Brown Forman Gives Investors Good News

Brown Forman


shares are rallying off 52-week lows, after the company slightly raised 2009 EPS guidance.

The company reported better-than-expected profit on higher sales of Jack Daniel's whiskey and Finlandia vodka. The company earned $143 million, or 94 cents a share for the quarter, up from $129 million, or 83 cents a share, in the same quarter a year ago.

As for the guidance, the company now expects to earn between $3 and $3.20 a share, largely due to an estimated 12-cents-a-share net gain from the sale of two wine brands.

We had removed shares of Brown-Forman from our "Recommended" list on Aug. 28, when they traded at $77.02. The company has a 3.10% dividend yield, based on last night's closing stock price of $43.88.

Despite the good news, the company is still concerned that the economic trends may force them to revisit these higher EPS estimates. The $39 levels seems to be a key area the stock needs to hold short term, but if that fails, then the $30-$31 range is likely. We would hold off until the stock shows some stabilization.

Brown-Forman is not recommended at this time, holding a Rating of 3.2 out of 5 stars.

Big Lots Lowers Guidance

Big Lots

(BIG) - Get Report

just reported third-quarter earnings of $12.2 million, or 15 cents a share, in the quarter ended Nov. 1, down 15% from $14.3 million, or 14 cents a share, a year ago.

The company saw a drop in margins, due to higher markdowns and a consumer drift toward lower margin categories such as consumables.

Management now expects EPS in a range between 90 cents and 99 cents for the quarter, down from earlier expectations of $1.02 to $1.09. Also, same-store sales are expected to decline as much as 2% to 4% in the fourth quarter.

Shares have been cut in half since June, and the stock may now be poised to test the $7-to-$10 price area it last hit in 2001. The retail space has been battered during the slowdown, and Big Lots has felt the slowdown as much as others, despite targeting cost-conscious consumers. We would prefer a name like


(COST) - Get Report



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if we wanted to have exposure in this area of retail.

Big Lots does not currently pay a dividend.

Boeing Shares Sink Below $40 on Possible Dreamliner Delay


(BA) - Get Report

shares are down nearly 8% today after news of a potential six-month delay in the delivery of the 787 Dreamliner passenger jet.

The Wall Street Journal

is citing unnamed sources who believe the first deliveries of the jet may not occur until as late as summer 2010. The company has had to deal with outsourcing issues, as well as supply chain and design delays. Throw in issues with the union that recently were being ironed out, and a delay is not a big surprise.

We had removed shares of BA from our "Recommended" list back on Aug.19, when the shares were trading at $63.64. The company has a 4.08% dividend yield, based on last night's closing stock price of $39.19. We would avoid bottom-fishing until shares can finally stabilize. The yield of over 4% is attractive, but the weakness in the share price continues to be an issue. We'd look for better opportunities elsewhere.

Boeing is not recommended at this time, holding a Rating of 3.2 out of 5 stars.

Legg Mason Cuts 8% of Workforce

Legg Mason

(LM) - Get Report

is announcing plans to reduce 200 jobs, or about 8% of its staff.

The company says this is part of its effort to reduce costs due to the weak financial markets. Management sees sustainable savings of $120 million in corporate expenses by the end of the first quarter of 2009.

We had removed LM from our "Recommended" list back on Sept.15, when the shares traded at $36.30. The shares were briefly on the "Recommended" list from the $39 level. The company has a 5.84% dividend yield, based on last night's closing stock price of $16.45.

The company is needing to hold the $15-$16 levels technically. If it fails to, then the $7-$8 price area is likely. The shares have come all the way down from the $130 level it had hit in 2006. We would look at better performing financial stocks instead, instead of bottom-fishing with Legg Mason.

Legg Mason is not recommended at this time, holding a Rating of 3.0 out of 5 stars.

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At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.

Tom Reese and Paul Rubillo are senior editors of Visit for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.