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Andrew Heyl

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  • 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 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 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 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 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 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 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 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 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 08:05 PM | Likes Like |Link to Comment
  • Why Casablanca Wants To Split Cliffs Natural Resources, The Bloom Lake Project And The Future Of Iron Ore [View article]
    The analysts have been dead wrong all year on the price of ore. I'm always skeptical of analysts from firms who may be trading in the companies analyzed. I feel more comfortable with the predictions of the ore companies. Nobody knows what China is doing, its a complete guessing game. Also if production is going up why is Joy Global down. CLF recapitalized last year with convertible preferred stock and will be fine. All it has to do is stay profitable profitable until another shortage of iron ore occurs, and don't forget its long term contracts with US steel producers.
    Feb 8 07:52 AM | 3 Likes Like |Link to Comment
  • Decoupling Of Oil Companies And Oil Prices Redux [View article]
    Thanks for catching the error. I made the correction.
    Feb 8 07:26 AM | Likes Like |Link to Comment
  • Two Birds With One Stone: Baxter Will Make Your Pockets Heavier And Heal The World In 2014 [View article]
    BAX's main source of growth over the last few years has been acquisitions. Do you have any figures on its organic growth?
    Jan 31 04:51 PM | Likes Like |Link to Comment
  • Chevron Dividend Stock Analysis [View article]
    Looks like you've done a lot of work in your intrinsic value analysis. It would be nice however, if you gave a little more detail on your methods, or maybe just show the formulas your using. I do a lot of similar models, such as Graham's formula for growth stocks, Value = Current Earnings X (8.5 plus twice the expected annual growth rate), and my calculation was somewhat different from yours. Same with your DCF calculations. In the end we were pretty close on the final fair value figure. I suppose it might have a lot to do with how you're computing earnings and cash flow. I also notice that you indicated analysts were estimating a 6.5 future growth rate, and that's exactly the growth prediction on Fast Graphs. I just recently recently started exploring Fast Graphs, and was wondering if you use it for some of your work. If so what do you think of it.
    Jan 26 07:45 PM | Likes Like |Link to Comment
  • Best Ideas For 2014: Long GCVRZ [View article]
    Here's a link to a article about Lemtrada that might be of interest to you. It indicates that it is really just a repackaging of Campath.
    Jan 16 12:54 PM | 2 Likes Like |Link to Comment
  • Why Bother Diversifying, Just Buy Berkshire Hathaway [View article]
    So the question is do you want Warren Buffet, or do you want to guess what index fund out of dozens are going to out perform him.
    Jan 15 06:49 PM | 1 Like Like |Link to Comment