C = Catalyst for the Stock’s Movement

Positives for Wal-Mart include strong cash flow, a generous 2.40 percent yield, consistent share buybacks, stock resiliency in bear markets, consistent stock performance, steadily increasing revenue on an annual basis, international sales growth, and fair valuation – the stock is currently trading at 15 times earnings.

Q1 EPS came in at $1.14, which was a 4.6 percent increase year-over-year. Wal-Mart’s Q1 comps declined 1.4 percent. The following reasons were given for the comps decline:

• Delay in tax refund checks
• Challenging weather conditions
• Less grocery inflation than expected
• Payroll tax increase

CEO Mike Duke stated:

“In a quarter marked by considerable headwinds to top line sales, Walmart delivered solid EPS growth of 4.6 percent. Walmart’s mission is simple and focused — to help people save money so they can live better. When we simplify and focus our execution against this mission, it’s easy for our associates to prioritize what they have to do to serve our customers.

I’m confident about our long-term strategy and the direction Walmart is headed. Our expectations about our U.S. businesses’ performance, coupled with more discipline in International, will allow us to improve our performance throughout the year.

There is no doubt that our company is making the right investments in e-commerce to differentiate ourselves and become a better Walmart. And with our sales growth in the first quarter, we believe our investments are paying off.”

Q2 EPS is expected to come in between $1.22 and $1.27 compared to $1.18 for Q2 in 2012. Q2 comps for Wal-Mart are expected to be flat to 2 percent. Q2 comps for Sam’s Club are expected to come in between 1 percent and 3 percent.

Wal-Mart is attempting to increase its online presence. According to Alexa.com, it currently has a global traffic rank of 181, and a United States traffic rank of 41. Over the past three months, pageviews-per-user has declined 12.32 percent, time-on-site has declined 11 percent, and the bounce rate (only one page per view) has increased 12 percent. Needless to say, Wal-Mart needs to make online improvements.

Below is a chart comparing fundamentals for Wal-Mart, Costco Wholesale Corporation (NASDAQ:COST), and Target Corp. (NYSE:TGT).

Let’s take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Mixed

Wal-Mart has underperformed its peers over the past year. However, investors aren’t looking for substantial gains in Wal-Mart. They’re looking for slow and steady while also collecting dividends.

At $77.40, Wal-Mart is trading below its 50-day SMA, but above its 200-day SMA.

E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Wal-Mart is close to the industry average of 0.70.

E = Earnings Are Steady

Earnings and revenue have consistently improved on an annual basis.

Q1 EPS was $1.14 on $114.2 billion in revenue. Both were year-over-year improvements.

Now let’s take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Support the Industry                         

Wal-Mart is always well-positioned. Those loyal to Wal-Mart will shop there in any economic environment. When the consumer weakens, many middle-income consumers will switch to Wal-Mart. This has been proven in the past. While online retailers are a threat, the biggest threat is the dollar store.

Conclusion

Many stocks have recently been rated OUTPERFORM here due to momentum. However, many of those trends aren’t sustainable. Wal-Mart, on the other hand, is a long-term OUTPERFORM.

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C = Catalyst for the Stock’s Movement

Yahoo has made a bold move by planning to acquire Tumblr for $1.1 billion. That’s a hefty price tag, but was it a necessary risk?

Tumblr reaches 700 million people globally, and it has a much younger demographic than Yahoo. For example, more than half of Tumblr’s audience is 35 or younger whereas more than half of Yahoo’s audience is 35 or older. As far as revenue goes, Tumblr only had $13 million in revenue last year, but that’s from $0 in 2007, and this year’s revenue is projected to be around $100 million. That’s some serious growth. Tumblr has also rapidly increased its number of unique users. It now has 117 million unique users, which is a big improvement over the 58 million unique users it had one year ago.

According to Alexa.com, Tumblr.com ranks #32 globally and #19 in the United States. That’s a ton of exposure. On the other hand, the past three months haven’t been great. Pageviews-per-user is down 11 percent, time-on-site is down 11 percent, and the bounce rate is up 6 percent. Some people might think that Yahoo will come to the rescue, but Yahoo CEO Marissa Mayer has already stated that she’s not going to mess this up. In other words, Tumblr will continue to be run by CEO David Karp, who is bright and innovative. If the site is heading in the wrong direction, there’s a good chance that he will come up with a solution to turn things back around. After all, this is a kid who chose to watch Steve Jobs documentaries over superhero movies when he was a kid. To him, Steve Jobs was the superhero. It’s possible this is only the beginning of what we will see from David Karp.

The big question on everyone’s mind is whether the Tumblr acquisition will be a Bebo/MySpace or an Instagram/YouTube. Opinions have been strong on both sides, but what many people are missing is that even if it’s a colossal failure, Yahoo can handle it. While the acquisition is a risk, it’s a calculated risk. It’s also a risk worth taking in order for Yahoo to broaden its demographic base.

Marissa Mayer showed she had some guts. That’s a plus, but what do employees think of her? Marissa Mayer seems to be a winner. According to Glassdoor.com, 85 percent of employees approve of the job she’s doing. That’s an excellent sign.

Below is a chart comparing fundamentals for Yahoo, Google Inc. (NASDAQ:GOOG), and AOL Inc. (NYSE:AOL).

Let’s take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Strong

Yahoo has outperformed its peers over the past year.

At $26.89, Yahoo is trading above its averages.

E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio for Yahoo is stronger than the industry average of 0.10.

E = Earnings Have Been Steady

Earnings have been steady over the years. The big concern is revenue, which is why Yahoo must make aggressive moves.

When we look at the last quarter on a year-over-year basis, revenue and earnings have both increased.

Now let’s take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Might Support the Industry             

Internet companies have been performing well due to innovation and acquisitions. However, this has also led to increased competition.

Conclusion

Yahoo is a well-run company making strategic attempts at growth. Yahoo has quality debt management, solid margins, and the stock is trading at eight times earnings, whereas the industry is trading at 22 times earnings. One word of caution is that Yahoo isn’t resilient to steep market corrections.

Yahoo is an OUTPERFORM until the broader market hits a wall.

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C = Catalyst for the Stock’s Movement

Tivo recently beat Q1 expectations. EPS came in at -$0.09 on $82.6 million in revenue. Analysts expected -$0.14 on $78.3 million in revenue. On a year-over-year basis, the loss narrowed and revenue increased. Tivo saw the largest MSO subscription increase in over seven years. It signed a distribution deal with Atlantic Broadband (twelfth largest U.S. MSO), it launched a “What to What” feature on Apple Inc.’s (NASDAQ:AAPL) iPad Mini, and it announced that its patent trial with Motorola is set to begin on June 10.

Tom Rogers, President and CEO of TiVo, said, “The solid financial results this quarter were the outcome of strong operational execution across our business. Our advanced television innovation is helping to drive the global adoption of TiVo as we increased our MSO subscription base by 277,000 subscriptions, our strongest quarter of MSO subscription additions in seven years. We delivered 13 percent year-over-year service and technology revenue growth and reported an Adjusted EBITDA profit, which significantly exceeded our guidance. As a result, we continue to believe that we should be Adjusted EBITDA profitable, even when including litigation spend, for Fiscal 2014.”

That’s the good news. The bad news is that Tivo consistently loses money. Promises are often made, but where are the actual results, as in profits? Is management the problem? According to Glassdoor.com, employees have rated their employer a 3.0 of 5, which is average. The concerning stats are that only 50 percent of employees would recommend the company to a friend and that only 42 percent of employees approve of CEO Tom Rogers.

The following are two quotes from employees on Glassdoor.com:

April 1: “Good company going down.”

May 19: “Good time on a slowly sinking ship.”

Ouch!

Below is a chart comparing fundamentals for Tivo, Dish Network Corp. (NASDAQ:DISH), and Comcast Corporation (NASDAQ:CMCSA).

Let’s take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Strong

Tivo has underperformed its peers over a three-year time frame, but the past month has been strong.

At $13.09, Tivo is trading well above its averages.

E = Equity to Debt Ratio is Strong

The debt-to-equity ratio for Tivo is stronger than the industry average of 2.60.

E = Earnings Have Been Inconsistent

Tivo is simply unable to deliver consistent profits. Revenue provides at least some reason for hope.

When we look at the last quarter on a year-over-year basis, we see an increase in revenue and a narrowed loss. However, it’s still a loss.

Now let’s take a look at the next page for the Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

Conclusion

Analysts like the stock: 15 Buy, 1 Hold, 0 Sell. However, when profits are scarce and employees aren’t confident in the direction of the company or their leader, there is significant cause for concern. Patent settlements have helped Tivo, but experienced investors want organic growth and consistent profits.

Tivo is a WAIT AND SEE.

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C = Catalyst for the Stock’s Movement

Tiffany recently hiked its dividend by 6 percent. This is often a sign that a company is confident in its future prospects, which thereby leads to increased investor confidence. For Tiffany, this makes 12 dividend increases in 11 years, and the stock now yields 1.60 percent.

Tiffany has been a strong brand for many years. The following video is an example:

The Tiffany brand is strong, but there is a dilemma on the horizon. With middle-income consumers slowing their Tiffany shopping, the company needs to lower some prices to get those consumers back into the store. This has the potential to tarnish the brand. Then again, revenue and earnings growth have been slowing, and something needs to be done.

This situation could become even more challenging if the stock market and/or real estate market suffer steep corrections. If this takes place, then high-income consumers are likely to decrease spending.

Tiffany, like almost every retailer, is trying to build an online presence. According to Alexa.com, Tiffany.com is currently ranked 12,146 globally and 3,135 in the United States. These numbers are poor for a retailer of this size. Over the past three months, pageviews-per-user has declined 9.5 percent, time-on-site has declined 9 percent, and the bounce rate (only one page per view) has increased 14 percent. These numbers aren’t inspiring.

Below is a chart comparing fundamentals for Tiffany, Coach (NYSE:COH), and Michael Kors Holdings Limited (NYSE:KORS).

Let’s take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Strong

Tiffany has been a strong performer over the past three years.

At $77.91, Tiffany is trading well above its averages.

E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Tiffany is close to the industry average of 0.20.

E = Earnings Have Been Steady

Earnings had been improving on an annual basis, but there was a setback in 2012. Revenue has improved for three consecutive years, but the rate of growth has slowed.

When we look at the last quarter on a year-over-year basis, we see a substantial increase in revenue and earnings. This is also the case on a sequential basis, but it would be difficult for this to continue.

Now let’s take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Might Support the Industry             

High-end retailers have been performing well as of late, but revenues are becoming a concern. In regards to the global economy, commodities have been slowing, which is often an early sign of slowing demand.

Conclusion

Tiffany has brand recognition, geographic diversification, solid margins, and high sales per square foot. On the other hand, the stock lacks resiliency in weak market environments. The stock is currently trading at 24 times earnings, whereas the industry is trading at 10 times earnings. Furthermore, there is a 7.30 percent short position on the stock, which indicates that there are many people betting against Tiffany.

Due to the stock’s upward momentum, there is more upside potential. However, downside risks outweigh potential rewards over the next year. Therefore, Tiffany is a WAIT AND SEE.

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C = Catalyst for the Stock’s Movement

Corning has been making new 52-week highs as of late, but is this trend sustainable? In this stock market environment, anything is possible. However, that doesn’t mean all moves are justifiable.

Corning Incorporated produces and sells specialty glasses, ceramics, and related materials worldwide. It operates through five segments: Display Technologies, Telecommunications, Environmental Technologies, Specialty Materials, and Life Sciences.

Corning has a diverse revenue base. There is currently high demand for tablets and smartphones, Gorilla Glass has received many positive reviews, Q1 estimates were recently beat, there have been cost and efficiency improvements, revenue has increased for three consecutive years, and the stock is at a good valuation, trading at 14 times earnings, while the industry trades at 19 times earnings. However, when you look at the breakdown for the last quarter, there is good reason for caution. The only segment that showed improvement was Life Sciences. Corning is confident in future growth, but that doesn’t mean confidence will lead to actual results.

On a quarterly basis, revenue has declined year-over-year as well as sequentially. It should also be noted that earnings have declined for two consecutive years. Other reasons for caution include contract negotiations with panel makers, Japanese yen depreciation, and a lack of resiliency. In regards to the latter, the stock didn’t hold up well during the financial crisis. If a similar environment were to present itself, Corning wouldn’t be a good place to hide.

Below is a look at some of Corning’s basic fundamentals.

Let’s take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Strong

Corning has performed well year-to-date.  However, it has underperformed the market over a three-year time frame.

At $16.35, Corning is trading well above its averages.

E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio is stronger than the industry average of 0.30. Debt management has been very good at Corning through the years.

E = Earnings Are Inconsistent

Earnings have been inconsistent, but revenue has been improving on an annual basis.

When we look at the last quarter on a year-over-year basis, we see a decline in revenue and increase in earnings.

Now let’s take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Might Support the Industry             

The television market has weakened, but there has been strength in smartphones and tablets. However, there has been weaker spending in the United States.

Conclusion

Corning has been a strong company for many years. The company culture is strong, which often indicates a winner. According to Glassdoor.com, employees have rated their employer a 3.6 of 5, and 80 percent of employees would recommend the company to a friend. Furthermore, 85 percent of employees approve of Wendell P. Weeks. It should also be noted that volumes and prices have improved. The dilemma is the economic environment we live in. There is a tremendous disconnect between Wall Street and Main Street. If all monetary stimuli were taken away tomorrow, where would the market be? No one knows the answer to that question. While this event won’t take place, there will eventually be a gradual exit. How durable will Corning be as this unfolds?

The 2.50 percent yield is enticing, and the stock is likely to see near-future appreciation. Therefore, it’s currently an OUTPERFORM. However, caution should be used as this stock doesn’t hold up well in difficult environments.

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C = Catalyst for the Stock’s Movement

The PC industry is in constant decline, revenues have been declining, and earnings have been inconsistent. As of right now, shareholders are set to receive $13.65 per share in cash by the second quarter of 2014 thanks to an LBO. Dell’s board is attempting to finalize the deal, but shareholder greed is getting in the way. Considering the circumstances, it might be wise for them to take the money and run.

Q1 results for Dell weren’t impressive. Non-GAAP EPS came in at $0.21 on $14.1 billion in revenue. Both were declines on a year-over-year basis. Enterprise Solutions Group revenue increased 10 percent, and Dell Services revenue increased 2 percent. However, Dell Software suffered an operating loss, and End User Computing revenue declined 9 percent. Gross margin declined to 19.5 percent from 21.3 percent for the same quarter one year ago. Costs and competition have increased. For those looking for good news, Dell yields 2.40 percent. Sorry, but there isn’t much more good news to report.

The chart below compared fundamentals for Dell and Hewlett-Packard Company (NYSE:HPQ).

Let’s take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Mixed

Dell has performed well year-to-date, but it has underperformed the market for years.

At $13.40, Dell is trading below its 50-day SMA, but above its 200-day SMA.

E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Dell is close to the industry average of 0.70.

E = Earnings Have Been Inconsistent

Earnings have traveled across rolling hills over the past several years. Revenue performance has been even more concerning.

As stated earlier, Q1 EPS came in at $0.21 on $14.1 billion in revenue. Below is a look at the four previous quarters.

Now let’s take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Do Not Support the Industry

PCs and laptops are in decline, and Europe is still very weak. On a global scale, there is an enormous disconnect between what’s taking place in equity markets and what’s taking place in the real economy. In other words, the consumer isn’t as strong as advertised.

Conclusion

Dell has been a well-run company for many years, but there isn’t much reason for optimism at the moment. Dell’s goal is to become a leading global provider of services to enterprises. The following is a related quote from Brian Gladden, Dell CFO:

“We made progress in building our enterprise solutions capabilities in the first quarter and are confident in our strategy to be the leading provider of end-to-end scalable solutions. In addition, we have taken actions to improve our competitive position in key areas of the business, especially in end-user computing, and it has affected profitability. We’ll also continue to make important investments to support our strategy and drive long-term profitability.”

Is there potential for Dell? Yes. But right now, downside risks outweigh upside potential.

Dell is a STAY AWAY.

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C = Catalyst for the Stock’s Movement

Baidu is an easy winner for search in China: it’s gaining in ground in mobile, and it’s now also the largest online video platform in China. Despite Q1 margin declines, margins are still solid, and year-over-year revenue and earnings were impressive. However, revenue and earnings declines on a sequential basis. That makes the story a little more difficult to read. In these situations, it’s often better to look at the big picture. And in this case, revenue and earnings have consistently improved on an annual basis. In addition to these positives, valuation is fair. Baidu is trading at 19 times earnings while the industry average is 21 times earnings.

On the negative side, costs have also increased. These costs have related to infrastructure, marketing, R&D, and online video platform. Looking ahead, Baidu will increase spending to improve its mobile position. Another negative is increased competition. Current competitors include Sina Corporation (NASDAQ:SINA), Sohu.com Inc. (NASDAQ:SOHU), and Qihoo 360 Technology Co. Ltd. (NYSE:QIHU).

The chart below compares traffic performance. Pageview-Per-User, Time-On-Site, and Bounce Rate (one page per view) are all based on the past three months. Note: Weibo.com is owned by Sina.com, and 360.cn is owned by Qihoo.com.

The chart below compared fundamentals for Baidu, Sina, and Sohu.

Let’s take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Mixed

Baidu has performed well over three-year and one-month time frames. However, it hasn’t performed well over a one-year time frame or year-to-date. Most importantly, it has underperformed its peers for every time frame listed below.

At $94.72, Baidu is trading above its 50-day SMA, but still below its 200-day SMA.

E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Baidu is weaker than the industry average of 0.10, but it still qualifies as normal.

E = Earnings Are Strong

Revenue and earnings have consistently improved on an annual basis.

As stated earlier, year-over-year numbers are impressive, but sequential numbers are cause for concern.

Now let’s take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Might Support the Industry

The industry has been performing well as of late, but that could be said about most industries throughout the world. The question is what the future holds. Nobody knows for sure, but as long as Chinese economic data isn’t regulated, numbers will continue to be manipulated.

Conclusion

Baidu is the largest search Internet Information Provider in China. That’s the good news. The bad news is that competition and costs have increased. Any numbers coming out of China should also be looked at under a microscope. Simply looking at real exports and imports, the numbers don’t add up. Exports have been over-invoiced, and imports have been under-invoiced. This has led to a manipulated GDP number. Therefore, there is potential for a significant slowdown in Chinese stocks if the truth is revealed. Then again, this has been going on for a long time. Who knows? Maybe it can last forever.

All factors considered, Baidu is a WAIT AND SEE.

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C = Catalyst for the Stock’s Movement

First Solar is one of the most interesting stories on the planet. There are many arguments that can be made from the bullish and bearish sides. Prior to getting to positives and negatives, let’s see what the analysts think. Most of them seem to be on the fence, but there are more bears than bulls: 2 Buy, 17 Hold, 8 Sell. It should also be noted that there is a 33.4 percent short position on the stock, which indicates that there are many non-believers.

As far as positives go, last quarter’s revenue increased year-over-year, margins are solid, cash flow is strong, and increased solar modular sales helped First Solar swing to a profit for the quarter compared to a loss for the same quarter last year. First Solar has now delivered a profit four quarters in a row. In addition to that, operating expenses were down to $107.1 million from $533 million. FY2013 guidance is for revenue between $3.8 billion and $4.0 billion, which would indicate continued growth. First Solar also commented that the second half of the year should be stronger than the first half of the year.

One big negative is that competitors are making cheaper solar panels due to a decline in the price of polysilicon. Another potential negative is that revenue has declined on a sequential basis. First Solar will layoff 150 North American employees in the coming weeks. This is after laying off 2,000 employees last year. Factory expansions have also been canceled. It’s evident that First Solar is most focused on the bottom line. This isn’t necessarily a negative for shareholders, but it does indicate that growth might not come as easy as many people think.

When it comes to company culture, it’s average at First Solar. According to Glassdoor.com, employees have rated their employer a 3.3 of 5, and 52 percent of employees would recommend the company to a friend. An above average 71 percent of employees approve of CEO James A. Hughes.

The chart below compared fundamentals for First Solar, SunPower Corporation (NASDAQ:SPWR), and SolarCity Corp. (SCTY).

Let’s take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Strong

The industry is on fire right now. Despite First Solar’s impressive run, it has actually underperformed its peers.

At $55.01, First Solar is trading well above its averages.

E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio is stronger than the industry average of 0.40.

E = Earnings Have Weakened

Earnings have weakened on an annual basis, but revenue has consistently improved on an annual basis.

When we look at the last quarter on a year-over-year basis, we see a substantial increase in revenue and earnings. However, there were significant declines in revenue and earnings on a sequential basis.

Now let’s take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Might Support the Industry

There is an oversupply of solar panels, a pricing war exists, and solar panels are still too expensive. If alternative energy options become cheaper, then solar energy will be pushed to the side. Many people feel as though solar will take over and it will be the only option, but that’s not the case. This will be a long and hard-fought battle for the industry. And competitors from other industries will always be present.

Conclusion

The stock has serious momentum right now, and the trend is always your friend – until it stabs you in the back. In the near term, First Solar is an OUTPERFORM. There could be a lot more room to run. However, there will likely be a steep correction in the stock price over the next one to two years due to declining demand.

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C = Catalyst for the Stock’s Movement

Ford has a lot going for it at the moment. An attempt will be made to cover all the biggest potential catalysts, but that’s not an easy task.

Let’s begin overseas. Ford expects sales to increase 50 percent in China by 2015. Ford is expanding in China, and 15 models will be introduced within the next 2.5 years. Of course, this will require more plants, which means increased spending. However, the auto market is strong in China, aided by government-backed investments and easy credit. Another positive for Ford is that Chinese consumers are shying away from Japanese brands, such as Toyota and Honda. This relates to an ongoing dispute over islands in the East China Sea. Ford’s sales have increased in China, and it has been stealing market share from competitors.

Russia also presents good potential. Ford Sollers is accelerating growth in Russia. A new engine plant and the launch of the Ford EcoSport SUV are expected within 18 months. There will now be seven models built by Ford Sollers opposed to just two models. Adil Shirinov, executive director and chief operating officer of Ford Sollers, recently stated:

“The demand for Ford SUVs is growing in Russia, and we’re pleased to announce that next year our already strong lineup of SUVs will be supplemented by the Ford EcoSport, Local production of the EcoSport by Ford Sollers in Tatarstan will help to strengthen the Ford brand position in Russia’s popular SUV segment.”

In regards to Europe, Allan Mulally wants to be profitable by 2015. This will require cutting operations and making the company leaner and meaner. Europe’s unemployment rate is still approximately 12 percent, and auto sales have been atrocious. However, Jim Cramer recently made an optimistic comment related to Europe: “Europe is bottoming. I think Ford is a buy. Don’t just quote me because John Chambers of Cisco says Europe is bottoming, and that’s fabulous for letter F.” It’s more likely that monetary stimulus is going to have a temporary positive impact than Europe is actually bottoming and all skies are clear ahead.

As far as the domestic market is concerned, Ford sales increased 18 percent year-over-year in April. By comparison, General Motors Company’s (NYSE:GM) sales increased 11 percent year-over-year, and Toyota Motor Corporation’s (NYSE:TM) sales increased 1.1 percent year-over-year.

A company’s culture is often a clear indication of employee optimism and production potential. Ford’s company culture is strong. According to Glassdoor.com, employees have given their employer a 3.5 of 5 rating, and 70 percent of employees would recommend the company to a friend. Even more impressive is that 94 percent of employees approve of CEO Alan Mulally. This is a sign of excellent leadership.

Many people feel as though Ford has a debt problem. However, that’s not the case. We’ll get into this in this on the next page. For now, let’s take a look at some numbers before forming an opinion on the stock. The chart below compares fundamentals for Ford, General Motors, and Toyota.

Let’s take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Strong

Ford has been a steady performer over the past three years. Toyota has claimed the number one spot for this group over a three-year time frame, and that has potential to continue, but all three companies are poised for near-term success.

At $15.06, Ford is trading above its averages.

E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Ford is much weaker than the industry average of 0.80. That being the case, you might be wondering why the debt-to-equity ratio is categorized as Normal. It’s because the debt-to-equity ratio would be much lower if it excluded Ford Credit.

Ford Credit has been performing very well. It takes on low-interest consumer loans and turns them around on consumers for considerable profits, over and over again. The best part is that these low-rate loans are secured for the long haul, which means profits will be even bigger when interest rates increase. However, when interest rates increase, auto sales are likely to weaken.

Now let’s take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Support the Industry (for now)

Auto sales have been strong everywhere expect for Europe. This trend is likely to continue considering everyone is printing money. It’s the biggest party that never ends! Yes, that was sarcasm. The point here is that the party has been extended. As long as real estate and stock prices continue to appreciate, auto sales will do well. All that said, the eventual hangover from this party will last many years.

Conclusion

Ford has one of the best leaders around in Alan Mulally. This is the most important factor. For those who put their trust in analysts, they like the stock: 10 Buy, 9 Hold, 2 Sell. For those who trust valuation, Ford is currently trading at 10 times earnings while the industry average is 19.5 times earnings. And for those who like yield, Ford currently yields 2.90 percent (higher than peers).

Needless to say, Ford is an OUTPERFORM.

Using a solid investing framework such as this can help improve your stock-picking skills. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

All content posted should not be considered professional advice. Please do your own research and consult with a professional financial advisor before making any investment decisions.

With shares of WebMD Health Corp. (NASDAQ:WBMD) trading at around $29.72, is WBMD an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

WebMD is making some changes, and these changes are likely for the better. It’s apparent that CEO Cavan M. Redmond wasn’t the ideal leader. According to Glassdoor.com, employees rated their employer a 2.6 of 5. Only 36 percent of employees would recommend the company to a friend, and only 22 percent of employees approved of Cavan M. Redmond. The Board of Directors has appointed David J. Schlanger to serve as Interim Chief Executive Officer.

Martin J. Wygod, Chairman of WebMD, said, “The change announced today will best position us to build on the momentum that our senior management team has created to date. Under David’s leadership, we will accelerate the development and implementation of strategies to diversify our revenue base and capture the opportunities arising from the rapidly changing healthcare landscape.”

All that said, Cavan M. Redmond must have done something right. In Q1, webmd.com averaged 132 million unique users per month, which was a 23 percent increase year-over-year. Regardless, company culture must be strong in order to achieve optimal results. Therefore, a change was necessary.

WebMD recently beat Q1 expectations and raised guidance. The company reported a loss of three cents per share whereas analysts expected a loss of 15 cents per share. Revenue also beat expectations by 5 percent. In regards to guidance, WebMD raised full-year expectations to -$0.26 to -$0.03. Analysts expected a loss of 30 cents per share. The raised guidance is mostly related to an improved outlook in the public portal advertising business. WebMD expects FY2013 revenue to come in between $450 million and $470 million, which is at best flat compared to 2012. For the current quarter, WebMD expects revenue to exceed $115 million. This would be a significant improvement on a year-over-year as well as sequential basis.

WebMD offers four services: WebMD Consumer Network, WebMD Professional Network, WebMD Private Portal Services, and WebMD Publishing Services.

WebMD Consumer Network consists of WebMD.com, MedicineNet.com, eMedicineHealth.com, and RxList.com. Through these sites, WebMD helps people take an active role in managing their health and wellness via timely written and video content provided by medical writers, physicians, and health educators. This is an interactive service.

WebMD Professional Network consists of Medscape.com and theheart.org. This service offers continuous education and training for professionals. The goal of the service is to increase clinical knowledge, provide important medical opinions, and to report medical findings and the latest treatments. This service also includes WebMD Direct Services, which consists of a proprietary database of physicians and offers physician engagement solutions, targeted recruitment, and online distribution and delivery.

WebMD Portal Services is designed to offer employers and health plan members more informed decisions in regards to benefits, treatments, and providers. Members have an opportunity to access personal health information, which can help aid these decisions. This service also includes health risk assessments, lifestyle education, health coaching, and pertinent information regarding cost and quality of healthcare. The ultimate goals are to use the information to determine the best provider, and to estimate costs of future treatments and procedures.

WebMD Publishing Services publishes WebMD the Magazine, which can be found in approximately 85 percent of physician waiting rooms in the United States.

In all, WebMD is widely known as the most trusted and recognized brand of health information. It would be difficult to imagine a scenario where this suddenly changes.

The chart below compares fundamentals for WebMD, Computer Programs & Systems Inc. (NASDAQ:CPSI), and Merge Healthcare Incorporated (NASDAQ:MRGE).

Let’s take a look at some more important numbers prior to forming an opinion on this stock…

T = Technicals Are Strong

WebMD has outperformed its peers by wide margins year-to-date.

At $29.72, WebMD is trading well above its averages.

E = Equity to Debt Ratio Is Weak

The debt-to-equity ratio for WebMD is weaker than the industry average of 0.50. This is one of the few negatives for WebMD at the moment. It is hopeful that new management can make an improvement.

E = Earnings Are Inconsistent

Annual earnings have been inconsistent, but based on current guidance, WebMD should be headed back in the right direction.

When we look at the last quarter on a year-over-year basis, revenue and earnings have both improved.

Now let’s take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Support the Industry

With baby boomers retiring in droves, there is going to be a significant increase in the need for health information. This simple fact should lead to a strong industry in the coming years.

Conclusion

WebMD is making all the correct decisions and looks to be heading in the right direction. With trends supporting the industry and new management in place, WebMD is a long-term OUTPERFORM.

Using a solid investing framework such as this can help improve your stock-picking skills. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

All content posted should never be considered professional advice. Please do your own research and consult with a professional financial advisor before making any investment decisions.