Earnings
Small Cap Earnings Lag As Economic Recovery Matures
Third quarter earnings show a widening gap between Small Cap earnings growth and Large Cap earnings growth. In the past two recessions, the gap in earnings growth between these two market cap tiers also widened with Small Cap earnings fading.
Energy Sector: Why We Are Growing Increasingly Cautious
Select Industries Portfolio has only miniscule exposure to Energy sector (0.6% of equity assets). This month’s “Of Special Interes”t presents the rationale for underweighting Energy stocks.
PPI Remains Above CPI: Bad Omen For Profits?
PPI rate of change exceeds the CPI at present, and has been higher since late 2003. Could be a bad omen for corporate profits.
Earnings Momentum Excluding Energy: Energy’s Boost To Become A Drag?
Energy sector earnings growth has helped keep overall S&P earnings advancing at a relatively strong rate. Growth would be about 9% to 10% below reported growth if Energy stocks were excluded.
What Is Driving S&P 500 Earnings Growth?
The Energy sector is really driving S&P 500 earnings Growth.
Assessing The Cycle….Putting Today’s Growth Into A Historical Context
Within the current cycle, the stock market recovery is mature, but based on the average post WWII recovery could still have some upside (S&P 500 to 1400?). Currently, earnings growth is well beyond historical averages, but the economic expansion is below the norm.
Looking For Earnings Disappointments.....Before They Hit The Fan
New Improved Potential Earnings Disappointments Screen: Inventory Growth Versus Sales Growth.
View From The North Country
A recap of the year so far, and our outlook for the second half of 2005.
Analyzing Large Cap, Mid Cap & Small Cap 2004 Composite Income Statements
2004 earnings very strong but further earnings improvements in 2005 will be largely a function of stronger sales, not any more margin expansions.
2005 S&P 500 Earnings Estimates Revised 2% Lower
Revised 2005 earnings for the S&P 500 down from +10% to +8%. Q4 2004 earnings stronger than anticipated. Will make for tougher comparisons at 2005 year end.
Tracking Earnings Expectations…..Still Considered Bullish
Early Q4 earnings comparisons are better than expected, but further improvements in 2005 will largely be a function of better sales, not margin improvement.
A Closer Look At Profit Margins
No matter how you cut it, we don’t expect to see much in the way of margin expansion. Further earnings growth will have to come from top line sales growth.
Answering Client Questions
Jim Floyd devotes several pages of “Inside The Stock Market” to answer client questions. Included are questions about reported versus operating earning, the impact of inflation on small cap stocks, and our rationale behind our interest rate target among others.
Profit Margins: It Don’t Get Any Better Than This
Estimated year end profit margins are expected to be at 7.4%, the highest level dating back to at least 1955.
Should Slowing Earnings Growth Be A Serious Concern?
Earnings growth still coming in strong. While not as robust as past 3-4 quarter’s growth rates, earnings are expected to be above historical trend line growth for the next 4-5 quarters.
Sector Spotlight...Energy
Based on oil futures prices, 2005 year-end consensus earnings forecasts for the Integrated Oil & Gas group appear too low! These too-low forecasts imply further upside for oil shares, and, at the very least, limited downside relative to the rest of the market.
What's Up With All The NIPA Earnings Revisions?
Most are aware of the recently released, relatively weak Q2 2004 ‘NIPA’ profits report. However, many may not be aware that NIPA earnings were recently revised downward for 2001-2003 periods.
View From The North Country
Terrorist threats, rising oil prices, the war in Iraq, and upcoming presidential election seem to have taken center stage against a backdrop of impressive corporate earnings momentum.
The "Wait and See" Market
It now seems that the market has settled into a comfort zone— or put differently— a trading range that reflects investors’ current lack of conviction about prospects for the second half of the year.
View From The North Country
Steve's Half Time Report: A recap of the year so far, and our outlook for the second half of 2004.
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