Monsanto Communications Failure

Monsanto (MON) disappointed investors by guiding to the lower range for Q4. You can tell by the strident nature of the guidance release that management wants to get past this disappointment and focus the market on the future. Given that stock prices are supposedly based on future earnings it’s hard to reconcile Chief Financial Officer Carl Casale’s comments about the future with the stock markets sell off disappointment on today’s numbers. The sell job was not complete. Read this snippet and then look at the price action. “With a solid wrap to the quarter, we’ll turn the page and start a new chapter as our growth focus shifts squarely to our seeds-and-traits business.”  

Carl Casale we have the failure to communicate just before you finalize your year-end numbers.

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

Benihana Long Long Road Ahead

The famous Benihana "Tiki Mug" has b...

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Benihana Inc (BNHN) reported radically reduced indebtedness and increased cash. They are still chugging away paying preferred shareholders. While it’s good to see less debt Benihana has another three to four years of debt reduction before they can throw off the chains of financial slavery. The debt is all short term because long term mortgage lenders will not lend on the collateral value of a specialty restaurant chattels. No mention of competition in Japanese restaurants, teppanyaki or sushi categories. Watch for a private buy out that may not maximize shareholder wealth.

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

Tiffany Commodity Play Not Retail

Tiffany & Co (TIF) reported an inventory position that equals twice its last quarter’s revenues. Inventory turns are not so good in the jewellery and bauble business. When you consider how much Gold, precious metals and gems make up the inventory number investors will realize that they are investing in a commodity play and not a retailer.

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

Gerber Increased Overheads

Gerber Scientific Inc (GRB) fails to provide substantive comment or MD&A about any of its four major divisions. They have consolidated the numbers and its all in one bowl of soup. Specifically they do not segment or discuss R&D. For a scientific company this is more important than guidance for the next few quarters. They do comment about the increase in SG&A claiming that they are reversing some wage freezes and paying out more in commissions. That’s great guy’s you just increased your over heads.

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

Brown Shoes Inventory Risk

Brown Shoe (BWS) neglects to point out that it’s increased inventory level is equal to the last quarters sales. They trumpet improved sales and revenues and then increase inventories by 10%. If the consumer continues to not buy they cannot cover the bet. When will we see better thinking on inventory.

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

Burger King Pulls Its Punches

Burger King, Donegall Place, Belfast, Northern...

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Burger King (BKC) missed the point in its latest earnings release. They have over 12,000 restaurants with a near 90% franchise rate. Yet in the press release they report 249 net new restaurants, 79 re-franchised restaurants, 54 re-imaged restaurants. These are pathetically small numbers. At the same time they report strong cash and balance sheets. The question becomes are they pulling their punches or do they really not have the capital and cash flow to do the job properly.

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

Salesforce Cash Yield Issues

Image representing Salesforce as depicted in C...

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Salesforce (CRM) now has almost 20% of its $14 Billion market cap in cash and near cash items. No dividend in sight. They are starting to categorize the cash investments in long-term assets but do not provide any substantive description of how the assets are deployed. If you are becoming a financial institution you need to disclose in the same manner as financial institutions. What is the cash yielding?

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