Another is ADT Corp. (ADT), which reported March quarter results that fell shy of Wall Street expectations by $0.02 per share. Keep in mind consensus expectations were for $0.43 per share and the company delivered $0.41 per share -- a 5% miss. Given the way the market has been treating misses, ADT shares will get hurt today. Now, sifting through the release we find that recurring revenue grew year-over-year and accounts for 92% of total revenue.
The company has been actively buying back stock. All told, since the $2 billion repurchase authorization was announced last November, ADT has repurchased $800 million shares. Not only did the company add 303,000 new customers to close the quarter with 6.5 million customer accounts, but despite the miss the management team reiterated its 2013 guidance.
I first recommended ADT shares as way to play the rebounding housing market. Since then we've continued to receive strong housing data -- new home sales, housing starts and the like.
The key question here is do we see any slowdown in the housing recovery? My thesis on ADT shares has not changed and the long-term view still looks bright. As with Nuance shares, I would recommend Real Money Pro subscribers who have sat on the sidelines with ADT to use any weakness to get involved in the shares at current levels for long-term profits. ADT was trading about $41.50 in late morning Wednesday trade.At the time of publication, Versace held no positions in the stocks mentioned.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV