Company Description

Casey's General Stores, Inc. together with its subsidiaries, operate convenience stores under the Casey's General Stores name in the Midwest states. It has operations in Iowa, Missouri, Illinois Kansas, Minnesota, Nebraska, South Dakota, Wisconsin, and Indiana. The company was founded in 1959 and is headquartered in Ankeny, Iowa.

Earnings Projections are on the Rise

The company is watching analysts boost estimates ahead of reporting fiscal second quarter results in early December. For the year ending April 2010, the Zacks Consensus Estimate jumped from $2.19 to $2.21 per share in 1 month's time.

For the following year, analysts polled by Zacks are calling for earnings of $2.25 per share, up from last month's $2.21.

The second-quarter Zacks Consensus Estimate of 60 cents per share was increased from 57 cents over the past 90 days.

A Solid First Quarter

The company announced fiscal first-quarter results in early September. Earnings of 87 cents per share, exceeded the Zacks Consensus Estimate by 45% and topped the year-prior total. During the past 4 consecutive quarters, Casey's delivered an average upside earnings surprise of 17.5%.

The company also declared a dividend of $0.085 per share, which translates into a an industry-leading yield of 1%. The dividend was paid out on November 2.

Beating the Benchmarks

Fundamentally, Casey's is leading the industry. The company's return on equity (ROE) of 14% doubles the industry average of 7%. Its net profit margin of 2% tops the industry average of 0.44%.

Casey's has also outperformed technically lately as shares have doubled the market's return over the past 3 months. Zacks Investment Research

Company Description

Casey's General Stores, Inc. together with its subsidiaries, operate convenience stores under the Casey's General Stores name in the Midwest states. It has operations in Iowa, Missouri, Illinois Kansas, Minnesota, Nebraska, South Dakota, Wisconsin, and Indiana. The company was founded in 1959 and is headquartered in Ankeny, Iowa.

A Solid Quarter

The company announced fiscal first-quarter results in early September. Earnings of 87 cents per share, exceeded the Zacks Consensus Estimate by 45% and topped the year-prior total. During the past 4 consecutive quarters, Casey's delivered an average upside earnings surprise of 17.5%.

"Strong gas margins and enhanced profitability inside the stores were the primary reasons for the record quarter," said President and CEO Robert J. Myers. "Lower retail fuel prices also brought about significant relief in our operating expenses."

The company also declared a dividend of $0.085 per share, which translates into a an industry-leading yield of 1%.

The dividend is payable Nov 16 to shareholders of record on Nov 2.

Bullish Forecasts and Strong Momentum

The company is seeing higher Zacks Consensus Estimates and a share price surge after reporting. For the year ending April 2010, forecasts of $2.19 per share are up a penny over the past month and are 21 cents higher than the projections of 2 months ago. The most accurate Zacks Consensus Estimate is more bullish at $2.28 per share.

The Zacks Consensus Estimate for the fiscal second quarter stands at 60 cents per share, versus the 2 months-ago level of 57 cents.

Shares of CASY have more than doubled the market's return after reporting first quarter results. Zacks Investment Research

Now don’t get me wrong―Mr. Commodities wasn’t all doom and gloom. In fact, his talk was both informative and highly entertaining. But Rogers doesn’t sugarcoat things―he’s very matter-of-fact about his concerns and projections for the future. And most of them don’t bode well for the U.S.

I’ll be posting an interview with Jim Rogers on the site in the coming week, but for now, I just wanted to offer some highlights from his speech at ETF Securities' mini-conference and the Q&A that followed.

1. The 21^st century belongs to China

According to Rogers, the 19^th century was the era of the British Empire and the 20^th century was the U.S.’ heyday. But the 21^st century is China’s (though the rest of Asia is definitely going to get a boost too).

The reasons for this are many, but some points brought up by Rogers include the following:

1. The Chinese want to live like we do;
2. They are more eager to work;
3. They are better at saving;
4. There are 1.5 billion Chinese citizens (and 3 billion people in all of Asia), and we owe them money. They are, according to Rogers, “among the best capitalists in the world.”

There will be some setbacks, of course, Rogers says, but these are opportunities. “If you see setbacks in China, you should pick up the phone and get more involved,” he advised, before adding his favorite refrain, “The best advice of any kind that I can give you is to teach your children and grandchildren Chinese.”

China’s path to world domination started with Deng Xiaoping’s capitalist programs in 1978, and there hasn’t been any looking back since. Rogers views China’s dominance as nigh-on unstoppable except for one little thing: its water problem. There are parts of the country that are running out of water, and when the water disappears, Rogers points out, so does civilization. However, the country is acting aggressively to combat the problem, and he doesn’t view it as that much of a threat.

2a. Jim Rogers is not a Ben Bernanke fan

Yep, it’s a fact. No “Team Bernanke” shirts for Jim Rogers (who said to scattered applause during the Q&A session that if he was in charge of the U.S. economy he would “abolish the Fed and resign.”).

Rogers is appalled by the government’s actions—Bernanke’s in particular. The U.S. government’s strategy calls for the debasement of the dollar, he says, calling it a “horrible policy.” While he concedes it can work in the short term, it NEVER works in the mid- or long term.

“He’s going to run those printing presses until we run out of trees, because that’s the only thing he knows,” Rogers said of Bernanke.

Add that on top of the country’s rapidly growing astronomical debt, and Rogers believes you’ve got a recipe for disaster.

2b. The U.S. dollar is screwed

Consider this a corollary to point 2a. Its status as a reserve currency is teetering on a precipice, in Rogers’ opinion, and he’s not alone. In fact, so many people are selling dollars right now that he’s sitting tight, waiting for a possible—and ultimately unsustainable—rally in order to exit the market. Of course, if it fails to rally and just drops again …

“I’ll just have to panic and sell like everyone else,” Rogers said.

3. Commodities, commodities, commodities

OK, as mentioned before, there are 3 billion people in Asia, most of whom are aspiring to play the home version of the American Dream game show. And let’s face it: American society is largely about consumption. We like stuff―we buy it, we wear it, we eat it, we flaunt it, we sometimes even bedazzle it (yeah, Google that). So that’s a lot more consumption on the global level. Rogers notes that while consumption is expected to increase exponentially, not a lot of capacity has been added in the last few decades for a lot of commodities. Meaning, not a lot of new refineries have been built, and not a lot of new resources have been discovered or excavated for a variety of commodities.

In terms of oil, Rogers cites the fact that Saudi Arabia has not seen any new oil discoveries but has consistently said for the past two decades that its reserves are at 260 billion barrels (in which time it has sold 60 billion barrels). He also points out that farmers are a rapidly disappearing species. So to sum up―that’s a lot more people competing for diminishing resources (including the all-important energy and food). Basic supply and demand theory pretty much takes it from there.

“Commodities are the second-largest asset class in the world,” Rogers noted. And they are “the best anchor” for your portfolio, he adds.

Rogers says the typical life span of a commodities bull market is 18-20 years. We’re currently in year 11 right now. Yeah, it could end tomorrow, but that whole supply and demand imperative could also extend this bull beyond its typical time frame.

During the Q&A session, though, the conversation took a darker turn. One questioner asked if the increased competition for resources might lead to war, and Rogers allowed it was a possibility, though he hoped it would not come to that. He pointed out that when a rising power clashes with an established power, the result is usually war, and said that research consistently shows that resource shortages lead to war. So, sure, commodities shortages might start World War III, but if you invest in the commodities themselves, you might at least be in decent financial shape when the shelling stops—and I’m not being flippant at all. War drives up the costs of commodities.

4. U.S. government bonds are the next big bubble

Well, would you lend money to us? Rogers says short-term bonds are probably OK, but he advises getting out of anything with a longer maturity. He calls it “inconceivable” that anyone would lend money to the U.S. for 30 years at the going rate, and notes that the U.S. was a creditor nation as recently as 1987.

“Now the U.S. is the largest debtor nation in the history of the world,” he said.

And for bond portfolio managers, he had some very pointed advice: “Get a new job.”

5. Protect yourself

The underlying theme of Rogers’ entire speech was that the world is changing, and here are some things you should know if you want to come out the better for it (and for your family members, clients, etc., to also come out the better for it) financially. Based on Rogers’ observations, it seems recognizing that change is a key step, but so is adapting to it (see advice regarding learning Mandarin, for example). And in Rogers’ eyes, commodities are a good way to achieve this protection. No investment is certain of course, but right now, he thinks commodities look pretty darn good.

Best Comment Of The Night

Addressing one audience member’s question, Rogers asked if the young man were an MBA. The questioner admitted to holding an MBA and was promptly told he should swap his MBA for an agriculture degree from Texas A&M.

“You should become a farmer,” Rogers said.

That’s an old line for Rogers, but he added a new wrinkle. If you’re not going to become a farmer, you should open the first Lamborghini dealership in Iowa. Because with farmers closing in on extinction just as the world needs more food, that’s probably what they’ll be driving in a few years.

Earnings per share rose to 27 cents from 19 cents a year ago. The Zacks Consensus Estimate called for 18 cents per share.

Revenues jumped 43.2% to $193.2 million from $134.9 million in the year ago period. All three of the company's segments saw growth in the quarter. Equipment sales jumped 44.3% to $141.1 million from $97.8 million last year. Parts sales climbed 37.7% and service revenues grew 44.4% to $15.6 million from $10.8 million in the second quarter of last year.

For the first six months of the year, revenues grew 25% compared to fiscal 2009.

The agriculture equipment business remained strong as the company's customers continued to have access to credit and were investing in equipment. They continue to purchase large tractors and combines. The construction equipment side of the business continued to be soft and was a reflection of the recession and a slowdown in the construction industry.

Titan added 2 agriculture equipment dealerships during the quarter. It also had $86 million in cash and cash equivalents as of July 31 and only $39.6 million in long-term debt.

Titan now operates a network of 68 agriculture and construction dealerships in North Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska, and Wyoming.

Reaffirmed Guidance

Titan still likes what it sees for the rest of fiscal 2010. It reaffirmed revenue and EPS guidance for the year. Revenue is expected in the range of $750 to $790 million. Earnings per share are projected between 92 cents and $1.04 per share.

Covering analysts moved to adjust their estimates based on the recent results. The third quarter Zacks Consensus Estimate fell 4 cents to 32 cents from 36 cents with 3 out of 4 analysts lowering in the last 30 days.

However, the full year Zacks Consensus Estimate jumped 4 cents to 96 with all 4 analysts raising during that time.

Value Fundamentals

Titan Machinery is now a Zacks #2 Rank (buy) stock. It is still an attractive value stock, trading at 12.5x forward earnings. Its price-to-book ratio is now 1.2. The company has a solid 1-year return on equity of 10.27%.

Read the Feb 10, 2008 article.

Update to Previous Value Zacks Rank Buy Stocks

Tech Data Corporation (TECD) beat the Zacks Consensus Estimate for the third straight quarter in August and sees IT spending stabilizing in the Americas in the upcoming quarter. TECD trades at 14.9x forward earnings. Read the full article.

RockTenn Company (RKT) has surprised on the Zacks Consensus Estimate 3 out of the last 4 quarters and has posted record earnings in both the first and third quarters. Can the company do it again when it reports fourth quarter in November? Read the full article.

Bucyrus International (BUCY) surprised on estimates for the second quarter in a row in July. Analysts forecast 10.6% year over year earnings growth in 2009 despite the global recession. BUCY isn't very expensive, trading at just 10.8x forward earnings. Read the full article.

GOL Linhas Aéreas Inteligentes S.A. (GOL) is finding profit in being Brazil's largest low-cost airline. The company has surprised on estimates the last 2 quarters. The stock is cheap, trading at 9.7x forward earnings. Read the full article.

Zacks Investment Research

Company Description

Casey's General Stores, founded in 1959 in Iowa, operates convenience stores affiliated with gas stations in small towns across the United States. As of March 31, the company operated 1474 stores.

Casey's Saw Record Fiscal First Quarter

On Sep 8, Casey's General Stores reported fiscal first quarter 2010 earnings that blew by the Zacks Consensus Estimate by 45%. Earnings per share were 87 cents which easily surprised on the Zacks Consensus Estimate of 60 cents and bested the year ago quarter by 50%.

The company attributed the record quarter to strong gas margins and enhanced profitability inside the stores.

Same-store gasoline gallons sold rose 3.2% with an average margin of 15.7 cents per gallon even as the average retail price per gallon was down 38% from a year ago.

Margins also increased on same store sales to 34.3% compared to 34% in the year ago quarter. Same-store sales, while up 6.4%, were under the company's goal of 8.9%. The cold summer hurt beer and beverage sales.

The company continued to expand its coffee and fountain drink offerings and its made-to-order sub sandwich program. A decline in the cost of cheese compared to a year ago boosted profit.

Expansion plans continue as the company opened 5 newly constructed stores and replaced another 5 stores. There were no acquired stores opened during the quarter. The company still anticipates expanding the number of stores by 4% by the end of fiscal 2010.

Zacks Consensus Estimates Rise

Covering analysts are optimistic about the second quarter and the full year given the better than expected second quarter results.

The second quarter Zacks Consensus Estimate rose 3 cents in the last 7 days with 4 out of 6 analysts raising during that period.

For fiscal 2010, the Zacks Consensus Estimate jumped 9.2% to $2.14 from $1.96 per share as 3 out of 6 analysts adjusted their estimates higher in the last week.

Value Fundamentals

Casey's General Stores is a Zacks #1 Rank (strong buy) stock. It has a price-to-book of 2.17. The company also has a solid 5-year average return on equity (ROE) of 11.58%.

As an added bonus, the company also pays a dividend, which it just raised in June, with a current yield of 1.10%.

Zacks Investment Research

Since January this year, the Illinois-based fertilizer company has been wooing its Iowa-based rival Terra in an all-stock deal for a total of $2.1 billion. Under the original proposal, each common share of Terra would have been entitled to receive 0.4235 shares of CF. However, Terra rejected the offer for the second consecutive time on Mar. 5, saying it undervalued the company.

In response, CF increased its offer price on March 9, to $2.77 billion based on $27.50 for each Terra share and again on March 23, to $3.07 billion based on $30.50 each by agreeing both times to an exchange ratio of not less than 0.4129 and not more than 0.4539 of each of CF’s share.

The third offer of $30.50 per Terra share was a premium of over 85% to Terra’s stock price before CF made the original offer on Jan. 15. Terra, however, again rejected CF’s offer the next day, citing the same reason of undervaluation.

In the beginning of August, CF sweetened the deal by raising the fixed exchange ratio to 0.465 shares of CF Industries for each Terra common share. This would bring about $1 billion in cash to shareholders of the combined company after the proposed deal closes. It would also distribute 5 million contingent future shares to CF stockholders. The contingent shares would be converted into CF stock if the stock trades at more than $115 per share over a certain period after the completion of the potential transaction.

As of Aug. 20, about 11.5 million shares of Terra common stock had been tendered into the exchange offer. CF anticipates the proposed bid to produce annual cost savings of $105 million–$135 million.

We recommend the shares of CF as Neutral.

Company Description

Casey's General Stores, Inc. together with its subsidiaries, operate convenience stores under the Casey's General Stores name in the Midwest states. It has operations in Iowa, Missouri, Illinois Kansas, Minnesota, Nebraska, South Dakota, Wisconsin, and Indiana. The company was founded in 1959 and is headquartered in Ankeny, Iowa

Bullish Forecasts

The company is seeing higher Zacks Consensus Estimates ahead of reporting fiscal first-quarter results. During the past 3 months, forecasts of $1.97 per share climbed from $1.80 for the year ending April 2010.

For the following year, the Zacks Consensus Estimate was increased from $1.95 per share to $1.97 over the past 3 months.

The Zacks Consensus Estimate for the fiscal first quarter stands at 60 cents per share, versus the 3 months-ago level of 55 cents.

First quarter results are scheduled for release on September 9.

Record Results

The company's fiscal fourth-quarter and full-year report included record earnings for the year of $1.69 per share. Last year, Casey's earned $1.68 per share.

Fourth-quarter earnings of 31 cents per share topped the previous year's 28 cents but missed the Zacks Consensus Estimate of 36 cents.

In fiscal 2010, the company said it plans to increase same-store sales of gas, groceries and prepared food. The company also increase its number of stress by 4%.

Casey's hiked its dividend to $0.085 per share, which was paid out on August 17. CASY's dividend yield tops the industry average at 1.3%.

Solid Fundamentals

The company offers a return on equity (ROE) of 12.5%, surpassing the industry average of 10%. The company's net profit margin of 2% is ahead of the industry average of 1%. Zacks Investment Research

Since January 2009, CF has been wooing its Iowa-based rival in an all-stock deal worth $2.1 billion. Under the original proposal, each common share of Terra would have been entitled to receive 0.4235 shares of CF. However, Terra rejected the offer for the second consecutive time on March 5, citing undervaluation of the company.

In response, CF increased its offer price on March 9, to $2.77 billion, or $27.50 for each Terra share, and again on March 23, to $3.07 billion, or $30.50 each, by agreeing both times to an exchange ratio of not less than 0.4129 and not more than 0.4539 of CF’s share.

The third offer of $30.50 per Terra share was a premium of over 85% to Terra’s stock price before CF made the original offer on Jan. 15. Terra again rejected CF’s offer the next day, citing the same reason of undervaluation.

The new exchange ratio is stated to bring about $1 billion in cash to shareholders of the combined company after the proposed deal closes. It would also distribute 5 million contingent future shares to CF stockholders. The contingent shares would be converted into CF stock if the shares trades at more than $115 each over a certain period after completion of the potential transaction.

CF anticipates the proposed deal to produce annual cost savings of $105 million–$135 million. Terra commented that its Board will look at the new bid by the end of this month.

We recommend the shares of CF as Neutral.

Company Description

Casey's General Stores, Inc. together with its subsidiaries, operate convenience stores under the Casey's General Stores name in the Midwest states. It has operations in Iowa, Missouri, Illinois Kansas, Minnesota, Nebraska, South Dakota, Wisconsin, and Indiana. The company was founded in 1959 and is headquartered in Ankeny, Iowa.

Record Results

The company recently released its fiscal fourth-quarter report, which included record earnings for the year of $1.69 per share. Last year, Casey's earned $1.68 per share.

Fourth-quarter earnings of 31 cents per share topped the previous year's 28 cents but missed the consensus estimate of 36 cents.

In fiscal 2010, the company said it plans to increase same-store sales of gas, groceries and prepared food. The company also increase its number of stress by 4%.

Casey's hiked its dividend to $0.085 per share, noting that it is payable August 17 to shareholders of record on August 3. CASY's dividend yield tops the industry average at 1.1%.

CASY has been trading ahead of market since reporting in mid-June, and stock is beating the market by more than 30% over the past year.

Bullish Forecasts

Analysts' earnings estimates for the year ended April 2010 are at $1.97 per share, above the 2 months-ago level of $1.80.

For the following year, analysts are calling for earnings of $1.97 per share, an increase from the 2 months-ago level of $1.95. Zacks Investment Research

Company Description

Casey's General Stores, founded in 1959 in Iowa, operates convenience stores affiliated with gas stations in small towns across the United States. As of March 31, the company operated 1474 stores.

Casey's Had Record Year

On June 15, Casey's reported fourth quarter results that missed on analysts' estimates by 5 cents a share while reporting record earnings for the year.

Fourth-quarter earnings per share were 31 cents compared to analysts' estimates of 36 cents but were higher than the year ago quarter of 28 cents per share. Adjusted fiscal earnings per share for the year were $1.80, which was a company record.

The Prepared Food and Fountain segment was the big winner in 2009 as same-store sales rose 9.1%, higher than the targeted 6.8%. Margins also increased slightly to 61.4% from 61.2%.

In 2010, the company is looking to expand its coffee and fountain selections as well as continuing the roll-out of its made-to-order sub sandwich program. Fourth quarter same stores sales climbed 7.2%.

The Grocery and Other Merchandise segment saw same store sale growth of 8% in the fourth quarter and 7% for fiscal 2009. Gasoline was the more difficult segment as prices spiked at the beginning of fiscal 2009. The fourth quarter saw same-store gallons sold rise 1.2%.

Even in difficult economic conditions, the company managed to increase its store count by 2%, adding 16 new stores and 16 acquired stores. It also replaced 14 stores and completely remodeled 2 others.

Dividend Increased

Unlike many other companies which are slashing dividends during the global recession, Casey's actually increased it by a penny to 0.85 cents from 0.75 cents payable on Aug 17 to shareholders of record on Aug 3. That is a current yield of 1.40%.

Consensus Estimates Move Higher

Covering analysts are bullish about the company's outlook in 2010. First quarter 2010 estimates climbed 4 cents to 59 cents per share in the last 30 days as 2 out of 5 covering analysts raised.

Fiscal 2010 consensus estimates jumped 20% in the last month to $1.96 from $1.80 per share as 3 out of 5 analysts raised.

Value Fundamentals

Casey's General Stores is a Zacks #1 Rank (strong buy) stock. It has a forward P/E of 13.02 and a price-to-book ratio of 1.80. The company has a solid 5-year average return on equity (ROE) of 11.27%.

Zacks Investment Research

STATES WITH PROJECTED FY2010 BUDGET GAPS
State	FY2010 pre-budget	FY2010 mid-year gap	FY2010 Total	FY2010 Total % of Budget
Alabama	$1.2 billion	0	$1.2 billion	16.70%
Alaska	$1.3 billion	0	$1.3 billion	30.00%
Arizona	$4.0 billion	0	$4.0 billion	41.10%
Arkansas	$146 million	0	$146 million	3.20%
California*	$34.2 billion	$19.5 billion	$53.7 billion	58.20%
Colorado	$1.0 billion	$384 million	$1.4 billion	18.60%
Connecticut	$4.1 billion	0	$4.1 billion	23.20%
Delaware	$557 million	0	$557 million	17.60%
District of Columbia	$650 million	$150 million	$800 million	12.70%
Florida	$5.9 billion	0	$5.9 billion	22.80%
Georgia	$3.1 billion	$750 million	$3.9 billion	22.30%
Hawaii	$682 million	$297 million	$978 million	19.10%
Idaho	$411 million	0	$411 million	16.40%
Illinois	$9.2 billion	0	$9.2 billion	33.00%
Indiana	$1.1 billion	0	$1.1 billion	7.50%
Iowa	$779 million	0	$779 million	13.20%
Kansas	$1.4 billion	Yes, DK size	$1.4 billion	22.60%
Kentucky	0	$1.1 billion	$1.1 billion	11.30%
Louisiana	$1.8 billion	0	$1.8 billion	21.60%
Maine	$640 million	0	$640 million	21.40%
Maryland	$1.9 billion	Yes, DK size	$1.9 billion	13.60%
Massachusetts	$5.0 billion	0	$5.0 billion	17.90%
Michigan	$2.4 billion	0	$2.4 billion	12.00%
Minnesota	$3.2 billion	0	$3.2 billion	21.00%
Mississippi	$480 million	0	$480 million	9.60%
Missouri	$923 million	0	$923 million	10.30%
Nebraska	$150 million	0	$150 million	4.30%
Nevada	$1.2 billion	0	$1.2 billion	37.80%
New Hampshire	$250 million	0	$250 million	16.20%
New Jersey	$8.8 billion	0	$8.8 billion	29.90%
New Mexico	$345 million	0	$345 million	6.30%
New York	$17.9 billion	0	$17.9 billion	32.30%
North Carolina	$4.6 billion	0	$4.6 billion	21.90%
Ohio	$3.3 billion	0	$3.3 billion	12.30%
Oklahoma	$600 million	0	$600 million	10.50%
Oregon*	0	0	0	0.00%
Pennsylvania	$4.8 billion	0	$4.8 billion	18.00%
Rhode Island	$590 million	0	$590 million	19.20%
South Carolina	$725 million	0	$725 million	12.50%
South Dakota	$32 million	0	$32 million	2.90%
Tennessee	$1.0 billion	0	$1.0 billion	9.70%
Texas	$3.5 billion	0	$3.5 billion	9.50%
Utah	$721 million	$279 million	$1.0 billion	19.80%
Vermont	$278 million	0	$278 million	24.80%
Virginia	$1.8 billion	Yes, DK size	$1.8 billion	10.90%
Washington	$3.4 billion	$195 million	$3.6 billion	23.30%
West Virginia	$200 million	0	$200 million	5.30%
Wisconsin	$3.2 billion	0	$3.2 billion	23.20%
Wyoming	0	$32 million	$32 million	1.70%
Total	$143.2 billion	$22.7 billion	$165.9 billion	24.40%

This will lead to very drastic cuts in state budgets. Access to medical care by the poor will likely be one of the first things to be cut.

Education budgets will also probably be pared. This could be decreased spending on new textbooks, which would not be good news for publishers like McGraw-Hill (MHP) and Scholastic (SCHL).

Another area that is likely to be hit is new equipment at the municipal level. For example, I would not expect Oshkosh (OSK) to have a very good year selling new fire engines and snow removal equipment to municipalities.

Layoffs of state and municipal workers will simply add to the already high and rising unemployment rate. In short, a big part of the federal stimulus spending is being offset by (legally mandated) anti-stimulus actions at the state level.

As the graph shows, state fiscal problems tend to persist well after the recession is officially over. Indeed the problem is usually worse in the second or third year since by then the "rainy day funds" have already been used up.

Following the last recession, states collectively had their worst year in 2004 with a shortfall of $80 billion (or less than half what they face for fiscal 2010), which was well after the recession officially ended. Thus 2011, and possibly even 2012, will be a very lean year at the state level as well.

Ron Pernick is co-founder and managing director of Clean Edge Inc. The San Francisco area-based consultant and researcher creates indexes to track various segments of the clean energy industry. One of its benchmarks serves as the basis for the PowerShares Global Wind Energy Portfolio (NASDAQ: PWND).  

IndexUniverse.com's Murray Coleman caught up with Pernick recently at Clean Edge's offices in Portland, Ore., working on development of a new index series expected to be unveiled by year's end.

IU.com: What do the correlations between conventional energy pricing trends and alternative energy trends show now?

Pernick: Conventional energy prices are extremely volatile. Over time, you can make the case that those will continue to increase, especially oil. On the other hand, clean energy prices in general have been going down. Solar power is a very striking example. For every doubling of solar PV modules [the technology used to convert sunlight into electricity], there's about an 18% decline in pricing.

IU.com: Is that a big change from past years?

Pernick: In 2007, for the first time, the solar industry started using more silicon than the high-tech semiconductor industry. From 2006 through 2008, we saw a significant shortage of silicon. But that three-year period is ending, which will further help to reduce costs of solar energy going forward. Some of the large manufacturers such as Suntech Power (NYSE: STP) last year started initiating price reductions of around 25% on solar cells and panels. And we're seeing more price reductions this year. That bodes well for the solar industry and solar PV modules in the future. We're also seeing companies like First Solar (Nasdaq: FSLR) delivering thin-film solar technologies now that are cheaper. That's a neat twist in the non-silicon, new chemistries market.

IU.com: How about wind energy?

Pernick: Over the past 30 years, we've seen a reduction in pricing in wind power. But now it's stabilizing. We probably won't see significant ongoing wind reductions in terms of costs. It could decrease slightly or remain stable. The key is that wind power has taken a maturation path where there are large players who've been working on large projects for years. Those include companies such as GE (NYSE: GE) and Siemens AG (NYSE: SI).

IU.com: As clean energy costs go down, how much will its usage escalate?

Pernick: My crystal ball is no better than anyone else's might be at making predictions. But many drivers are in place to increase usage in the United States. More than two dozen states already have renewable portfolio standards, which require states to produce clean electricity at certain levels. For example, California is requiring 33% of all electricity produced in the state to come from renewable sources by 2020. And a number of states are pegging that rate at 20-25% by 2025. Today, between 8-10% of our electricity generation in the U.S. comes from renewable energy. That figure includes hydropower. It's important to remember that most of these state mandates don't include hydro.

IU.com: What do you see as the biggest gainers from such a development?

Pernick: There's no doubt wind is going to be a big benefactor of this push on a statewide level. There are 12 states, in particular, that appear to be well-positioned. Those include Texas and Iowa, of course, along with almost anywhere across the Great Plains. Also, the three Western states stand to gain along with those in the Eastern coastal parts of the country. Wind prices are relatively stable now, which is a plus for states looking to plan projects on a larger scale.

IU.com: What about solar power?

Pernick: Considering that solar costs are positioned to drop dramatically in the next several years, we could easily get to a point where solar might represent 10% of the country's electricity generation by 2025. But that can only happen with utilities actively involved in the process. Other industries also must take the right steps in terms of gaining proper access and receiving enough incentives to fully take advantage of new solar technologies. It's important to note that in the past five years, the most activity we've seen in the U.S. in terms of solar adoption has been from commercial and industrial buildings putting systems on roof tops.

IU.com: How is new legislation impacting new projects?

Pernick: The last two quarters of 2008 and the first quarter of 2009 were pretty dismal. The decimated credit markets didn't help alternative energy sectors. But we're starting to see the impact of stimulus dollars and more liquidity in credit markets show up in a number of different ways. For example, the stimulus package includes over $9.3 billion to improve high-speed rail. To build a smarter grid system, another $11 billion is targeted in the stimulus bill. In total, we've identified more than $70 billion from this stimulus package for clean energy projects alone. If you add clean water spending into the mix, that goes up to close to $90 billion.

We also should see some stimulus coming as the result of an eight-year extension for solar tax credits. The most we've seen in terms of extensions in the past have been two years. And it often takes a long time to actually receive an extension. So this eight-year period should provide a lot more clarity in lowering costs for people to install solar power.

But we don't expect any of these drivers to make a big impact on clean energy industries until early 2010. So while we're starting to see some increased activity, it's going to take some time to recover from the ravages of the recent bear market.  

IU.com: What is the most attractive subsegment of renewable energy market?

Pernick: Some other areas of interest are conservation and efficiency. By deploying these measures, you reduce the amount of electricity needed. Weatherizing a house, for example, is a great idea. How many people use a digital thermostat to automatically turn off their heat when they don't need it? And there are a lot of new energy efficient technologies coming down the road—including windows that can reduce cold or heat outflows by three-to-five times. Retrofits are great and a lot of programs are being developed to help people fund these types of projects.

But the really dramatic changes are coming in the green building arena with brand new structures. Anything embedding more intelligent and efficient systems in our power grid is going to make a huge difference. When there's a power outage today, utilities find out today by phone calls. In the future, utilities are going to use technologies that talk to each other. It's the next big networking project in high-tech.

Company Description

Casey's General Stores, Inc. together with its subsidiaries, operate convenience stores under the Casey's General Stores name in the Midwest states. It has operations in Iowa, Missouri, Illinois Kansas, Minnesota, Nebraska, South Dakota, Wisconsin, and Indiana. The company was founded in 1959 and is headquartered in Ankeny, Iowa.

Stellar Earnings

The company saw a solid third quarter. Earnings per share of 28 cents came in 47% ahead of the consensus estimate.

"We are pleased with the execution of our strategy," said President and CEO Robert J. Myers. "We were able to exceed third quarter earnings from a year ago despite a gas margin decline of over 3.5 cents per gallon."

The company has outperformed the market over the past year, receiving an extra boost after delivering the strong third-quarter results.

Wall Street is Bullish on CASY

Current fiscal year earnings projections of $1.74 per share are above the 2 months-ago level of $1.66. For the following year, earnings expectations of $1.80 were increased from last month's $1.74 and $1.70 of 2 months ago.

CASY's fiscal year ends in April, and the fourth-quarter report is scheduled for release on June 10.

Favorable Comparisons

CASY's return on equity (ROE) of 13% is in line with the industry average. The company's dividend yield of 1.2% stands out as most of CASY's industry peers pay no income. Its net profit margin of 2% is also in line with the industry average.

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Company Description

Casey's General Stores, Inc. together with its subsidiaries, operate convenience stores under the Casey's General Stores name in the Midwest states. It has operations in Iowa, Missouri, Illinois Kansas, Minnesota, Nebraska, South Dakota, Wisconsin, and Indiana. The company was founded in 1959 and is headquartered in Ankeny, Iowa.

Wall Street is Bullish on CASY

Current fiscal year earnings projections of $1.73 per share are above last month's $1.66. For the following year, earnings expectations of $1.76 were increased from last week's $1.74 and last month's $1.72. CASY's fiscal year ends in April.

Favorable Comparisons

CASY's return on equity (ROE) of 13% is in line with the industry average. The company's dividend yield of 1.1% stands out as most of CASY's industry peers pay no income. Its net profit margin of 2% is also in line with the industry average.

Solid Quarter

The company recently reported favorable results for the fiscal third quarter. Earnings per share of 28 cents came in 47% ahead of the consensus estimate.

"We are pleased with the execution of our strategy," said President and CEO Robert J. Myers. "We were able to exceed third quarter earnings from a year ago despite a gas margin decline of over 3.5 cents per gallon."

The company has outperformed the market over the past year, receiving an extra boost after delivering the stellar results. Zacks Investment Research

The company said that both units would be merged into a single agriculture and turf division, starting on May 1. It will result in charges of approximately $25 million in the fourth quarter this year.

Last week, Deere announced a workforce reduction of 160 workers at a facility in Iowa, and in March it shed 325 positions from its construction and forestry division.

In its fourth quarter, DE reported earnings per share of 48 cents, which missed the consensus by 25%. The past 60 days have seen earnings estimates for this fiscal year, ending October 2009, drop 91 cents to $3.31.

DE is a Zacks #5 Rank ("Strong Sell") company.

Shares of DE are slightly higher today by less than 1%. It is trading on lower-than-normal volume of about 1.18 million shares, compared to the average of almost 6 million.

Company Description

iPCS Inc. is the Sprint PCS Affiliate of Sprint Nextel with the exclusive right to sell wireless mobility communications, network products and services under the Sprint brand in portions of Illinois, Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee.

The company covers over 10 million residents and nearly 700,000 subscribers. The company is headquartered in Schaumburg, IL where it employs about 550 people, and carries a market cap of roughly $170 million.

Out of the Red

On Mar 2 iPCS announced fourth-quarter results that included a earnings per share of 0 cents. While that alone seems disappointing, this was up from a net loss of 24 cents per share one year ago. Another plus was that analysts were expecting a 27 cent loss.

Estimates Spike

After the wireless company announced earnings analysts drastically revised their forecasts. The consensus estimate for 2009 is currently 28 cents, up from a loss of 49 cents one week ago. Estimates for 2010 are now averaging $1.49, up from 89 cents.

These projections would be greater than 200% growth in 2009 and more than 400% in 2010.

The Chart

Shares of IPCS have been building momentum since January. Take a look at the chart below.

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Company Description

Titan Machinery operates a network of 63 full service agricultural and construction equipment stores in North Dakota, South Dakota, Minnesota, Iowa, Nebraska, Wyoming and Montana. Two of the stores are outlet stores. The company represents various brands including, among others, Case IH, New Holland Agriculture, New Holland Construction, and Case Construction.

Titan has been on an acquisition streak in recent weeks.

On Dec 23, the company announced it had acquired Anderson Power and Equipment, Inc., an agriculture equipment dealership in Thief River Falls, Minnesota. Anderson Power, which had been operating since 1972, had reported revenues of $8.6 million for the fiscal year ending March 31, 2008. Titan closed the deal on Dec 22, 2008.

On Jan 23, Titan also reported it had closed on the previously announced acquisition of Western Plains Machinery Co. and WP Rentals. Western Plains and WP Rentals, between them, had 9 construction equipment stores in Montana and Wyoming. The deal closed on Jan 1.

Combined, both companies generated revenues of $48.9 million in fiscal year 2007 which ended Dec 31, 2007, the most recently reported period.

Revenue Jumped 62% in the Third Quarter of 2009

On Dec 15, Titan announced its third quarter 2009 results which easily beat Wall Street estimates by 95.65%, or 22 cents per share. Net income surged 204% to $8.2 million from $2.7 million in the year ago period.

Revenue climbed 62% to $214 million from $132.2 million a year ago. Growth was primarily due to the continued strength of the agriculture economy, acquisitions, and organic growth.

Titan Raises 2009 Guidance

In December, the company was bullish on the rest of 2009 as it saw a strong pipeline for acquisitions, which came to fruition, as well as organic growth.

For the fiscal year 2009, ending on Jan 31, 2009, Titan raised its revenue forecast in the range of $635 million to $675 million compared to the previous guidance of $590 million to $635 million.

Earnings per share climbed to a range of $1.07 to $1.11 from prior guidance of 89 to 94 cents.

Consensus Estimates Rise

Given the strong third-quarter results, 2009 consensus estimates have moved sharply higher in the last 2 months to $1.11 from 93 cents. That is now at the high end of the guidance range.

2010 consensus estimates are also up 11 cents to $1.16 per share in the last 60 days.

Analysts still expect aggressive growth from the company, with a 5-year earnings growth projection of 24%.

Value Fundamentals

Titan Machinery is a Zacks #1 Rank (strong buy). It has surprised 3 out of 4 quarters by an average of 69.14%.

The company is trading at 10.2x forward earnings. It has a price-to-book of 1.22. TITN is scheduled to report fourth-quarter earnings on Mar 17.

"TITN" Free Stock Analysis: Buy? Sell? Hold?
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Company Description

Casey's General Stores, Inc. together with its subsidiaries, operate convenience stores under the Casey's General Stores name in the Midwest states. It has operations in Iowa, Missouri, Illinois Kansas, Minnesota, Nebraska, South Dakota, Wisconsin, and Indiana. The company was founded in 1959 and is headquartered in Ankeny, Iowa.

CASY Saw Revenue Growth during a Challenging Quarter

The company recently delivered a solid fiscal second quarter in the face of a difficult environment. President and CEO Robert J. Myers said, “despite the challenging economic environment, same store sales in all three categories were positive for the quarter and customer traffic remained solid.”

On a year-over-year basis, second-quarter revenue increased by about 17%. Earnings per share of 54 cents were even with the year-ago result.

Analysts are hinting toward more growth going forward. For the third quarter, analysts upped the earnings per share forecast by a penny over the past week to 24 cents. For the year ending April 2009, earnings projections have held relatively steady lately at about $1.58 per share.

Competitive Income

Casey's also declared a quarterly dividend of $0.075 per share, noting that it is payable on February 16 to shareholders of record on February 2. The company's dividend yield of 1.3% is well ahead of the industry average.
"CASY" Free Stock Analysis: Buy? Sell? Hold?
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The Trade Deficit increased to $57.2 billion in October from a $56.6 billion deficit in September.  October exports were $151.7 billion, $3.4 billion, less than September exports of $155.1 billion, and imports of $208.9 billion, $2.7 billion less than September imports of $211.6 billion.  Net exports helped abate diminished GDP levels, and on the report of the trade deficit decreasing in October, the forecast for 4th quarter GDP will be lowered further. Advance 4th quarter GDP estimates are scheduled for release by the Bureau of Economic Analysis on January 30th, 2009 at 8:30 AM EST.

Upcoming Releases
Retail Sales (12/12 at 8:30 AM EST)
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The situation is dire. GM is burning through cash at a pace that could mean bankruptcy, and all three players are struggling with high costs, weak vehicle sales, frozen credit lines and dwindling cash reserves calling into question whether they can survive much longer without government help. The answer, of course, is that…

This from Taipan Publishing’s emerging markets blog:

As climate change and energy independence have headlined a number of events during the past two years of presidential campaigning, I’m happy to see alternative energy back in the investment ring.

Surprisingly, many top-notch European companies see the U.S. as a major growth region for the renewable energy business, and they are coming over in droves to set up shop.

Let’s take a look at just one of the technologies…

Company Description

Casey & General Stores, Inc. together with its subsidiaries, operate convenience stores under the Casey's General Stores name in the Midwest states. It has operations in Iowa, Missouri, Illinois Kansas, Minnesota, Nebraska, South Dakota, Wisconsin, and Indiana. The company was founded in 1959 and is headquartered in Ankeny, Iowa.

Solid Growth

The company reported an all-time high in earnings for the first fiscal quarter, surpassing the consensus estimate by nearly 18% and noting that the record quarter gave CASY a solid foundation for meeting its annual performance goals. During the past 5 consecutive quarters, the company missed analyst forecasts only once and on average topped estimates by 11%.

First-quarter sales were up 16.8% to $1.3 billion. Same-store gallons sold increased by 0.50%. Grocery and other merchandise same-store sales climbed 4.7%, and prepared food and fountain drinks same-store sales jumped 12.3 percent.

Favorable Comparison and Higher Expectations

CASY offers a dividend yield of 1%, which exceeds the industry average as CASY's industry group pays little to no income. The company's return on equity (ROE) is 13%, which beats industry average of 5%.

Analyst earnings estimates for the year ending April 2009 of $1.58 per share are above last month's expectations of $1.56. The most accurate projection of $1.63 per share is a more bullish one.
"CASY" Free Stock Analysis: Buy? Sell? Hold?
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Company Description

Casey & General Stores, Inc. together with its subsidiaries, operate convenience stores under the Casey’s General Stores name in the Midwest states. It has operations in Iowa, Missouri, Illinois Kansas, Minnesota, Nebraska, South Dakota, Wisconsin, and Indiana. The company was founded in 1959 and is headquartered in Ankeny, Iowa.

Solid Growth

The company reported an all-time high in earnings for the first fiscal quarter, surpassing the consensus estimate by nearly 18% and noting that the record quarter gave CASY a solid foundation for meeting its annual performance goals. During the past 5 consecutive quarters, the company missed analyst forecasts only once and on average topped estimates by 11%.

First-quarter sales were up 16.8% to $1.3 billion. Same-store gallons sold increased by 0.50%. Grocery and other merchandise same-store sales climbed 4.7%, and prepared food and fountain drinks same-store sales jumped 12.3 percent.

Favorable Comparison and Higher Expectations

CASY offers a dividend yield of 1%, which exceeds the industry average as CASY’s industry group pays little to no income. The company’s return on equity (ROE) is 13%, which beats industry average of 5%.

Analyst earnings estimates for the year ending April 2009 of $1.56 per share are above last month’s expectations of $1.49.
"CASY" Free Stock Analysis: Buy? Sell? Hold?
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