Feb 27, 2013|
Stock Talk - Paul Swinand, Morningstar
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
When it is a stock analyst at Morningstar here's I like -- in the morning -- guys. They don't work for Merrill Lynch they don't have there -- have a horse in the race and have an angle they don't Randy you're an analyst with Merrill Lynch account at a discount your your opinion. Because you might be under reading the stock earlier clients on the stock -- their proposed. All doesn't care one way that he talks about stocks he likes or dislikes whatever he wants in the first stock the -- talk about with Paul is JC Penney to more people. Good morning and Matt thanks for the plug -- -- they the other thing is that it be careful yeah. Yeah you can you can pick up management to make people man you've been in detail but I'm in the long run and that he -- But hopefully generate the long run. That's our cause like you guys community to start with you on mutual funds in the got into stocks and I just like I I completely discount an analyst report. If there with Merrill or Morgan Stanley because I know they on the stock you guys don't own any stocks so that's -- elected religious -- any notes onto a JC -- The last out to -- are a little bit. Although although New York and at the bank wanted it and you and Ron Johnson took over and now they're literally -- Growing up but I still have gone down so now what if I am right in the long run by the I would on enamored with that last ball went. If that went -- -- and -- that took over that docket for important debate during an analyst day on however at that price levels that you know 78 team. Perspective it jump back up and the world wanted but I did you know I think it short covering ahead this quarter. Of course they're -- out tonight and that talking mistreated that the failed decline that continues to they've had. 20% point 2% 26%. Failed the quarterly sales decline in -- visit the run history is that going to be worse this quarter. Mostly due to traffic. And people that were used the clip being cool I'm. Are not coming in the -- now -- respect that I've done in this store is you know maybe bias that people that actually came in as a pivot stayed home. Glad I think people really like the doors. Other big part of that strategy is that if he would Johnson is gonna switch a lot of merchandise in national brands -- -- every -- low price. They're gonna have their own little shop in shop in the perpetuity -- is that when he impressed. They have enough money goes their run through the whole system that's what I read the other day and another analyst said I am not sure they have enough cash to finish the deal. Yes and that's where the focus of the -- my focus is going to be atomic cash and I've done that pretty deep talent out there and now the but the -- but statement under the that's been working against them the last nine months. That things like -- -- and tables that tend to reverse them up over the over time that even -- -- they've done worse compared to last year. That whatever the reverse the help that brings so. I think that they might be slightly off the -- target which is -- -- -- -- and you're a billion in action I think it might be slightly off that. I think they're gonna have enough money in May make make this thing work. I -- they'll continue to work but it mark has done eventually get better you know you can't. -- -- forever but at the bit critical year. So what do you think it's worth a couple of years -- pay twenty bucks a share for today. You know I I think it's worth at least -- -- box at the very Volvo very controversial -- But even at 38 but I'm being extremely conservative still very low operating margin very low road. If this sisterhood if it's that kind of like target over the doubt that the former target as well apple executive. On you know I I can be way too conservative -- who were at war. All right so let's take a look at coach that's your next pick. This is a 48 dollar stock while it's taken a big -- you watch it today it's it's up 5% this morning. Yet jumped -- -- out some amendment any rumors. I would say there's a site just rumors. Armed and well managed company like this in my opinion. Although it's showing up on probably an enemy screen with a cheap right now management does it just doesn't. Give up over night -- they think you know they've been during this critical for 3040 years they're gonna think hey I can tell that they seemed that it is time Paul Weyrich helped the day -- Thirteenth fourteenth. -- But however you know coach is. You know -- businesses related mr. page is it Andy and departments has -- very buried in market. Coach -- phenomenally good margin and do that by producing great product. Even though it seemed like expensive bag -- 3400 dollars it's actually at a very reasonable price for the quality. The worry of course is that. The pin number of new entrant has been a lot of attention on Michael -- But the market very fragmented I think -- is getting too much attention is that if -- like people are going in and -- the pop up by a coach bag and I just went to court. So you know this has acted. The company makes. 7530%. Gross margin and when the you know they've been normalized. On the thirty plus percent operating margin. -- puppet on a catch you know many that. You know it if you looked at just the numbers you would think that that defense perspective that sparked that even if the world you know had a whole financial crisis there's been the only one let Annie Duke if you didn't know what they did. You're just looked at the balance sheet and and their cash generation. But the back trade because every note that the aspiration electric customer it's not. -- -- -- who beat on it that person who worked for letting him though you know elected like for back to that does that stack is very. Skittish the moment they'll -- down a little. The back now. By this one on a debt right. Yes and so it's been going down for a little bit now but. Is defective this cheap I don't think there's a whole lot more downside to -- about and the cash generation of strong. Got it got it. Are well IE I appreciate oh by the late coach would you think it's worth the couple years out. We've got a fair value that they have 63 -- -- you know since yet and that I would also point out. The market is the word has been the North American out there will be constant sales. The growth story -- anywhere like that they have met that coaches. If China doesn't do anything for coach coaches just entry in Europe the long run growth is really about China and Europe. In China they're I think they're gonna take care shared just like they did in Japan when that kind of these kind of slowed down from the government and. You know. Yet the -- you're probably right primary well adjusting Texan I appreciate your time Paul thank you have. Well both the patient and not. That's right patience is a virtue when it comes to buying stocks are great. Also and and Morningstar joining us today on the financial exchange local company. TJ Maxx reported earnings this morning we're going to be joined by francoeur TL from the Boston Herald. What I can tell you is TJ Maxx shares trading down 7 pennies this morning. They increased their stock buyback. But be at their their outlook going forward. Is weakening and I think June the you know retailer like TJ Maxx I think one of the reasons they may be. Downgrading their outlook going forward is the consumer has less money in his pocket. Yeah and in and and I the complaint I can tell you that right after Christmas I went in. I was looking for -- sale that's what sweaters on sale right January your everything's gone. -- summer clothes. -- -- second week aging levees -- had a great Christmas season. But the entire store was filled with meetings is to ensure that you're number eight as a -- I thought that I stopped yet it as a stockholder I -- absolutely no I have not been out in almost five weeks. That's not all night for us -- yes isn't the point at TJ Maxx. Isn't everything on sale there it all the time -- Shiloh gauge that now we know why she's a little cranky she hasn't been TJ Maxx and -- -- it wins every. I'm just getting a little -- not about this -- RPM this is why this is. Then somebody's running at the wrong way what about JC Penney feel the same in I think they've been on the down slope for a while Padilla but I was absolutely shocked. All my life right after Christmas you going you get sweaters on sale. Everything is gone they took it -- look at out of the store. We're gonna have to use our listeners as a way to help. Select stocks because last some where they're shopping Jews -- little turned off at TJ Maxx evidently. -- take a look at that we're gonna have time to take a look at some of June's favorite text messages when we come back on the -- --