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Bryan Wagman

 
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  • Why Caterpillar Isn't Anything More Than A Hold Here [View article]
    Thank you for the thoughtful comment. I agree with what you said about the debt-to-equity ratio, your depiction of that is definitely more meaningful to the company than mine. On the other hand, I don't think it is necessary to downplay the mining concerns. Although the segment is currently only 16% of CAT's revenue (and so further increases won't be too detrimental), you can't just ignore the fact that it has fallen from the 33% peak. The growth that we had seen from that segment over the last five years or so was definitely significant in the big picture. But now that the segment has fallen back down to 16% of sales, we see this is undoubtedly an area the company will have to build their way back to success in. Although the long term picture is not affected by the struggle (most would agree that Caterpillar will eventually get the segment back on track and maintain market leadership, as you stated in your other comment), a lot of people currently have different opinions of when that return to stability will finally come, which affects the valuation. If your investment horizon is longer than the amount of time you think it will take for the segment to return to its high-level performance (which mine is), this shouldn't pose a problem. But considering that there is no guarantee the mining segment will be repaired anytime soon, this might not be a good idea for an investor with a horizon shorter than a few years. Even if unjustified in a big-picture-valuation standpoint, we all know the type of hit a stock can take from a discouraging earnings report (i.e. a report that details further and/or sustained mining struggles). Overall, though, you do have a good point that for the true value investor, the time to invest is when the business is performing at a level that is less impressive than what you and others know the company is capable of.
    Nov 22, 2014. 11:46 PM | Likes Like |Link to Comment
  • Why Caterpillar Isn't Anything More Than A Hold Here [View article]
    If a company has the balance sheet to do so, which CAT does, I don't see a problem with implementing a buyback program to supplement stockholder returns.
    Nov 22, 2014. 11:35 PM | Likes Like |Link to Comment
  • Why Caterpillar Isn't Anything More Than A Hold Here [View article]
    Why would you see this as unhealthy? Clearly, Caterpillar is still spending a few billion on CapEx, and the share buybacks aren't inherently a bad sign just because of the size. The company has a lot of capital available to them at this time, and all this shows me is that they see the purchase of their common stock at current market prices as a worthwhile investment.
    Nov 18, 2014. 08:51 PM | Likes Like |Link to Comment
  • EnerSys: An Under-Followed Company With Great Prospects For The Future [View article]
    I'll admit the last few months haven't been encouraging, but the fundamentals were not changed. My minimum investment horizon is 2-3 years, and I'm willing to hold much longer if that's what it will take for my thesis to come to light. If EnerSys continues to struggle, I may have to re-assess my hypothesis, but I don't see this struggles being long term. The "solid quarters" that we're all waiting for might not come within the next three or four reports, but that doesn't mean EnerSys no longer has an overall bright future.
    Oct 1, 2014. 07:26 PM | Likes Like |Link to Comment
  • EnerSys: An Under-Followed Company With Great Prospects For The Future [View article]
    Overall, I wouldn't say the company or the investment thesis has changed. The stock, admittedly, has tumbled since I wrote this. But with the fundamentals still in place, I'd consider this a buying opportunity.
    Sep 30, 2014. 09:24 AM | Likes Like |Link to Comment
  • Valmont Industries: A Series Of Growth Opportunities Fit Company Strategy Perfectly [View article]
    TalonC,

    Thank you very much for the comment, I can see that your familiarity with the company is at a level that is rarely reached. I agree with Early Retiree, this was a thoroughly valuable comment that really adds to the conversation on this stock.
    Aug 22, 2014. 03:54 PM | Likes Like |Link to Comment
  • Valmont Industries: A Series Of Growth Opportunities Fit Company Strategy Perfectly [View article]
    Although I respect your opinion either way, I should be more clear:
    1. It's not so much high tech investment, but the start up costs are not minimal. They come in the form of heavy material costs, and these aren't relieved until the company is able to grow enough to start appreciating some scale benefits such as volume discounts from suppliers. Also, even a very simple object like a concrete pole needs machinery, property, and other resources to produce.
    2. Brand power in an industry such as this one might actually be significant. When you have had success with a past company, you're not likely to leave them when it is something as important as infrastructure. Due to the serious and non-discretionary nature of Valmont's products, brand loyalty is likely to be high.
    3. Regulations need to be met both by the companies buying Valmont's products, as well as by Valmont when they make these products. Areas where the government is heavily involved in, such as infrastructure, tend to have heavy regulations.
    Aug 20, 2014. 03:52 PM | Likes Like |Link to Comment
  • Valmont Industries: A Series Of Growth Opportunities Fit Company Strategy Perfectly [View article]
    Overall, there is a chance that margins could start to fall a bit and settle into lower than expected long term levels. But there are a few notable points that might prevent this. First of all, Valmont is one of the most well established companies in the markets that it operates in. Their brand is well known among the infrastructure industry, and has high enough quality products to maintain customers, even if they have to do it through more competitive pricing. But I don't believe the pricing will get too bad because there are decent barriers to entry. The main one is high start up costs, because you'll need a factory to make the products that Valmont says. Also, there are a lot of regulatory requirements to meet. If Valmont continues to grow and become a more major player in their markets, declining margins won't be too bad.
    Aug 20, 2014. 02:14 PM | Likes Like |Link to Comment
  • The Reward Far Outweighs The Risk At AGCO [View article]
    That is true, the debt to equity ratio of 3.41 for DE is too high for my liking, and it has been in a general uptrend over the long term as the company continues to finance projects through debt. Also, the valuation multiples for both companies are considerably low on a historical basis, but AGCO still seems to be a bit cheaper.
    Aug 11, 2014. 10:23 AM | 1 Like Like |Link to Comment
  • The Reward Far Outweighs The Risk At AGCO [View article]
    Thanks for the comment, rdcrealock. Interesting article, and both DE and AGCO certainly have their strengths and a few weaknesses. Overall, though, I think they both have strong business models that will drive significant profits going forward as farmers look to invest in their equipment. The depressed valuations in this industry also make both stock look even better.
    Aug 11, 2014. 07:26 AM | Likes Like |Link to Comment
  • The Reward Far Outweighs The Risk At AGCO [View article]
    Corn prices have fallen significantly in the last few months, and this could have an adverse impact on AGCO. If farmers don't make as much money on the corn, they won't have as much to spend on machinery. This could be a serious problem if things get worse. But, overall, I think that commodity prices will remain stable enough for AGCO to continue profiting, and the company's CEO agrees with me: http://bloom.bg/1kU0B42
    Aug 10, 2014. 01:18 PM | Likes Like |Link to Comment
  • The Reward Far Outweighs The Risk At AGCO [View article]
    Thanks for the comment, Factoid. It seems that there has been significant buying from insiders lately, and this is one of the even stronger examples. When you have people of power, influence, and expertise buying shares, it indicates that the company must be doing something right.
    Aug 10, 2014. 01:07 PM | Likes Like |Link to Comment
  • The Reward Far Outweighs The Risk At AGCO [View article]
    You have a good point. Although "trimmed", admittedly, was an understatement, I still don't think it has much of an impact on the long term thesis. In the short term, that's a different story. But if you are a long term value investor such as myself, times of difficulty in good businesses can create wonderful buying opportunities. Thanks for the comment.
    Aug 10, 2014. 01:05 PM | Likes Like |Link to Comment
  • The Reward Far Outweighs The Risk At AGCO [View article]
    Thanks for the comment, Steffen. For the resource you're looking for, I looked around a bit but couldn't find much other than just transactions with specific dates. If anyone comes across that information, I would also be interested in taking a look.
    Aug 10, 2014. 01:01 PM | Likes Like |Link to Comment
  • Take-Two Interactive: Wait For A Dip [View article]
    This is actually a very good point. I guess what I would say is that, in terms of future cash flows, there is not much visible alpha in an investment at the current price. But as Buffett said, it's better to buy a wonderful company at a fair price than the other way around, and this is an example of a wonderful company at a fair price. Depending on your investment horizon, these prices may actually indicate a strong buy.
    Jun 8, 2014. 11:08 PM | Likes Like |Link to Comment
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