gfp927z
3月前
Bar, Yes, that's a very sound philosophy to not own microcaps. But as a hobby they can be fun to follow, and there are actually a few microcaps (mkt cap under 1 bil) that have solid growing revenues / earnings and great balance sheets, but it's very rare. A few that I've found are Winmark (WINA), and Climb Global Solutions (CLMB), although Winmark has now surpassed 1 bil in mkt cap, so is a small cap. Once you get into the small caps though (1-5 bil mkt cap), there are a lot of solid ideas (list below), and then in the 5-10 mkt cap range there are tons of great stocks.
It's fun finding these smaller gems, but as you said the larger caps have numerous key advantages for LT buy/hold. But Buffett would likely be heavy into the 10-30 bil mid cap range if he didn't have such a massive amount of $ to invest. He basically has to stick to very large caps due to that factor, but among these its rare to find wide valuation discrepancies, so tougher for a value stock picker to produce the big % gains. Buffett was fortunate with the mega Apple position, which kept Berkshire's returns competitive in recent years, but if he could he would be investing in mid caps like he did decades ago during Berkshire's heyday.
Arcosa (ACA) - Infrastructure related products + solns (4 Bil) ------------------------------------ 0.2% (Industrial)
Cavco Industries (CVCO) - Factory built homes (3 Bil) --------------------------------------------- 0% (Real Estate)
Cbiz Inc (CBZ) - Financial, insurance, advisory services (3.8 Bil) -------------------------------- 0% (Financial)
PC Connection (CNXN) - Custom configured computer systems (2 Bil) ---------------------- 0.6% (Technology)
LeMaitre Vascular (LMAT) - Medical devices for peripheral vascular disease (2 Bil) ------ 0.7% (Healthcare)
Sterling Infrastructure (STRL) - E-infrastructure, transportation, building solns (4 Bil) ---- 0% (Industrial)
StoneX Group (SNEX) - Diverse financial services, trading, brokerage (3 Bil) ---------------- 0% (Financial)
Transcat (TRNS) - Instrument testing and calibration services (1 Bil) --------------------------- 0% (Industrial)
UFP Technologies (UFPT) - Diverse packaging, component products (2.3 Bil) -------------- 0% (Healthcare)
Winmark (WINA) - Used merchandise store franchisor (1.4 Bil) --------------------------------- 1.0% (Retail)
https://investorshub.advfn.com/Buy-Hold-Stocks-42434
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gfp927z
3月前
Bar, OT - I wouldn't buy those either (JOBY, ACHR), but they do have some cool technology. But I thought BABYF had an interesting idea too, and look how that turned out, yikes. I actually made money on that stock during its big runup, and luckily stayed away during the long decline, but best to stick to the S+P 500 and some solid large caps like CTAS, and that will get the job done. Then maybe a few small and micro caps to follow as a hobby, but my limit has been $1000 per stock max.
>> Pilot <<
I didn't get a pilot's license, but spent plenty of time in and around airplanes. My dad got his license as a teenager, and was a phenomenal pilot. Had his own aerial spraying company for several years in the Midwest, got his aero engineering degree and was eventually in the space program, spy satellites, the Space Shuttle, even the Presidential 'doomsday' helicopter, you name it. He always spoke highly of Boeing. A key problem with the aerospace companies in recent decades, especially on the defense / military side, is that they've been merged into a small number of quasi monopolies, so very limited competition (or none). That's a big part of what has produced such problems at Lockheed and others, since without competition they get lazy and quality inevitably suffers, with huge cost overruns, etc. Boeing basically had a global monopoly on large airliners for decades, but still had a 'culture of excellence' for a long time, but with Airbus at their heels, Boeing eventually took some serious shortcuts which led to disaster. Their space related programs have also been slipping badly, and a total revamp of the company 'culture' is required. Aerospace requires absolute dedication to quality, with no shortcuts, and this has to be maintained at all times, so not easy to stay at that level.
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gfp927z
3月前
Bar, OT - I think the plan (eventually) is for these aircraft to be fully autonomous, similar to autonomous cars. But it's a bad idea imo. While aircraft have long had autopilot systems, they've always had a pilot on board. Going full autonomous would theoretically work best when all vehicles (cars, planes) are autonomous, and interconnected to eachother via the same computerized system. But a sad day when that happens imo, though that's where the longer term transportation paradigm is heading.
Btw, speaking of airplanes, my dad's later plane had an autopilot, but previously that was basically my job - to take over to give him a rest on longer flights. But the autopilot was great at reducing fatigue, and could be programmed to fly via the VOR radio signals (pre-GPS) to the desired destination. Now everything uses GPS satellite signals to navigate, but 'back in the day' there were hundreds of radio signals across the country you could home in on, while using others to triangulate your position. Before that there were 'ADF' and 'LORAN, and before that was 'the Beam' (before my time), which was just a strong east-west radio beam across the entire country that would produce a humming type sound when your were 'on the Beam'.
It's amazing how everything has changed, but having fully autonomous (no pilots, even as a back up) is where I would draw the line. Fully autonomous is where mlitary aviation is also heading, and there it makes more sense, since the aircraft can then maneuver and pull far higher G loads than with a human on board. A live person would 'black out' at high G loads, thus limiting the aircraft's maneuvering ability. So full autonomus is fine for military applications, but for commercial I'd say forget it. Obviously no sane passenger will get on an airliner when there is no human pilot on board, but who will get in one of these fully autonomous taxi's? Maybe someday, but probably not for many years. Initially business executives will be the main target market for these air taxis (saving time to get to an airport), but these guys won't likely risk their necks in a pilotless drone aircraft. So for the forseeable future, there will be pilots.
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gfp927z
3月前
Bar, CTAS hasn't been down under the 200 MA since 2022, when the Fed was in full tightening mode. It spent that year basically sideways, but then the upward trajectory returned, as almost always happens with great LT stocks.
Boeing is up almost 30% since the Nov low, so a nice recovery. It will take time for the new management to get things back on track, but the US absolutely has to maintain its dominance in aerospace, and Boeing is a big part of that. Speaking of aerospace, it looks like the 'air taxi' companies are starting to gain some traction (ACHR, JOBY). Still early, and a lot can go wrong, but nice to see the stocks moving up in recent months.
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gfp927z
3月前
Bar, I picked up some CTAS today near the close. There could be a little more downside, but it seems close enough. Only a small position since I'm mainly just using the S+P 500 these days, but couldn't resist. CTAS has one of the absolute best LT charts anywhere, amazing trajectory and steadiness. A 20% drop seems like a rare gift.
There are actually a lot of great stocks on sale right now, so I might do some more bargain hunting tomorrow. It'll be interesting to see if Buffett is doing some 'shopping' during the current market drop. Even with the pullback, CTAS is probably still too expensive to fit his criteria, but he might be grabbing some of the other current bargains. BRK itself is down 8-9% from the Nov high, so might be time for the Oracle to resume his BRK purchases?
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gfp927z
3月前
>>> Why Cintas Is Plunging Today
by Billy Duberstein
Motley Fool
December 19, 2024
https://finance.yahoo.com/news/why-cintas-plunging-today-183600174.html
Shares of professional uniform company Cintas (NASDAQ: CTAS) plunged 9.3% on Thursday as of 12 p.m. EDT.
Cintas has been a long-term winner in the market and, prior to the past week, had been up some 50% on the year. However, the past week's inflation scare and last night's "disappointing" earnings report sent shares tumbling today.
Cintas' valuation didn't leave room for error
At first glance, one might be confused as to why investors had such a negative reaction to these numbers. Revenue was up 7.8% to $2.56 billion, in line with expectations, while earnings per share (EPS) expanded 21.1% to $1.09, ahead of expectations.
Management also raised its full-year guidance to between 6.9% to 7.5% revenue growth, up from a prior 6.5% to 7.5% range. EPS growth guidance was raised from 10% to 12.1% previously to a range of 12.9% to 14.5%.
So what exactly is wrong with an earnings beat and raise? It's likely that much had to do with Cintas' lofty valuation heading into the report, which topped 50 times earnings.
Moreover, Cintas only raised the bottom end of the revenue-guidance range, not the top end, and the full-year guidance figures imply lower growth ahead than the second-fiscal-quarter's results. While this was just a slight deceleration, Cintas' valuation may have assumed a continuation of the current year's strength and not a slowdown.
Uncertainty leads to profit-taking
There are a lot of 2024 winners that appear to be selling off right now as investors aim to lock in profits. Moreover, there's a high amount of uncertainty around inflation, interest rates, and the policies of the incoming administration.
There may not be anything to panic about with Cintas, as its results were fine and guidance may have been conservative. That being said, investors appear to be paying attention to valuation a bit more amid all the uncertainty today.
gfp927z
3月前
Bar, Yes, looks like it could be a nice buying opportunity. It's down almost 20% from the Nov high. Still not 'cheap' based on its PE, but it's rare to see an opportunity like this with CTAS. I know you aren't into TA / charts, but right now it's below its 200 MA, which doesn't happen often, and the RSI only 19, so extremely near term oversold. So.. could be time to buy / add to positions :o)
>>> Cintas Stock Sinks on Drop in Uniform Direct Sales
Investopedia
by Bill McColl
December 19, 2024
https://finance.yahoo.com/news/cintas-stock-sinks-drop-uniform-185010198.html
Key Takeaways
Cintas shares tumbled Thursday as the provider of uniforms and other business supplies reported a decline in direct sales of its uniforms and warned about pricing.
Second-quarter revenue and profit topped analysts' estimates.
Shares of Cintas sank to their lowest level since August.
Cintas (CTAS) shares tumbled nearly 10% intraday Thursday as the provider of uniforms and other business supplies reported a decline in direct sales of its uniforms and warned about pricing.
In a transcript of the company's earnings call provided by AlphaSense, Chief Executive Officer (CEO) Todd Schneider noted that uniform direct sales are a "strategic business for us that sells into Fortune 1000-type customers, airlines, hotels, casinos, those types. So that business can be quite lumpy."
Schneider also said that raising prices has been more challenging, and with inflation coming down "it's very reasonable to think that price increases will come down as well."
Cintas Q2 Revenue, EPS Topped Estimates
The comments offset strong results from Cintas. The company reported fiscal 2025 second-quarter earnings per share (EPS) of $1.09, topping the Visible Alpha consensus, with revenue increasing 7.8% year-over-year to $2.56 billion, matching expectations.
Cintas also raised its full-year EPS outlook to $4.28 to $4.34 from $4.17 to $4.25. It sees revenue between $10.255 billion to $10.320 billion versus the previous outlook of $10.220 billion to $10.320 billion.
Shares of Cintas sank 9.4% to $185.28, their lowest level since August.
bar1080
3月前
Seeing lots of chatter now about tariffs in the financial news. I'm glad to see stocks such as my MMM and Rockwell becoming more prominent again in my portfolio. I like to have about 5 or 6 major stock holdings in the Buffett fashion, plus some small ones and the index funds of course. As I often say, Diversification and Quality.. From what I observe, most IHUBers are WAY under-diversified. Plenty of penny idiots just have one or two stocks. They do that to preserve the Lottery Effect, hoping for a single monster win to make them rich. Having one or two stocks keeps their gambling juices flowing, which addicts need.
Above everything, Ihub is a casino. Virtually no sensible investing -- in the Buffett/Munger fashion -- happens around here. It's all gambling.
Currently i have about 20 meaningful stocks and I think that's a good number. My CPA son has a number of small positions. Several times I've urged him to make more of his investments of meaningful size, and fewer slivers.
gfp927z
3月前
Bar, Sounds like a good year :o)
I also had a nice year, but in spite of wanting to stay LT buy / hold, I was in and out several times. That worked out well, but in principle is not the ideal strategy. I'm still compelled to take profits as they build up, which has worked well in this year's choppy market, but better to just hang in there long term.
Fwiw, I moved the individual stock portion of the portfolio into the S+P 500, and have been using that exclusively for the stock side. That's basically what Buffett recommends for many investors (S+P 500), and I also decided to follow his high allocation in cash / T-bills, and lowered the max allowable in stocks down to a 15% allocation (from the previous 25-30%).
Anyway, we'll see what 2025 brings. The effects of the tariffs will likely be a growing source of angst. The Fed had engineered the desired soft landing, but the tariffs complicate things a lot on the inflation front, economic growth, the global aspects, etc.
Buffett's decision to not reinvest his cash pile back into stocks has me spooked. By various measures (Buffett Index, CAPE/ Shiller Index, etc), valuations are historically extremely high, and the overall speculative type atmosphere these days is probably another red flag for Buffett. He's not even buying shares of Berkshire, and has been a net seller of stocks for 8 consecutive quarters. Also, Ajit Jain has sold of over half his Berkshire shares, so some clear red flags right now.
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gfp927z
4月前
Bar, Yes, Cintas is like the energizer bunny, and has one of the best long term charts anywhere (trajectory and steadiness). Only a few other companies have long term charts this steady (MMC, AJG, PGR).
While the PE has always been high for CTAS, it's now in the 50s, so about the same as Costco. Berkshire once owned some Costco, but it's valuation became too rich, and Cintas would be in that category also.
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gfp927z
8月前
>>> Cintas (NASDAQ: CTAS) provides products and services to help a wide range of businesses keep their premises clean, such as uniforms, mops, fire extinguishers, and safety training. Like Accenture, the company's revenue and net income has increased steadily during the past three fiscal years.
https://finance.yahoo.com/news/3-growth-stocks-buy-hold-104500181.html
Total revenue increased from $7.1 billion in fiscal 2021 to $8.8 billion in fiscal 2023 (ended May 31). Net income rose at a slower pace but still posted consecutive year-over-year increases, going from $1.1 billion in fiscal 2021 to $1.3 billion by fiscal 2023. Free-cash-flow generation averaged $1.26 billion over the three fiscal years and demonstrates the impressive cash generation of Cintas's business.
For the first nine months of fiscal 2024 ended Feb. 29, Cintas saw revenue continue to climb, increasing by 9.1% year over year to $7.1 billion. Net income rose by 16% year over year to $1.16 billion. Free cash flow did even better over the same period, jumping 31% year over year from $820 million to $1.08 billion.
Cintas's latest quarterly dividend came in at $1.35 per share, a 17% year-over-year increase from the prior year's $1.15. The company boasts an enviable track record of raising its dividends consistently since it went public 41 years ago.
The company's vision is to expand its market by acquiring new customers and increasing its market share as only 1 million businesses out of a potential 16 million are its clients. With market penetration rates of less than 20%, management believes there's room for further growth. If the company is successful, investors should see its top and bottom lines continue to grow.
gfp927z
9月前
Bar, That's a great mid cap ETF, and the Vanguard ETF (VO) has an even lower expense ratio (0.3% vrs 0.5%), but both are ultra low.
Btw, here are some ideas for individual mid cap stocks (links below). I originally defined the 10-50 Bil range as 'Mid Cap', but that is somewhat dated due to 'market cap creep' over the years. The IJH and VO ETFs use considerably higher levels, and thus include companies like CTAS and APH as mid caps, while I have those as Large Caps. Either way though, this is an extremely fertile area for stock pickers -
Mid Cap Ideas (mkt cap 10 - 50 bil) -
https://investorshub.advfn.com/Mid-Cap-Ideas-28751
Large Cap (mkt cap 50 - 200 bil) -
https://investorshub.advfn.com/Large-Cap-Ideas-28756
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gfp927z
9月前
Bar, Yes, the ultra high dividend payers should be avoided imo. Even a moderately high dividend payout can signal that the company doesn't see many attractive growth opportunities within their business, so they return the capital back to shareholders. I figure it's best to have a decent allocation to mid caps, to get the higher growth potential. But nothing wrong with having some 3-4% dividend payers for stability, like KO, PEP, plus some 2-3% div payers like PG, MCD.
Fwiw, I decided to mainly stick to the S+P 500 to keep things simple, although that index is heavily over weighted in the mega-cap tech names. Almost 20% of the SPY is in just 3 stocks -- MSFT, AAPL, NVDA, and another 10% is in AMZN, META, GOOG. We could be seeing a repeat of the 'Nifty 50' phenomenon, only now it's the 'Nifty 6'.
So probably good to add a mid cap index, as you have done. Mid caps have been lagging in recent years, but over very long periods (15, 20 years) the VO has beaten VOO, albeit with more downside volatility during the bear markets.
With mid caps, good stock picking can beat the mid cap index funds by a wide margin, and that's where Buffett would probably be if he didn't have such a huge amount to invest. A stock picker like him would be shooting the lights out with the mid caps, like he did in the early days of Berkshire.
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bar1080
9月前
I don't get excited when my stocks split. That's mostly an accounting adjustment. For one thing, I usually hold my stocks for years. Similarly I don't worry about div increases unless they indicate strong, enduring profits, What I love are several YEARS of earnings growth with few downturns. There are just too many ways to juice a dividend for short periods to appeal to newbies and traders. That's done all the time in Pennyland. .
Did I show this article to you? "There Is Nothing Special About Dividends." I'm always leery of flimsy stocks with suspiciously huge payouts, especially one shot dividends, Of course many investors seek regular dividends, but the best way to get them is with a PORTFOLIO of strong, growing diversified payers, without gimmicks. Buffett type investments.
https://www.morningstar.com/portfolios/there-is-nothing-special-about-dividends
gfp927z
9月前
Hi Bar, >> Split >> Stock splits are back in fashion. Here’s why, and which companies could be next
FRI, JUN 14 2024
Stock splits, long out of favor, are making a comeback.
It started with Walmart, which announced a 3-for-1 stock split on Jan. 30, with the additional shares being distributed on Feb. 23.
And from there, it picked up steam. On Thursday, Williams-Sonoma announced a 2-for-1 split, and on Wednesday, Broadcom announced a 10-for-1 split.
Notable stock splits in 2024
(when distributed)
Walmart
3-1 2/23/24
Cooper Companies
4-1 2/16/24
Texas Pacific Land
3-1 3/27/24
Old Dominion Freight Line
2-1 3/27/24
Nvidia
10-1 6/7/24
Amphenol
2-1 6/11/24
Chipotle Mexican Grill
50-1 6/25/24
Broadcom
10-1 7/12/24
Williams-Sonoma
2-1 7/8/24
Cintas
4-1 9/11/24
Sony Group
5-1 10/8/24
Lam Research
10-1 10/3/24
Why the comeback in stock splits?
Stock splits are far less common now than 20 or 30 years ago. During the tech and internet bubble of the late 1990s, stock splits were common. David Kostin, chief U.S. equity strategist at Goldman Sachs, noted that roughly 15% of Russell 1000 firms split their stock each year in the late 1990s, but that proved to be an anomaly.
By the mid-2000s, roughly 5% of the Russell 1000 members split their stock each year, and after the great financial crisis from 2008-2009, stock splits practically ceased.
Importantly, splits did not increase after the market began recovering in 2010.
The likely reason is the institutional base for stock ownership has come to dominate the market. Institutional investors invest by dollar value, not by shares. They would typically buy, for example, $10 million in stock and wouldn’t care what the price is.
But recently, there are signs of a subtle shift. Some of it may be because the price of some stocks reached absurd levels. Chipotle, for example, has never split its stock and is trading over $3,200 and will soon split 50-for-1. Nvidia was over $1,200 by the time it split 10-for-1.
More importantly, some companies appear to be more interested in appealing to retail investors.
Nvidia noted that the purpose of the split was to “make stock ownership more accessible to employees and investors.” Chipotle said the same thing.
Walmart also cited these factors in its statement announcing the split: “The stock split is part of Walmart’s ongoing review of optimal trading and spread levels and its desire for its associates to feel that purchasing shares is easily within reach.
Does splitting a stock affect the price?
In theory, no. The value of the company remains the same.
However, many academic studies have noted various changes in trading patterns for stocks that split, though these changes are not uniform. One academic study published in the Journal of Risk and Financial Management in 2023 found several positive benefits:
1) trading volumes go up
2) liquidity, or the ability to trade a lot of shares without moving the price, improves
3) stock splits increase the shareholder base for the company
These changes may have subtle impacts on the stock price.
Candidates for stock split?
If companies with a retail focus are suddenly more sensitive to their prices, there are some obvious candidates. The “over $1,000” club in the S&P 500 is small and getting smaller: Chipotle ($3,230), Broadcom ($1,679) and Lam Research ($1,032) are all splitting their stocks.
The holdouts include Booking Holdings ($3,852), Autozone ($2,809), and Deckers Outdoors ($1,026).
Other high-priced stocks with a retail focus include Costco ($843) and Super Micro Computer ($872), which recently joined the S&P 500.
However, if corporate America smells that there is a trend and can attract attention by splitting stocks, retail-facing companies with much lower price profiles may also become candidates.
That might include Spotify ($305), Ulta Beauty ($397) or even ServiceNow ($715), which has never split its stock.
gfp927z
9月前
>>> Cintas Board of Directors Approves 4-For-1 Stock Split
Business Wire
May 2, 2024
https://finance.yahoo.com/news/cintas-board-directors-approves-4-201500865.html
Stock split to increase accessibility to all investors, including Cintas employee-partners.
CINCINNATI, May 02, 2024--(BUSINESS WIRE)--Cintas Corporation (Nasdaq: CTAS), a leading provider of business-to-business services, today announced that its Board of Directors approved a four-for-one split of its common stock. Shareholders of record, as of September 4, 2024, will receive three additional shares for each share held, which will be distributed after market close on September 11, 2024. Cintas’ shares are expected to begin trading on a post-split basis at the market open on Thursday, September 12, 2024. Prior to this announcement, Cintas’ most recent stock split was in 2000.
"At Cintas, we call our employees ‘partners’ in recognition of the value that each individual contributes to our success as a company. Our founder, Dick Farmer, also believed the importance of each employee-partner having ownership in the company to share collectively in that success," said Todd Schneider, Cintas' President and Chief Executive Officer. "Cintas shares are trading near record highs as a result of our steadfast focus on serving our customers. We believe that the time is right to split the stock and increase its accessibility to our employee-partners and investors so that they can continue to share in the future growth of Cintas."
The company expects that the stock split will increase the number of shares of Cintas’s outstanding common stock from approximately 101 million shares to approximately 404 million shares.
About Cintas
Cintas Corporation helps more than one million businesses of all types and sizes get Ready™ to open their doors with confidence every day by providing products and services that help keep their customers’ facilities and employees clean, safe, and looking their best. With offerings including uniforms, mats, mops, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety training, Cintas helps customers get Ready for the Workday®. Headquartered in Cincinnati, Cintas is a publicly held Fortune 500 company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of both the Standard & Poor’s 500 Index and Nasdaq-100 Index.
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