This week was rather busy (and so will next week) as numerous companies that I am either invested in OR have dipped my toes in OR am just overall curious about, reported quarterly earnings and I spent some time reading those earnings as well as listen to their audio webcasts.
Jesus, what a BEAST of a payment processing company Visa is. Revenue of $4.9 billion with net income of $2.1 billion THIS QUARTER ALONE.
Year Over Year from Q4 2016 we see an increase of 20% service revenues, 16% in data processing revenues, and 20% in international transaction revenues. Net revenue for their fiscal year 2017 was $18.4 billion in comparison to $15.0 billion reported the fiscal year 2016. Dividend was raised, Visa will pay out a 0.78 annual dividend per share, compared to 0.66 per share.
Visa was up almost 2% the day they reported earnings and have remained in the 2 - 3% range afterwords.
The Coca-Cola Company
Despite the decline consumption of carbonated and sugary drinks and the slow decrease of revenue of the company, I still think this is a buy and a hold for the next decade. Analysts expectations were $8.72 billion in revenue, Coke reported $9.08 billion, down by 15% Year Over Year. Net income of $1.4 billion. We can thank the rebranding of their "Coke Zero" product into "Coke Zero Sugar" that was introduced in August which gave a huge boost to their earnings. Coke plans to roll out "Coke Zero Sugar" internationally beginning of next year.
Strangely enough, their share price soared ~1.1% but just to later fall - 0.6% but hey, it's the stock market, things like this happen all the time.
I want you to go back to your years of high school (I know, cringe huh?) and recall the two classmates you saw that were together and thought to yourself "man they'd make a great couple, I ship them." That's how I currently feel on Coca-Cola with Monster beverage. They'd make a phenomenal couple, a great duo, in this case, a phenomenal acquisition made by Coke, that will only boost Coca-Cola's revenues. Or so I hope.
Chipotle Mexican Grill
Beloved Chipotle, stop making people ill. What irks me the most is that Chipotle reported phenomenal earnings. Revenue of $1.13 billion and net income of $19.6 million. I'm more than happy to see those numbers, but the moment investors saw that comp sales were only 1%, Chipotle opened ONLY 38 restaurants, and earnings per share were down due to hurricane Irma and Harvey, that was when investors sold their shares.
This company is a tank, despite having numerous norovirus and e.coli illnesses impact them, possibly a restaurant's worst nightmare, they always seem to bounce back both in revenues and share price. If we look at Jack in the box stock (at the time, Foodmaker inc was the parent company) the share price fell 30% and took almost a whole decade to become profitable again. In Chipotles scenario, sales fell in 2016, but there was a huge turnaround at the beginning of 2017. Chipotle reported 2Q 2017 earnings and the stock price rallied to $499 per share. It's only a matter of time before Chipotle recovers AGAIN and rallies, but for how long can they keep this up for is the question? Nonetheless, I'm still bullish on the stock, despite short sellers shorting this falling knife. It has become cheaper to purchase shares, it's almost at 5 year lows, in burrito currency, it costs about 71 Chipotle burritos to own 1 share of Chipotle from it's 52 week high, now it costs 39 Chipotle burritos to own 1 share.