Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.
Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.
Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Macquarie Infrastructure (NYSE: MIC ) , whose recent revenue and earnings are plotted below.
Top Construction Material Stocks For 2015: Colonial Municipal Income Trust (CMU)
MFS High Yield Municipal Trust operates as a nondiversified, closed-end management investment company. The trust invests primarily in medium and lower quality bonds and notes issued by or on behalf of state and local government units. Its portfolio primarily comprises investments in health care, tax-backed, utilities, transportation, housing, education, industrials, resource recovery, industrial, manufacturing, oil and gas, and refunded/escrowed sectors. Columbia Management Advisors, Inc. serves as the investment advisor of the trust. The trust was formerly known as Colonial Municipal Income Trust and changed its name to MFS High Yield Municipal Trust in 2007. MFS High Yield Municipal Trust was founded in 1987 and is based in Boston, Massachusetts.
Advisors' Opinion:- [By Paul McWilliams]
Marvell (MRVL) is clearly carrying a big zit on its forehead from the ongoing legal battle with Carnigie Mellon University (CMU). A jury awarded CMU damages slightly in excess of $1B, and the judge could triple that.
Top 10 Industrial Disributor Companies To Own For 2014: Callaway Golf Co (ELY)
Callaway Golf Company, incorporated on May 7, 1999, together with its subsidiaries, designs, manufactures and sells golf clubs (drivers, fairway woods, hybrids, irons, wedges and putters) and golf balls, and also sells golf accessories (such as golf bags, golf gloves, headwear, towels, umbrellas and travel gear) under the Callaway Golf and Odyssey brand names. The Company sells pre-owned golf products through its Website, www.callawaygolfpreowned.com. In addition, it sells Callaway Golf and Odyssey products direct to consumers online through its Websites shop.callawaygolf.com and www.odysseygolf.com. The Company also licenses its trademarks and service marks in exchange for a royalty fee to third parties for use on golf related accessories, including apparel, footwear, eyewear, rangefinders and practice aids. Its products are sold in the United States and in approximately 100 countries around the world.
The Company designs, manufactures and sells golf clubs and golf balls, and designs and sells golf accessories. The Company�� products are designed for golfers of all skill levels, both amateur and professional. The Company�� principal products include Drivers, Fairway Woods and Hybrids; Irons; Putters; Golf Balls, and Accessories, Softgoods and Other. Drivers, Fairway Woods and Hybrids product category includes sales of the Company�� drivers, fairway woods and hybrid products, which are sold under the Callaway Golf brand. Irons include sales of the Company�� irons and wedges, which are sold under the Callaway Golf brand. Putters include sales of the Company�� putters, which are sold under the Odyssey brand. Golf Balls includes sales of the Company�� golf balls, which are sold under the Callaway Golf and Strata brands. Accessories, Softgoods and Other includes sales of golf bags, golf gloves, golf footwear, rangefinders, golf apparel, packaged club sets, headwear, towels, umbrellas, eyewear and other accessories, as well as sales of pre-owned products through www.callawaygolfpre! owned.com. Additionally, this product category includes royalties from licensing of the Company�� trademarks and service marks on products such as golf apparel, golf footwear, rangefinders and practice aids.
The Company competes with TaylorMade, Ping, Acushnet, Puma, SRI Sports Limited, Mizuno, Bridgestone, and Nike.
Advisors' Opinion:- [By Rick Munarriz]
3. Who's your caddy?
Callaway Golf (NYSE: ELY ) may have ushered in a new era in golfing with its oversized Big Bertha drivers, but these days, the golf gear maker keeps landing in the rough.
Top 10 Industrial Disributor Companies To Own For 2014: Alaska Communications Systems Group Inc.(ALSK)
Alaska Communications Systems Group, Inc. provides integrated communications services primarily in Alaska. The company operates in two segments, Wireline and Wireless. The Wireline segment offers voice, broadband data, internet access, long distance, and other communications products and services; local exchange network and network connectivity solutions; voice and broadband termination services to inter and intrastate carriers; and multi-protocol label switching, metro Ethernet, network access, and other information technology infrastructure hosting and management services. This segment serves business customers; multi-national corporations; municipal, state, and federal governments; residential customers; small and medium sized businesses; governmental entities; and other telecommunications carriers. The Wireless segment provides facilities-based voice, data, and other value-added services, as well as equipment sales services; and operates 14 retail stores. As of Decembe r 31, 2011, its wireless network supported approximately 118,000 connections. Alaska Communications Systems Group, Inc. was founded in 1998 and is headquartered in Anchorage, Alaska.
Advisors' Opinion:- [By Equities Lab]
The stocks that currently pass the stock screen in order of market cap are Frontier Communications Corp , Crown Media Holdings (CRWN), Vonage Holding (VG), MCG Capital Corp (MCGC), 1-800-FLOWERS.COM (FLWS), MTR Gaming Corporation (MNTG), Alaska Communications (ALSK), and Enzon Pharmaceuticals (ENZN).
Top 10 Industrial Disributor Companies To Own For 2014: Alcoa Inc.(AA)
Alcoa, Inc. engages in the production and management of primary aluminum, fabricated aluminum, and alumina. The company operates in four segments: Alumina, Primary Metals, Flat-Rolled Products, and Engineered Products and Solutions. The Alumina segment engages in mining of bauxite, which is then refined into alumina. The Primary Metals segment produces aluminum. The Flat-Rolled Products segment engages in the production and sale of aluminum plate, sheet, and foil. The Engineered Products and Solutions segment produces and sells titanium, aluminum, and super alloy investment castings, hard alloy extrusions, forgings and fasteners, aluminum wheels, integrated aluminum structural systems, and architectural extrusions. Its products are used in aircraft, automobiles, commercial transportation, packaging, building and construction, oil and gas, defense, consumer electronics, and industrial applications. The company holds interests in bauxite mining activities. The company has op erations primarily in the United States, Australia, Spain, Brazil, the Netherlands, Norway, France, the Russian Federation, Hungary, Italy, the United Kingdom, China, and Germany. Alcoa, Inc. was founded in 1888 and is based in New York, New York.
Advisors' Opinion:- [By Laura Brodbeck]
Next week investors will be waiting for several key earnings reports including Wells Fargo & Company (NYSE: WFC), Alcoa (NYSE: AA), Family Dollar Stores (NYSE: FDO) and Infosys Limited (NASDAQ: INFY).
- [By Sean Williams]
With little in the way of economic data on the table today, all eyes are now fixated on the start of earnings season, which is scheduled to kick off after the bell with aluminum giant Alcoa's (NYSE: AA ) second-quarter report.
- [By Garrett Cook]
Shares of Alcoa (NYSE: AA) got a boost, shooting up 6.03 percent to $15.75 after the company reported stronger-than-expected fiscal second-quarter results. Alcoa posted its adjusted earnings of $0.18 per share on revenue of $5.85 billion. However, analysts were projecting earnings of $0.12 per share on revenue of $5.63 billion.
- [By Lennox Yieke]
Alcoa Inc's (NYSE: AA ) iconic recovery, which commenced in October 2013, has seen its stock rise unabated to levels intimately close to its 52-week high of $16.71 a share. Despite the extended run, there is still more upside in Alcoa. This is because the Aluminum miner, which is the largest in the US, has an integrated strategy that courts growth and security at the same time.
Top 10 Industrial Disributor Companies To Own For 2014: National Western Life Insurance Company(NWLI)
National Western Life Insurance Company provides life insurance products for the savings and protection needs of policyholders and annuity contracts for the asset accumulation and retirement needs of contract holders. Its life products include universal life insurance and interest-sensitive whole life, as well as traditional products, such as term insurance coverage; and annuity products comprise flexible premium and single premium deferred annuities, fixed indexed annuities, and single premium immediate annuities. The company markets and distributes its insurance products primarily through independent national marketing organizations to residents of various countries in central and South America, the Caribbean, the Pacific Rim, eastern Europe, and Asia. It also engages in small real estate, nursing home, and other investment operations. The company was founded in 1956 and is based in Austin, Texas.
Advisors' Opinion:- [By Brian Pacampara]
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, life insurance company National Western Life Insurance Company (NASDAQ: NWLI ) has earned a coveted five-star ranking.
- [By David Merkel]
The two stocks in question are Stancorp Financial (SFG) and National Western Life Insurance (NWLI). The short cases for both are based on a naive view of how insurance companies work.
Top 10 Industrial Disributor Companies To Own For 2014: Propell Technologies Group Inc (PROP)
Propell Technologies Group, Inc., incorporated on February 04, 2008, offers enhanced oil recovery technology and services. These services are offered through its wholly owned subsidiary Novas Energy USA, Inc., through commercial application of a Plasma-Pulse Technology.
The Company�� technology is designed to be suitable for oil wells as deep as 12,000 feet. Novas�� Plasma-Pulse Treatment is an Enhanced Oil Recovery (EOR) technology and process. The treatment uses no chemicals.
Advisors' Opinion:- [By James E. Brumley]
While the ongoing implosion of crude oil prices has put high-profile names like Chesapeake Energy Corporation (NYSE:CHK) and Linn Energy LLC (NASDAQ:LINE) in the limelight - and the hot seat - all the noise surrounding those and other names may have distracted investors from looking at the oil rout in an opportunistic light rather than through the panic-colored glasses that have proven so damaging to the likes of LINE and CHK. Rather than fret over how difficult life was going to be for Linn Energy, Chesapeake Energy, and all their peers now that the price of oil was at or below the cost of drilling for it, investors should have been looking at companies that make drilling for oil cheaper and more cost-effective. Enter Propell Technologies Group Inc. (OTCBB:PROP).
- [By John Udovich]
Mid cap oil services stocks Dresser-Rand Group Inc (NYSE: DRC) and�Flowserve Corp (NYSE: FLS) and small cap Propell Technologies Group Inc (OTCBB: PROP) are all direct or indirect players in the enhanced oil recovery (EOR) sector among other niches. Of course, it might seem strange to be talking about oil services or enhanced oil recovery stocks when the bottom has fallen out from under the price of oil but consider the following two charts from WTRG Economics�and Gasbuddy.com:
- [By John Udovich]
Although oil prices ended the year at multi year lows, now would be the time to take a closer look at�small cap gas compression or enhanced oil recovery (EOR) stocks like�Usa Compression Partners LP (NYSE: USAC), CSI Compressco LP (NASDAQ: CCLP) and Propell Technologies Group Inc (OTCBB: PROP) before oil and gas prices inevitably rise again. To begin with, natural gas compression services are used to transport natural gas and specifically to get�natural gas from low-pressure wells into gathering systems, storage and processing facilities�as well as to maintain production as reservoir pressure declines. Compression services�are also used to extract gas from�unconventional natural gas sources like shale plays. Meanwhile,�so-called enhanced oil recovery or EOR is just a generic term for the techniques used for increasing the amount of crude oil that can be extracted from an oil field with potential methods including steam flood and water flood injection�or hydraulic fracturing�(so-called fracking). Naturally, demand for compression services and EOR technologies would be impacted by oil and gas commodity prices.
Top 10 Industrial Disributor Companies To Own For 2014: Sunedison Inc (SUNE)
SunEdison Inc, formerly MEMC Electronic Materials, Inc., incorporated on October 1, 1984, is engaged in the development, manufacture and sale of silicon wafers. The Company is a developer and seller of photovoltaic energy solutions. Through Solar Materials and Solar Energy (SunEdison), it is a developer of solar energy projects. The Company operates in two segments: semiconductor materials and solar energy. The Company�� Solar Energy segment includes the operations of its old Solar Materials segment, as well as its SunEdison business. In the Semiconductor Materials, the Company offers wafers with a variety of features. The Company�� wafers vary in size, surface features, composition, purity levels, crystal properties and electrical properties.
Semiconductor Materials
The Company�� monocrystalline wafers for use in semiconductor applications range in size from 100 millimeter to 300 millimeter and are round in shape for semiconductor customers because of the nature of their processing equipment. Its wafers are used as the starting material for the manufacture of various types of semiconductor devices, including microprocessor, memory, logic and power devices. In turn, these semiconductor devices are used in computers, cellular phones and other mobile electronic devices, automobiles and other consumer and industrial products. Its monocrystalline wafers for semiconductor applications include four general categories of wafers: prime, epitaxial, test/monitor and silicon-on-insulator (SOI) wafers.
The Company�� prime wafer is a polished, pure wafer with an ultraflat and ultraclean surface. The Company�� epitaxial (epi), wafers consist of a thin silicon layer grown on the polished surface of the wafer. Typically, the epitaxial layer has different electrical properties from the underlying wafer. This provides customers with isolation between circuit elements than a polished wafer. Its AEGIS product is designed for certain specialized applications requiring high resis! tivity epitaxial wafers and its MDZ product feature. The AEGIS wafer includes a thin epitaxial layer grown on a standard starting wafer. The AEGIS wafer�� thin epitaxial layer eliminates harmful defects on the surface of the wafer, thereby allowing device manufacturers to increase yields. The Company supplies test/monitor wafers to its customers for use in testing semiconductor fabrication lines and processes. An SOI wafer is a different starting material for the chip making process.
Solar Energy
The Company�� Solar Energy segment provides solar energy services that integrate the design, installation, financing, monitoring, operations and maintenance portions of the downstream solar market to provide a solar energy service to its customers. As of December 31, 2012, SunEdison interconnected over 675 solar power systems representing 989 megawatt of solar energy generating capacity. As of December 31, 2012, SunEdison had 73 megawatt of projects under construction and 2.6 gigawatts in pipeline. In support of its downstream solar business, its Solar Energy segment manufactures polysilicon, silicon wafers and solar modules. Additionally, its Solar Energy segment will sell solar modules to third parties in the event the opportunity aligns with itsinternal needs. It provides its downstream customers with a way to purchase renewable energy by delivering solar power under long-term power purchase arrangements with customers or feed-in tariff arrangements with government entities and utilities. Its SunEdison business is dependent upon government subsidies, including United States federal incentive tax credits, state-sponsored energy credits and foreign feed-in tariffs. The Company�� solar wafers are used as the starting material for crystalline solar cells.
The Company competes with Shin-Etsu Handotai, SUMCO, Siltronic and LG Siltron, SunPower Corporation, First Solar, Inc., Enerparc, Sharp Corporation (Recurrent Energy), Phoenix Solar, BELECTRIC, JUWI Solar Gmbh, and S! olar City! .
Advisors' Opinion:- [By Anna Prior]
SunEdison Inc.(SUNE) on Thursday said it completed its purchase of AES Corp.'s(AES) 50% ownership stake in the Silver Ridge Power LLC joint venture.
- [By Lee Jackson]
SunEdison Inc. (NYSE: SUNE) has changed its name and ticker but remains a top stock to buy at Merrill Lynch. The company recently did a large secondary offering to expand its solar growth. It also is looking to spin off its semiconductor business in an upcoming IPO. Merrill Lynch has a $10 price target, while the consensus figure is higher at $11. SunEdison closed yesterday $8.16.
- [By Jayson Derrick]
SunEdison (NYSE: SUNE) is in talks to invest $2 billion to build a low-cost polysilicon factory in China. The facility will have a capacity of 20,000 to 30,000 metric tons a year that can produce polysilicon for $2 per kilogram less than its rivals. Shares gained 6.81 percent, closing at $16.63.