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Andrew Heyl

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  • Genuine Parts: Increasing Dividends For 58 Consecutive Years [View article]
    I agree with much said about GPC. My one concern is valuation. It looks very overvalued at its current price probably by 10 to 20 percent. I like to buy value stocks at below to fair value and not above it. I realize a company like this should sell at a premium but I would need a substantial correction to ne a buyer. Kerry did not talk much about it's valuation. I am curious as to the fair value calculations others have placed on the stock and the models they use.
    Jun 2, 2014. 01:22 PM | Likes Like |Link to Comment
  • Uncertainty Aversion: Why Cliffs Natural Resources Is A Good Buy In An Environment With Uncertain Iron Ore Prices [View article]
    A positive for CLF has always been their long term contracts with American steel companies. Although I have read comments that the contracts are somewhat adjusted by the spot price of ore, I have never seen anything definitive on these contracts. I would think that CLF's profit would be protected to some extent by these contracts, and that they wouldn't enter into the contracts if they would be required to sell at a loss. Does anyone have a handle on the pricing provisions of these contracts. If so I would like to be enlightened. Also CLF's close proximity to its American clients has always been a positive and an counter-balance to its high extraction costs. Savings in transportation costs, should make it less dependdent on spot prices. From what I've been reading the problem of new production in emerging markets is a lack of infrastructure. Even if ore can be extracted cheaply, you still have to get it to market, and the transportation is not there. Is anyone really going to develop new miness with low ore prices. So the projections for beig increases in supply seems a bit speculative. The Ring of Fire in Canada is a good example of this. Its development is at a standstill. Unfortunately the big three mining companies have decided to increase production to address the problem of declining revenues. This will cause low ore prices and will only work if the lower prices drive out the small miners, thus resulting in big three enjoying a monopolistic advantage in a few years. If that happens ore prices should go through the roof. With its aging infrastructure, and the boom in the oil and gas industry, I don't think you have to worry much about future demand in the US. The emerging markets have massive population growth and a lot of catching up to do, so I think you're going to get a lot of growth there also. Eventually ore price are going to go back up. The question is how long do you want to wait, and can you be sure that you're investing in a company that isn't going bankrupt. I think CLF is pretty safe with its restructuring last year, and the upside could be big. The best bet is to buy its preferred convertibles, which are returning about 10% on dividends at this time.
    May 24, 2014. 08:38 PM | 4 Likes Like |Link to Comment
  • Baidu Q1 2014 Preview: Expect Strong Revenue Beat; Waiting For Better Entry Point [View article]
    This is a high growth tech stock, by the time profits stabilize you won't be able to get in at $150.00.
    Apr 20, 2014. 02:40 PM | Likes Like |Link to Comment
  • Baidu: Valuation And Annual Report Highlights [View article]
    I think your calculations are wrong by a decimal point. 4 billion divided by 350 million does not come to 116.08. It's 11.6, which is its book value. Regardless I don't quite see the point of adding current net assets to current total net assets to reach a value, since current net assets are included in total assets.
    Apr 20, 2014. 01:50 PM | Likes Like |Link to Comment
  • Hospira Incorporated: Unappreciated Upside Due To A Promising Biosimilar Pipeline [View article]
    Have you been following HSP's problems with the FDA. They recently received another warning letter. Do you have any opinions on how its chronic compliance problem will effects its performance.
    Apr 11, 2014. 10:52 AM | Likes Like |Link to Comment
  • Westar Energy: A Solid Company With A Generous Dividend - Selling At A Discount [View article]
    I was somewhat surprised by the graphs myself, especially the 2013 data. The comparisons were not meant to be any deep evaluations of SO and WR, but just a measure of how WR was doing in the industry on a few key metrics. After seeing the charts, I do intend to look into GXP and SO further.

    Thanks for the coments
    Mar 17, 2014. 12:02 PM | Likes Like |Link to Comment
  • Westar Energy: A Solid Company With A Generous Dividend - Selling At A Discount [View article]
    All intrinsic value estimates are highly speculative and subject to a lot of manipulation. I try to take out as much discretion as I can. That's why I use a WACC number for my discount rate. 5% is a low rate, but WR's WACC is 4.8%, so I rounded it to 5%. Anyone can make the intrinsic value come out to whatever they want just by changing the discount rate. By using the WACC rate I remove that temptation. I imagine my value is higher because of the 5% rate, but WACC numbers do mean something which should translate into intrinsic value - a low rate should mean stronger company. For an example, if I had used 7% the value on the Earnings model would have been $32 and the Dividend model would have been $33, but how would I justify diverging from my model?
    Mar 17, 2014. 11:56 AM | Likes Like |Link to Comment
  • The Buckle Continues Its Pattern Of Flat Growth [View article]
    There is probably a built in bias in the investment community against apparel retail companies that our headquartered in small towns in the middle of the country, and that bias is BKE's strength, and why they are able to keep margins higher than those headquartered in the high cost coast cities.
    Mar 9, 2014. 09:46 PM | Likes Like |Link to Comment
  • The Buckle Continues Its Pattern Of Flat Growth [View article]
    My main concern is the Amazon effect. I've been to both web sites, and it does look like Amazon has a slight price advantage, but its difficult to measure since there are so many different styles of jeans. It's no longer just classic Levi's, Lee's and wrangler's. BKE also has its own house brand which isn't sold on Amazon, although they show their product for price comparison, and give a link to BKE's web site. I still think clothes are a lot different than books. People want to try on jeans, and I'm not sure that even young people are going to try on jeans in a store and then try to find the identical jeans on-line to save a few bucks, but I could be wrong. There's also the question of how long Amazon can continue selling its products at a loss, but so far they've been able to convince plenty of investors that this is a viable business model.
    Mar 9, 2014. 12:52 PM | 1 Like Like |Link to Comment
  • The Buckle Continues Its Pattern Of Flat Growth [View article]
    I can't answer your question since I haven't analyzed any of these companies. I do find the list intriguing though, and my curiosity may lead me to look at these companies more closely. Do you also follow VFC?
    Mar 9, 2014. 07:33 AM | Likes Like |Link to Comment
  • Why A Precise Fair Value Estimate Of ConocoPhillips Will Always Be Conceptually Wrong [View article]
    All your calculations are really for naught, when you ignore the spin-off of Phillips66, which was a major restructuring. It is no accident that after the spin-off the capital expenditures doubled. Where do you think they got the cash, why did they substantially increase the CapX, and what will be the future CapX. Those are the questions that need to be answered? You will notice that assets, liability and assets went down substantially after the spin-off, but you're using number's back to 2010, which are completely irrelevant to the newly restructured company. Sometimes looking strictly at number gives a distorted view. You first need to know what's going on in the company.
    Mar 4, 2014. 03:40 PM | Likes Like |Link to Comment
  • Wal-Mart's Problem And The Market Today [View article]
    You reap what you sow. Do you think they will ever learn that low paid workers can't buy the junk in their stores.
    Feb 20, 2014. 06:57 PM | 1 Like Like |Link to Comment
  • Bank Of America: Will The Stock Take Off Now? [View article]
    Bankers with economic/investment backgrounds are who got us in to this mess.
    Feb 20, 2014. 06:23 PM | 1 Like Like |Link to Comment
  • Cliffs Natural Resources Has Immediate Upside Potential [View article]
    Why not buy the convertible preferred shares and collect a 9% dividend while you wait to see what happens?
    Feb 13, 2014. 05:07 PM | 1 Like Like |Link to Comment
  • The Market Liked The Buckle's January Sales Numbers [View article]
    The difference between BKE and the other apparel retailers is that BKE is debt free and better able to weather a downturn for a year or two. Even in the worst years, like 2013, they have positive earnings although their growth has slowed, and comp's are down. They also can grow by continuing their conservative expansion program of opening a few new stores a year.
    Feb 10, 2014. 08:05 PM | Likes Like |Link to Comment