Tuesday, July 22, 2014

Coca Cola Earnings Review & My Two Cents

Hello all! As earning season continues on its way-- Coca Cola announced 2nd quarter earnings today., 7/22/14,
 


Here are some of the highlights from the call:

The Good:
Global Unit case volume grew 3% during the second quarter and 2% year to date. International volume grew 3% while North American volume remained the same. Volume also accelerated in North America, Eurasia and Africa, Europe and Asia Pacific.
The Not so Good:
Reported net revenues were down 1% in the second quarter and 3% year to date.

Reported operating income was down 2% in the second quarter, and year to date.

Earnings per share for the quarter was reported at $0.58, which is down 1%

Cash flow from operations was at $4.5 billion, a significant increase from reported cash in quarter 1 which was at $1.1 billion.

My Two Cents:
Despite the “less than stellar” results for this quarter— Coke is one of those companies in my portfolio which I consider to be part of the “core”. In other words, despite of its “conservative” growth prospects I don’t see myself selling it any time in the near future (if ever). On the contrary, it is one of those in which I would purchase additional shares if we ever face a significant pull back in the price.

What’s not to love about coke? First of all, I don’t drink soda so that may come as a surprise. However, considering I am probably in the minority as a non-soda drinker, whether I like soda or not that has nothing to do with the profitability of this company. I bought coke back in December 2011 for a few main reasons: 1. Strong international brand with only one sole competitor 2. The company pays dividends (currently a nice $1.22 a share) 3. It’s one of Warren Buffet’s favorites. (my virtual investing mentor). 

Sometimes I wished I would have grabbed more shares at that price but I’m very happy with the returns it has provided me with over the years (nearly 47% return since time of purchase) and I am certain it will continue on that path, even if at a conservative level.

Has my original thesis of this company changed at all? Nope. And, with that said, I will remain a happy shareholder.

…and can we close with their oh-so-cool new marketing campaign of personalized bottles:

 
You can make your on at http://www.shareacoke.com/#bottle (How cool is that!!!)
Any questions, concerns, confused about anything on here? Feel free to email me at teachmetoinvest@gmail.com
 
Cheers to profits!
Mabel

Google Earnings Review & My Two Cents

Google had quite the incredible quarter!
 
Earnings were reported this past Thursday, July 17th.

 
 
Before I dive in to earnings, just want to share that my very first shares of stock ever were from Google (back in June of 2008). I am pretty sure I’ve told this story a million times on the blog but is currently one of my favorite companies to own and thus, why I am so excited to share news of another amazing quarter.

*I don’t own many shares of the company and I am not sure I would buy new shares at today’s prices (currently trading at ~$594 a share). However, I am happy to be a shareholder (even with my very minor contribution) and definitely see this company thriving for years to come.

So anyways, here’s a basic overview of the earnings:

·         Consolidated revenue of $15.96B (yes, billion) for the quarter ended June 20, 2014. This represents an increase in revenue of 22% in comparison to the same quarter last year. It comes to no surprise that bulk of that (65% of total revenue) was generated directly from their site (revenue generated from direct advertising on their site). Google makes money in a few different ways but advertisement remains its main source of revenue!

·         Net income for the second quarter came in at $3.42 billion, which is a slight increase from the $3.23 billion generated during second quarter 2013!

·         Reported cash flow from operations (a “fancy” term for money generated by a company’s normal business operations, or cash generated from doing business) came at $5.63 billion for the second quarter 2014, compared to $4.71 billion in the second quarter 2013.

·         Capital expenditures were reported to be $2.65B, the majority of these expenses had to do with the new construction of a data-center, real estate purchases and production equipment.

·         Free Cash Flows-- Company generated $2.98 billion free cash flow for the quarter. For the entire year (12 months ending 06/30/14) Google has a total of ~$3.4 billion. For the entire history of the company, including all the money that has accumulated (+ short term investments), the amount is now at $55.5 billion, as of quarter ending June 30th, 2014. 

*For my beginner investors--- free cash flow is basically all the cash a company is able to generate (or is left over with) after paying all expenses including investments made to maintain or expand operations.  I don’t know about you but if I had 55+ billion worth of cash and short term investments (those that last less than a year) in my bank account I would be pretty happy (that’s actually quite an understatement).

·         Long term debt for Google as of June 30th, 2014 is 3.2 billion (*considering the incredible amount of cash Google generates, you’ll probably notice this is not very significant).

I could probably go on and on but I will stop right here. If you would like to take a closer look at the earnings yourself (and would like something to read on the train while on your way to work or during leisure times) feel free to check out the complete earnings release: Here

My Two Cents
Google is Google. Is a leader. Is a verb. Nothing comes close. I can easily see this company growing an excelling as the years go on. Beside advertisement, they are working hard to develop other sources of revenue—from acquisitions to innovative projects like “Google glass” or self-driven cars, I feel Google’s potential is quite exponential and I look forward to seeing how they continue to remain innovative and a leader for years to come.

*If you have any questions in terms of where to find certain numbers in the financial statements or anything in general you aren’t clear about, feel free to email me! Also, feel free to say hello. Always love hearing from my readers.

Happy Investing and cheers to profits!

Mabelle

Catching up on Earning season!-- Johnson & Johnson Earnings Review

Hey everyone! I am alive , well and absolutely loving DC and my internship. Learning so much I can’t even begin to explain how blessed I feel. I’ll write a catch up post soon but  is earnings season!! I’ll be posting earning results for the companies I currently own as they report earnings. Johnson and Johnson was the first company from my portfolio to report earnings, last week on 07/15/14. Here I give you a brief summary of the result, some educational pointers and my two cents...

---

Johnson & Johnson (Ticker: JNJ) is one of my portfolio favorites- by far! If you are looking for a company with diversity where it matters, this one should definitely be on your list. What do I mean by “where it matters”? Well, in a nutshell, J&J likely makes a lot of the products that you, as a consumer, uses on a consistent basis.  As indicated in their Yahoo! Finance “bio”—the company is engaged in the research and development, manufacture, and sale of various products in the health care industry worldwide. So, not only does this company excel at a domestic level but they are also known internationally.

Just to give you an idea—J&J is the “owner” of products such as Aveeno, Clean & Clear, Lubriderm, Neutrogena, Listerine, Band-Aid, Tylenol, Zyrtec, Motrin and even Splenda! (I just found out about Splenda as I did research for this post). And those listed are not even all of the products. The company strives towards innovation and works hard to remain relevant and a competitive leader within their industry. Need I say more? Definitely a stock I would recommend to anyone—from for my beginner investors to seasoned investors alike. If you are looking to buy shares, I would recommend buying when the market is down so you can get a little bit of a discount considering the stock is trading at about $102 per share. With that said-- current price shouldn't really matter to a long term investor whom believes in a company's long term growth potential.

Here are some of the earnings highlights of how they did during the second quarter 2014:

Quick Summary of financials

1.    Company reported sales of $19.5 Billion which represents an increase of 9.1% in comparison to the same quarter in 2013.

2.    Earnings Per Share came in at $1.51 (or $1.66, a whooping increase of 12.2%, excluding specialty items)

3.    Sales domestically (USA) increased 14.9% while international sales increased 4.4%-- for an overall operational growth of 5% (love seeing growth in a company that’s already big as it is).

Great News For New Drug approvals

As previously mentioned, JNJ strives to have a solid and successful R&D team who’s task is to come up with new products and development not only for the profitability of the company but for the sake of health and well-being of the consumer. During the quarter the Food & Drug Administration (FDA) granted approval of SYLVANT- a new drug for the treatment of patients with Castleman disease. Approval was also granted for VOKANAMET, a treatment for type-2 diabetes and OLYSIO for patients with hepatitis C.  Permission was also granted by the FDA to extend its adult indication of schizophrenia to include teenagers 15 and older (which opens up more market for the product).

The CEO showed continuous optimism in the company’s performance going forward and increased full-year 2014 earnings per share estimates to $5.85-$5.92. He indicated: “Our strong second quarter results reflect the continued success of our new product launches and the progress we have made in achieving our near-term priorities…our diversified business model, focus on long-term growth drivers and talented colleague’s position us well in this evolving and dynamic global health care market”. –Alex Gorsky, CEO.

My Two Cents:
Company is great, is well diversified, has strong results and continue to strive for future growth. Company stays in my portfolio.

Wednesday, June 4, 2014

Book Review: The Elements of Investing (Updated Edition)

Hey all!

Hope everyone is doing great today! Gorgeous weather here in NYC!

The other day while browsing my local library's personal finance section I came across this gem:


The book seemed pretty practical and small enough to be a quick, informational read- so I grabbed it and ran with it. I finished the book yesterday while on the train and decided to provide a quick review on it. So, here you have it:

My overall review of it is that is a wonderful book with a lot of great information from how to get started with investing all the way with super specific and practical tips on where to put your money (ticker symbols and all!). I love books that get away from simply emphasizing the theory and actually provide practicality!

The book makes a great emphasis on the fact that the most effective way for an individual investor to get rich is by doing it s slowly and investing in index funds. The thought process behind that strong suggestion (I say 'strong' because its emphasized several times throughout the book) is the fact that index funds provide enough diversification so that no matter what happens in the market, your money is safer and more profitable in the long term as oppose to having the majority of your money invested solely on individual stocks.

On a personal level, the book allowed me to educate myself further on other forms of investing rather than concentrating all my money in equities. I have to be honest that I have never invested on index funds, ETFs, or mutual funds. It is something I have thought about a lot but have not acted on it as of yet. Most of my investing is done in individual companies while keeping in mind the importance of diversification. Hence, I approach this by making sure my money is allocated within different industries.

Other great tips I learned about (or was reminded of) include but are not limited to the following:

1. The different tax advantages that come with investing in government bonds and instruments of the sort as oppose to individual equities.

2. The "controversial" idea of selling losers rather than winners-- I thought this was quite interesting yet something to definitely consider as they make a great point. The book reminds us that selling losers provides us with tax breaks while selling winners adds to our income opening up the possibility of paying more taxes.

3. Rebalancing our portfolios about once a year--- this is to be done with the purpose of allowing us to collect some gains from "winner" investments and also to make sure we don't have too much of our money allocated in one single stock/investment (bringing us back to a 'balanced & diversified portfolio').

4. The amazing power of DRIPS also known as Direct Reinvestment Plans. DRIPs allow you to increase your position in a company/investment without any action on your part. Hence, making it an "get rich automatically machine". Check out this article for a quick overview of what a drip  is.

5. The idea that no one can time the market, hence, techniques such as dollar cost averaging can be very effective in making sure we get investments in our portfolio at various prices; not too high and not too low.

6. The importance of saving and living below our means. Saving is actually the very first chapter of the book and I could not agree more! As a saying I heard recently says "save to invest rather than save to spend!"

...and so much more!

I would say my favorite chapter is chapter V: Keep it simple. Here, the authors elaborate on the idea that investing should be simple. Doesn't have to be complicated in any way and encourages this methodology: KISS- Keep It Simple, Sweetheart.

I encourage you to get the book or borrow it from your local library. I think that both, new and experienced investors alike, can find a good amount of sound and valuable information in his book.
Next steps for me? I plan to do some research on some of the specific recommendations provided in the book. I will share some feedback and let you guys know if I end up investing in any of the recommended funds.

...Remember this my friends:


Tell me, Have you read this book before? what are your thoughts? any books you would recommend?

As always, wishing LOTs of profits,
Mabel

Monday, June 2, 2014

Common Habits of Millionaires

Hey everyone!

Hope you all had a great weekend! If you know me on a personal level-- you know that one of my passions is reading books, articles, any kind of literature on personal finance. I also enjoy watching TV shows on said topic. This weekend I came across a show on Fox Life (Spanish channel) entitled "Your Finances with Julie Stav". The topic of the show was focused on habits  of people with a millionaire mind. Reminded me of a book I read long ago entitled 'Secrets of a Millionaire mind'.  I love being inspired and considering one of my favorite sayings is "I will be a millionaire one day" I figured why not share what I learn along the way?! 

1. Millionaires spend less than what they make-- Live below their means!!

2. Understand the power of compound interest also known as the "8th world wonder", money takes time to grow.

3. Eliminate all debt monthly-- doesnt carry around credit card debt from month to month

4. Understands that financial freedom is a mental state! If you have a negative mentality of scarcity that is what you will attract. The opposite is also true-- a mentality of abundance and prosperity attracts just that! 

5. Millionaires Can't lay around doing nothing all day-- people with a millionaire mind are always looking for way to nourish their minds either through continuing education or simply seeking others that may know more than them, to learn from them. They also surround themselves with positive people whom are motivated. 

6. Understand they'll make mistakes-- no one is perfect. We all make mistakes and in the process we gather experience which can often times turn in to "golden nuggets of wisdom".

There you have it! What are your thoughts on having a millionaire mind? Do you agree with the above?

Saturday, May 31, 2014

Portfolio Status

Hello Everyone!

It has been a while since I've shared a recap of how my stock portfolio is doing. I will be the first one to admit that the past several months from January-May have been extremely busy for me. However, as pointed out in my prior post, I finally have some time to relax and do the things I love doing more often--- that includes managing my stock portfolio and looking for new companies to add to my repertoire.

I have some time until my new job/internship begins and that means I have been running again in the new found gorgeous NYC weather (another one of my passions) as well as enjoying some morning Television. I must confess that I have been absolutely obsessed with CNBC's "Squack on the street" and was pretty excited when one of the hosts replied to a random tweet I wrote one morning:







...Is the little things in life I tell ya'.

But anyways, still in the process of finding new stocks to add. I have some in mind but still doing some "background" analysis before I take that next step.

So anyways, how are my stocks doing? Considering the current bull market and how great the market has been overall, specially during the past week, I am happy to say that the majority of my positions are doing great. I have one portfolio with TradeKing and the other one with TDAmeritrade (may be looking to consolidate soon). But here you have a quick snapshot:


Symbol Description Avg Price Current Price Dividend Yield
CL Colgate Palmolive Company $59.19 $68.40 2.20% (1.44)
COH Coach Inc $74.01 $40.71 3.30% (1.35)
GOOG Google Inc $229.01 $559.89 n/a
GOOGL Google Inc $229.65 $571.65 n/a
JNJ Johnson & Johnson $82.85 $101.46 2.80% (2.80)
KO Coca Cola Company $27.95 $40.91 3.00% (1.22)
NWY New York & Co Inc $3.30 $3.96 n/a
V Visa Inc $143.35 $214.83 .80% (1.60)
Symbol Description Avg Price Current Price Dividend Yield
DIS Disney 73.96 84.01 1% (.86)
NKE Nike 75.91 76.91 1.30% (.96)
VZ Verizon 51.22 49.96 4.30% (2.12)
COH Coach Inc 73.54 40.71 3.30% (1.35)

You may notice there is one lagging stock in my portfolio which has been lagging for quite some time. Take a quick look above and you'll be able to identify what I am talking about. 

Most of my prior posts emphasize how much faith I have in the company as a whole and it is true that it still remains profitable with a lot of cash. However, the consistent decrease in North American sales for the past several quarters and increasing competition from companies like Michael Kors have hurt the stock price tremendously. Sales, however, have been increasing outside the U.S; specially in China and the company is currently going through a transition of becoming more of a "lifestyle brand" as oppose to simply a luxury brand; as well as branching out in to products targeted to the male population. 

In my honest opinion as an individual investor I still remain firm on the believe that it is a great company. However, I feel that competition is fierce and  it will take some time before the company is able to get through the "growing pains" of transition and emerge back in to healthy and profitable quarters in North America. The issue is-- how long will this take exactly? they have amazing management and are working hard behind the scenes to turn back the company but only time will tell. 

I also feel that the theory of an "hourglass" economy may also be affecting sales in North America. In simple terms---an hour glass economy refers to the idea that the "bottom" consumers---those who only buy things on sale and are constantly looking for cheaper deals, is expanding. On the other end of the spectrum-- those individual whom only buy extravagantly expensive luxury brands is also expanding, leaving the "middle" with less consumers and perhaps this is why Michael Kors sales margins were also recently affected during the past quarter. This is just a theory. 

Aside from this, I think the main issue is without a doubt competition. If COH is able to be strategic about their turn around and fight back the brands that are eating up market share, I believe a positive turn around in its N.A sales and its stock price is in fact in its future. However, time will be the best determinant of this conclusion and in the meantime, I will continue to watch my stocks like a hawk and do what I need to do when the time comes. 

Thank you for reading!

Feel free to share:

1. What stocks are on your current watch list?
2. What stock is currently "lagging" in your portfolio?

As always...wishing you LOTS of profits,

-Mabel

Wednesday, May 28, 2014

MBA: Completed!

Hey Everyone,

I am alive and well. I can finally say that I am finally living the "calm before the storm". I started an MBA degree part time back in the spring of 2010. Although I often felt like I would never finish; I have to be honest in that I took it slow and steady. I never took more than 2 classes per semester and didn't always take summer classes. However, when I realized during the fall of 2013 that I could actually finish my degree if I took up four classes the following semester I decided to suck it up and do it. And so I did. As one of those sayings go "don't delay happiness".



If you are a close family member or friend you can be a testament to how difficult getting his degree has been for me and how many sacrifices I had to endure in order to get through semesters. From missing celebratory events of loved ones to having my laptop and books with me during vacations or mothers day/fathers day celebrations, to crying by myself at night feeling alone and wondering whether so much sacrifice would be worth it. But one thing is for sure. The support from my parents, my sister and friends was always incredible. And that means the world.



Despite my love and passion for finance I have to be honest in that my most difficult and challenging classes where all finance related (note: finance was my concentration!). There were times where I either wanted to quit because of how difficult things would get and I have to admit there were a couple of times where I would fear I would fail a class (I have never failed a class in my entire life). However, thanks to a whole lot of focus, determination, and most importantly-- prayers; I managed to pass each and every single one of my finance courses as well as all other courses I took on. I maintained a GPA over 3.0+ during my entire MBA career which was no easy task working full time and going to school at night.

Today I can finally add the "MBA" designation next to my name and I am also incredibly excited for what's to come in my life. I am so incredibly lucky to be starting an internship with one of my favorite companies this summer (will share more about that soon) doing what I LOVE. And after that, the sky is the limit. I am not sure what exactly is going to happen in my life going forward but all I know is that I have goals, plans, and an incredibly good feeling for what's to come. Instincts never lie!


Something I am very proud of is that I was able to finish this degree with very minimal debt. I was lucky enough that when I started this degree I worked for an employer that was paying for my courses. When I changed employers, although they didn't pay for the courses, I was almost done with the MBA and I managed to work out my finances in a way where I was able to  keeping loan at a minimum. I plan to start paying back ASAP and have a clean slate once again. I will be doing some research on the best way to approach repayment but I am always willing to listen to advise from the investing/personal finance community so if anyone wants to share tips or tricks let me know!

Now that school is behind me I will have more time to blog and do the things I enjoy. I have so much catching up to do in the investing department of my life and looking forward to it. In the meantime I have been spending a lot of time watching CNBC in the mornings (can I just say I am kind of obsessed?!) and just monitoring my portfolio of stocks. Thinking about doing some rebalancing but will share more about that when I figure out which route I will take.

Thank you for reading and cheers to new beginnings!

I forgot to mention this but my MBA is in Finance and Entrepreneurship.


...And in honor of my favorite author whom passed away today, may God rest her soul. I leave you with a very relevant quote:



Wishing you lots of profits,

Mabel A. Nunez, MBA
:)