Thursday, September 28, 2017

McCormick Delivers Spicy Q3 2017 Earnings

First of all sorry for the light and sporadic posting lately.  Life has been very busy. But onto earnings from one of my favorite holdings McCormick & Company(MKC)

McCormick reported Q3'17 results with EPS of $0.85 on revenues of $1.18 billion.  It was overall a good quarter when you look at things outside of their RB Foods acquisition. The company is seeing strong growth in all markets, especially their main brands in the US.  The company's industrial EMEA operations saw strong growth on the industrial side as the Giotti acquisition helped contribute 25% to sales growth for the quarter.

The acquisition of Reckitt Benckisers Group Plc's(RB) added 4% to sales growth during the quarter. If you recall a lot of people were worried, myself included, that McCormick might be overpaying for RB's unit that contains French's Mustard, and Franks Red Hot Sauce. Turns out my worries about costs so far are true as the company noted increased expenses in their report.  That's trickling down to their EPS guidance which is basically flat for 2017 at $3.69-$3.73 compared to 2016's $3.69 as the company expects integration costs to shave $0.51 off EPS this year.  I think the company will beat those numbers, but really not by much. Maybe just a penny or two. There were additionally minimal changes to the company's cost saving projection at $105 million, which is in line with what it's projected each of the last few years.

Still the market took this report on an upbeat note and sent the shares soaring higher by 5% on the day as shares crossed the $100 mark for the first time since June

Here is what management had to say

Lawrence E. Kurzius, Chairman, President and CEO, stated, "Our strong third quarter financial results continue our growth momentum and reflect the effectiveness of our strategies and engagement of our employees around the world. We are driving both sales growth and significant productivity improvements resulting in adjusted operating margin expansion. Both our consumer and industrial segments contributed to our constant currency sales growth of 8%. Our consumer segment delivered base and new product sales growth from the year ago period, led by the Americas. Our industrial business delivered excellent sales growth across all regions driven by new products, expanded distribution, and customer intimacy. In addition to our strong base business and new product growth, the acquisitions of RB Foods and Giotti contributed to higher sales as valuable additions to our global portfolio of flavors. Through the third quarter, we have grown year to date sales 6% in constant currency.

Sunday, September 17, 2017

TLH Market Review 9/17/17

"You can have to much of a good thing" - Anonymous

I'm not quite sure a lot of people would agree with that quote above if they glanced at their investment accounts lately.  When the markets keep heading higher who really wants to complain?  Well I'm sure we could find a lot of people on Twitter. On Friday the S&P 500, Dow, and Nasdaq all hit new highs.  A trifecta!  Clearly most people aren't overly concerned about North Korea firing missiles just about every day.

The indexes have piled on

Thursday, September 14, 2017

The Battle of International & American Real Estate

An area not talked about enough is the big disparity in International Real Estate(VNQI), and American Real Estate(VNQ) performance. Below is a chart depicting the performance for the last year.  You can see International based land and bricks are doing better than their American brethren.

Why is that?

Visit to see more great charts.

Sunday, September 10, 2017

TLH Market Review - 9/10/17

Well it doesn't seem a couple of hurricanes, missiles, and a Federal Reserve Board missing more than half it's members can slow down the markets.  Well maybe just a little bit.  For our Labor Day shortened week the S&P 500 fell a whopping 8.92 points. That's hardly a heartbeat at this level. Of course that's not to say everything is going great.