USA Snap Shot
We warned last month that August had a miserable reputation for being unfriendly. Fortunately, the month was not unfriendly, but then it was not friendly either. The market had posted a return of 10.57% as August started and finished at 10.55% for the year. The return was not harmful, but was not beneficial either. However, we will take a drop of only 0.02% for the month and be thankful the month is over.
USA Stock Consideration Change Report
PDC Energy moves to Buy consideration and Rollins moves to Sell consideration.
USA Fair Value Change Report
Aerovironment Fair Value moves up to $43 to $31.
Update Economic USA GDP
GDP or Gross Domestic Product moved well into the most-likely-range of our forecast at 3.0%. As a comparison, we were at 1.4% GDP at the end of last quarter and 2.1 at the end of 2017. The current average rate is just slightly higher at 2.2%
United Technologies Maybe Chasing Rockwell Collins
United Technologies is possibly offering to acquire Rockwell Collins for $140/share, a price that reflects 137.0% Fair Value (Fv). Rockwell Collins is currently trading at 128.2% Fv. We are doubtful this acquisition will produce favorable financial results long term for the company. We believe they may be chasing the higher margins from Rockwell Collins in hopes it will benefit their income statement very quickly. Longer term they may be surprised as to how difficult it will be to retain Rockwell Collins creative talent in a larger United Rockwell.