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  • Liberty Media: Profits more than double; broadband spinoff wraps [View news story]

    Thanks, although no vacation and I haven't been away. Instead, I've been very focused on rebalancing my portfolio and short term trading. It's far easier and more lucrative as the Sirius PVs continue to drop and I can generate more PVs from CPST and FTR with less effort. I also find writing about BGS, while somewhat less views than the other two, is easier to to discuss and I can get some feedback on my views.

    So, mostly short term trading in AAPL, ARNA and SIRI, and then doing a lot of work on adjusting my dividend portfolio. I just filled out a full position in BGS (meaning 5% of my dividend portfolio) paired with AUG $30 covered calls, while reducing my older holdings in FTR when it topped $8 while the VZ deal was still in the rumor phase. I've also been buying some XOM and T after taking gains in WYN.

    I started four separate articles over the past 2-3 weeks and just haven't been able to finish them. Also waiting for any insight into PFSW when they release earnings and hold a CC next Thursday. It has been a stellar performer since I wrote my first article on the company in July of 2013 when it was under $4. Anyway.... keeping busy and following, just not pushing out as many articles.
    Feb 27, 2015. 02:10 AM | Likes Like |Link to Comment
  • Liberty Media: Profits more than double; broadband spinoff wraps [View news story]

    "That continually posit that Liberty is out to harm SiriusXM. "

    There is a big difference between Liberty being "out to harm SiriusXM" and Liberty going down a path to benefit Liberty that happens to be at the expense of Sirius. Suppose Liberty wants to make an acquisition or investment. They decide the best way to get cash is for Sirius to borrow another $4 billion so that Sirius can ramp up the buyback while leaving Liberty in control. Sirius accelerates the buyback and Liberty enters into a new share purchase agreement.

    Accelerated buyback boosts share price and Liberty enters into another share sale agreement at the higher price. In the long run, depending on your view of buybacks and debt and increased interest expense, this may be good, bad or neutral for Sirius. The last time a similar event occurred, the share price started a downward spiral.

    Liberty's ROI is much less or much greater depending on which shares and sales you look at. The original 2.6 billion shares were purchased for $12,500, or .00048 pennies per share. The next 705,823,552 shares were purchased for $1.5746 billion. or about $2.34/share. Then they sold 136,600,825 shares for $500 million or $3.66 per share. Then, they picked up 5,866,666 shares in December when their 7% convertible debt was redeemed.

    They have had a phenomenal return, but most of that - on a percentage basis is well in the rear view mirror.
    Feb 26, 2015. 12:59 PM | 4 Likes Like |Link to Comment
  • Liberty Media: Profits more than double; broadband spinoff wraps [View news story]

    "Now, about the dividend that Siri pays, I have yet to receive a check-----what is the date for the dividend?"

    I guess you are new to Sirius. The Board of Directors declared a special cash dividend in the amount of $0.05 per share of common stock, payable on December 28, 2012 to stockholders of record as of the close of business on December 18, 2012. See

    If you were a shareholder at the time and did not get your dividend, you should complain to your broker or Sirius management.

    "Unless a Common Shareholder receives real money in hand there is no dividend. "

    Not true, but I understand why you would feel that way. Read this article:

    Intra-corporate dividends are a method used by certain corporations and holding companies to move money around without tax consequences while limiting liabilities.
    Feb 26, 2015. 12:24 PM | 2 Likes Like |Link to Comment
  • Liberty Media: Profits more than double; broadband spinoff wraps [View news story]

    You wrote "however it is Sirius that is feeding the money to Liberty." Aside from the interest and redemptions on certain Sirius debt held by Liberty and the original repayment of the bailout loan, Sirius has delivered a total of less than $700 million in cash (money) to Liberty. That's the $500 million share purchase agreement and and the one-time 5 cent dividend. It has been close to a year since the last time Sirius was "feeding the money to Liberty."

    There is a difference in control and being able to access the cash, and the lack of access was likely the primary reason for the merger offer.

    "...when a company controls 57% of another company that is control by whatever method they do it."

    Liberty had "control", which is not access, the minute they bailed out Sirius despite having "only" 40% of the company at that time. Liberty was limited to negative controls at that time, and can now mandate certain actions, but they can't just go in and raid the cookie jar.
    Feb 26, 2015. 12:02 PM | 3 Likes Like |Link to Comment
  • Update: Capstone Turbine Continues To Announce New Orders [View article]
    Jack Ready-

    I like the concept, and reminds me of an article I read decades ago during the first oil embargo which discussed the idea of low flow hydroelectric power. Instead of using massive dam projects (which can be environmentally unfriendly) it would capture the natural movement of water in rivers to run turbines,

    I guess anything is possible but it doesn't seem to fit their model and seems incompatible with their current designs. BTW, you can always pose the question on theCapstone web site "Ask Management" section:
    Feb 26, 2015. 10:36 AM | Likes Like |Link to Comment
  • Liberty Media: Profits more than double; broadband spinoff wraps [View news story]

    " however it is Sirius that is feeding the money to Liberty."

    This is not really correct. Liberty does not have direct access to the cash at Sirius. It can borrow against its stake (as it did with a margin loan when it took a big stake in CHTR) or it can sell back shares to Sirius or it can have Sirius pay everyone a dividend. Beyond that, it cant access the Sirius FCF.
    Feb 26, 2015. 03:21 AM | 3 Likes Like |Link to Comment
  • Update: Capstone Turbine Continues To Announce New Orders [View article]

    "interested in your sentiments about DJ's statement"

    Unfortunately, he has shown an amazing lack of accuracy with respect to his forecasting, both with the cash balances and revenue. Over the past couple of years a strong cash position turned into a weak one, forcing a capital raise and dilution when they failed to meet the ratios in the Wells Fargo agreement (see this May 2014 article , where I wrote about Jamison's lack of insight into cash management:
    "On the Q3 conference call, everything was supposed to have turned around. Here's how Jamison concluded the conference call:"Obviously this is the best all around quarter in the company history. We're very happy with the results; highest revenue, highest product revenue; gross margin in both dollars and percentage, record backlogs like we discussed, both in FPP and in product; a tremendous book-to-bill ratio of 1.4:1, average selling price is at the highest levels and strong cash, I mean our cash position is becoming more of a strength for us." ...However, since those statements were made on February 10th [2014], something went wrong and required the need to bring in another $30 million. The cash that was supposed to be a strength had turned to a weakness."

    On the plus side, the investor that plowed money into the company paid about $1.70 for the shares.

    The major problem right now is that those macroeconomic conditions are not really stabilizing or improving. As I noted above with respect to oil prices - there is no real sign of improvement. Oil prices have yet to stabilize and there are those that believe the price could remain in the current range (or even go lower into the $30's) for quite some time. It has to hurt CPST revenue opportunities in new drilling/fracking and offshore platforms with the costs too high to keep some wells producing, let alone drill new ones. There are too many "positives" with respect to production out there, and unless the Saudis decide to cut back their production, there is little reason to think the prices will rise. Good for consumers, but not great for CPST.

    The Ukraine remains a major hotspot and it's not clear how well BPC will do in that environment. The dollar remains strong, and it doesn't help that ECB can't figure out what to do with Greece while other countries are trying to weaken their currencies to boost exports. That said, the products are sound with newer models that combine greater efficiency with lower costs on the way. The company, IMO, will get to profitability, but it is nearly impossible to know when considering how poorly management has forecasted over the few years.

    I suppose I should finish an article I have been writing on Q3, but I have been to busy trading and reallocating my portfolio to focus.
    Feb 26, 2015. 02:35 AM | 2 Likes Like |Link to Comment
  • Sirius XM Court Cases Continue [View article]
    Ol blue Eyes-

    "Not right away, as the Captain would probably agree, given the politics involved and the natural reticence of Congress to do much of anything. "

    I certainly agree about it not occurring right away. As to whether it benefits Sirius or not, I really don't know. Not trying to put words in your mouth, but it seems for it to benefit Sirius would presume that artists are being fairly compensated today, and all that is occurring is redistributing the pieces of the pie.

    I think I would argue that the pie has shrunk from the loss of record sales, and fairness should have the objective of restoring the size of the pie, perhaps adjusted even higher to account for inflation. BTW, Frear spoke about this at the MS conference yesterday.
    Feb 24, 2015. 03:12 AM | Likes Like |Link to Comment
  • Is It Time To Consider B&G Foods For Its Dividend? [View article]

    "Sounds like you have a good plan in place."

    Thanks. Well, a plan anyway. ;-) I consider myself to have been very lucky and many of the circumstances just fell into place, the result of having made some good friends along the way.

    Still, I tend to worry about a lot of things. Low interest rates, high inflation, a political system that has made it impossible for legislators to compromise, employment for recent college grads, Greece, the Middle East, low oil prices, high oil prices, climate change... even terrorism.

    Some may be more rational than others and many have a personal connection. One daughter ran in the Boston Marathon. I was on the phone with her when the bombs went off as she was walking back towards the finish line to cheer on those still finishing. Another daughter has been teaching pre-k and kindergarten in Africa for the past several years, partly because she can't afford to live and work in NYC despite multiple masters degrees and having been certified to teach those with special needs. I have a son who has yet to secure a job despite a doctorate in an advanced scientific field.

    I have seen massive destruction in NJ, much of it affecting family, friends and neighbors, from hurricanes Sandy and Irene. I sold a rental proprty with a six-figure capital gain about a year before the Bush tax cuts that lowered cap gains tax rates. I put money into private real estate LPs and UGMA accounts before Bill Bradley pushed through tax reform that introduced the kiddie tax and removed some of the benefits of paper losses on leveraged transactions. The list goes on, and I recognize that I have been too aggressive with my investing at times and both unlucky and very lucky at other times.

    If there is one thing that I have learned, it is never to get too complacent. As to my plan... It will be years before I know just how good it is/was.
    Feb 24, 2015. 02:50 AM | Likes Like |Link to Comment
  • Is It Time To Consider B&G Foods For Its Dividend? [View article]
    Steve Rasher-

    I'm happy to discuss any of the options online. If it is useful to me, I figure it might be useful to somone else...

    As to how long we can keep up the house? I expect it will be a fairly long time. I have good relationships with some of the contractors in the area who are willing to recommend reliable handymen to take care of things. For the foreseeable future, a large place is useful as the kids, grandkid and the rest of the extended family are often here for holidays, long weekends, summer vscations, etc. ....
    Feb 23, 2015. 07:48 PM | Likes Like |Link to Comment
  • Update: Capstone Turbine Continues To Announce New Orders [View article]
    Caroline Bondoc-

    "Margins improved on 19% less revenue than Q3 Fiscal 14."

    This is due to a variety of factors, some of which are more or less permanent and others which are more transitory. The company explanation is "The change in the gross margin during the three months ended December 31, 2014 compared to the three months ended December 31, 2013 was driven by multiple factors including lower production and service center labor and overhead expenses of $0.5 million, lower warranty expense of $0.3 million and lower royalty expense of $0.2 million. The positive impact of these factors was offset by the adverse impact of lower average selling prices and product mix for our microturbines of $2.2 million. Management continues to implement initiatives to improve gross margin by further managing warranty expense and to further reduce direct material costs as we work to achieve profitability."

    The cost improvements in warranty and materials appears to be ongoing. There was a permanent reduction in royalty expense, which - if I remember correctly - was achieved during Q3 of fiscal 2014. Product mix will impact margin percentages, with the higher MW systems typically carrying a higher margin.

    Is he sandbagging? I don't think so. There has been a lengthening of the book to ship cycle, and management acknowledged that the long term soft guidance of revenue - product order backlog was a good indication of the next 4Qs of revenue. Now the expectation is that it is an indication of the next 6Q's of revenue.

    Hard to know how all the the disruptions in the world oil markets with prices sagging to the $50/BBL level will hurt CPST. (Then there is the whole Russian situation where Putin has decided to cut off his nose to spite his face.) The latest bad news on that front is that a Libyan pipeline is back in operation, and they produce some of the most desirable crude.
    Feb 23, 2015. 06:20 PM | 2 Likes Like |Link to Comment
  • Sirius XM Court Cases Continue [View article]
    Ol Blue Eyes-

    "I believe that all radio stations, to this day, keep a record of all songs played each day. "

    Keeping detailed records would appear to be absolutely necessary to figure out the composer-songwriter-pu... royalties. However, if performance royalties are to be analogous to the digital royalties, those are calculated on a percent of revenue or per play per listener. It's the per play per listener that makes things very "messy."
    Feb 23, 2015. 05:39 PM | Likes Like |Link to Comment
  • Is It Time To Consider B&G Foods For Its Dividend? [View article]
    Steve Rasher-

    Thanks for the info. I was aware of the $500k exclusion. Fortunately/unfortunat... I live in an area of NJ that went relatively unscathed by the housing bust, plus the town has a top school system and a traditional town center, making the whole package very desirable.

    I also bought cheaply at the bottom back in 1991 when there was another housing recession and relatively high interest rates. The lot is extremely desirable, and I am currently sitting on a high six-figure gain, and I expect it will continue to appreciate. Builders are buying small capes and ranches for $600k+ and tearing them down and cramming in all kinds of McMansions.

    Anyway, if one spouse inherits from the other, part of the cost basis is stepped up to the market value on the date of death. OTOH, I can't recall if the cost basis can still be rolled forward on a sale and purchase of a more expensive primary residencenot that that helps.

    The big problem with tax planning is not knowing what will change and when. George Stienbrenner died at the right time so the Yankees passed to his heirs when estate taxes were unlimited... :-/
    Feb 22, 2015. 07:11 PM | Likes Like |Link to Comment
  • Is It Time To Consider B&G Foods For Its Dividend? [View article]
    La Marque-

    I am also in "retirement", having stopped working when HP shut down the unit where I was working following the dot-com implosion. The only places I get concerned about the tax ramifications are with UBTI from LPs in IRAs - too much work - and stuff that triggers the AMT.

    I thought that the differential between LTCG and qualified dividends wasn't all that great, even at rates above 15%. In my case, where I am using options to boost returns, I am creating ordinary income from the short-term gains on the options, and the potential short term gains on the shares becoming ordinary income.

    Now, if I could figure out what to do with gain on our primary residence... For tax planning, we should probably move, rent it out, depreciate it, wait for one of us to die so the other gets the stepped up basis.... gets a bit morbid after a while. ;-)
    Feb 22, 2015. 03:09 PM | Likes Like |Link to Comment
  • Sirius XM Court Cases Continue [View article]

    Clearly you don't even bother to read the comments. This was my response to Ol Blue Eyes prior comment (about 5 comments above this one):
    "It's a very interesting situation, and may benefit Sirius if analog radio now decides to play less music and carry more chatter and commercials between songs."
    Feb 21, 2015. 12:59 PM | 1 Like Like |Link to Comment