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Brendan Wagner  

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  • Paragon Offshore: A Spin-Off With Minimum 40% Upside Potential [View article]
    PGN is not a "pure-play" jackup story - they have risks that Rowan does not. They have six floaters, two of which come off contract in Brazil in 2015. One will likely go back to work there, the other probably not. These are huge EBITDA contributors, and are the bulk of management's worries.

    I doubt PGN will pay the $80-90million dividend that NE proposed in the form 10's. Most likely a smaller amount will be proposed by management, an amount allowing for dividend growth. The cash flow saved may go to buy back debt, and that seems to make sense with the 2022 and 2024 notes trading at 93cents on the dollar.

    I conservatively value PGN at 5x trough 2016 EBITDA of $500m and assume they've paid off $200m in debt by then. That leaves equity of $1billion, or $11.90 per share.
    Sep 5, 2014. 01:14 PM | Likes Like |Link to Comment
  • Why "S&P 2000″ Is A Fed Manufactured Mirage: The "Buy The Dips" Chart That Says It All [View article]
    "blinding proof that the S&P 500 is now a complete creature of central bank liquidity and manipulation." - what an amazingly arrogant view you have! In your exhaustive research, did you bother to look at what is happening to actual companies? Is the Fed the only reason that the S&P500's largest company(Apple) is up 750% since March 2009, or is it because their net income rose 749% when comparing March14 to March09? Did the Fed help them sell 43.7million iphones in the March14 quarter, versus 3.8million in the March2009 quarter? And what did the Fed have to do with the Ipad sales of 16.3million units in the March14 quarter, compared to zero in March09 when the product had not even been released yet? Your belligerence blinds you to what is going on "under the hood" of the broad market. Yes, the Fed is accommodating the market, but there's plenty more going on that justifies most of the rise in stocks. Whether you're bullish or bearish, lazily analysis when combined with arrogance can only be harmful in the long-run.
    Aug 25, 2014. 02:01 PM | 12 Likes Like |Link to Comment
  • Heinz May Be A Buffett Stock, But This Isn't A Buffett Price [View article]
    Buffett is happy to pay a fair price for a great brand. The flaw in your valuation is the discount rate. Heinz bonds (cusip 423074AN3) due March2017 have a coupon of 1.5% and yielded about 1.3% before the deal was announced. And yet you use a 7.5%-9% discount rate, which is far, far too high.
    Feb 14, 2013. 11:55 AM | 1 Like Like |Link to Comment
  • Market Valuation Indicators: Overvaluation Relatively Unchanged [View article]
    I agree with Armistead. The Shiller 10year PE for the March 09 lows was not low enough for certain bears in the market. Thus they KILLED their investors' performance and missed the entire rally. One example of the Shiller PE is Apple. It's 10year average EPS right now is about $6.70, versus the $43 they will actually make this year. The reliance on backward-looking models while ignoring changes in the underlying business is inexcusable, especially for professionals with $Billions entrusted to them.
    May 2, 2012. 08:13 AM | 2 Likes Like |Link to Comment
  • The Crowd Is Wrong About Best Buy [View article]
    I agree that BBY is undervalued but the $2.5billion in FCF for the year just ended will not be repeated - it was a one-time working capital reversal. This year FCF will be closer to $1.5-1.6billion, still a lush yield that should afford some upside for the stock.
    Apr 4, 2012. 05:06 PM | 1 Like Like |Link to Comment
  • Why Apple Will Never Trade At $1,000 [View article]
    Some numbers disagree with you. Apple's eps grew 86% in 2011, 75% in 2010, and will grow about 55% this year. If you slow that down to 20% in 2013 and 2014, price the stock at 15x earnings and add back cash&investments per share of $173(by then), you have a $1,077 stock. It may or may not happen that way, but it's no stretch for it to get there.
    Mar 6, 2012. 11:35 AM | 5 Likes Like |Link to Comment
  • 7 U.S. Technology Companies Trading Under 10 Times Free Cash Flow [View article]
    I agree that FCF is extremely important and useful as a valuation measure. But plenty of great companies (and great investments) can be overlooked by FCF investors, as they might be in a growth/investment phase.
    Jun 17, 2011. 10:44 AM | Likes Like |Link to Comment
  • Best Buy: Great Cash Flow, Solid Earnings, Inexplicably Low Valuation [View article]
    The company is forecasting $2-2.5billion in Free Cash Flow this year, which makes that free cash flow yield north of 20% if you net out the cash.
    Jun 15, 2011. 09:01 AM | 1 Like Like |Link to Comment
  • REIT IPOs: The Wave Before the Surge [View article]
    no, the recent ones aren't all internally managed. but anyway, these blind pools (well not so blind now that they've invested proceeds) are a great buy on the dips, buying a dollar for 70cents.
    Jan 13, 2011. 12:05 PM | Likes Like |Link to Comment
  • REIT IPOs: The Wave Before the Surge [View article]
    I'd point out that these blind pool IPO's can have some complicated operating agreements with related parties, as REIT rules require a 3rd party manager of assets in many cases. One nice sign is management that invests alongside the rest of us by buying shares in the IPO or soon after. Among the blind pool REITS, Jeff Fisher at CLDT put in the largest slug of his own $$$$. (no position)
    Jan 12, 2011. 09:48 AM | 1 Like Like |Link to Comment
  • Apartment REITs May Be the Only Sure Way to Play Real Estate [View article]
    a little more research is called for. and watch out if you're buying the common shares of some of these REITS - you'll forever be abused and diluted in order to raise $$$ to pay off those higher than you in the capital structure:

    Oct 14, 2010. 02:24 PM | 2 Likes Like |Link to Comment
  • So how to boost the economy? Harvard professor Jeffrey Miron says legalizing drugs - all drugs - would help, saving an estimated $41.3B/year on total government enforcement and producing tax revenue of $46.7B/year, assuming drugs were taxed at rates comparable to those on alcohol and tobacco.  [View news story]
    Only to a Harvard prof does more tax revenue mean "boosting the economy."
    Oct 6, 2010. 02:08 PM | 6 Likes Like |Link to Comment
  • Don't Let Talk of a Bubble Scare You Out of Bonds [View article]
    You wrote "The term “bubble” implies a grossly mispriced asset that is susceptible to substantial losses."

    You can define "bubble" however you like, but it is perfectly valid to say that receiving .44% to lend to the US Govt for two years is a "bubble," especially considering that the USA's finances are magnitudes worse than they were decades ago when you could lend to the govt for over 10%. Saying that there's no bubble simply b/c you get principal back ignores the point that a bubble can also mean being paid too little to lend.
    Sep 29, 2010. 08:34 AM | 9 Likes Like |Link to Comment
  • Dividends vs. Stock Buybacks: Exxon [View article]
    Good article Tim. As a fan of dividends/acquisitions over buybacks, XOM has always been the thorn in my argument.

    One thing I'd note is the idea that when companies buy back stock, then the investor "owns more of the company." Well sure you do, but you "own more" of a company that has a smaller cash balance than the day before. And the market might give the company a smaller PE multiple due to reduced cash, so you've gained nothing.

    Overlooked is the conflict of stock options. Management that is heavy on stock options does not benefit from dividend payouts, so they might be more inclined to use a buyback to push the shares up temporarily.

    As for the company argument that their industry might be to volatile for them to commit to a dividend, I say nonsense. Look at Cal-Maine in the shell egg business - hugely volatile, so they don't commit to a fixed dividend, but rather a fixed % of net income.
    Sep 15, 2010. 09:10 AM | 3 Likes Like |Link to Comment
  • Three Deep Value Stocks With Major Upside [View article]
    Well done!
    Aug 30, 2010. 07:41 AM | 1 Like Like |Link to Comment