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Recent Articles
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Casey’s General Stores Executing Well
Oct 7, 2025
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Image Source: TradingView.
Looking to fiscal 2026, Casey’s expects EBITDA to increase 10%-12% and inside same-store sales to increase 2%-5% on an inside margin of approximately 41%. The company expects to open at least 80 stores in fiscal 2026, through a mix of M&A and new store construction, bringing the three-year strategic plan period total to approximately 500 stores. We like Casey’s, but shares aren’t cheap enough for us to bite.
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Lennar Continues to Navigate Weakness in the Housing Market
Oct 7, 2025
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Image Source: TradingView.
In the fiscal third quarter, Lennar’s new orders increased 12% to 23,004 homes. Excluding mark-to-market gains, fiscal third quarter net earnings were $516 million, or $2.00 per diluted share, compared to $1.1 billion, or $3.90 per diluted share in the prior year quarter. The average sales price of homes delivered was $383,000 in the third quarter of 2025, compared to $422,000 in the third quarter of last year. Gross margins on home sales were $1.4 billion, or 17.5%, in the third quarter of 2025, down from 22.5% in the third quarter of 2024. Lennar is navigating weakness in a housing market that is requiring additional incentives, hurting margins, while it deals with higher land costs. We’re not interested in Lennar’s shares at this time.
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Nike Has Posted 23 Consecutive Years of Increasing Dividend Payouts
Oct 5, 2025
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Image Source: TradingView.
During the first quarter of fiscal 2026, Nike returned $714 million to shareholders, consisting of dividends of $591 million, up 6% from the prior year, and share repurchases of $123 million. Nike has repurchased 124.4 million shares under its $18 billion program approved by the board in June 2022 for a total of approximately $12.1 billion. At the end of the quarter, inventories at Nike were $8.1 billion, down 2% compared to the prior year, while cash and short-term investments were $8.6 billion, down approximately $1.7 billion from last year. Nike continues to face pressure in its footwear division, though apparel sales were strong in the quarter. Footwear revenue fell 12% on a constant currency basis in China. Looking to the fiscal second quarter, revenues are expected to be down low single digits, while gross margins are expected to fall 300-375 basis points, including a net headwind of 175 basis points from tariffs.
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Costco’s Shares Are Not Cheap
Oct 5, 2025
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Image Source: Costco.
In the fourth quarter of fiscal 2025, Costco’s gross margin expanded 13 basis points, while SG&A as a percentage of sales dropped 17 basis points, bolstering operating income. Net income for the fourth quarter was $2.61 billion, $5.87 per diluted share, seven cents better than expected and compared to $2.354 billion, $5.29 per diluted share in last year’s quarter. Long-term debt totaled $5.7 billion at the end of the quarter, while cash and short-term investments were $15.3 billion. Merchandise inventories fell to $18.12 billion from $18.65 billion at the end of last year’s quarter. We like the fundamental momentum at Costco and its outlook remains bright, but its valuation is quite stretched at the moment. We remain on the sidelines.
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