Salesforce.com Update BUY

CRM : NYSE : US$55.71 BUY 
Target: US$65.00
WHAT THE FIRM COULD DO TO HELP THE STOCK OUTPERFORM THE MARKET.
Investment thesis
As the best-in-class cloud software firm, Salesforce remains our favorite large cap
growth stock. With more transparency (revenue run-rates of the various clouds was
a good start), the firm could see multiple expansion; however, even if this doesn’t
happen, we expect the shares to advance at least 20% over the next 12 months.
That’s a worthwhile potential return for a large cap stock. BUY.
 Another upside print. CRM reported Q2/15 revenues and non-GAAP EPS of
$1.32B and $0.13, which were respectively $29M and a penny ahead of our
estimates. Constant currency revenue growth was 37% in the quarter, and
calculated billings of $1.35B were nicely ahead of our $1.30B estimate and up
33% compared to a year ago. Total backlog (billed and unbilled) ended the
quarter at $7.35B, which is up 17% versus Q2/14. Lastly, CRM generated FCF
of $174M, or $0.27 per share, which was well ahead of our $0.18 estimate;
YTD FCF is up 90% compared to 1H/14.
 Color from the call. The firm noted an 8-figure deal (one of several) with 3M in
the quarter as well as a Salesforce1 Platform deal with Safeway. In the quarter,
sales cloud was 49% of subscription revenue, service cloud 26% (though the
fastest growing), SF1 platform 15%, and marketing cloud 10%. On the event
front, CRM will host its Connections marketing cloud conference in late
September (which could pressure a stock like MKTO as the firm makes noise on
that front), and management suggested that the firm will be introducing an
entirely new product line and category at Dreamforce in October.
 Outlook: F2015 revenues increase ~$40M, EPS inches up by a penny. This was
a classic beat and modest raise quarter. Revised guidance points to 32%
revenue growth and ~150 bps of operating margin expansion in F2015.
Interestingly, Q3/15 marks the first full quarter that CRM will have lapped the
ET acquisition, and implied billings guidance suggests healthy, 25% growth

Opting Out Of Paying Taxes

Opting Out Of Paying Taxes. Click on title

 

 

 

There are more options than whining and complaining

Stantec Inc.

STN : TSX : C$70.12
STN : NYSE
BUY 
Target: C$78.00

COMPANY DESCRIPTION:
Focused on fee-for-service work, Edmonton-based
Stantec plans, designs, and manages projects in the
North American infrastructure and facilities sector. The
company’s business model incorporates diversity across
regions, end markets, and all phases of the infrastructure
life cycle to manage risk and deliver growth. 2013
marked Stantec’s 60th consecutive year of profitability.

Sustainability — Infrastructure
SOLID Q2/14 RESULTS; MAINTAIN BUY RATING AND INCREASING TARGET TO

C$78.00 (FROM C$75.00)
Investment recommendation
We are maintaining our BUY rating and increasing our one-year target
price to C$78.00 from C$75.00 following better-than-expected Q2/14
financial results, an increase in our estimates, and as we roll forward
our valuation base by a quarter. We still believe that Stantec’s 5%
targeted organic growth rate for 2014, paired with the strong pick-up in
acquisition activity (closed and announced deals), are supportive of the
company’s long-standing growth targets. In our view, Stantec should
remain a core holding: management has a clear and consistent strategy
and game plan, no lack of opportunities to drive average annual revenue
and earnings growth of ~15% for the foreseeable future, and a long
track record of very disciplined and consistent execution. We also expect
regular annual dividend increases of 10% or more for the foreseeable
future.
Valuation
We rely on our five-year DCF model (10.5% discount rate) to value
Stantec. Our target price equates to a P/E multiple of 20.0 times and an
adjusted EV/EBITDA multiple of 11.4 times our 2015 estimates. Given
the company’s available growth opportunity and consistent ROE (~18%
level), we view these multiples as supportable, although nearer to the
higher end of the historical range. We are comfortable with this given
current overall momentum, where we are in the cycle, and what we feel
are relatively conservative forward estimates.

S&P 500 Tops Record Level

U.S. stocks climbed, sending the Standard & Poor’s 500 Index above a closing record, as investors speculated the Federal Reserve will continue to support the economy as central bankers meet in Jackson Hole.

The S&P 500 added 0.1 percent to 1,988.94 at 9:34 a.m. in New York, above a closing high of 1,987.98 reached July 24.

“Markets are looking for some indication from Yellen as to what happens once quantitative easing stops,” Peter Dixon, a global equities economist at Commerzbank AG in London, said by phone. “I suspect she’ll say that it depends on the data. The U.S. economy is in reasonable shape. The task for central banks, and Yellen is at the forefront, is how to wean markets away from almost unlimited liquidity provisions when the economy is recovering but remains fragile.”

The S&P 500 rose 0.3 percent yesterday, closing within two points of a record. The benchmark index has rebounded 4 percent from a three-month low on Aug. 7 as investors speculated central banks will keep interest rates low even as the economy shows signs of recovery.

Fed Minutes

Minutes to the central banks’ July meeting released yesterday showed that officials raised the possibility that aggressive stimulus will end sooner than anticipated, even as they acknowledged persistent slack in the labor market. The central bank will probably wind up its asset-purchase program at its October meeting, according to a Bloomberg survey of economists.

Data today showed fewer Americans than forecast applied for unemployment benefits last week. Yellen has highlighted uneven progress in the labor market in making the case for further accommodation.

The Fed minutes showed “many participants” still see “a larger gap between current labor market conditions and those consistent with their assessments of normal levels of labor utilization.” At the same time, “many members” noted that the “characterization of labor market underutilization might have to change before long,” particularly if the job market makes faster-than-anticipated progress, the minutes also said.

Jackson Hole

Fed Chair Janet Yellen will speak tomorrow at the Fed Bank of Kansas City’s economic symposium that starts today in Jackson Hole, Wyoming. European Central Bank President Mario Draghi will also speak.

The S&P 500 has almost tripled since its March 2009 low, helped by three rounds of Fed stimulus, coupled with better-than-projected corporate earnings. The gauge has not had a decline of 10 percent in almost three years. It trades at 17.8 times the reported earnings of its companies, near the highest level since 2010.

Soft Touch

Investors are betting that a soft touch on monetary policy will continue to suppress stock volatility, pouring a record stretch of cash into an exchange-traded note that rallies as calm returns to equities. The Chicago Board Options Exchange Volatility Index, the gauge known as the VIX (VIX), has lost 31 percent this month, closing at its lowest level since July 23.

Among other economic reports today, data at 9:45 a.m. may show a preliminary gauge of manufacturing slipped to 55.7 this month from 55.8 in July. Another report may indicate existing-home sales expanded at a slower pace in July while the Conference Board’s index of leading indicators, a measure of the outlook for the next three to six months, rose 0.6 percent in July, economists forecast.

Gap Inc. and Salesforce.com Inc. are among eight S&P 500 companies reporting earnings today.

The Boeing Company Come Fly With Me

BA : NYSE : US$125.58 BUY 
Target: US$160.00
Transportation and Industrials — Airlines and Aerospace
737 RATE INCREASE AND IMPLICATIONS FOR THE SECTOR
Investment recommendation
We believe BA’s strong hint that rates will go up further on the
737 is a strong statement about its confidence in the commercial
cycle, and a positive catalyst. It will also help BCA margins and
cash flow as BA frees up additional slots to sell. With BA stock
outperforming the market since the commentary, we believe a
step up in 737 rates is a positive catalyst. We continue to like
Boeing for the potential cash flow upside, and strength in the
commercial cycle.
Investment highlights
 We believe that the 737 accounts for over 50% of BA’s
earnings, but is also a very significant program for SPR, DCO,
as well as most of our sector. We believe that a step up to
52/month on the 737 can add the most to BA, DCO, ESL and
SPR valuations.
 We are concerned that a rate of over 50/month from both
Boeing and Airbus adds additional risk if these rates are not
sustainable. We believe the supply chain is focused on
50/month as a natural threshold.

Valuation
Our $160 price target is based on the average of an 18.0x EPS
multiple and a 12.0x EBITDA multiple, applied to our 2015
estimates.

Dick’s Sporting Goods In The Rough ?

DKS : NYSE : US$44.21 HOLD 
Target: US$49.00

Consumer & Retail — Footwear and Apparel
WORKING THROUGH STIFF HEADWINDS,

Investment recommendation
DKS reported Q2 EPS of 67c. vs. our estimate and consensus of 65c,
driven by stronger-than-expected comp growth of 3.2%, tighter expense
controls and a lower share count, partially offset by gross margin
contraction as steep promotions in golf drove traffic at the expense of
margins. The hunting category continues to experience challenges as it
comp’d -HSD in 2Q14.
That said, growth in other outdoor categories is
offsetting the weakness in guns/ammo, which drove flat total category
comps. The company provided EPS guidance of $0.38-$0.42 for 3Q14,
including a -2c impact due to higher SG&A expense related to 32 new
store openings in the third quarter.
Investment highlights
 DKS has taken meaningful steps to mitigate the impact of the
struggling golf business, but the promotional activity is expected to
continue into 2H. Also, generally high promotional activity across
the industry will impact DKS by an estimated 4c in 2H14 as it will
need to keep the promotional pace with its competitors to drive
traffic. Lastly, hunting is expected to offsetDKS is benefitting from its move to reduce sq ft in golf and increase
the space in Women’s & Youth apparel. We would like to see an
incremental reduction in golf sq ft.; however, the company is being
methodical about the space shifts and resulting cost/benefits.
Valuation
Our $49 target is a blend of 15x 2015E EPS, 8x EBITDA, and DCF the growth in other
outdoor categories in the near term.

Guaranteed Tax Savings Or You Don’t Pay

Guaranteed Tax Savings Or You Don’t Pay.

 

Who else offers a  guarantee ?

See Tax Haven Guru

http://www.taxhavenguru.wordpress.com

 

Guaranteed Investment Performance Or You Don’t Pay

In the same way that I urge investors to use an adviser I too have a business coach. This week I complained that my performance of a 31% gain in 2013 was not gaining me the respect or new clients to which I thought I was entitled.

He challenged me :
a) I was not ” entitled ” to anything more than I earned by performance
b) My performance allowed me to guarantee an annual 12 % return or I will forfeit the 1 % annual fee and the 20 % performance fee.

The Challenge – a guarantee  for your annual investment return despite all risks to our performance and our costs .

Investors and pensions need efficient methods to screen, research, perform due diligence and monitor managers in their quest to deliver returns. They need to know the data they are using is accurate and fresh — and represents the best options available worldwide across every asset class. They must take into account their own assets and liabilities and the impact to portfolio risk while screening strategies and tracking exposures. They also need polished reports and presentations to provide evidence of a sound, inclusive selection processes for regulators and committees.

Placing these decisions in Jack A. Bass Managed Accounts removes the work from your hands to ours .

Meeting the Challenge
Jack A. Bass Managed Accounts offers a comprehensive suite of solutions for screening and monitoring, as well as risk assessment leveraging the data of the most important databases. In fact, 89% of surveyed clients agree that Jack A. Bass Managed Accounts helps them save their time during the due diligence process, while 75% of pension clients agreed .

The answer to When? – is always NOW ! – not tomorrow.
Contact Information

Information must proceed action and that is why we offer a no cost / no obligation inquiry service if you are not already a client.

Email info@jackbassteam.com

or Call Jack direct at 604-858-3202 – Pacific Time 9:00 – 5;00 Monday to Friday

Crew Energy Inc.

CR : TSX : C$9.66 BUY 
Target: C$15.00

COMPANY DESCRIPTION:
Crew Energy is an intermediate oil and gas company with
a large portfolio of exploration and development
opportunities in western Canada. The company has a
two-pronged approach to corporate development,
supplementing organic growth with strategic acquisitions

Energy — Oil and Gas, Exploration and Production
GROUNDBIRCH EMERGING
Investment recommendation

Crew released second quarter results which generally met expectations
on production and cash flow. More importantly, its operational update
contained early stage but encouraging results from its first two
horizontal wells at Groundbirch, and with further expected news-flow in
H2/14 (Tower & Attachie results and potential A&D activity), we believe
the stock will continue to garner investor interest. We are maintaining
our BUY rating and C$15.00 target price based on an unchanged 1.0x
multiple to NAV and a 7.5x 2015E EV/DACF multiple.
Investment highlights
Q2 in line. Second quarter production averaged 27,200 boe/d in line
with CG/consensus of 27,198/26,637 boe/d. Operating CFPS of $0.39
met our $0.39 estimate and consensus of $0.40.
Early and encouraging Groundbirch results. Crew provided early stage
results from its two recently completed wells (still cleaning up).
Management indicated that the wells are flowing at 4.5 MMcf/d (after 10
days) and 3.5 MMcf/d (after 14 days) and are in the over-pressured
window of the Montney (1.3 to 1.4 times normal pressure). We believe
these results met management’s expectations.
Expressions of interest to purchase Princess have been received. Crew
has received expressions of interest for its Princess property but
cautioned a sale may or may not be consummated. Its commentary
suggested that the received offers would result in an after tax
(accounting) loss on the property of ~$200 to $250 million (based on
book value, which can’t be estimated from our perspective). We believe
a disposition of Princess in the $150 million range would be viewed
positively by the market.

Valuation
Crew currently trades at a 0.7x multiple to CNAV, 5.3x EV/DACF
multiple, and $49,200/BOEPD based on our 2015 estimates, versus peer
group averages of 0.8x CNAV, 6.2x EV/DACF, and $78,200/BOEPD

Help ! The IRS and my ex-wife are at the door.

Help ! The IRS and my ex-wife are at the door.

 

What to do when money is the issue and time is a problem.

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