Last night news broke that General Electric (GE) had made a formal bid for Alstom’s (ALSMY) thermal, renewable, and grid businesses. Of course, Siemens (SI) has a month to make a bid of its own, but General Electric is currently sitting right where it wants to be.
Agence France-Presse/Getty ImagesNomura’s Shannon O’Callaghan and team asses the impact of General Electric’s bid for Alstom:
The $13.5B enterprise value represents 7.9x standalone EBITDA and 4.6x after $1.2B of synergies that GE expects (~6% of sales). Alstom�� companion announcement and conference call indicates that GE will absorb EUR 0.9B of net liabilities, including EUR 1.2B of pension liabilities, and will also take on potential FCFA litigation payments. If we assume EUR 1B for litigation liability and include the pension and other net liability, we estimate the implied EV/EBITDA multiples would be 9.4x pre-synergies and 5.5x post synergies. We estimate the post synergy ROIC�� at 12% before these liabilities and 10% after (assuming 35% tax rate although GE will likely achieve a better rate). The $1.2B synergy target is to be realized by year 5 and strikes us as achievable. GE indicated that this transaction effectively completes their M&A for 2014 and 2015, as well as noted that, aside from the buyback/share exchange related to the Retail Finance transaction, additional buyback will only be in an amount required to offset employee plan dilution.
10 Best Heal Care Stocks To Watch For 2015: Cato Corp (CATO)
The Cato Corporation (Cato) is a women�� fashion specialty retailer. As of January 28, 2012, the Company operated 1,288 fashion specialty stores in 31 states, principally in the southeastern United States, under the names Cato, Cato Fashions, Cato Plus, It�� Fashion, It�� Fashion Metro and Versona Accessories. It operates in two segments: stores and Credit. The Company�� stores offer a assortment of on-trend apparel and accessory items in primarily junior/missy, plus sizes, girls sizes 7 to 16, men�� and kids sizes newborn to seven. Its merchandise lines include dressy, career, and casual sportswear, dresses, coats, shoes, lingerie, costume jewelry, handbags, men�� wear and lines for kids and newborns. Its merchandise is sold under its private label and is produced by various vendors in accordance with the Company�� specifications.
The Company offers its own credit card and a layaway plan to make the purchase of its merchandise convenient for its customers. The Company�� stores are located in the southeastern United States in a variety of markets ranging from small towns to metropolitan areas with trade area populations of 20,000 or more. Stores average approximately 4,500 square feet in size. The Company offers its own credit card, which accounted for 4.8% of retail sales during the fiscal year ended January 28, 2012 (fiscal 2012).
Advisors' Opinion:- [By Rich Duprey]
Discount fashion retailer Cato� (NYSE: CATO ) �reported this morning that May sales wilted.
For the four weeks ending June 1, total sales were $81.7 million, a 3% drop from the $84.3 million it recorded in the year-ago period.�That translated into a same-store sales decline of 2% for May.
- [By Rich Duprey]
Clothing retailer�Cato� (NYSE: CATO ) �announced yesterday�its second-quarter dividend of $0.05 per share, the same rate it paid last quarter after paying a special dividend of $1.00 per share in December.
Best Retail Companies To Own For 2014: Restoration Hardware Holdings Inc (RH)
Restoration Hardware Holdings, Inc. (Restoration Hardware Holdings), incorporated on August 18, 2011, is a holding company. The Company is merchants of home furnishings. Restoration Hardware Holdings offers merchandise assortments across a number of categories, including furniture, lighting, textiles, bath ware, decor, outdoor, garden, and baby and child products. The Company�� business is integrated across its multiple channels of distribution, consists of its stores, catalogs and Websites. As of July 28, 2012, the Company�� operated a total of 73 retail stores, consisted of 71 Galleries and two full line Design Galleries, and 10 outlet stores throughout the United States and Canada. RH is a brand in the home furnishings. During the fiscal year ended January 28, 2012 (fiscal 2011), the Company opened five stores and closed 22 stores. In fiscal 2011, the Company distributed approximately 26.1 million catalogs, and its Websites logged over 14.3 million visits.
Restoration Hardware Holdings operates a Website for its Baby & Child brand at www.rhbabyandchild.com. The Company opened its two full line Design Galleries in Los Angeles in, June 2011 and Houston in November 2011. In May 2011, the Company launched catalog applications for Apple�� iPad and iPhone that enable customers to view and purchase its product assortment. Restoration Hardware Holdings operates three store types: the Company's full line Design Gallery format, approximately between 22,000 and 28,000 gross square feet; its Gallery format of approximately 7,000-15,000 gross square feet, and its Baby & Child Gallery format of approximately 2,000-3,000 gross square feet.
Advisors' Opinion:- [By Jeremy Bowman]
What: Shares of Restoration Hardware (NYSE: RH ) were looking as good as new today, climbing as much as 30% after it bumped up its first-quarter forecast today.
Best Retail Companies To Own For 2014: Spectrum Brands Holdings Inc.(SPB)
Spectrum Brands Holdings, Inc., together with its subsidiaries, operates as a consumer products company worldwide. It offers consumer batteries, including alkaline and zinc carbon batteries, rechargeable batteries and chargers, and hearing aid batteries and other specialty batteries; pet supplies, such as aquatic equipment and supplies, dog and cat treats, small animal foods, clean up and training aids, health and grooming products, and beddings; and home and garden control products comprising household insect controls, insect repellents, and herbicides. The company also provides electric shaving and grooming devices; small appliances, including small kitchen appliances and home product appliances; electric personal care and styling devices; and portable lighting. Its sells its products through various trade channels, including retailers, wholesalers and distributors, hearing aid professionals, industrial distributors, and original equipment manufacturers primarily under t he Rayovac, Remington, Varta, George Foreman, Black & Decker, Toastmaster, Farberware, Tetra, Marineland, Nature?s Miracle, Dingo, 8-in-1, Littermaid, Spectracide, Cutter, Repel, Hot Shot, Black Flag, and TAT brands. The company was headquartered in Madison, Wisconsin. As of January 7, 2011, Spectrum Brands Holdings, Inc. operates as a subsidiary of Harbinger Group Inc.
Advisors' Opinion:- [By Ben Levisohn]
Shares of Energizer have jumped 15% to $112.37 at 10:24 a.m. today, while Spectrum Brands (SPB) has risen 1.4% to $76.88 and Kimberly Clark (KMB) has gained 1% to $112.14.
- [By Marc Bastow]
Consumer products manufacturer Spectrum Brands (SPB) raised its quarterly dividend 20% to 30 cents per share, payable on Mar. 18 to shareholders of record as of Feb. 19.
SPB Dividend Yield: 1.58%
Best Retail Companies To Own For 2014: Zumiez Inc (ZUMZ)
Zumiez Inc. (Zumiez) is a specialty retailer of action sports related apparel, footwear, equipment and accessories operating under the Zumiez brand name. As of January 28, 2012, the Company operated 434 stores in the United States and 10 stores in Canada. In addition, the Company operates a Website that sells merchandise online. At January 28, 2012, its stores averaged approximately 2,900 square feet. Its apparel offerings include tops, bottoms, outerwear and accessories, such as caps, bags and backpacks, belts, jewelry and sunglasses. Zumiez�� footwear offerings primarily consist of action sports related athletic shoes and sandals. Its equipment offerings, or hardgoods, include skateboards, snowboards and ancillary gear, such as boots and bindings. The Company also offers a selection of other items, such as miscellaneous novelties.
The Company supplements its merchandise assortment with a select offering of private label products across many of its apparel product categories. During the fiscal year ended January 28, 2012 (fiscal 2011), its private label merchandise represented 17.7% of the Company�� net sales. The Company sources its private label merchandise from foreign manufacturers worldwide.
The Company competes with Abercrombie & Fitch, Aeropostale, American Apparel, American Eagle Outfitters, Billabong, CCS, Forever 21, Hollister, Hot Topic, Old Navy, Pacific Sunwear of California, The Buckle, Wet Seal, Tilly��, Urban Outfitters, Big 5 Sporting Goods, Dick�� Sporting Goods, Sport Chalet and The Sports Authority.
Advisors' Opinion:- [By Wallace Witkowski]
Zumiez Inc. (ZUMZ) �shares fell 3.6% to $23.57 on light volume after the specialty retailer said same-store sales were hit by weak mall traffic.
- [By Ben Levisohn]
Importantly, a potentially strong Easter selling season (per our own store checks and lateral reads from the Gap (GPS), Zumiez (ZUMZ), and L Brands (LB)) and momentum into Mother’s Day could give the bulls something to hang their hats on.
- [By Sue Chang]
Zumiez Inc. (ZUMZ) �is likely to post earnings of 62 cents a share in the fourth quarter.
Best Retail Companies To Own For 2014: AutoNation Inc (AN)
AutoNation, Inc. (AutoNation), incorporated on May 30, 1991, is an automotive retailer in the United States. As of December 31, 2011, the Company had three operating segments: Domestic, Import, and Premium Luxury. As of December 31, 2011, it owned and operated 258 new vehicle franchises from 215 stores located in the United States, predominantly in metropolitan markets in the Sunbelt region. Its stores sell 32 different brands of new vehicles. The core brands of vehicles that it sells, representing approximately 90% of the new vehicles that it sold during the year ended December 31, 2011, was manufactured by Ford, Toyota, Nissan, General Motors, Honda, Mercedes-Benz, BMW, and Chrysler. The Company offers a diversified range of automotive products and services, including new vehicles, used vehicles, parts and automotive repair and maintenance services , and automotive finance and insurance products, which includes the arranging of financing for vehicle purchases through third-party finance sources. The Company retailed approximately 400,000 new and used vehicles through its stores in 2011. It acquired one automotive retail franchise and related assets during 2011.
Domestic segment consists of retail automotive franchises that sell new vehicles manufactured by General Motors, Ford, and Chrysler. Its Import segment is comprised of retail automotive franchises that sell new vehicles manufactured primarily by Toyota, Honda, and Nissan. Its Premium Luxury segment is consists of retail automotive franchises that sell new vehicles manufactured primarily by Mercedes-Benz, BMW, and Lexus. The franchises in each segment also sells used vehicles, parts and automotive repair and maintenance services, and automotive finance and insurance products. For the year ended December 31, 2011, Domestic revenue represented 34% of total revenue, Import revenue represented 37% of total revenue, and Premium Luxury revenue represented 28% of total revenue. Corporate and other is consist of its other businesses, incl! uding collision centers, e-commerce activities, and an auction operation, each of which generates revenues, as well as unallocated corporate overhead expenses and retrospective commissions for certain financing and insurance transactions that it arranges under agreements with third parties.
The Company�� stores acquires vehicles for retail sale either directly from the applicable automotive manufacturer or distributor or through dealer trades with other stores of the same franchise. it acquires used vehicles from customer trade-ins, auctions, lease terminations, and other sources. It recondition used vehicles acquired for retail sale at its stores��service facilities and capitalize costs related thereto as used vehicle inventory. Through its VVOs, which are located on existing store facilities, it sells vehicles that it would have traditionally wholesaled with an average retail price lower than that of used vehicles it typically retail. Used vehicles that the Company do not sell at its stores or VVOs generally are sold at wholesale prices through auctions.
The Company offers a variety of automotive finance and insurance products to its customers. The Company arranges for its customers to finance vehicles through installment loans or leases with third-party lenders, including the vehicle manufacturers��and distributors��captive finance subsidiaries, in exchange for a commission payable to the Company. It also offers its customers various vehicle protection products, including extended service contracts, maintenance programs, guaranteed auto protection (GAP, this protection covers the shortfall between a customer�� loan balance and insurance payoff in the event of a casualty), tire and wheel protection, and theft protection products. The vehicle protection products that its stores offers to customers are underwritten and administered by independent third parties, including the vehicle manufacturers��and distributors��captive finance subsidiaries. The Company sells t! he produc! ts on a straight commission basis; however, it also participate in future underwriting profit for certain products pursuant to retrospective commission arrangements. Commissions that it receives from these third-party providers may be subject to chargeback, in full or in part, if products that it sells, such as extended service contracts, are cancelled. Its stores also provide a range of vehicle maintenance, repair, paint, and collision repair services, including warranty work that can be performed only at franchised dealerships and customer-pay service work. The Company has entered into framework agreements with vehicle manufacturers and distributors. It operates each of its new vehicle stores under a franchise agreement with a vehicle manufacturer or distributor.
Advisors' Opinion:- [By Chris Hill]
Shares of CarMax (NYSE: KMX ) �hit an all-time high on Wednesday after fourth-quarter profits rose 13%. To what extent is CarMax competing with Ford (NYSE: F ) , General Motors (NYSE: GM ) , and�Autonation (NYSE: AN ) ? What's the opportunity for CarMax going forward? In this installment of MarketFoolery, our analysts discuss the future of CarMax.
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