ConocoPhillips (COP) released Q2 2013 earnings that beat consensus estimates by $0.12/share. While the company has been performing flawlessly on its strategic multi-year transformation plan by disposing of non-core assets, organically growing production, and providing a compelling dividend, the story this quarter was early signs of the 3-5% growth in cash margins the company has promised. As a result, COP's Q2 earnings beat was in stark contrast to slightly disappointing results from Chevron (CVX) and a disastrous earnings report from ExxonMobil (XOM).
Strategic Multi-year Transformation Plan Update
The data provided below comes from the company's Q2 conference call transcript and slide presentation.
Asset Dispositions: Since the beginning of the year, COP has received approximately $1.7 billion in proceeds from asset sales (Cedar Creek Anticline) and expects to close Algeria, Nigeria and Kashagan dispositions by year-end. These sales will add ~$9 billion of additional proceeds in 2013. The company also said it is still looking to rebalance its interest in Canadian oil sands holdings where it is a bit over weighted.Production Growth: Adjusted for dispositions and planned downtime, COP had 4% organic production growth in Q2 compared to a year ago. Last quarter COP grew 2% on the same basis.Compelling Dividend: COP recently announced a 4.5% dividend increase to a quarterly payout of $0.69/share and now yields 4.2%. Conoco's yield continues to be significantly higher than Exxon Mobil's 2.7% and Chevron's 3.1%.Cash Margin Expansion
Top 5 Information Technology Stocks For 2015: Corrections Corporation of America (CXW)
Corrections Corporation of America (CCA) incorporated on September 24, 1998, is a real estate investment trust. The Company is the owner of privatized correctional and detention facilities and prison operators in the United States. As of December 31, 2012, the Company operated 67 correctional and detention facilities, including 47 facilities that the Company own, with a total design capacity of approximately 92,500 beds in 20 states and the District of Columbia. Beginning of January 1, 2013, the Company has provided correctional services and conducted other operations through TRSs. A TRS is a subsidiary of a REIT that is subject to applicable corporate income tax and certain qualification requirements. In January 2012, the Company closed the operations of the 1,172-bed Delta Correctional Facility in Greenwood, Mississippi. In January 2013, the Company announced that it has completed an internal reorganization of its business operations.
The Company specializes in owning, operating, and managing prisons and other correctional facilities and providing inmate residential and prisoner transportation services for governmental agencies. In addition to providing the fundamental residential services relating to inmates, its facilities offer a variety of rehabilitation and educational programs, including basic education, religious services, life skills and employment training and substance abuse treatment. These services are intended to help reduce recidivism and to prepare inmates for their re entry into society upon their release. The Company also provides health care (including medical, dental, and mental health services), food services, and work and recreational programs.
The Company�� customers consist of federal, state and local correctional and detention authorities. During the year ended December 31, 2012, federal correctional and detention authorities represented 43% of its total revenue. Federal correctional and detention authorities primarily consist of the Federal Burea! u of Prisons (BOP), the United States Marshals Service (USMS), and the United States Immigration and Customs Enforcement (ICE). Its management services contracts typically have terms of three to five years and contain multiple renewal options. Its facility contracts also contain clauses that allow the government agency to terminate the contract at any time without cause, and its contracts are generally subject to annual or bi-annual legislative appropriations of funds.
The Company is compensated for providing prison bed capacity and correctional services at an inmate per diem rate based upon actual or minimum guaranteed occupancy levels. Occupancy rates for a particular facility are typically low when opened or immediately following an expansion. However, beyond the start-up period, which typically ranges from 90 to 180 days, the occupancy rate tends to stabilize. During 2012, the average compensated occupancy of its facilities, based on rated capacity, was 88.2% for all of the facilities it owned or managed, exclusive of facilities where operations have been discontinued.
The Company provides a variety of rehabilitative and educational programs at its facilities. Inmates at facilities the Company manage may receive basic education through academic programs designed to improve literacy levels and the opportunity to acquire GED certificates. The Company also offers vocational training to inmates who lack marketable job skills. Its craft vocational training programs are accredited by the National Center for Construction Education and Research. This foundation provides training curriculum and establishes industry standards for over 4,000 construction and trade organizations in the United States and several foreign countries. In addition, the Company offers life skills transition-planning programs that provide inmates with job search skills, health education, financial responsibility training, parenting training, and other skills associated with becoming productive citizens.
! As of December 31, 2012, the Company provides transportation services to governmental agencies through its wholly owned TRS, TransCor America, LLC, or TransCor. CCA owns 49 correctional and detention facilities in 15 states and the District of Columbia, two of which it leases to third-party operators. The Company also owns two corporate office buildings. Additionally, it manages 20 correctional and detention facilities owned by government agencies. Owned and managed facilities include facilities placed into service that the Company owned and managed. Managed-only facilities include facilities owned by a third party and managed by the Company.
The Company competes with The GEO Group, Inc. and Management and Training Corporation.
Advisors' Opinion:- [By Ben Levisohn]
Prison REIT Corrections Corp of America (CXW) yields 6.2% and trades at 24.9 times earnings, while�Geo Group (GEO) yields 6.4% on a P-E ratio of 20.8 times.
Top 5 Performing Stocks To Own Right Now: E*TRADE Financial Corporation(ETFC)
E*TRADE Financial Corporation, a financial services company, provides online brokerage and related products and services primarily to individual retail investors under the E*TRADE Financial brand in the United States. It offers trading products and services, including automated order placement and execution of the U.S. equities, futures, options, exchange-traded funds, and bond orders; sweep deposit accounts; access to E*TRADE Mobile Pro to trade stocks and transfer funds between accounts, as well as to monitor real-time investment, market, and account information; access to Power E*TRADE Pro, a desktop trading software for active traders; an open applications programming interface for third-party and independent software developers; margin accounts; cross boarder trading; access to international equities; research and trade idea generation tools; and E*TRADE Community that utilizes social media to offer a platform to customers. The company also provides access to the inve stor resource center that provides an aggregated view of its investing tools, market insights, independent research, education, and other investing resources; advisory services through Online Advisor; fixed income tools to identify, evaluate, and implement fixed income investment strategies; access to Retirement QuickPlan calculator that provides action plan on personal retirement savings; one-on-one portfolio recommendations and personalized plans; managed investment portfolio advisory services; unified managed account advisory services; individual retirement accounts; access to non-proprietary exchange-traded funds and mutual funds; investing and trading educational services through online videos, Web seminars, and Web tutorials; and deposit accounts, including checking, savings, and money market accounts. In addition, it provides software and services for managing equity compensation plans for corporate customers. The company was founded in 1982 and is headquartered in Ne w York, New York.
Advisors' Opinion:- [By Ben Levisohn]
Shares of E*Trade Financial (ETFC) have surged today after the online broker was given permission to reallocation capital from its bank to the parent company today. The Wall Street Journal has the details:
- [By Jon C. Ogg]
E*TRADE Financial Corp. (NASDAQ: ETFC) was reiterated as Buy, but the price target was raised to $19.50 from $16.50, at Sterne Agee, making the third or fourth such price target upgrade in as many days, but what stands out here is that this appears to now be a “street-high” price target.
- [By Ben Levisohn]
Only the Nasdaq Composite showed the true destruction: It fell 2.6% to 4,127.73 on Friday and finished off 0.7% on the week. Among the big losers: E*Trade Financial (ETFC), which plunged 9.6% to $20.43 on concerns about its “pay for order flow” practices, Akamai Technologies (AKAM), which fell 6.7% to $54.35, Netflix (NFLX), which dropped 6% to $337.31 despite the fact that it might get a boost from Amazon’s (AMZN) new set-top box. Regeneron Pharmaceuticals (REGN) dropped 4.9% to $285.34 as biotech stocks got drubbed.
Top 5 Performing Stocks To Own Right Now: Royal Bank of Scotland Group PLC (RBS)
The Royal Bank of Scotland Group plc (RBS), incorporated on March 25, 1968, is a holding company of a global banking and financial services group. The Company operates in the United Kingdom, the United States and internationally through its two principal subsidiaries: The Royal Bank of Scotland plc (the Royal Bank) and National Westminster Bank Plc (NatWest). Both the Royal Bank and NatWest are clearing banks. In the United States, the Company�� subsidiary Citizens Financial Group, Inc. (Citizens) is a commercial banking organization. The Company�� business segment include UK Retail, UK Corporate, Wealth, Global Transaction Services, Ulster Bank, US Retail & Commercial, Global Banking & Markets (GBM), RBS Insurance, Central items, Non-Core Division and Business Services. In February 2012, Ensign Group, Inc. acquired $21.5 million seven-year term loan from RBS Asset Finance, Inc., an affiliate of the Company. In May 2012, The Paragon Group of Companies PLC announced the acquisition of further unsecured consumer loans, through its Idem Capital Securities subsidiary, from the Company.
In September 2011, the Company sold Hilton Glasgow City hotel to Topland Group. In October 2011, Paragon Group of Companies PLC acquired a portfolio of unsecured consumer loans from Royal Bank of Scotland Group plc. In December 2011, the Company sold its tenanted pub business to Scottish & Newcastle Pub Company (Management) Limited (S&NPC), a subsidiary of Heineken N.V.
As of December 31, 2011, the Royal Bank and NatWest had 627 and 1,493 retail branches, respectively, in the United Kingdom. Ulster Bank has a foot print of 236 branches and a network of business banking offices across Northern Ireland and the Republic of Ireland. US Retail & Commercial had 1,519 retail banking offices (including in-store branches) covering Connecticut, Delaware, Illinois, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Vermont.
UK Retail
The Company offers a range of banking products and related financial services to the personal market. It serves customers through the RBS and NatWest networks of branches and automated teller machines (ATMs) in the United Kingdom, telephony, online and mobile.
UK Corporate
The Company is a provider of banking, finance, and risk management services to the corporate and small and medium enterprises (SME) sector in the United Kingdom. It offers a range of banking products and related financial services through a nationwide network of relationship managers, and also through telephone and Internet channels. The product range includes asset finance through the Lombard brand.
Wealth
The Company provides private banking and investment services in the United Kingdom through Coutts & Co and Adam & Company. It also offers offshore banking through RBS International, NatWest Offshore and Isle of Man Bank, and international private banking through Coutts & Co Ltd.
Global Transaction Services
The Company offers global payments, cash and liquidity management, and trade finance and commercial card products and services. Through the network and partner bank agreements, GTS is able to support and connect customers across 128 countries.
Ulster Bank
Ulster Bank is retail and business bank in Northern Ireland. It provides a range of financial services. As of December 31, 2011, the Retail Markets division, which had a network of 236 branches, operated in the personal and financial planning sectors. The Corporate Markets division provides services to SME business customers, corporates and institutional markets.
US Retail and Commercial
The Company provides financial services through the Citizens and Charter One brands. US Retail & Commercial is engaged in retail and corporate banking activities through its branch network in 12 states in the United States and through non-branch offices in othe! r states.!
Global Banking and Markets
The Company is a banking partner to corporations and financial institutions globally, providing a range of debt and equity financing, risk management and investment services to its customers. The division is organized along six principal business lines: money markets, rates flow trading, currencies, equities, credit and mortgage markets, and portfolio management and origination.
RBS Insurance
The Company provides a range of general insurance products to consumers through a range of brands, including Direct Line, Churchill and Privilege. It also provides insurance services for third party brands through its UKI Partnerships business. In the commercial sector, its NIG and Direct Line for Business operations provide insurance products for businesses through brokers or direct respectively. Through its international division, RBS Insurance sells general insurance, mainly motor, in Germany and Italy. In addition to insurance services, RBS Insurance continues to provide support and reassurance to millions of the United Kingdom motorists through its Green Flag breakdown recovery service and Tracker stolen vehicle recovery and telematics business. On 15 February 2012, a new corporate brand, Direct Line Group, was announced.
Central Functions
Central Functions consist of corporate functions, such as treasury, funding and finance, risk management, legal, communications and human resources. The Centre manages the Company�� capital resources and regulatory projects and provides services to the operating divisions.
Non-Core Division
Non-Core Division manages separately assets, which the Company intends to run off or dispose of. The division contains a range of businesses and asset portfolios from the GBM division, higher risk profile asset portfolios, including excess risk concentrations, and other illiquid portfolios. It also includes a range of other portfolios and businesses, inclu! ding regi! onal markets businesses.
Business Services
Business Services supports the customer-facing businesses and provides operational technology, customer support in telephony, account management, lending and money transmission, global purchasing, property and other services. It also leverages its purchasing power and is the Company's center for managing large-scale and complex change.
Advisors' Opinion:- [By Reuters]
Kris Connor/Getty ImagesU.S. Attorney General Eric Holder. The U.S. Justice Department is preparing to file civil fraud charges against Citigroup and Bank of America's Merrill Lynch unit over their sale of flawed mortgage securities ahead of the financial crisis, according to people familiar with the probes. Civil investigators have compiled evidence that allegedly shows that investors lost tens of billions of dollars after purchasing securities Citigroup (C) had marketed as safe even though the bank had reason to believe otherwise, one person said. An investigation into the mortgage securities marketed by Merrill Lynch, which Bank of America (BAC) agreed to acquire at the height of the crisis in 2008, is also close to completion, two other people said. Probes against Royal Bank of Scotland (RBS) and Credit Suisse (CS) are also underway and progressing, according to another two people familiar with those cases. Representatives for all four banks declined to comment. The U.S. banking industry, which faces a range of mortgage-related lawsuits, has contended that many of the alleged investor losses can be attributed to the financial crisis, and that they shouldn't be held liable for marketing a variety of mortgage securities that ultimately soured. The Justice Department hasn't determined the exact timing of upcoming lawsuits, the sources said, although U.S. Attorney General Eric Holder told Reuters earlier this month that the department planned to bring more mortgage-related cases in early 2014, while declining to name which companies were targeted. The probes could also lead to settlements instead of lawsuits. The cases stem from a government task force the Obama administration created in early 2012 to probe the sale of shoddy home loans repackaged for investors. Last month, JPMorgan Chase (JPM) entered a $13 billion settlement with the Justice Department and other agencies, to resolve charges that the bank overstated the quality of mortgages it was
- [By Royston Wild]
I am currently looking at the dividend prospects of�Royal Bank of Scotland Group� (LSE: RBS ) (NYSE: RBS ) and assessing whether the company is an appetizing pick for income investors.
- [By Garrett Cook]
The Royal Bank of Scotland Group plc (NYSE: RBS) shares were also up, gaining 10.38 percent to $12.34 on strong earnings report.
Equities Trading DOWN
- [By Royston Wild]
LONDON --�Shares in majority-nationalised�Royal Bank of Scotland Group� (LSE: RBS ) (NYSE: RBS ) �have come under renewed pressure in recent weeks, trudging 24% lower from January's one-and-a-half-year peak around 368p.
Top 5 Performing Stocks To Own Right Now: Wisdomtree International Energy Sector Fund (GNAT)
WisdomTree International Energy Sector Fund (The Fund) is a non-diversified fund. It seeks investment results that closely correspond to the price and yield performance, before fees and expenses, of the WisdomTree International Energy Sector Index (The Index). The Fund is managed by WisdomTree Asset Management, Inc.
The Index is derived from WisdomTree Index of Europe, Far East Asia and Australasia (DEFA) Fund. It measures the performance of dividend-paying companies in developed markets outside of the United States and Canada within the international energy sector. The companies are weighted in the Index based on regular cash dividends paid. The Index includes companies from oil and gas producers, oil and gas services, pipelines, alternative energy sources, and coal industries.
Advisors' Opinion:- [By Todd Shriber, ETF Professor]
Unusual volume (at least 5X ADV): Market Vectors Gaming ETF (NYSE: BJK), Guggenheim Timber ETF (NYSE: CUT), WisdomTree Global Natural Resources ETF (NYSE: GNAT), iShares MSCI Global Gold Miners (NYSE: RING) and the Global X Social Media Index ETF (NASDAQ: SOCL).
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