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Alexander J. Poulos

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  • How Carl Icahn Will Accelerate Apple's Ascent [View article]
    Sally,

    On the subject of PAYX, I can't believe how many people overlook this well run company. Fabulously run with a very wide moat and a very shareholder friendly management team. In PAYX case they have a buyback authorized but haven't used it since the p/e is high and they are fairly valued at this time. They set up the buyback in 2011 when the shares were being unfairly penalized by the Street. Thankfully, since then they have performed quite nicely. I am using them as an example of a company that shouldn't be using a buyback at this time but instead raising the dividned whic is exactly what they have done. 2 different ways otr rewarding shareholders based on the price of the shares at the time. Hope these examples help and thanks for commenting.
    Aug 19 09:35 AM | Likes Like |Link to Comment
  • How Carl Icahn Will Accelerate Apple's Ascent [View article]
    Sally,

    Thats exactly what AAPl is doing right now. The reason why they are issuing debt is because the money is being held overseas. For them to repatriate the money they would pay a tax rate of between 20-35% on the money. By using debt they save themselves the hassle of losing such a chuck. The proceeds from the sale of bonds goes to the buyback and the companies more than ample cashflow pays the interest out. It is the correct thing to do.

    If Congress would smarten up, allow a tax holiday say 7% to repatriate all funds held overseas the US treasury would be flush with funds and tech such as CSCO and AAPL wouldn't need to sell bonds to fund buybacks. Unfortunatly, leadership is quite lacking in politics today.
    Aug 19 09:31 AM | Likes Like |Link to Comment
  • How Carl Icahn Will Accelerate Apple's Ascent [View article]
    Sally,

    You borrow money to invest in new endeavors. It has been written in many places and even threatened by Buffet himself. When the share price is too low a buyback is the best remedy. Keeping cash stashed overseas earning less than 3% is foolish. When you get a chance look at Teledyne when it was run by Harry Singelton. His long term performance actually beats Buffet's. He would aggressively buy shares when the stock was depressed and swap shares for new business's when the price was expensive. Best manager and creator of value that nobody has heard of. At p/e of less than 10 and no major acquisition targets a buyback is the most prudent way of rewarding shareholders.

    A company you might be interested in with plenty of cash and no debt is PAYX. I have owned then since 11/11 at $29 and have reinvested the dividends back into the shares. Very happy with the results. Wrote about them here. http://seekingalpha.co...
    Aug 18 07:37 PM | 1 Like Like |Link to Comment
  • The Week That Icahn Bought Apple [View article]
    George,

    Thank you for including my article in your list of worthwhile articles to read on the topic. I am honored to be included.
    Aug 17 08:36 PM | 1 Like Like |Link to Comment
  • The Week That Icahn Bought Apple [View article]
    Cagdas,

    My articles are almost always about positions held. I do this as a hobby not to make a living so to write about something not owned is meaningless for me. I find if I can articulate my investment idea into an article format the reasoning behind is solid. It has prevented me from taking unprofitable positions. It doesn't work all the time, (notice my INTC articles) but I have been pleased with the results. If I do sell out of a position I post it. Not expecting to get any recognition for it, I really enjoy the exchange of ideas on this site and this is my way of giving back.
    Aug 17 08:33 PM | 1 Like Like |Link to Comment
  • How Carl Icahn Will Accelerate Apple's Ascent [View article]
    kimboslice,

    Appl represents a great value today. My original purchase was in March at $475 and again at $450. The shares did trade lower, (at one point much lower) but as you so eloquently put "to an investor this is meaningless". If the product refresh is successful the $700 high will be surpassed. The cash generating ability combined with a miniscule debt make it extremely attractive, hence Icahn's and others interest. Thanks for reading and commenting.
    Aug 17 08:28 PM | 1 Like Like |Link to Comment
  • How Carl Icahn Will Accelerate Apple's Ascent [View article]
    ispank,

    I take it that you aren't a fan.
    Aug 17 08:24 PM | Likes Like |Link to Comment
  • Is Warren Buffett's Favorite, IBM, Really Underperforming? [View article]
    anomaly1,

    Not sure it gets there. IT as a whole is poor here. Watch share counts and net margins. Both are progressing right on plan. I will buy more if it does go to $175.
    Aug 16 08:57 PM | Likes Like |Link to Comment
  • How Carl Icahn Will Accelerate Apple's Ascent [View article]
    Sally,

    Keep in mind the cost of the debt. Apple should be able to borrow at less than 4%. Your economic interest(ie share of the company's profit) goes up as the share count is reduced. The interest costs are minimal. It would be a very smart move. Thanks for reading and commenting.
    Aug 16 08:54 PM | Likes Like |Link to Comment
  • Coca-Cola Should Buy Chobani [View article]
    billwcoin,

    Actually the Kefir brand could take off. It would be distributed similarly to how Minute Maid is currently supplied and there isn't much competition in this market. KO can dominate the market fairly quickly, while the yogurt business would be tough sledding with powerful well entrenched players.
    Aug 15 09:46 PM | 1 Like Like |Link to Comment
  • Is Warren Buffett's Favorite, IBM, Really Underperforming? [View article]
    Speach Theripist,

    It just amazes me. You have the best investor of our lifetime, comes out and telegraphs his fourth largest holding. He clearly articulates his reasoning behind it and the stock is behaving exactly as planned. IBM beats earnings, ruthlessly cuts costs and Wall Street hates it. Perfect, count me in. When this moves everyone will wonder why didn't I get in on that. Thank you for reading and making your first comment on this forum. Feel free to follow me, I will make regular updates on IBM.
    Aug 15 06:50 PM | Likes Like |Link to Comment
  • How Carl Icahn Will Accelerate Apple's Ascent [View article]
    Apple (AAPL +0.4%) is trading slightly higher on an ugly day for tech. Shares rallied to $500 earlier in the week, thanks in large part to Carl Icahn.
    RBC's Amit Daryanani has hiked his PT to $525 from $475, and (unlike UBS) is on board with Icahn's call for an even bigger buyback. He thinks raising another $55B in debt for buybacks could boost FY14 EPS by $4, and that increasing leverage to a large-cap norm of 1.8x would allow Apple to repurchase 18% of its float.
    Earlier: China Mobile chairman optimistic about iPhone deal


    Reducing the float by 18% would be beneficial for existing shareholders especially if margins hold firm and sales expand.
    Aug 15 02:50 PM | 1 Like Like |Link to Comment
  • Coca-Cola Should Buy Chobani [View article]
    hwood007,

    Let me clarify the statement a bit further. Chobani is directly delivered to distribution centers. KO greatest strength is its delivery network that constantly keeps the shelves stocked with their products. Their team is out 7 days a week whereas a grocery store for example may restock twice a week. The delivery network isn't refrigerated requiring either a new trucks or retrofitting the current ones. From what I have seen, I don't see this happening.
    Aug 15 01:32 PM | 3 Likes Like |Link to Comment
  • Coca-Cola Should Buy Chobani [View article]
    Wes,

    Interesting article. I don't see a Chobani purchase happening for two reasons. 1st- KO won't diversify away from what it is, the worldst largest beverage manufacturer. Yogurt doesn't fit into this definition. 2nd- The product needs to stay refrigerated and that would entail an additional fleet of delivery trucks. I don't see the company making the investment. One idea that fits this definition would be if they decided to branch out into nutritional shakes. The product can be massed produced and doesn't need refrigeration. With their marketing muscle they have the opportunity to become number one in the group.
    Aug 15 12:28 PM | 2 Likes Like |Link to Comment
  • Is Warren Buffett's Favorite, IBM, Really Underperforming? [View article]
    As per Bloomberg,

    Berkshire also holds the largest equity stakes in Coca-Cola Co. and Wells Fargo.

    Buffet calls those two holdings, along with American Express Co. (AXP) and International Business Machines Corp. (IBM), his “big four.” He told investors in a March letter that they should rejoice that their share of the businesses’ future earnings will climb over time with buybacks.

    Interestingly, Buffet requested confidentiality on some of his moves. He is building a large position in a new holding and it will be very interesting to see who it ultimately is.

    http://bloom.bg/15IwnCm
    Aug 15 08:26 AM | 1 Like Like |Link to Comment
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