Earning season results in a little more detail

Investment Analysis Clubs Saul’s Investing Discussions
1

In the heat of all that is going on with the correction that we are in the midst of, I forgot to give a little summary of my results in the earnings season. I’ll put it together a little more descriptively, if a little late, now:

Three stocks have already reported:

AMZN reported revenues up 23%. As I told you when I indicated I was starting a position in AMZN, there’s no point in trying to follow earnings. What I decided to follow was trailing 12-month operating cash flow per share (instead of trailing 12-month net earnings per share). I figured this was as close to a similar figure as I could get, and I do realize that it’s untaxed. Here’s what it looks like:


Mar 2014: 	$11.12
Jun 2014: 	$11.10
Sep 2014:	$11.87
Dec 2014:	$14.16
Mar 2015:	$16.23
Jun 2015:	$18.40
Sep 2014:	$20.04

As you see, this quarter’s trailing value of $20.04 was up 69% from the $11.87 a year ago. Now I know that someone linked to a post by someone who felt that AMZN had no right to call it Cash Flow because they weren’t including and excluding the correct things. I really don’t care because as long as whatever they are measuring is up 69% from a year ago it’s going in the correct direction. Rapidly. (I can’t figure out what Amazon is doing anyway).

For those who care, the “PE” figured by dividing today’s close by the trailing op cash flow per share, is 30.4, which considering that it isn’t real earnings and is untaxed, is certainly high. Just saying. I’m not sure AMZN will ever be cheap. They are one of my smallest positions in the range of 1.5%

INBK will be quicker. Their earnings were 51 cents, up 82% from 28 cents a year ago, but a bit of a sequential slow down in growth rate from the last couple of quarters that grew over 100%. Trailing earnings are $1.79, up 118% from 82 cents a year ago. I can’t tell you more details because Anirban hasn’t filled us in yet with one of his wonderful comprehensive summaries. The PE at today’s close was about 17.5, which seems a little low for a company growing earnings at 118%.

With BOFI mostly gone, INBK is now my 3rd biggest position, in the range of 12%. Who would have thought it?

SKX has been discussed at length, but, for a quick summary: Revenue up 27%, I figured Earnings at 49 cents up 29% from 38 cents. I added back the short-term legal expenses but not the foreign exchange translation losses or the advance rent payments (which are real rent, after all, and now won’t come out of a future quarter). I figure their trailing earnings at $1.56 (feel free to disagree), which gives them a rate of growth of trailing earnings of 73% from 90 cents a year ago, and a PE of 20.4.

After the drop they are my second largest position in the range of 16.5%. I added a bunch on Friday at $29.88 and a tiny bit more today.

CNC and INFN will report tomorrow, before and after the market. I’ll try to keep up better.

Saul

For Knowledgebase for this board
please go to Post #9939.

A link to the Knowledgebase is also at the top of the Announcements column
on the right side of every page on this board

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2

CNC reported this morning. Their merger with Health Net was just approved by both sets of stockholders. Their adjusted earnings were 84 cents, up 37% from 61 cents a year ago. Their revenue growth seems remarkable (without the big merger which takes effect next year). Here’s how I’ve recorded it (in billions). Note that those aren’t annual gains, they are sequential quarterly gains.


Mar 2014: 	        $3.4
Jun 2014: 	        $3.7
Sep 2014:		$4.2
Dec 2014:		$4.4
Mar 2015:		$4.8
Jun 2015:		$5.2
Sep 2014:		$5.8

Trailing earnings are $2.97, up 64% from $1.81 a year ago. PE is 19.5 which is obviously low for a company growing so fast and probably represents concern about the integration of the merger as well as worry about political risk. This is a small position for me, in the range of 1.5%.

Here are the three stocks which had previously reported:

AMZN reported revenues up 23%. As I told you when I indicated I was starting a position in AMZN, there’s no point in trying to follow earnings. What I decided to follow was trailing 12-month operating cash flow per share (instead of trailing 12-month net earnings per share). I figured this was as close to a similar figure as I could get, and I do realize that it’s untaxed. Here’s what it looks like:


Mar 2014: 	        $11.12
Jun 2014: 	        $11.10
Sep 2014:		$11.87
Dec 2014:		$14.16
Mar 2015:		$16.23
Jun 2015:		$18.40
Sep 2014:	 	$20.04

As you see, this quarter’s trailing value of $20.04 was up 69% from the $11.87 a year ago. Now I know that someone linked to a post by someone who felt that AMZN had no right to call it Cash Flow because they weren’t including and excluding the correct things. I really don’t care because as long as whatever they are measuring is up 69% from a year ago it’s going in the correct direction. Rapidly. (I can’t figure out what Amazon is doing anyway).

For those who care, the “PE” figured by dividing yesterdays close by the trailing op cash flow per share, is 30.4, which considering that it isn’t real earnings and is untaxed, is certainly high. Just saying. I’m not sure AMZN will ever be cheap. They are one of my smallest positions in the range of 1.5%

INBK will be quicker. Their earnings were 51 cents, up 82% from 28 cents a year ago, but a bit of a sequential slow down in growth rate from the last couple of quarters that grew over 100%. Trailing earnings are $1.79, up 118% from 82 cents a year ago. I can’t tell you more details because Anirban hasn’t filled us in yet with one of his wonderful comprehensive summaries. The PE at yesterdays close was about 17.5, which seems a little low for a company growing earnings at 118%.

With BOFI mostly gone, INBK is now my 3rd biggest position, in the range of 12%. Who would have thought it?

SKX has been discussed at length, but, for a quick summary: Revenue up 27%, I figured Earnings at 49 cents up 29% from 38 cents. I added back the short-term legal expenses but not the foreign exchange translation losses or the advance rent payments (which are real rent, after all, and now won’t come out of a future quarter). I figure their trailing earnings at $1.56 (feel free to disagree), which gives them a rate of growth of trailing earnings of 73% from 90 cents a year ago, and a PE of 20.4.

After the drop they are my second largest position in the range of 16.5%. I added a bunch on Friday at $29.88 and a tiny bit more today.

Saul

For Knowledgebase for this board
please go to Post #9939.

A link to the Knowledgebase is also at the top of the Announcements column
on the right side of every page on this board

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3

I loved your “I really don’t care because as long as whatever they are measuring is up 69% from a year ago it’s going in the correct direction” line. I’ve been long AMZN for almost five years now and I’m up 244% on it. And they said it was way overpriced back then too.
Keep it up!

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