Berkshire Hathaway reports record profit

Buffett also said in his annual shareholder letter to “never bet against America.”

Warren Buffett Berkshire Hathaway’s (BRK.A, BRK.B) fourth quarter profits rose, with its net earnings rising to $38.5B, or $23,015 a Class A share equivalent, up almost 23% from the previous year’s profit of $29.2B, or $17,909 a share.

Stockwinners offers real time news and information

Operating earnings, which exclude some investment results, rose to $5 billion from $4.4 billion the year before.

Buffett also said in his annual shareholder letter to “never bet against America.”

“In its brief 232 years of existence… there has been no incubator for unleashing human potential like America,” he added.

“Despite some severe interruptions, our country’s economic progress has been breathtaking. Our unwavering conclusion: Never bet against America.” Buffett said the conglomerate owns the biggest amount of U.S. assets by value than any other company in the country.

Berkshire Hathaway also bought back a record amount of company stock last year. During the fourth quarter, the company bought back about $9B shares for a total 2020 repurchase of $24.7B.

Buffett said in his annual shareholder letter that repurchases have continued since year-end and “is likely to further reduce its share count in the future.”

“That action increased your ownership in all of Berkshire’s businesses by 5.2% without requiring you to so much as touch your wallet,” the letter reads.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Stein Mart files for Chapter 11 bankruptcy

Stein Mart voluntarily files Chapter 11 bankruptcy protection

Stein Mart (SMRT) announced that it and its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Middle District of Florida – Jacksonville Division.

Stein Mart files for bankruptcy protection

Stein Mart offers designer and name-brand fashion apparels, home decor merchandise, accessories, and shoes at everyday discount prices in the United States. As of June 3, 2020, it operated 281 stores in 30 states. The company was founded in 1908 and is headquartered in Jacksonville, Florida.

The Company has filed customary motions with the Bankruptcy Court that will authorize, upon Bankruptcy Court approval, the Company’s ability to maintain operations in the ordinary course of business, including, among other things, the payment of employee wages and benefits without interruption, payment of suppliers and vendors in the normal course of business, and the use of cash collateral.

Too much savings caused Stein Mart’s demise

These motions are typical in the Chapter 11 process and the Company anticipates that they will be approved shortly after the commencement of its Chapter 11 case.

Details on the Company’s Chapter 11 process and go-forward strategy are as follows:

The Company expects to close a significant portion, if not all, of its brick-and-mortar stores and, in connection therewith, the Company has launched a store closing and liquidation process.

The Company, however, will continue to operate its business in the ordinary course in the near term; and the Company is evaluating any and all strategic alternatives, including the potential sale of its eCommerce business and related intellectual property. 

SMRT last traded at $0.18.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Retail bankruptcy filings are coming

J. Crew files for bankruptcy; Madewell to remain part of J.Crew

J.Crew Group announced it has reached an agreement with its lenders holding approximately 71% of its Term Loan and approximately 78% of its IPCo Notes, as well as with its financial sponsors, under which the Company will restructure its debt and deleverage its balance sheet, positioning J.Crew and Madewell for long-term success.

Madewell to remain part of the J.Crew Company, Stockwinners

Under the terms of the Transaction Support Agreement, the Company’s lenders will convert approximately $1.65 billion of the Company’s debt into equity.

To facilitate the restructuring contemplated by the TSA, the parent company of J.Crew Group, Inc., Chinos Holdings, Inc. and certain affiliates, have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Virginia.

The Company has secured commitments for a debtor-in-possession financing facility of $400 million and committed exit financing provided by existing lenders Anchorage Capital Group, L.L.C., GSO Capital Partners and Davidson Kempner Capital Management LP, among others.

Subject to Court approval, the DIP financing, combined with the Company’s projected cash flows, is expected to support its operations during the restructuring process.

As part of the TSA, Madewell will remain part of J.Crew Group, Inc.

Libby Wadle will continue in her role as CEO of Madewell.

J.Crew files for Chapter 11 bankruptcy protection, Stockwinners

“This agreement with our lenders represents a critical milestone in the ongoing process to transform our business with the goal of driving long-term, sustainable growth for J.Crew and further enhancing Madewell’s growth momentum,” said Jan Singer, CEO, J.Crew Group.

Neiman Marcus is expected to file for bankruptcy protection too

“Throughout this process, we will continue to provide our customers with the exceptional merchandise and service they expect from us, and we will continue all day-to-day operations, albeit under these extraordinary COVID-19-related circumstances.

Pier 1 Imports filed for bankruptcy protection

As we look to reopen our stores as quickly and safely as possible, this comprehensive financial restructuring should enable our business and brands to thrive for years to come.”

GNC is also expected to file for bankruptcy protection

The Company has filed a series of customary “first day” motions with the Bankruptcy Court seeking to maintain its operations during the restructuring process to help facilitate a smooth transition into Chapter 11.

JCP is inline for bankruptcy filing protection following weak sales

Note that in 2011, TPG Capital LP and Leonard Green & Partners LP privatized J.Crew in a $3 billion leveraged buyout.

Recent bankrupt retailers include Forever 21 and Pier 1 Imports.

Forever 21 filed for bankruptcy protection recently

Other retailers that may file for bankruptcy in the near future include: Neiman Marcus, JCP, GNC, and AEO. Note that Gaps (GPS) has been suffering from soft retail sales. Lands’ End (LE) is also suffering from soft sales.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Dick’s Sporting shares may have topped

Dick’s Sporting dips despite fifth upgrade this month

Dick's Sporting dips, Stockwinners.com
Dick’s Sporting dips

This morning, Telsey Advisory analyst Joseph Feldman upgraded Dick’s Sporting Goods (DKS) to Outperform as he expects industry pressures will stabilize. Since the beginning of the month, four other Wall Street analysts have upgraded the stock to buy-equivalent ratings, citing better sector trends and benefits from new U.S. tax reforms.

BUY DICK’S SPORTING

In a research note to investors, Telsey Advisory‘s Feldman upgraded Dick’s Sporting Goods to Outperform from Neutral and raised his price target on the shares to $42 from $25 as he adjusted his earnings per share estimates for the benefit from tax reform.

While the analyst acknowledged that the company is currently in a period of earnings pressure due to price competition on athletic apparel and footwear, driven by increased distribution to new channels such as department stores and online and too much inventory, he expects industry trends to stabilize in the second quarter of 2018, leading to better results for Dick’s Sporting in the second half of the year.

BETTER INDUSTRY TRENDS

Earlier this week, Susquehanna analyst Sam Poser also upgraded Dick’s Sporting to Positive from Neutral, saying the company’s results should surprise to the upside given a low bar and “less worse” weather driven sales trends.

The analyst said he continues to believe Dick’s needs to proactively take control of its business and focus on customer engagement rather than succumb to the promotional environment.

Overall, #Poser contended that better than expected earnings, starting with the fourth quarter of 2017 results and continuing with 2018, will drive shares higher.

The analyst also raised his price target on the sock to $41 from $25. Last week, his peer at Buckingham had upgraded Dick’s Sporting to Buy from Neutral, with a $39 price target, citing tax reform benefits and recent strength across retail.

Back on January 12, Deutsche Bank analyst Mike #Baker also upgraded Dick’s Sporting Goods to Buy, while raising his price target on the shares to $39 from $33.

The analyst told investors he sees industry trends bottoming, inventory levels coming back into balance with demand and therefore lessen the impact on gross margins, and reduced risk to margin forecasts as models already reflect increased investment spending.

Wells Fargo analyst Ike #Boruchow was the first to upgrade the stock this month to Outperform back on January 3, saying the outlook for Dick’s is improving.

The analyst noted that high-level industry trends appear to be stabilizing, and the company has already re-based 2018 numbers in a “prudently conservative manner.”

Further, with the consolidation occurring in the sporting goods industry, Dick’s Sporting can continue to take market share from struggling brick-and-mortar competitors and be the “survivor” of the industry’s consolidation, he contended.

Additionally, the analyst pointed out that as a 100% domestic retailer with a high tax rate, the company is a key potential beneficiary of U.S. tax reform. Boruchow raised his price target on the shares to $35 from $26.

PRICE ACTION

In Thursday morning’s trading, shares of Dick’s Sporting (DKS) have dropped over 1% to $33.36. However, over the last month Dick’s shares are up nearly 13%.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.