Why CHC Group Ltd. Plunged Today

Is this meaningful or just another movement?

Jul 10, 2014 at 11:23AM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of offshore energy helicopter services specialist CHC Group (NYSE:HELI) sank 12% today after its quarterly results and outlook disappointed Wall Street.

So what: CHC shares have rallied nicely in recent months on signs of rebounding growth, but today's fourth-quarter top-line miss -- revenue rose just 3% to $452.78 million versus the consensus of $466.64 million -- coupled with downbeat guidance is forcing Mr. Market to quickly sober up. And while CHC's loss of $26.1 million was narrower than expected, adjusted EBITDAR margin for the quarter fell 240 basis points to 32%, suggesting that the company's competitive position is weakening as well.

Now what: For full-year fiscal 2015, management now sees EBITDAR growth in the high single to low double-digit range on a revenue increase in the mid to high single-digit range. "Major indicators about expected growth in oil-and-gas exploration and production remain positive, especially in deepwater and ultra-deepwater locations," President and CEO William Amelio reassured investors in a press release. "We believe we are positioning CHC well to capture this growth, while delivering on our financial goals for fiscal 2015 and the longer term." When you couple CHC's turbulent top-line trend with its still-hefty debt load, however, I'd hold out for an even wider margin of safety before betting on that bullishness. 

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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