U.S. Dividend Stock: Commercial Metals Company (CMC)

Commercial Metals Company (NYSE:CMC) share price jumped at US$ 22.12 before falling back to end the trade at US$ 20.56 a share. The dividend stock is -16.08% off a 52-week high stock price of US$ 24.64 but is up 56.25% since hitting the US$ 14.28. Investors are buying the stock with a trailing-twelve-month price-to-earnings (P/E) ratio of 44.12.

After a -6.2% fall from previous close of US$ 21.92, Commercial Metals Company (CMC) has a US$ 2.42 Billion market cap. The company pays a US$ 0.12-cent-per-share quarterly dividend, giving it a 2.33% yield. That brings its full year payout to US$ 0.48 and 153.4% annual payout ratio based on EPS. According to FT, Year on year, growth in dividends per share remained flat while earnings per share excluding extraordinary items fell by -25.99%. Additionally when measured on a five year annualized basis, dividend per share growth is in-line with the industry average relative to its peers, while earnings per share growth is above the industry average.

The CMC has tumbled -5.06% year-to-date. The equity has slowed down in recent weeks, with shares lower about -2.51% in the past three months. It added -11.15%, climbed -0.34% and jumped 29.29% in the week, one month and six months, respectively. Revenue growth rate was recorded at -9.7% and net income per share was seen moving at a 44.9% rate in the past five years.

Commercial Metals Company (NYSE:CMC) is over -1% above analysts’ consensus price target of US$ 20.8. The stock has blown through analysts’ low price target of US$ 14, but is still below the high US$ 27 target. On a price appreciation basis over the past 12 months, the stock returned 50.79%.

Financial Times data shows, In 2016, Commercial Metals Co reported a dividend of 0.48 USD, equaling last years dividend. The 11 analysts covering the company expect dividends of 0.48 USD for the upcoming fiscal year, maintaining dividends from this year. The most recent short interest data show 7.71% of the company’s stock are short sold. It would take about 4.4 days to cover all short positions. In terms of volatility, it has a beta coefficient of 1.5 and technical analysis volatility indicator called Average True Range or ATR around 0.75.

Commercial Metals Company (NYSE:CMC) closed 13.15% above its 200-day moving average which many technicians use as a guide to the long-term trend, so stocks above the line are considered to be in longer-term uptrends, while those below it are considered to be in downtrends. The stock is -5.38% below another chart threshold, its 50-day moving average and -5.01% below its 20-day simple moving average.

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U.S. Dividend Stock: Commercial Metals Company (CMC)

Chinese Tire Companies Win U.S. Trade Case

The U.S. International Trade Commission (ITC) yesterday determined by a 3-2 vote that the domestic U.S. tire industry was not injured or threatened with injury by imports of truck and bus tires from China. Although the U.S Department of Commerce last month in its concurrent investigations had determined that Chinese truck and bus tires were dumped and subsidized, the ITC’s negative determination means no more antidumping or countervailing duties (AD/CVD) will be collected on imported Chinese truck and bus tires.

The ITC’s negative determination is a good indication that for all the protectionist rhetoric and trade saber rattling from the Trump administration, the ITC is not just going to rubber stamp every case filed by a petitioning domestic industry. The ITC will still decide its AD/CVD cases based on the extensive amount of industry data collected from its investigations and will not rely just on the alternative facts offered by petitioners.

This tires case was weak from the outset. First, it was brought only by the United Steel Workers (which represents the workers at the big U.S. tire factories) and not by the tire companies themselves. Unlike virtually all other AD/CVD cases, the domestic producers in this case did not want to sign their name to the petition. Some have speculated that the Steel Workers filed this and other tire AD/CVD cases to obtain negotiating leverage to try to extract production and wage concessions from the U.S. tire industry management.

Although the U.S. market for truck and bus tires in 2015 was about $ 6 billion dollars, U.S. producers supplied only 60 percent of that demand. U.S. truck and bus tire producers already are operating at full capacity, so even with new U.S. tire factories opening, imports are still clearly needed to meet U.S. demand. China was the leading import source of truck and bus tires with about $ 1.2 billion imported in 2015.

All the U.S. produced tires were of premium brands, whereas most of the Chinese tires were sold under lesser known or private label brands. Because consumers generally associate producers’ brand names such as Goodyear or Bridgestone or Michelin with quality and performance, Chinese tires not surprisingly were priced lower when sold under a private label. This price difference associated with the different brands reflects the distinct market segments; the higher priced premium U.S. brands did not really compete with the no-name generics or private label Chinese tires. Moreover, though tire prices declined between 2013 to 2015, this was due primarily to declines in raw material costs, primarily natural rubber.  Prices of U.S. tires sold to OEM customers fell at the same rate as prices for U.S. aftermarket sales, even though very few Chinese tires were sold to OEM customers. Chinese tires thus cannot be blamed for the price declines that were occurring.

The domestic tire industry also was performing quite well and thus had a hard time demonstrating it had been injured. The domestic industry was healthy as production, capacity utilization, shipments were all higher in 2015 compared with 2013. Employment, wages and productivity indicators also showed improvement. The domestic producers had high and rising profits (operating income = 20.7%; net income = 18.3%), even though prices had fallen. So, even as Chinese imports were increasing, U.S. tire producers were thriving.

Despite all of these facts, this case could have resulted in an affirmative injury or threat of injury determination based on the increasing volumes of low-priced Chinese import tires that reducing the domestic producers’ market share. An argument can also be made that the significant volume of Chinese tires caused the domestic industry to lose revenue and be less profitable than it would have been without the Chinese imports.

In its preliminary investigation, the ITC made an affirmative determination by a 4-2 vote that the domestic industry was injured or threatened with injury, but two of the six Commissioners changed their positions in the final investigation. Vice Chairman David S. Johanson had found a threat of injury in the preliminary investigation, but switched to a negative injury/ threat determination in the final. Commissioner Dean A. Pinkert voted affirmative in the preliminary determination but then abstained and did not participate in the final investigation. If either of these two votes had stayed affirmative, a 3-3 tie vote would have resulted in AD/CVD duty orders being issued. Given the closeness of the vote, I expect the United Steel Workers will appeal the ITC’s negative determination to the U.S. Court of International Trade

Ultimately, this ITC negative determination was not only a huge victory for the Chinese tire industry and for U.S. importers of those tires, but also for anyone who wants U.S. trade cases to be determined on the facts and the law  and legal arguments presented and not just on a protectionist trade policy. The vast majority of petitions filed have resulted in AD/CVD orders being issued, and it likely will continue this way for the foreseeable future.  Given the current political climate, however, it’s nice to see a negative ITC determination just to be reassured that the ITC still recognizes its obligation under U.S. trade laws to conduct investigations fairly and that not all AD/CVD petitions are deserving of trade remedy relief.

Chinese Tire Companies Win U.S. Trade Case

Sanofi Offers to Buy Medivation for $9.3 Billion

Sanofi the French drugmaker went public on Thursday with its offer of $ 9.3 billion to acquire U.S. cancer company Medivation after the company had rebuffed original approaches. The plan to target Medivation returns Sanofi the biotech company to the takeover trail as it looks for new treatments for cancer to add to its portfolio and […]
Corporate News – The Cerbat Gem

Sanofi Offers to Buy Medivation for $9.3 Billion

China Manufacturing: Bad Contracts and Bad Times Lead to Bad Products

Not entirely sure why, but in the last couple weeks our China lawyers have seen a massive increase in emails and phone calls from North American companies seeking our help in dealing with defective products/quality control problems. In this post, I explain what you (and they) need to have in place to avoid these sorts of problems in the future, and to make it possible to resolve such problems should they occur. Our China attorneys also have been receiving an unusually high number of emails and phone calls from companies being pursued by Sinosure, and I will discuss how to deal with that in a future post.

My theory is that this slew of calls is due to two things. An increase in QC problems at China factories due to rising costs. Whenever costs rise for China factories quality problems rise as well, until such time as the China companies can increase their prices to their foreign buyers. This influx of bad product calls may also simply be due to the time of year; it may just be the end of 2016 hangover. I note that our last bit tick in these calls was in February 2016. What makes this year’s version so much more interesting for us anyway, is how many of these new matters involve Internet of Things products and how woefully unprepared these companies are to deal with these problems.

I am going to try to avoid getting all preachy here, but I truly do believe that all of these companies could have avoided their bad product problems had they had a good contract in place with their China product supplier. Only one of the companies that have contacted us so far this year had any contract at all with their China factory, and that one contract called for all disputes to be resolved in the U.S. Court of the American buyer, and as we have discussed constantly on here, that is 99.99% of the time a non-starter. In Four Common (And Somewhat Deadly) China Law Mistakes To Avoid, I briefly (for me anyway) gave a real life example as to why this is such a bad idea:

A lawyer calls us with an airtight $ 2 million dollar breach of contract lawsuit against a Chinese company. This lawyer had drafted a contract calling for disputes between her client and the Chinese counter-party to be resolved in Boston Federal Court and she had already sued the Chinese company in Boston and secured a default judgment against it. She was now seeking my law firm’s help in domesticating the judgment in China, and It was clear she expected us to jump at the opportunity to take the case on a contingency fee basis.

That is until we told her that China does not enforce U.S. judgments. Ever.

She then came up with the idea that we start all over by suing the Chinese company again in China. We had to tell her that could not work because the Chinese court would have two strong grounds for throwing out that lawsuit. First, improper jurisdiction because the contract clearly called for the lawsuit to be in Boston. Second, res judicata because the entire case had already been tried (and won) in Boston (the proper jurisdiction). I have no idea how she explained all this to her client.

American lawyers commonly assume that what makes sense for a domestic transaction necessarily also makes sense for an international transaction. Boston would have made sense in the above instance if the counter-party had been in Los Angeles, but the rules and the issues are different when doing business internationally.

If you check out this post, China Contracts that Work, you will see that what is needed for you to have a manufacturing contract that works is for that contract to be in Chinese with a provision calling for disputes to be resolved in a Chinese court under Chinese law. Your manufacturing contract should also contain a liquidated damages provision and a mold protection provision (so that the factory does not keep your molds if there is a dispute, and be properly chopped/sealed by the Chinese side. It is also critical that your contract be with the right Chinese company as Chinese companies are notorious for signing agreements with an essentially empty shell company, usually based in Hong Kong. If your contract satisfies all of these things, the odds of your having a manufacturing problem go way way down. And if you have such a contract and you do have a problem, your odds of being able to resolve it with your Chinese factory without having to contact a China law firm for legal assistance go way way up. And in those rare instances where you do need to engage a China attorney to assist, that attorney will be well positioned to resolve your problem relatively quickly.

One more thing. Whenever someone contacts our law firm with a problem with their factory, one of the first things we always ask them is whether they have secured China trademarks for their trade name and their brand and their logo. We then explain how common it is for Chinese factories (they actually have someone else do the filing for them) to go off and register YOUR brand name and YOUR logo as a trademark so that they can use this as leverage against you or so that they can keep making your product with your brand name and your logo and sell that product in any country in the world where you have not protected them with a trademark. Sadly, about half the time we are too late and the trademarks have already been registered to someone else, making it difficult or even impossible for the foreign buyer to continue having its products made in China. For more on this critical IP issue, check out When to Register your China Trademark. Ask Tesla and China: Do Just One Thing, Trademarks. So if you have not already registered your brand names and logos in China, you should do this IMMEDIATELY and you certainly should do so before you complain to anyone there.

China Law Blog

China Manufacturing: Bad Contracts and Bad Times Lead to Bad Products

Apple Weighs Legal Options Against President’s Travel Ban

Apple (NASDAQ:AAPL) is reportedly considering joining the legal fight against the Trump administration’s executive order on immigration. The order suspends entry of all refugees to the United States for 120 days. It also blocks citizens of 7 countries from entering the U.S. for 90 days and bans Syrian refugees for an indefinite amount of time. […]
Corporate News – The Cerbat Gem

Apple Weighs Legal Options Against President’s Travel Ban

Book Review: Known, The Handbook for Building and Unleashing Your Personal Brand in the Digital Age

All of the personal branding gurus out there are leaving out an important piece of the puzzle.

Yes, you should try to discover your life’s passion. But what’s next?

According to Mark W. Schaefer, consultant, speaker, and author of Known, the missing piece is applying your passion in service of a long-term goal.

For example, talking about my obsession with cupcakes is not going to help my personal brand unless I’m opening a bakery.

Mark is a masterful teacher, and he uses extensive interviews with successful people to give the reader actionable advice. He pulls back the curtain on regular people who found the right niche, built an engaged audience, and then patiently activated that audience to achieve a goal.

He’s the right person to talk about this subject, since he left the corporate world and started over as a consultant, using blogging as his calling card to become known in a new professional niche. His blog, grow, is now one of the top marketing blogs in the world.

My favorite thing about this book is that it’s written in Mark’s inimitable voice, as if you’re old friends. It’s not a stuffy, by-the-numbers business book.

Each person interviewed brings a new insight to the story, whether it’s the “grandpa who shoots things on YouTube,” or the blogging pediatrician. You’ll just have to read the book to meet these interesting characters.

There is also a separate workbook that takes the lessons from the book and provides a step-by-step walkthrough of the process to become “known.” Each question or prompt will provoke deeper thought and encourage you to put some meat on the bones of your professional plan.

I’d recommend this book to anyone who is struggling to be heard and recognized above the din. You’ll find inspiration and solid ideas in one entertaining package.

 

 

Disclosure: I consider Mark a friend, but he did not request this review or send me a free book (what’s up with that?). I forked out my own hard-earned dollars to purchase it, and these are my unvarnished opinions.

 

Author’s Bio: Rosemary O’Neill is an insightful spirit who works for Social Strata — makers of the Hoop.la community platform. Check out the Social Strata blog. You can find Rosemary on Google+ and on Twitter as @rhogroupee

The post Book Review: Known, The Handbook for Building and Unleashing Your Personal Brand in the Digital Age appeared first on Successful Blog.

Successful Blog

Book Review: Known, The Handbook for Building and Unleashing Your Personal Brand in the Digital Age

Microsoft Says Cortana is for Bing and Edge Searches Only

This week Microsoft started blocking rival browsers as well as search providers from using the Cortana search box in Windows 10. Cortana is the prime search area for the operating system. Microsoft on a post to its company blog said that to ensure it can deliver integrated search engine experiences designed for the operating systems […]
Corporate News – The Cerbat Gem

Microsoft Says Cortana is for Bing and Edge Searches Only