Buy To Hold, Hold To Buy - Quarterly Portfolio Changes

Here's the short list of those equities we have changed from buy to hold, and from hold to buy since our last review.

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Quarterly Rating Change From Buy To Hold

Oracle Big Share Buybacks

Oracle Corporation (ORCL) reported fiscal 2022 first quarter revenues increased 4% to $9.7 billion with net income increasing 9% to $2.5 billion and EPS up 19% to $0.86 on an 8% reduction in weighted average shares outstanding. The company returned $8.88 billion to shareholders during the quarter through dividends of $887 million and big share repurchases of $8 billion at an average cost per share of $85.11. During the past ten years, Oracle has reduced its shares outstanding by 46% at an average cost per share that is less than 50% of the current stock price. For the full fiscal 2022 year, Oracle expects revenues to grow in the mid-single digit range with operating margins the same or better than pre-pandemic levels. Over the past eight years, Oracle has provided a divine 210% total return. Hold.

Pepsico Pops!

PepsiCo (PEP) reported third quarter revenues rose 12% to $20.2 billion with net income down 3% to $2.2 billion and EPS decreasing 3% to $1.60, primarily due to higher taxes. Core operating profits increased 6% during the quarter and reflected the impacts of supply disruptions and the adverse impacts of inflation within the transportation, labor and commodity markets. Free cash flow increased 8% during the first nine months of the year to $4.4 billion with the company paying $4.3 billion in dividends. For the full 2021 year, management raised their revenue and earnings outlook with organic revenue growth expected to be about 8% with core EPS of at least $6.20, representing 11% growth. Over the last seven years, PepsiCo’s stock has popped with the stock doubling and sweet dividends adding to the total return. Hold.

Quarterly Rating Change From Hold To Buy

Berkshire Hathaway $20 Billion Share Buyback

Berkshire Hathaway (BRK-B, BRK-A) earned $10.3 billion in the third quarter and reported the company’s net worth during the first nine months of 2021 increased 6.6%, or $29.3 billion, to $472.5 billion. Berkshire’s balance sheet at quarter end continues to reflect very significant liquidity with more than $144 billion in cash and equivalents. Free cash flow rose 14% during the first nine months of 2021 to $22.4 billion. Berkshire’s largest investment during the year has been the $20.2 billion repurchase of its own shares, including $7.6 billion in the third quarter. Berkshire Hathaway’s stock has risen tenfold over the last 21 years. Buy.

Cisco Systems 1Q Net Income +37%

Cisco Systems (CSCO) reported fiscal first quarter revenues increased 8% to $12.9 billion with net income jumping 37% to $3 billion. Order demand was the strongest in over a decade. Cisco is taking multiple steps to mitigate component shortages to meet the demand. Revenue growth of 5%-7% is expected in 2022 with EPS in the range of $2.77 to $2.89. Cisco’s stock has routed up an 821% gain over the last 24 years. Buy.

Hormel Foods Increased Dividend 9% 93 Years Of Dividends

Hormel Foods (HRL) reported third quarter revenue increased 20% to a record $2.9 billion with organic sales up 14% thanks to strong demand in all business segments and across all sales channels. Hormel has paid 93 consecutive years of uninterrupted dividends. Hormel expects to deliver record sales in the fourth quarter along with improving margins. Over the last 20 years, Hormel has provided a Spamtastic 761% total return. Buy.

3M Dividend Yields 3.3%

3M (MMM) posted a 7% increase in third quarter sales to $8.35 billion with net income flat at $1.4 billion due to supply chain disruptions and inflationary pressures. Overall end market demand remained strong across all business groups and geographies. 3M returned $1.4 billion to shareholders in the third quarter, including $856 million in cash dividends and $527 million of share repurchases. Total sales are expected to increase 9% to 10% in 2021 with EPS in the range of $9.70 to $9.90. The dividend currently yields 3.3%. Over the last 14 years, 3M’s stock has gained 143%. Buy.

Maximus 20% Return On Equity

Maximus (MMS) reported fiscal year 2021 revenues increased 23% to $4.25 billion with EPS up 38% to $4.67. Maximus generated a solid 20% return on shareholders’ equity for the year. Revenue growth was driven by approximately $1.1 billion of COVID19 response work. For fiscal 2022, Maximus expects revenues in the range of $4.4 billion to $4.6 billion and EPS in the range of $4.00- $4.30. Over the last five years, Maximus’ stock has gained a tidy 41%. Buy.

Starbucks Increased Dividend 9%

Starbucks (SBUX) served up record 2021 fiscal year results with sales percolating 24% higher to $29.1 billion and net income jolting ahead to $4.2 billion. Starbucks brewed up a 9% dividend increase, marking the 11th consecutive year of dividend increases. Starbucks announced plans to return $20 billion to shareholders over the next three years via dividends and share repurchases. Over the last seven years, Starbucks’ stock has nearly tripled. Buy.

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