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JUST BOUGHT BRAND NEW POSITION IN:

Home Depot and KeyCorp! (and sold Gen'l Mills and Coach positions!)

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Wednesday Night's Show Highlights:

Can an old-school company like R.R. Donnelly "print" money for your portfolio?... Yes!

Wednesday, July 30, 2014

CHANGE NOTICE - Mon./Tues. now shown on Wednesday night's show.
OUR "PIVOT" TO IMPROVE EVERYTHING for you... Please read explanation here>>

Jim: quote markCan an old company learn new tricks? That's the question we need to ask about R.R. Donnelley & Sons, RRD, the 150-year-old company that's the largest player in the old-fashioned commercial printing industry with a bountiful 6% yield.

quote markYep, commercial printing, a business that may seem obsolete in our increasingly digital world, especially when you consider that this stock has come down 19% year to date, courtesy of two weak quarters in a row... I think there's more life to this business. But then R.R. Donnelley reported this morning, and low and behold, sure enough, results were better than expected. The company delivered a 7-cent earnings beat off a 35-cent basis, with higher than anticipated revenues that climbed 12% year over year.

quote markThat's pretty solid. At the same time, management reaffirmed their full-year guidance. And together with that beat, that sent the stock up 81 cents. Hey, that's nearly 5%. So what's going right here? First of all R.R. Donnelley has a fantastic business putting together financial statements, and they're the single-most-trusted firm in the space. Second, while commercial printing may be in decline, it's also a highly fragmented industry, so the company's been making acquisitions, and they dramatically slashed costs, like buying Consolidated Graphics, another commercial printer, for $700 million in October. Third, R.R. Donnelley does have one big tailwind, outsourcing. Because when you have parts of your business scattered all over the globe, that creates terrific demand for the company's packaging and labeling business. That's a good one, not to mention the logistics, distribution, warehouse and servicing, and e-books. Now, while R.R. Donnelley has had a tough year, the stock has still given you a 40% return, with dividends, since I first got behind it, roughly 13 months ago. And I think that huge dividend is more than secure, easily covered, and the stock deserves to be in the $20s...

Read more from this segment »

Read all of Wednesday night's show recap »

Lightning RoundTonight's Lighting Round Picks: 

  Pitney Bowes, Inc. (PBI)

Jim: quote markYou know, that's a really great question (caller asked if he missed the move here), because I've got to tell you, it has moved so, so much. But those guys are smart. They're doing a lot of right things. I like the logistics business. No. The answer is that they can go higher.

All Lightning Round picks »

  Arena Pharmaceuticals, Inc. (ARNA)

Jim: quote markNo, see I'm not a fan. You know, people were mad at me that I didn't really like it not that long ago, okay. And the stock has come down. And I've just got to reiterate, it's just not one of my favorites. I don't think, you know, you've got some biotech company that has not been the right place to be. I like here, let's repeat it, the Regeneron, because of the anti-cholesterol; I like Celgene because of the Revlimid; I like Biogen because of the MS (multiple sclerosis) franchise; and I like Gilead because of the Hepatitis C. You know what? Do I need more? Okay, Seattle Genetics and ISIS.

All Lightning Round picks »

  Dexcom, Inc. (DXCM)

Jim: quote markOkay, we had Dexcom on. I really like that company. I think they're doing a lot of good things. I've got to tell you, I bet there's a lot of companies that want to buy that company if the stock keeps going down. By the way, let's be really clear. Where am I on the device business? I like Edwards, EW. I had them on not that long ago. The stock was up almost 10%. I like St. Jude. Dexcom is a terrific spec, but Edwards is best in show.

All Lightning Round picks »

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