.5 times earnings look outrageous. Those figures give a PEG ratio of 3.9, a substantial premium to three-year average of 2.6. The sky-high valuation may explain why Warren Buffett slashed his stake in Apple.
2. Ulta Beauty
Ulta operates more than 1,400 stores across the United States, where it sells about 25,000 products spanning mass-market to high-end items from approximately 600 brands. Over the last few years, Ulta has secured a leadership position among U.S. beauty retailers due to store openings, effective marketing, compelling loyalty perks, and investments in e-commerce.
Ulta reported disappointing financial results in the second quarter. Revenue increased less than 1% to $2.6 billion, and same-store sales actually declined 1%. Meanwhile, gross margin contracted 100 basis points, and GAAP earnings declined 11% to $5.30 per diluted share. Management also lowered its full-year outlook, such that evenue and earnings are forecasted to decline 1% and 11%, respectively.
In a recent note, Morningstar analyst David Swartz attributed Ulta’s disappointing performance and guidance to competitive pressure, primarily arising from the rapid expansion of Sephora stores within Kohl’s locations. But he thinks the company will turn things around. “We forecast Ulta will expand its store base by about 20% over the next 10 years while achieving same-store sales growth of about 4%,” he wrote.
Ulta is undoubtedly facing headwinds, but the stock is priced more reasonably than Apple. Wall Street expects earnings to increase at 9% annually over the next three years, which makes the current valuation of 15 times earnings seem fair. Those figures give a PEG ratio of 1.6, which is a slight premium to the three-year average of 1.5.
I think patient investors can follow Berkshire’s lead and buy a small position in Ulta stock today. But small is the key word. I would start with no more than 1% of my portfolio and build my position opportunistically during pullbacks. But investors should bear in mind that Ulta has failed to outperform the S&P 500 over the last three- and five-year periods.
Should you invest $1,000 in Apple right now?
Before you buy stock in Apple, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Apple wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $662,392!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. TheStock Advisorservice has more than quadrupled the return of S&P 500 since 2002*.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, Berkshire Hathaway, and Ulta Beauty. The Motley Fool has a disclosure policy.
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