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business newsLemon of a Quarter From Bank of New York Mellon?
By
Justin Sharon
Apr 19, 2011 5:00 pm
The blue-blood asset gatherer ended with a 2.91% tumble in a rebounding market after reporting first quarter results this morning.
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Please see Banking on the Bank of New York and Bank Stock Buybacks Draw Ratings Scrutiny.
Not far from The Bank of New York headquarters in downtown Gotham you will find Wall Street’s favorite bull marauding in Bowling Green. Today a sea of green surrounds Brunswick Corporation (BC), a recreational products powerhouse arguably best known for all things bowling. The Illinois outfit established in 1844 ended 4.88% higher, taking its one-year gain to over 50%. Its other businesses include billiards, exercise equipment, yachts, and fiberglass fishing boats. Shares have traded up ahead of the April 28 first-quarter earnings announcement and amid signs of an improving economy. Analysts are increasingly positive, with both Wedbush Morgan (Outperform initiation and $29 target price) and Longbow research (upgrade to Buy from Neutral) issuing optimistic assessments over recent weeks. Boat sales have bottomed out after reaching a record low of 137,000 in 2010 and Brunswick, as the world’s biggest recreational boat builder, should see a lift from this rising tide. As for bowling, it operates approximately 100 centers and launched the iconic Automatic Pinsetter in 1956. One year later the firm made its first appearance on the Fortune 500 but if the Eisenhower era was spent looking at the stars, the industry has since spent a long time in the gutter. Brunswick stock slumped from $75 in 1961 to only $13 twelve months later as the bowling boom ended with a thud and Richard Nixon installing a one-lane alley in the White House at the end of the decade hardly helped the sport stop its slide in popularity. The company reported strong sales growth of 20% last year, and costs have been cut, but with 41% of overall income coming from abroad, any sustained gain in the greenback will leave it vulnerable.
Also check out Birthday Parties Downsize With the Times and Special Offer: Rent Rupert Murdoch’s Yacht for Just $45,000 a Day!
Speaking of yachts, Jim Clark owns the world’s second largest, one which comes in at a cool $100 million. His main claim to fame is having founded Netscape, but Clark’s most enduring legacy may yet prove to be having also given Healtheon its start back at the dawn of the Internet era. The company may have been 10 years ahead of its time in retrospect but there are signs its successor firm has at last arrived after several incarnations. Founded in 1996 as as Healthscape, Healtheon briefly became Healtheon/WebMD after buying the latter for $3.9 billion in May 1999. What is now WebMD Health (WBMD) enjoyed an extremely strong day, rising an even 3.00% after being begun with a bullish Buy rating at Canaccord. America’s leading online health portal, it provides all manner of disease information and symptom checklists for a captive audience of “cyber-chondriacs.” (The site’s current top-trending aliments include sunburn, salmonella, spider bites, and swollen feet.) Anything electronic which reduces piles of patient information in an infamously unwieldy medical system that accounts for 17% of the economy must be a good thing. WebMD recently said it expects to beat Street estimates when it reports Q1 on May 5, helped by higher site traffic. This will doubtless delight shareholders, if not doctors who view a little information as a dangerous thing in a nation already overly enamored with self-diagnosis. An estimated 19% increase in 2011 revenues is undeniably impressive, but risks include pricing pressure and heightened competition.
Famous and Infamous Dot-Commers: Where Are They Now? has more on the heady early days of Healtheon.
Increasingly burnt-out Britney Spears, who appeared in a much-commented-upon commercial called Now and Then back in 2002, would probably like to turn the clock back on her career by nine years. And after an afternoon like this, so would Omnicom Group Inc. (OMC), whose BBDO unit made the ad. The Madison Avenue firm founded in 1944 finished 3.03% lower, among the worst performers on both the S&P 500 Index and small cap Russell 1000. It announced first quarter per share earnings rose 24% to $0.69, which actually beat Street consensus by a dime. International sales — up 13% to $1.5 billion — were a standout at the company, which has now cleaned up at the Super Bowl for an entire generation. Omnicom, whose other advertising agencies include DDB Worldwide and TBWA Worldwide, is a marketing and corporate communications leader that boasts blue chip accounts such as Anheuser-Busch InBev (BUD) McDonald’s (MCD) and Pfizer (PFE). Investors appear to have sold on the news, and a 7% increase in operating expenses to $2.81 billion did cause some concern. CEO John Wren said “We continue to make progress towards our goal of returning margins to 2007 levels by 2012.” The 10.2% margin figure for Q1 was essentially flat with year ago levels, though it should be noted this is typically its seasonally weakest period. So what would Don Draper — who is also expected to mount a comeback in 2012 — do? Stay in the stock, for shares appeared undervalued even before today’s battering.
Turn to When Ads Go Strange and Motorola Leaks 15 Seconds of Apple-Bashing Super Bowl Ad for related research.
No positions in stocks mentioned.
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