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Alexander J. Poulos

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AAPL, AMGN, BBBY, BBY, BMY, BP, BPT, C, CCE, CL, CMG, CPB, CSCO, CVX, DE, DEO, DOW, DTV, DXJ, DZZ, ESV, EXPD, FXY, GD, GDX, GE, GIS, GLD, GOOG, GSK, HIG, HSY, IBM, INTC, JNJ, KO, KR, LLY, LO, M, MAT, MCD, MO, MSG, NKE, NOC, O, ORCL, PAYX, PFE, PG, PM, RAD, RDS.A, RDS.B, RIG, ROST, SBUX, SHLD, SVU, SWY, T, TGT, THI, TSM, UNH, V, VVUS, VZ, WAG, WMT, WY, XHB, XOM, ZIP
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  • Ensco Plc: Is A 6% Yield Enough To Overcome The Risks Involved In Holding The Shares? [View article]
    mako,

    It is always important to have confidence in your investments. It allows the investor to ride out the storms such as the last two down days knowing the company is well run, that operates in a vital industry that will grow over time. Thanks for reading and commenting.
    Apr 11 09:14 PM | 1 Like Like |Link to Comment
  • Ensco Plc: Is A 6% Yield Enough To Overcome The Risks Involved In Holding The Shares? [View article]
    inspector,

    Well said, I expect the price of oil to increase unlike Barron's. The scenario you have detailed above will more than likely carry the day. Thanks for reading and commenting.
    Apr 11 09:12 PM | Likes Like |Link to Comment
  • Ensco Plc: Is A 6% Yield Enough To Overcome The Risks Involved In Holding The Shares? [View article]
    Psalerno,

    I would love it if ESV will do a buyback here instead of raising the dividend further. I suspect they won't most of their free cash is going towards the purchase of the six new rigs under construction. I believe that ESV is the best run of the bunch. Thanks for reading and commenting.

    PS- Your INTC call was spot on, they outperformed my CL. Well done.
    Apr 11 09:10 PM | Likes Like |Link to Comment
  • Ensco Plc: Is A 6% Yield Enough To Overcome The Risks Involved In Holding The Shares? [View article]
    RLJ,

    The shares were down today, so congrats on your purchase. Thanks for reading and commenting.
    Apr 11 09:07 PM | Likes Like |Link to Comment
  • Ensco Plc: Is A 6% Yield Enough To Overcome The Risks Involved In Holding The Shares? [View article]
    njbother,

    The dividend is the "guaranteed" portion of the ESV equation with the capital gain portion coming from the inevitable higher price oil will fetch by the end of the decade. I am not sure when the next turn in the drilling cycle will come, I do know that compounding the dividend here will lead to an outside gain. The question in my view is when not so much if. Thanks for reading and commenting.
    Apr 11 09:06 PM | 1 Like Like |Link to Comment
  • Ensco Plc: Is A 6% Yield Enough To Overcome The Risks Involved In Holding The Shares? [View article]
    Timmies,

    Have you considered ESV which doesn't have either of those concerns? Granted the yield is lower than SDRL however it is far less leveraged which allows me to sleep well at night. RIG does have one of the oldest fleet which will hamper its ability in an environment of falling day rates to maintain an adequate level. If you are interested in exposure to this area, in my opinion ESV offers the best combination of a high dividend yield with low leverage and a shareholder friendly management team. Thanks for reading and commenting.
    Apr 10 08:47 PM | 4 Likes Like |Link to Comment
  • Ensco Plc: Is A 6% Yield Enough To Overcome The Risks Involved In Holding The Shares? [View article]
    Bugle Boy,

    It definitely pays to read everything with a skeptical eye. Thanks for reading and commenting.
    Apr 10 07:56 PM | Likes Like |Link to Comment
  • Ensco Plc: Is A 6% Yield Enough To Overcome The Risks Involved In Holding The Shares? [View article]
    JB,

    You raise an excellent point, that is where the future growth in the industry will come from. Some of the oil majors are scaling back on capex this year which is causing the analysts to sour on the drilling industry. The down spike will be short lived, the dividend allows an excellent opportunity to compound wealth in a vital industry. Thanks for reading and commenting.
    Apr 10 07:55 PM | Likes Like |Link to Comment
  • Ensco Plc: Is A 6% Yield Enough To Overcome The Risks Involved In Holding The Shares? [View article]
    Tomzg,

    They very well may raise it further this year, if they do I suspect it will be later in the year after they take delivery of their new drill ship. I would prefer if they used any funds they plan on earmarking for a dividend hike to repurchase shares as the shares are ridiculously under priced. Any sort of buy back here will aid in overall capital gains. Unfortunately, management has indicated it will be using its free cash flow this year to pay for the new rigs under construction. Thanks for reading and commenting.
    Apr 10 06:57 PM | Likes Like |Link to Comment
  • Ensco Plc: Is A 6% Yield Enough To Overcome The Risks Involved In Holding The Shares? [View article]
    Jan,

    You are very welcome. ESV shares are incredibly cheap, when combined with an above average dividend yield make them a compelling buy in my view. At some point the value will be recognized, until then I will simply wait and reinvest the dividend. Thanks for reading and commenting.
    Apr 10 06:50 PM | 1 Like Like |Link to Comment
  • Amgen: The Best Value In Biotech [View article]
    Kolpin,

    Congrats, AMGN is truly a well run company that will deliver growth through the rest of the decade. Watch the shares rally as their pipeline becomes approved.
    Apr 10 06:47 PM | Likes Like |Link to Comment
  • Revisiting My Bullish Thesis On Bristol-Myers Squib [View article]
    Bristol-Myers Squibb's (BMY) combination oral therapy of Daclatasvir and Asunaprevir cleared Hepatitis C in 90% of previously untreated patients in a Phase III trial.
    The combo also cured HCV in 82% of those who didn't respond to prior therapy and 84% of those who had cirrhosis, which accounted for almost one third of subjects.
    Around 5-7% of patients suffered serious side effects, such as an increase in liver enzymes, although this is reversible and was resolved following treatment.

    excellent news.
    Apr 10 05:05 PM | Likes Like |Link to Comment
  • Ensco Plc: Is A 6% Yield Enough To Overcome The Risks Involved In Holding The Shares? [View article]
    maybenot,

    Thank you. I am hard pressed to see a plausible scenario for $75 oil outside of a recession which I don't believe is imminent. Lets examine the geopolitical sphere with a special focus on Russia. Lets say in the best case scenario, Russia doesn't attempt to invade the rest of the Ukraine. There will be no embargo placed on their oil assets and the worlds attention shifts to something else. The price of oil will still remain high due to the "fear" they may act in a negative manner. The pessimistic scenario would be Russia invading the Ukraine and forcing the US and EU into placing an embargo on their oil similar to what was done with Iran. It would remove quite a bit of supply from the world market which would invariably lead to higher prices. Not in our interests or Russia's as their economy would collapse since they are very dependent on oil sales.
    As for the offshore contractors, I suspect this is an excellent opportunity  to accumulate a large position in an indispensable sector. This trade is for the patient investor though as the sector will continue to under perform for at least the remainder of the year. I purchased shares at $59 which in hindsight was simply too high. I have received two dividend payments which have been reinvested back in. I anticipate holding the position for the quite a few years.
    I had a similar experience with a different company, GE which was purchased at $30 in 2007 right before the financial collapse. Needless to say, the timing was absolutely terrible as the shares plummeted below $10 in a short period of time. Instead of locking in such a large loss, I simply allowed the dividend to reinvest and waited for the turnaround. Wound up selling GE at $30 per share in 2012 with an average cost of $17, hence generating a profit. It didn't do as well as the overall market however it fell under the guise of rule one of investing which simply states "never lose money".
    Thanks gain for reading and commenting.
    Apr 10 04:02 PM | 1 Like Like |Link to Comment
  • Ensco Plc: Is A 6% Yield Enough To Overcome The Risks Involved In Holding The Shares? [View article]
    momintn,

    Oil is truly unique in that it is required to basically run modern life thus basically insulating it from the extreme boom busts seen in other commodities. For example if beef becomes too expensive people will sub chicken etc. There really isn't a cost efficient substitute so hence the commodity has true pricing power.

    The second benefit is oil acts as a true inflation hedge. Take a look at XOM revenues going back 10-20 years. The revenue numbers keeps climbing as the demand for the product is simply there. Oil needs to be explored, extracted, shipped, refined etc before it becomes gasoline (one example)so as costs increase due to wages, location, etc the companies are successfully able to pass on the costs to consumers. A person who purchases XOM for example is doing so for its bond like features with a constantly rising coupon (dividend) level. With the 10 year US treasury trading at 2.7% XOM yield is roughly equivalent however in my opinion vastly superior for two reasons. The first being XOM raises the dividend every year, whereas with a bond the payment is fixed. The second being the potential for capital gains. Over a ten year period it isn't unreasonable to expect the shares to appreciate at bare minimum the rate of inflation hence protecting your capital. Bonds simply do not offer this sort of protection.

    The price of oil can collapse which is evident when the world goes into a recession. The shares will go down as well however less so than the overall market which offers your portfolio some defense in tough times. Also in these times if an investor doesn't need the dividend to fund living expenses, reinvesting the dividend will a tremendous impact on overall gains for the ten year time frame via the magic of compounding. I hope this helps, I had similar thoughts about oil until last year when I read a book recommended by Warren Buffet called "the Outsiders" by William Thorndike. XOM actually outperformed Berkshire Hathaway over a thirty year period which is probably one of the reasons why Warren decided to purchase XOM late last year.

    Take a look at this previous article about equity bands and tell me what you think. http://seekingalpha.co...
    Apr 10 02:38 PM | 4 Likes Like |Link to Comment
  • Ensco Plc: Is A 6% Yield Enough To Overcome The Risks Involved In Holding The Shares? [View article]
    2839298249,

    I agree, the analysts came out roughly two months ago bad mouthing the industry to really no avail. The shares are back to where they were previously, I don't see the "tremendous downside" that they seem to be harping on. The industry is worthy of a long term hold especially with the generous dividend, as eventually the analysts will catch on and push the shares higher. thanks for reading and commenting.
    Apr 10 02:23 PM | 2 Likes Like |Link to Comment
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