Vince Martin
Long/short equity, value, gambling

Pitney Bowes: Tough To Play Its Continued Decline

Pitney Bowes (NYSE:PBI) is a classic example of the "value stock" versus "value trap" debate. On the one hand, PBI bulls point to the company's impressive fundamentals. The stock's price-to-earnings ratio is just 5.4 at the midpoint of the company's GAAP guidance for 2012, while free cash flow yield for 2012 could be as high as 40%, given FCF guidance of $750-$850 million and the company's market capitalization of about $2.1 billion. Meanwhile, PBI offers an astounding 14.3% dividend yield (at $10.45, its share price as of this writing), with a 37.5 cent quarterly payout that has been raised in each of the last 28 years.

Bears, meanwhile, argue that the company's reliance on outdated "snail mail" and...

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