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Alexander J. Poulos

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  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    Andysud,

    Not really, the downturn was weather related as same store sales growth and expansion continue at a nice pace. shares are out of favor and trading at a below market value for a defensive company that is growing at an above market rate. Look again at the company and the category they compete in, they are one of the few retailers that actually does Better in a recession. Very defensive play. Thanks for reading and commenting.
    Mar 31 09:47 PM | Likes Like |Link to Comment
  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    Bahamas!,

    Believe me, it wasn't a knee jerk reaction. I have spent the last four days pondering the issue along with some mathematical projections on the impact of the dilution. DG was chosen for the reasons mentioned above along with the fact that it has become cheap. I know you follow my work, the overriding theme is finding stable companies trading at below market prices and holding them until they become recognized by the investment community. DG is still in its growth phase after a minor stumble due to factors (gov't snap benefit cut, weather) that were out of their control. I expect a sharp bounce back and a much higher share price in the not so distant future. Thanks as always for reading and commenting.
    Mar 31 09:44 PM | Likes Like |Link to Comment
  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    JD,

    I simply don't need the dividends to live and as I have detailed above the total overall returns with DG should be higher than those of KO. Thanks for reading and commenting.
    Mar 31 06:17 PM | 1 Like Like |Link to Comment
  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    Toasty54,

    I was actually contemplating MCD to replace it, yet its growth path is also quite restrained here. I suspect most would be more receptive to my points as quite a few view DG as unworthy since it doesn't pay a dividend. i also realize quite a few are retired and are dependent on the dividend that will be received tomorrow to pay bills which I can understand. The article is meant to spark conversation which it has and I believe that I have succeeded in this endeavor. Thanks for reading and commenting.
    Mar 31 06:15 PM | 1 Like Like |Link to Comment
  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    Cassandra,

    Fair enough point, thank you for reading and commentig.
    Mar 31 06:11 PM | Likes Like |Link to Comment
  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    heglimp,

    Fair enough point. There are some who are far more shareholder friendly with IBM and PM immediately coming to mind. Thanks for reading and commenting.
    Mar 31 06:09 PM | Likes Like |Link to Comment
  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    AdamDivy,

    I have funds for only one, as I tend to keep position size relatively even in the portfolio. thanks for reading and commenting.
    Mar 31 06:08 PM | 1 Like Like |Link to Comment
  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    ejnarlesky,

    I don't need the income for at least another 20 years so I can afford to transition into a company that is still in its growth phase. I suspect DG will initiate a dividend once it saturates its core market, but this will be quite a few years away. thanks for reading and commenting.
    Mar 31 06:07 PM | 2 Likes Like |Link to Comment
  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    JGWright,

    For KO to continue to raise the dividend at that rate they will have to show sales gains which has become harder to come by. By diluting the shares instead of reducing them you will have less overall funds available for dividend hikes going forward which isn't the most envious position to be in. As for my decision, the growth rate of KO is less than appealing for reason's mentioned above. Thanks for reading and commenting.
    Mar 31 06:05 PM | 2 Likes Like |Link to Comment
  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    George,

    Thank you for reading my work and you are correct I tend to have a more long term time horizon as my work has led you to believe. The decision to sell KO was pondered before Mr Winters posted his letter, his work helped me get my hands over the total dilution the proposal will entail.

    Your comment ""If" the compensation structure is temporarily out of balance, I can assure you it will be corrected in short order. The entire culture at Coca-Cola centers around share owner value.. They don't talk about it from time to time, it is the primary mission of every employee EVERY day. It is the qualifying question to every proposition brought before management.. "Will this action enhance share owner value?" was the exact view I had of the company based on their track record yet I can't reconcile this with the proposal put forth. The dilution level is simply excessive and I fail to see how the board is looking out for shareholders after putting forth this proposal. As you are aware I have departed, as the path for total overall returns is less than stellar.

    To replace KO I looked for a company that will do well in hard times to sort of balance out the portfolio. The dollar store format is tailor made for this with DG in my view the best operator in the space. They have a clear path for expansion and have been cutting into the mighty WMT sales which is quite impressive. The format in my view is a category killer, that will become more popular as they expand further. Keep in mind CVS silly decision to halt tobacco sales will generate more foot traffic into the dollar stores in general. Once people become accustomed to shopping their they spend even more money their cutting into sales of other players. Thank you for the very thoughtful comment and for reading my work. You may want to really evaluate the proposal put forth by management, it isn't in the best interests of shareholders. Your comment made author's pick.
    Mar 31 06:01 PM | 2 Likes Like |Link to Comment
  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    petethebeet,

    Thank you, it has definitely sparked some conversation which was exactly my intention. Thanks for reading and commenting.
    Mar 31 05:49 PM | 1 Like Like |Link to Comment
  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    Buyandhold 2012,

    For those who bought KO 30 years ago it would be absolutely foolish to sell. The dividend received should be roughly equivalent to your adjusted purchase price making holding the shares the correct move. 30 years ago is exactly that, the past. For those who purchased the shares recently managements proposal is quite simply not in your best interests as detailed above.

    As for DG, take a look at what they have accomplished and in what industry they compete in. The dollar store format is counter cyclical, as it performs best when the market sells off and we go into a recession. The shares have basically flat lined here as the severe winter weather negatively impacted sales in the fourth quarter. The temporary setback allows the patient investor to get in at roughly 15 time's this years reduced earnings in a company with a clear path for significant growth ahead. In my view the overall returns (in DG case capital gains) will outweigh those offered by KO (dividend plus cap gains) with less volatility and risk. Thanks for reading and commenting.
    Mar 31 05:48 PM | Likes Like |Link to Comment
  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    Byole,

    Se above response addressed to Brad as WMT also relentlessly reduced their share count while the stock stagnated. Excellent move on their part. Thanks for reading and commenting.
    Mar 31 05:39 PM | 1 Like Like |Link to Comment
  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    Brad,

    If you look further into the companies you mentioned you will also notice they reduced their share count in the time frame you referenced. By taking advantage of their lower share price and reducing their float, they set themselves up for a much higher price as the math (net earnings/shares outstanding) became more favorable. That is what makes KO proposal all the more galling, they won't be taking advantage of their lower share price because the money earmarked for repurchases will be used to soak up all the new shares issued to employees for compensation. In my view, absolutely unacceptable. Thanks for reading and commenting.
    Mar 31 05:38 PM | 2 Likes Like |Link to Comment
  • Saying Goodbye To Coca-Cola, Time To Move On [View article]
    0xfc,

    KO is currently facing significant challenges in its core market. Their main product, soda is under attack with claims that are partially true that the product is causing obesity. The product does contain calories, predominantly in the form of sugar however its not the single serving size that will cause obesity. What causes obesity is excessive consumption of calories above what you need to function. For example if a person drinks a 2 litter of Coke on a daily basis they will put on weight. This isn't the companies fault but the individuals. With the above backdrop in mind, meaningful volume gains will be hard to come by in the developed world, (North America and Europe) as the governments make a push for healthier lifestyles to combat the rise in health care costs.

    This brings us to what can we reasonably expect to offer going forward. The answer was a dividend hike that well exceeds inflation with a current yield above that of a ten year bond. KO was deemed a shareholder friendly board that used excess cash flow to routinely repurchase shares. The board with their obscene proposal is can no longer be viewed as shareholder friendly, Furthermore, what makes the plan so obscene is the dilution aspect which will curtail any sort of meaningful earnings advance. I am not alone in this view and have decided to exit. In my view KO has become a bond without a foreseeable path for capital gains. Not something I am really interested in as I look for total returns which can be in the form of dividends and share repurchases or above average eps growth with an aggressive share repurchase plan. DG fits the second criteria, hence its inclusion. Thanks for reading and commenting.
    Mar 31 05:33 PM | 2 Likes Like |Link to Comment
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