It takes money to make money. Most investors know that, but with business media so focused on the "how much," very few investors bother to ask, "How fast?"
When judging a company's prospects, how quickly it turns cash outflows into cash inflows can be just as important as how much profit it's booking in the accounting fantasy world we call "earnings." This is one of the first metrics I check when I'm hunting for the market's best stocks. Today, we'll see how it applies to International Flavors & Fragrances (NYSE: IFF ) .
Let's break this down
In this series, we measure how swiftly a company turns cash into goods or services and back into cash. We'll use a quick, relatively foolproof tool known as the cash conversion cycle, or CCC for short.
Why does the CCC matter? The less time it takes a firm to convert outgoing cash into incoming cash, the more powerful and flexible its profit engine is. The less money tied up in inventory and accounts receivable, the more available to grow the company, pay investors, or both.
Best India Stocks For 2015: Delphi Automotive PLC (DLPH)
Delphi Automotive PLC (Delphi), incorporated on May 19, 2011, is a global vehicle components manufacturer and provides electrical and electronic, powertrain, safety and thermal technology solutions to the global automotive and commercial vehicle markets. As of December 31, 2012, the Company operated 126 manufacturing facilities and 15 technical centers utilizing a regional service model that enables it to serve its global customers. The Company operates through four segments: Electrical / Electronic Architecture; Powertrain Systems; Electronics and Safety and Thermal Systems. In October 2012, the Company acquired FCI Group�� Motorized Vehicles Division.
The Company�� Electrical / Electronic Architecture segment provides complete design of the vehicle�� electrical architecture, including connectors, wiring assemblies and harnesses, electrical centers and hybrid power distribution systems. Its Powertrain Systems segment provides systems integration of full end-to-end gasoline and diesel engine management systems, including fuel handling, fuel injection, combustion, electronic controls and test and validation capabilities. Its Electronics and Safety segment provides critical components, systems and advanced software for passenger safety, security, comfort and infotainment, as well as vehicle operation, including body controls, reception systems, infotainment and connectivity systems, hybrid vehicle power electronics, passive and active safety electronics, displays and mechatronics. Thermal Systems segment provides powertrain cooling and heating, ventilating and air conditioning (HVAC) systems, such as compressors, systems and controls, and heat exchangers for the vehicle markets.
Electrical/Electronic Architecture
The Company�� offers complete electrical/electronic architectures for its customer-specific needs. Connectors are engineered for use in the automotive and related markets, but also have applications in the aerospace, military and telematics sector! s. Electrical centers provide centralized electrical power and signal distribution and all of the associated circuit protection and switching devices, thereby optimizing the overall vehicle electrical system. Distribution systems are integrated into one optimized vehicle electrical system, which can utilize smaller cable and gauge sizes and ultra-thin wall insulation.
The Company competes with Lear Corporation, Leoni AG, Molex Inc, TE Connectivity, Ltd., Sumitomo Corporation and Yazaki Corporation.
Powertrain Systems
The Company offers products for complete engine management systems (EMS) and other products to help optimize performance, emissions and fuel economy. The gasoline EMS portfolio features fuel injection and air/fuel control, valvetrain, ignition, sensors and actuators, transmission control products, and powertrain electronic control modules with software, algorithms and calibration. The diesel EMS product line offers common rail fuel and air injection system technologies. The Powertrain Systems segment also supplies integrated fuel handling systems for gasoline, diesel, flexfuel and biofuel configurations. It also includes diesel and automotive aftermarket and original equipment service in the Powertrain Systems segment.
The Company competes with BorgWarner Inc., Bosch Group, Continental AG, Denso Corporation, Hitachi, Ltd. and Magneti Marelli S.p.A.
Electronics and Safety
The Company offers a range of electronic and safety equipment in the areas of controls, security, infotainment, communications, safety systems and power electronics. Electronic controls products consist of body computers and security systems. Infotainment and driver interface portfolio consists of receivers, advanced reception systems, digital receivers, satellite audio receivers, navigation systems, displays and mechatronics. Safety electronics includes occupant detection systems, collision warning systems, advanced cruise control technologies a! nd collis! ion sensing. Electric and hybrid electric vehicle power electronics includes power modules, inverters and converters and battery packs.
The Company competes Autoliv AB, Bosch Group, Continental AG, Denso Corporation, Harman International Industries and Panasonic Corporation.
Thermal Systems
The Company offers energy efficient thermal system and component solutions for the automotive market and continues to develop applications for the non-automotive market. Its automotive thermal products are designed to meet customers��needs for powertrain thermal management and cabin thermal comfort. Powertrain cooling products include condenser, radiator, fan module and charge air cooling heat exchangers assemblies. Climate control portfolio includes HVAC modules, with evaporator and heater core components, compressors and controls.
The Company competes with Denso Corporation, MAHLE Behr Industry, Sanden Corporation, Valeo Inc. and Visteon Corporation.
Advisors' Opinion:- [By Ben Levisohn]
Morgan Stanley’s strategists are no fans of consumer sectors–staples or discretionary–but that doesn’t mean all consumers stocks are stinkers, as stocks like Delphi Automotive (DLPH) and Macy’s (M) look primed to shine.
Top 10 International Companies To Watch For 2014: PowerShares S&P SmallCap Information Technology Portfolio (PSCT)
PowerShares S&P SmallCap Information Technology Portfolio (the Fund) seeks investment results that correspond generally to the price and yield performance of an index called the S&P SmallCap 600 Capped Information Technology Index (the Index). The Index consists of common stocks of the United States information technology companies. These are companies that are principally engaged in the business of providing information technology-related products and services, including computer hardware and software, Internet, electronics and semiconductors, and communication technologies. The Index is compiled, maintained and calculated by Standard & Poor's Financial Services LLC. The Fund will normally invest at least 80% of its total assets in common stocks of small-capitalization information technology companies. The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The Fund�� investment adviser is Invesco PowerShares Capital Management LLC. Advisors' Opinion:- [By Stephen Leeb]
The PowerShares S&P 500 Small-Cap Technology (PSCT) is geared towards smaller, more agile, but also less-established firms, while iShares S&P North American Technology ETF (IGM) offers broad, blue-chip technology industry exposure.
Top 10 International Companies To Watch For 2014: Clarke(t)
T.Clarke plc, a building services contractor, provides electrical and mechanical installation services and supplies associated equipment. The company offers information communications technology (ICT) services in the areas of structured cabling and connectivity, network infrastructure and security, networked energy management, data centre infrastructure, and managed and support services; facilities management services, such as preventative, reactive, and planned maintenance solutions; and green technologies services, which comprise photovoltaics, rainwater harvesting, biomass boilers, ground source heating, air source heating, wind turbines, lighting, and carbon reduction audit services. It also provides massive reading station redevelopment, cross rail, border rail link, and underground power upgrade services for the rail sector; lifecycle building services combining mechanical and electrical works with ICT for utilities and technologies sectors; lifecycle services for ho tel and residential sectors, which include electrical, ICT, and mechanical systems design, installation, commissioning, and maintenance; and mechanical and electrical contracting services for education, healthcare, government/local authority, retail and leisure, stadiums, transport, towers, media, and residential sectors. In addition, the company manufactures and prefabricates elements of an installation, as well as engineering components. T.Clarke plc was founded in 1889 and is headquartered in London, the United Kingdom.
Advisors' Opinion:- [By Matt Thalman]
Shares of AT&T (NYSE: T ) and Verizon (NYSE: VZ ) rose an astonishing 1.38% and 1.12%, respectively, today despite being two of only seven Dow components ending the day in the black. The index itself lost more than 175 points today, or 1.07%. The likely cause for the move higher was an announcement made yesterday by AT&T that it would be reporting a non-cash gain of $7.6 billion from its pension plan due to better-than-expected performance of the company's pension during 2013. Verizon recently reported a similar event when it said that it would report a $6 billion gain from its pension obligation. What this essentially means is that the amount each company will need to add to its employee's pension funds has just dropped by a massive amount, and thus, more money can be used for business operations, or given back to shareholders.�
- [By Dan Carroll]
Things heat up on Tuesday for Dow investors, with four companies on the index reporting quarterly data. Analysts expect $0.01 year-over-year earnings gains from Travelers (NYSE: TRV ) and DuPont (NYSE: DD ) , projecting average EPS figures of $2.02 and $1.52, respectively, while estimating United Technologies' (NYSE: UTX ) earnings to dip $0.01 from last year's quarter to $1.30. AT&T (NYSE: T ) is also expected to succeed in its earnings on Tuesday, with experts projecting earnings of $0.64 per share, a year-over-year gain of more than 6%. AT&T's stock has shot up by nearly 14% in the past three months alone, and an earnings beat could send shares even higher.
- [By Matt Thalman]
Before we jump into the Dow's big losers of the week, let's take a moment to examine the Dow's top stock. AT&T (NYSE: T ) gained 2.98% this past week, prompted by a 2% move on Tuesday that came after the FCC approved the deal AT&T, DISH Network, and a number of other smaller wireless providers had agreed upon to help increase the spectrum band some of the carriers will now have access to. This FCC is looking out for consumers, who should be able to get better service. For AT&T, the world's largest mobile-telecom provider, it's a case of "the enemy of my enemy is my friend," as the deal will increase the competition for its rivals.�� �
- [By Dan Carroll]
The Dow's telecom stocks are on the upswing today as well. Verizon (NYSE: VZ ) shares have surged 1.6%, while rival AT&T's (NYSE: T ) stock has picked up 1.3%. Electronic publication PCMag released the results of a study on America's major networks yesterday, and AT&T ranked as the fastest 4G LTE network nationwide. It's a victory for AT&T, but not one the company should get used to.
Top 10 International Companies To Watch For 2014: Alaska Air Group Inc. (ALK)
Alaska Air Group, Inc., through its subsidiaries, Alaska Airlines, Inc. and Horizon Air Industries, Inc., operates as an airline company serving destinations in the western United States, Canada, and Mexico. The company provides passenger air services; and freight and mail services primarily to and within the state of Alaska and on the West Coast. As of December 31, 2009, it operated a fleet of 110 jet aircraft; and Horizon Air Industries operated a fleet of 18 jets and 40 turboprop aircraft. The company was founded in 1932 and is based in Seattle, Washington.
Advisors' Opinion:- [By Stephen Quickel]
Seattle-based Alaska Air Group (ALK), under attack by Delta Air Lines on its home turf, has been expanding southward into Salt Lake City, New Orleans, and Tampa.
- [By Maria Armental and Anna Prior]
Alaska Air Group Inc.(ALK) said it is planning a 2-for-1 stock split next month. Shares have tripled since the company’s prior split two years ago amid broad sharp gains for airline stocks on signs of consistent profitability.
- [By Will Ashworth]
Next Page
Top Potential Buyouts: #3, Alaska Air Group (ALK)
Alaska Air (ALK) might not be the largest airline in the U.S., but it�� certainly one of the most profitable.
Top 10 International Companies To Watch For 2014: Symmetricom Inc.(SYMM)
Symmetricom, Inc. provides timekeeping technologies, instruments, and solutions worldwide. Its Communications business unit provides timing technologies and services for communications infrastructure. The Communications business unit products comprise primary reference sources; edge clocks and distribution products for synchronization outside the network core; building integrated timing supply and sync supply unit for the central office; the PackeTime product suite; data over cable service interface specifications timing interface systems; network management and monitoring software; and embedded hardware and software solutions for integration with various elements of the communications ecosystem, such as silicon, routers, switches, microwave backhaul, and base stations. The company?s Government business unit offers time technology products for aerospace/defense, IT infrastructure, power infrastructure, and science and metrology applications. The Government business unit p roduct portfolio comprises timescale clock sources; network time servers; network time displays; time code generators; bus level timing cards; primary reference standards, such as rubidium and cesium oscillator standards; high stability masers; chip-scale atomic clocks; ruggedized crystal oscillators; and custom time and frequency systems. It offers timekeeping in GPS satellites, national time references, and national power grids, as well as in critical military and civilian networks, which enable data, voice, mobile, and video networks and services. The company sells its products through distributors, systems integrators, and manufacturer sales representatives. It serves various markets, including communications service providers; network equipment manufacturers; silicon suppliers; aerospace/defense; power utility infrastructure; IT infrastructure; underwater exploration and navigation; and science and metrology. The company was founded in 1956 and is headquartered in San J ose, California.
Advisors' Opinion:- [By Lauren Pollock]
Microsemi Corp.(MSCC) agreed to pay almost $298 million to acquire Symmetricom Inc.(SYMM), a deal that will expand the power-management supplier’s exposure into the aerospace and defense industries while also immediately adding to earnings. Shares in Symmetricom soared.
- [By Rich Smith]
San Jose, Calif.-based Symmetricom (NASDAQ: SYMM ) has a new chief executive officer.
On Tuesday, the "precise time" computer announced a series of changes in upper management. Current CEO David G. Cote is leaving the company "to pursue other interests" and has been replaced by new CEO Elizabeth A. Fetter, a current board member. Details on Fetter's compensation have yet to be filed with the SEC.
Top 10 International Companies To Watch For 2014: Varian Medical Systems Inc.(VAR)
Varian Medical Systems, Inc. designs, manufactures, sells, and services equipment and software products for treating cancer with radiotherapy, stereotactic radiotherapy, stereotactic body radiotherapy, stereotactic radiosurgery, and brachytherapy worldwide. Its Oncology Systems segment offers products, such as linear accelerators, brachytherapy afterloaders, treatment simulation and verification equipment, and accessories; and information management, treatment planning, and image processing software. This segment serves university research and community hospitals, private and governmental institutions, healthcare agencies, doctors? offices, and cancer care clinics. The company?s X-ray Products segment provides x-ray tubes for use in a range of applications, including computed tomography scanning, radiographic or fluoroscopic imaging, mammography, special procedures, and industrial applications; and flat panel digital image detectors for filmless x-ray imaging. It sells t hese products to imaging systems original equipment manufacturers that incorporate them into their medical diagnostic, dental, veterinary, and industrial imaging systems; independent service companies; and directly to end-users. The company also designs, manufactures, sells, and services Linatron x-ray accelerators, imaging processing software, and image detection products for security and inspection purposes, such as cargo screening at ports and borders, and nondestructive examination in various applications. In addition, it develops products and systems for delivering proton therapy; and technologies in the areas of digital X-ray imaging technology, volumetric and functional imaging, improved X-ray sources, and technology for security and cargo screening applications. The company was formerly known as Varian Associates, Inc. and changed its name to Varian Medical Systems, Inc. in April 1999. Varian Medical Systems, Inc. was founded in 1948 and is headquartered in Palo Alto , California.
Advisors' Opinion:- [By Ben Levisohn]
Intuitive Surgical has fallen 4.4% to $381.39 today, but doesn’t seem to be having much of an impact on comparable companies. Hologic (HOLX) has ticked up 0.2% to $22.06, Danaher (DHR) has fallen -.4% to $72.05 and Varian Medical Systems (VAR) has gained 0.2% to $78.70.
- [By Seth Jayson]
Basic guidelines
In this series, I examine inventory using a simple rule of thumb: Inventory increases ought to roughly parallel revenue increases. If inventory bloats more quickly than sales grow, this might be a sign that expected sales haven't materialized. Is the current inventory situation at Varian Medical Systems (NYSE: VAR ) out of line? To figure that out, start by comparing the company's inventory growth to sales growth. How is Varian Medical Systems doing by this quick checkup? At first glance, not so great. Trailing-12-month revenue increased 7.2%, and inventory increased 13.0%. Comparing the latest quarter to the prior-year quarter, the story looks decent. Revenue grew 6.7%, and inventory increased 13.0%. Over the sequential quarterly period, the trend looks healthy. Revenue grew 13.3%, and inventory grew 0.6%. - [By Ben Levisohn]
Varian Medical Systems (VAR) and Stryker (SYK) are heading in opposite directions after reporting very different earnings after the close today.
Getty ImagesShares of Stryker have gained 0.5% to $79–they were up as much as 3.1% at $81–after reporting a profit of $1.23, beating forecasts for $1.22, while revenue came in at $2.47 billion, ahead of forecasts for $2.43 billion. Stryker also said that its full year earnings would come in between $4.74 and $4.90 using new amortization rules. Because of that change it’s hard to tell how that compares to consensus estimates for $4.57.
Varian, meanwhile, has dropped 0.6% to $82 after it said it earned 91 cents a share, up 6% from a year ago and ahead of analyst forecasts for 90 cents, according to FactSet. Varian also predicted that full-year earnings would come in between $4.22 and $4.32 a share, straddling the consensus estimate of $4.29.
Top 10 International Companies To Watch For 2014: ARMOUR Residential REIT Inc (ARR)
ARMOUR Residential REIT, Inc.( ARMOUR), incorporated on February 5, 2008, is an externally-managed Maryland corporation managed by ARMOUR Residential REIT, Inc. The Company invests primarily in hybrid adjustable rate, adjustable rate and fixed rate residential mortgage backed securities (RMBS). These securities are issued or guaranteed by a United States Government-sponsored entity (GSE), such as the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac), or are guaranteed by the Government National Mortgage Administration (Ginnie Mae) collectively, Agency Securities. From time to time, a portion of its portfolio may be invested in unsecured notes and bonds issued by United States Government-chartered entities, collectively, Agency Debt. As of December 31, 2012, Agency Securities account for 100% of its portfolio.
The Company seeks long-term investment returns by investing its equity capital and borrowed funds in its targeted asset class of Agency Securities. The Company�� assets have been invested in Agency Securities or money market instruments, primarily deposits at federally chartered banks. The Company borrows against its Agency Securities using repurchase agreements. Its borrowings generally have maturities that may range from one month or less, up to one year, although occasionally it may enter into longer dated borrowing agreements to more closely match the rate adjustment period of its Agency Securities.
Advisors' Opinion:- [By Amanda Alix]
This development will likely give battered mREITs like Annaly Capital (NYSE: NLY ) , Armour Residential (NYSE: ARR ) , and American Capital Agency (NASDAQ: AGNC ) �a huge boost as investors begin to feel less panic regarding a tapering of the current QE3 program. Markets have responded to the Summers announcement by soaring skyward, apparently feeling relief and confidence about the fate of the taper.
- [By John Maxfield]
An article published today by Bloomberg News cited a source at JPMorgan Chase claiming that mREITs like Annaly Capital Management (NYSE: NLY ) , American Capital Agency (NASDAQ: AGNC ) , and ARMOUR Residential (NYSE: ARR ) may have needed to sell about $30 billion worth of MBSes in "just one week last month to maintain the amount of borrowing relative to their net worth." As the article went on to note, "Those types of sales deepened losses in the mortgage-bond market, which had the worst quarter since 1994, accelerated the exit from fixed-income funds, and fueled a jump in home-loan�rates�to a two-year high."
- [By Amanda Alix]
After getting beaten to a pulp again last Friday, mortgage REITs ticked upward on Monday, even as a mass downgrading of the sector�took place by Wunderlich Securities. Though agency players Annaly Capital (NYSE: NLY ) and American Capital Agency (NASDAQ: AGNC ) were able to gain back only a portion of their Friday stock price losses -- as was particularly hard-hit Armour Residential (NYSE: ARR ) �-- the upswing was a welcome, though surprising, outcome.
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