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Alexander J. Poulos

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  • What I Am Doing With My AT&T/DirecTV Shares [View article]

    I am moving more into mid career now which necessitates a larger amount of bond exposure than in years past. T is being used as a bond substitute due to very low yields being offered. At some point in the future, T very well maybe sold with the proceeds going into bonds. The move won't be initiated anytime soon as evidenced by plunging (from 3% in Jan to 2.5%is now) bond yields. When the ten year long bond is above 5%, I very well may consider the move. Thanks for reading and adding to the conversation.
    May 27, 2014. 11:11 AM | 4 Likes Like |Link to Comment
  • Sirius XM Holdings Is A Worthwhile Speculation [View article]

    Well said. My attraction to SIRI was further peaked after seeing the share price drop significantly below the proposed offer from LMCA. With the company announcing their intent on repurchasing a large amount of shares and for the stock to trade down is a true gift. This is similar to Warren Buffet's hope of what would transpire with IBM when he initiated his original position. Mr Buffet mentioned he hoped the shares would languish for a significant period of time to allow the share repurchase to significantly reduce the share count. I decided to take advantage of the opportunity with a buy in price of roughly $3.23. Lets see where the shares are in 12 months time.
    May 19, 2014. 10:52 PM | 4 Likes Like |Link to Comment
  • Sirius XM Holdings Is A Worthwhile Speculation [View article]

    I believe your bullishness is warranted. Lets hope the shares respond sooner rather than later. Thanks for reading and commenting.
    May 19, 2014. 06:35 PM | 4 Likes Like |Link to Comment
  • Sirius XM Holdings Is A Worthwhile Speculation [View article]

    Thank you, I try to be as factual and precise as possible. I use multiple sources for relevant material, which tend to cut down on factual errors. Lets hope my bullish stance is warranted.
    May 19, 2014. 06:32 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]

    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, 2014. 08:47 PM | 4 Likes Like |Link to Comment
  • Exxon Mobil: Time To Break It Up And Slim It Down [View article]

    You mentioned "On point #3, how does selling assets and spinning off marginal parts of the business lower the credit rating? It would raise the credit rating. This is exactly what XOM has done over the past few years. They have been disposing of less favorable assets and using the cash raised from them to buy back shares. At Triple AAA credit rating their rate can't go any higher.

    Lets examine the buyback question a bit further. The XTO deal was announced in Dec. 2009 and closed in the second quarter of 2010. It was an all stock deal with XOM issuing new shares to purchase the company. The new shares obviously dilute existing shareholders and the company has predictably underperformed. In 2009 XOM had 4,832 million shares outstanding and finished the end of 2011 with 4,875 million shares outstanding. The company has successfully reabsorbed the new shares issued however performance has suffered. Share count has dropped to 4,628 million at the end of 2012 and an additional 45 million this quarter. the buybacks have certainly helped boost earnings which would have been down further due to the collapse of nat gas prices.

    I got in at $87 this year and expect the shares to perform very well over time. I anticipate the gas boom will boost XOM's bottom line significantly. As for the comment about exporting nat gas, prices in Asia are far higher that what is seen here. It makes sense to export the product and get the highest return possible.

    I sense you are a frustrated long term shareholder. Sorry, the shares have sucked for a while but in my opinion they will do well going forward.
    Aug 11, 2013. 08:23 PM | 4 Likes Like |Link to Comment
  • Exxon Mobil: Time To Break It Up And Slim It Down [View article]

    A couple of points from your article. 1- You mention worldwide oil demand will be lower than the IEA production, citing the rise of natural gas powered engines. Fair point, however doesn't that play into XOM strength in purchasing XTO energy? The purchase and the subsequent collapse of nat gas prices is what has dragged down XOM performance. Perhaps, Rex was actually being a "visionary" here and foresaw the coming use of nat gas and didn't want to miss it. As you know, XOM is producing a roughly 50/50 split between gas and liquids whereas CVX is 65/35 oil. I suspect as the nat gas boom continues prices will firm up especially when the chemical plants in Louisiana come on line.

    That brings me to point number 2 the buyback/dividend commentary. If the nat gas boom proceeds as planned XOM is well positioned to profit on this trend. By buying back the shares during this trough is EXACTLY WHAT a smart asset allocator should do. Dividends are wonderful however an above average dividend (compared to the SP 500) with an aggressive buyback that actually shrinks the share count is preferable for the long term investor. Your individual share will be worth a higher percentage of the profit generated by the company.

    3- XOM has a triple AAA credit rating and has access to all sorts of capital. To split up would negate this tremendous advantage. XOM can actually borrow at a smaller rate than some of the countries it competes against.

    I am long XOM and have written about my thoughts which can be seen
    XOM is performing as to be expected. Patience will be amply rewarded here as the chemical plants in Louisiana begin to come online in 2015 along with the Kearl project and some of their other major cap ex projects. I enjoy reading your articles and believe patience is needed here. Thanks for writing.
    Aug 11, 2013. 07:20 PM | 4 Likes Like |Link to Comment
  • Is Intel's Failure To Hike Its Dividend A Sign Of Things To Come? [View article]

    Sir, give it a rest. Your holier than thou attitude is nauseating. The comment that young people are unaware of the dangers is simply ridiculous. You are saying that they are ignorant and can't read. Warnings are clearly marked on the product. The next comment about the third world is again insulting. You are now stating that the people there are ignorant as well and need a do-gooder such as yourself to show them the path of enlightenment or at bare minimum to save them from harming themselves. People make choices in life and need to live with the consequences of their actions.
    Jul 31, 2013. 09:11 PM | 4 Likes Like |Link to Comment
  • Revisiting The Bullish Case For McDonald's [View article]
    Thanks for the kind words. It just amazes me how Wall Street is so focused on the next 90 days. It's this shortsightedness that allows for values like this to occur. Thanks for reading and commenting.
    Oct 19, 2012. 07:31 PM | 4 Likes Like |Link to Comment
  • GE's Stock And Dividend Should Be Avoided [View article]

    The case for holding GE is very simple. It strictly revolves around what can an investor expect for a future dividend. At its current rate it doesn't include any potential dividend returned to the parent by GE capital which encompasses a large portion of the debt held on GE's books. GE capital has returned to profitability after the pruning of its balance sheet that has occurred since the financial crisis. Incidentally a large portion of the revenue drop can be accounted for by GE capital.

    Now that GE capital is back on track management has indicated they expect a significant dividend to the parent from GE capital. I expect a significant dividend hike this year once the Fed gives the green light. I also expect the old dividend of $1.24 to be restored as soon as possible. At current prices that works out to a 6% dividend well worth it at current interest rates.
    May 3, 2012. 10:08 AM | 4 Likes Like |Link to Comment
  • General Electric's Dividend Is A Bargain [View article]
    Many people are allowing emotion to cloud their judgment on GE. GE was a market darling in the late 90's and early 2000's trading at levels unjustified by actual earnings and potential earnings growth. This is in the past and the only thing that currently matters is where the company is going in the future. With GE capital finally showing a profit GE will most likely raise its dividends and continue to grow overall earnings. In my opinion the company is undervalued and offers good profit and income potential. For a risky options play concerning their upcoming earnings announcement please see Long GE.
    Apr 16, 2012. 07:45 PM | 4 Likes Like |Link to Comment
  • Supervalu Is Drastically Undervalued [View article]
    Analytical Chemist,

    I disagree with two of your points concerning SVU. Your assertion that they do have a crushing debt load is partially correct. SVU is a cash flow machine which allows them to carry and manage the high debt load. The problem with the debt level is the business is declining as witnessed by declining same store sales numbers. When one is highly leveraged such as SVU you need stable to growing sales and revenues to service debt. If revenue and profits falter you may be forced into a restructuring which certainly doesn't benefit shareholders. I wrote an article comparing SVU to a unlevered regional competitor. The regional competitor was taken private at a large premium to its current share price. The same won't happen with SVU because of debt.

    The second point you make is SVU will be forced to cut its dividend. I believe that a cut is inevitable and should have been undertaken already. The money saved should be used to reduced debt more aggressively or store remodels/improvements. Forgetting to remodel/improve the shopping experience is what doomed Sears and is what is usually forgone in highly indebted companies.
    Apr 8, 2012. 11:03 AM | 4 Likes Like |Link to Comment
  • Don't Shrug Off Similarities To The Past 2 Aprils [View article]

    I concur. The beauty of being an individual investor is that I can shift a large percentage or all my holdings into cash and wait for a correction. I don't have to worry about performance as compared to benchmarks (especially quarterly) since I have to only answer to one person and that is myself. The market is up close to double digits currently, if one converts to cash you will have locked in a stellar year and best of all get to keep your hard earned gains.

    Thanks again for the article.
    Apr 2, 2012. 10:16 AM | 4 Likes Like |Link to Comment
  • CVS Caremark Should Acquire Walgreen [View article]
    Morningstar has just engaged in a long winded exercise of pure nonsense. The idea of combing the two largest drug store chains in the country would never fly with the government and more importantly the consumer. The merger would reduce choice which is what we as Americans thrive on.

    For a different take on Walgreens please see
    Feb 19, 2012. 08:18 PM | 4 Likes Like |Link to Comment
  • Not Yet Useful to Correlate the Unemployment Rate to the Outcome of Presidential Elections [View article]
    What the author forgets is that Reagan won because the unemployment rate was much higher when his watch began and had come down dramatically. This is one of the many reasons behind his landslide reelection. The other factor was interest rates came down dramatically and GDP growth took off. Juxtapose that with what we have here. Unemployment under the Obama's has gone up and is now at least 2% higher than when he came into office. GDP growth has been sluggish and under trend. With under trend GDP growth the economy will not produce enough jobs to dramatically lower the unemployment rate. The other major impediment is regulation as in the over reach by the nlrb and epa. Add more regulations onto business and guess what they won't invest, nor expand or hire. Instead they will retrench and look to preserve profits. Obama has shown himself to be the exact polar opposite of Reagan. I predict that the same fate that befell Ford, Carter and Bush #1 will happen here.
    Jul 4, 2011. 04:37 PM | 4 Likes Like |Link to Comment