Finding the Elusive 10-Q

The form 10-Q contains a corporation's quarterly financial statements. This form can be found on a corporation's website. Eventually the financial information can be found everywhere — such as Yahoo Finance — but if I want the information as soon as it is released I go to the company's website. The form 10-Q is roughly 60 pages long. I might have to dig through it to find the financial statements.

Consider for example a stock I own in my portfolio, Apple Inc. (AAPL). On www.apple.com there isn't a link for investor relations. But if I click Site Map at the bottom of the page, that sends me to a page with hundreds of links including one labeled Investors. This is Apple's investor relations page. Investor news will show a press release of the quarterly results and the actual SEC filing called Form 10-Q.

I read both. The press release is a breezy summary of profit results from the company's point of view. Form 10-Q is longer and more tedious to read. But it is more reliable in that it may contain any bad news that the company didn't emphasize in the press release. 

Decorating the Christmas Dollar Tree

Has anyone but me noticed how incredibly busy Dollar Tree has been? I frequent a local Dollar Tree almost weekly. The manager told me that in one month the store had already surpassed the most profitable months of summer.

There are over 3,500 Dollar Tree stores nationwide. In the last quarter ending in October, the company reported a 37% increase in profit. Profit was $93.2 million compared to $68.2 million a year earlier. I can see what Dollar Tree is doing right. The company truly is a value-driven variety store operating at a one dollar price point. Finding a scientific calculator that helped me ace an introductory algebra course convinced me of this. I was the only one in my algebra class who didn't use the $40 Texas Instrument calculator sold at the college bookstore. The Dollar Tree calculator was just as good. (However, I still needed a $80 graphing calculator for advanced algebra and calculus. Electronics hasn't yet become that inexpensive.)

After the experience of finding such a good calculator, I was hooked on the store and intrigued by its bargains. I went on to find organic strawberries, organic blueberries and Westsoy lowfat soy milk (usually over $2 for a unit at any grocery store.)

I also checked out other dollar stores. They were comparable in party favors and holiday knickknacks but they lacked in variety and, yes, quality. I found lots of calculators in all kinds of sizes and colors. But only Dollar Tree had a scientific calculator. And, only Dollar Tree had at times organic products or soy milk.

To my surprise I also found a Tool Bench 8-piece hex key set. Instead of screws with either a flat or Philips head, many screws in electronics require a hex key to unscrew. The Dollar Tree hex key set was a big help when I had to disassemble my CD driver after my three year old niece pushed pennies through the slot. When I saw the kind of screws, I panicked until I walked into a Dollar Tree. The store had a hex screw key set. (I retrieved the pennies and put the CD player back together.)

Now, after finding the hex key set, Dollar Tree has become more than just intriguing, but a place I turn to when I really need something.

After hearing their latest earnings report I decided to become a shareholder. I started with 100 shares at 55.65, that's nearing its 52-week high. Dollar Tree is the kind of stock position I plan on adding to on any weakness. For example, Dollar Tree stock price seems to be impacted by weaknesses in other discount stores. Worries about Walmart may have sent Dollar Tree down 3% Thursday. Friday, the stock made a quick recovery while Walmart continued its decline. (I can see Dollar Tree stock going over 60, setting new 52 week highs.)

The US is now at 10 percent unemployment. That's not only 17 million people out of work, but 17 million people who will forgo expensive luxuries in exchange for a $1 price tag.

What is the value of a dollar? What can one really purchase with one dollar? The easiest way to experience the value of a dollar is through the useful products found at Dollar Tree.

Tesla's "Secret" Advantage

The conventional Wall Street thinking on Tesla Motors is that it's a vanity stock or a fraud. Tesla says its engineering costs will be half that of its competitors. That may sound fantastic to Wall Street but let's look at one "secret" competitive advantage that analysts are not seeing: Tesla builds electric cars - they are not building electric versions of fuel-burning cars.

Eventually, Tesla will make an automobile in half the time that it would take Ford because Ford cars will still be using traditional design not an electric car design. 

Tesla has already tried electrification of a traditional car. Their first attempt was the Tesla Roadster which used the fuel-burning Lotus design. In designing the Roadster, Tesla had no idea the manufacturing costs would be 1/3 higher than originally planned. Tesla began testing this year a car that used an electric design from the beginning. That puts Tesla ahead of the curve.

Ford, along with the rest of the industry, is planning electric cars that are variations on fuel-burning car designs. Ford will run into the same problems as Tesla did with the Roadster; a car that will be hard to design and expensive to manufacture.

Why is an electric design easier to manufacture than a fuel-burning design? First, there is no engine in an electric car. (I know this saves a bundle because I just spent $3000 having the engine in my fuel-burning car reconditioned.) With no engine, there is no need for the engine block and the heavy frame which serves to protect the passengers from the engine in case of a crash. This means the weight of the car is reduced to almost half. Components such as axles, tires, even bolts, don't have to be as substantial as before. The number of parts is reduced to about half and the labor to assemble the car is also reduced. That's how much difference there is between making an electric version of a conventional car and making an all electric car.

What makes an electric car expensive is the battery. However, we know that the price of batteries will fall. After battery prices have fallen, electric cars will cost less to manufacture than their fuel-burning ancestors. The question Wall Street and the auto industry should be asking is this: Which auto makers will be ready when that day comes?