E Portfolio Highlights - June 2020

Quarterly Movers & Shakers

During the past three months, the S&P 500 index rose 3% despite very high volatility and a deep global recession brought on by the coronavirus. The following stocks generated 17% or better gains during the same period.

Tractor Supply (TSCO) reported solid first quarter results with sales up 8% to $2.0 billion and EPS sprouting 13% higher to $.71. Free cash flow increased substantially during the quarter to $54.3 million. During the quarter, Tractor Supply spent $263.2 million on stock repurchases and $40.8 million on dividends. Management expects record breaking second quarter sales with 24% to 29% growth and gross margin expansion. Tractor Supply’s stock plowed up a 38% gain during the past quarter. Hold.

Facebook (FB) reported first quarter revenue rose 18% to $17.7 billion with both net income and EPS more than doubling. With people sheltered in place around the world, Facebook experienced increased engagement, especially in messaging and video calls, as people relied on its products more than ever to connect with the people and organizations they care about. Free cash flow increased 36% during the quarter to $7.4 billion with the company repurchasing $1.3 billion of its common stock. Facebook ended the quarter with a fortress balance sheet with more than $60 billion in cash. Given the firm’s financial strength, it still expects to hire 10,000 people this year. Subsequent to quarter end, Facebook announced a $5.7 billion investment in Jio Platforms in India. Facebook’s stock advanced a friendly 17% during the past quarter. Hold.

Apple (AAPL) reported fiscal second quarter sales rose 1% to $58.3 billion with net income down 3% to $11.2 billion. Free cash flow increased 24% during the first half of the year to $40 billion. During the first half, the company paid $6.9 billion in dividends and repurchased $39.3 billion of its stock. Apple ended the quarter with $104 billion in cash and investments net of long-term debt. Apple announced a 6% increase in its dividend and announced a new $50 billion share repurchase program. Apple’s stock picked up a 16% gain during the last three months, contributing to its crisp 810% total return over the last decade. Hold.

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