Greenberg: What You May Have Missed
SAN DIEGO (
TheStreet) -- Here's what you may have missed over the past week on
Reality Check, my
Herb on TheStreet blog and even social media.
-- What I'm Hearing on Harley
-- What ITT Education Didn't say
-- Boulder Brands, Valeant, MercadoLibre report
-- Clean Harbors Gets Dirty
-- RealPage gets Ripped
-- Buffett Tells Investors to Get Real
-- Assorted Twitter comments
WHAT ITT DIDN'T SAY: ITT Education, in a press release, told the Consumer Financial Protection Bureau it has no business suing the for-profit education company. But, notes Brad Safalow of PAA Research, a longtime for-profit schools analyst: "I think it's telling that they didn't deny the grievances identified by the CFPB, but just referenced that those practices are regulated by other entities."
GLUTEN-FREE EARNINGS ROLL-UP: Meanwhile, Watch List companies Boulder Brands, Valeant Pharmaceuticals and MercadoLibre reported. As I wrote:
- Boulder, the gluten-free play: "Adjusted EPS would have missed but instead beat after adding back restructuring and relocation-related charges, which added 2.5 cents to earnings per share. Without it the company would have missed by $0.01. "This is the second quarter in a row BDBD has pulled tricks to spin a miss into a beat," according to the notes from one of Reality Check's contacts. "Last quarter, they pulled forward $5 million in Udi's sales and introduced adjusted EPS when guidance and expectations had been for purely GAAP EPS. Adjusted EPS had never been mentioned." Still, the stock skyrocketed.
- Valeant, a pharma roll-up: The best news for Valeant -- its organic growth excluding generic drugs showed signs of improvement. That should be expected as the company acquires non-generic drug companies. But as even bullish analysts who cover the company have privately told investors, numbers don't matter here. The stock barely budged.
- MercadoLibre, the Amazon of Latin America: The company steers investors to look at "units sold" rather than actual numbers because it strips out currency issues. Well, units sold rose by 20%, which is less than analysts had expected." Investors ignored it and bid the stock higher, anyway.
CLEAN HARBORS' MESS: Watch-list company Clean Harbors lowered guidance -- not what the investors were expecting. With the new guidance, the stock is actually more expensive now, trading at 26x EPS vs. 20.5x coming into today. As I noted, its stock got clobbered and analyst after analyst downgraded.
REALPAGE RATTLED: Not only did the apartment-management software company miss fourth-quarter revenue and earnings expectations, but it missed and guided down on perhaps the most important metric of all: organic growth (and not in a small way). From the Herb on TheStreet blog: BUFFETT: "When Wall Streeters tout EBITDA as a valuation guide, button your wallet." And from Twitter: Valeant 10-K out, 2013 FCF is less than $3.00/shr, well below the $8.00 "cash earnings" that Pearson keeps crowing about. (My retweet of another.) FTC (summarized): "Can't say what action we may/may not take re Herbalife. " True bureauspeak! As I noted on ULTA, these SEC reviews can cause companies to get more conservative. http://stks.co/c0Gk6 Can't believe Tesla will care. My fave point on SEC letter to $TSLA is No. 11 on GAAP vs. Non-GAAP is actually significant. http://stks.co/f0KUt. Over and out. -- Written by Herb Greenberg in San Diego Follow @herbgreenberg