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DG Ruralist  

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  • Zoetis: Great Dividend Growth Post-Pfizer Swap [View article]
    devlau20,

    Zoetis was not a traditional spin-off. It was a "split-off". In May or so of 2013, you would've received a form to tender or "swap" some of your Pfizer shares for shares of Zoetis. A Pfizer shareholder holding shares through Computershare would've had to filled out the form to receive any shares of Zoetis.

    It's unfortunate you didn't tender your shares. As a long-term investor, I advised doing so at the time:

    http://seekingalpha.co...

    Ruralist
    Mar 27, 2015. 08:54 AM | Likes Like |Link to Comment
  • Why Your Only Edge With Large Caps Is Valuation [View article]
    So I guess you're buying lots of IBM, CAT, HAL, and BP right now then?

    Easy to write this article in hindsight. Hard to stomach those companies right now for many people.

    Long all I listed,
    Ruralist
    Mar 20, 2015. 09:05 AM | 9 Likes Like |Link to Comment
  • Retired Investors: Beware The Materials Sector Of The S&P 500 - Part 9 [View article]
    Stan,

    "keep it simple and stick with what you know"

    I currently work for and have common shares in a large multi-national aircraft company headquartered in Europe. So, yes, I am very much interested in learning more about foreign companies from Chuck.

    I have several foreign companies that are on my watch list in addition to my many US companies. They are titans of their respective industries, and if there are associated ADR's available, why wouldn't someone at least be interested in learning more about them? I do not believe it is ever a good approach to limit or constrain yourself when it comes to investing or knowledge in general. You can't have "known" something until at one point you first learned about it.

    My watch list includes: RDS-B, UL, NSRGY, BBL, EADS, ABB, MDT, BP, STO, & BUD. Some people don't even realize that some of these are foreign. There are lots of other great foreign companies as well to consider.


    "With international stocks, one must also be cognizant of the exchange rate."

    That's absolutely true and should be considered. There are a couple of ways I handle it and I will share them with you.

    First, several of the companies I previously mentioned report earnings and dividends in dollars, so there is no issue (RDS-B, BBL, etc). Several foreign companies do this, so keep your eye out for them.

    Secondly, usually (though not always), a change in exchange rate will impact both the dollar and other denomination (such as Euro) in opposite ways. They sort of hedge against each other in that way. So when we have a strong dollar (as we have had lately), my US companies report earnings with negative F/X impacts, while my foreign companies report earnings with positive or constant F/X impacts (unless they have most of their business tied to the US). Another example: when the exchange rate increased between the Dollar and the Euro, my Euro-dominated dividend check increased accordingly, but it will cost more if I want to travel to Europe.


    So, yes, I agree that exchange rates should be considered when evaluating foreign companies. I myself find it to be a useful hedging tool to keep those dividend checks growing constantly. I also believe that one should not sacrafice quality when researching for foreign companies. I myself fall into the "great company at a good price, rather than a good company at a great price" group of investors. Just remember that not all great companies exist within the US.

    Happy Investing,
    Ruralist
    Mar 5, 2015. 09:22 AM | Likes Like |Link to Comment
  • Retired Investors: Beware The Materials Sector Of The S&P 500 - Part 9 [View article]
    Chuck,

    I know that you're sticking with S&P500 companies in this series of articles, but this sector provides a good example to not limit yourself to the USA when it comes to providing an industry-balanced portfolio. Specifically, I'm speaking of BBL in the materials sector.

    I haven't seen too many international companies/stock-screeners shown by you. I always enjoy your take on valuations of specific companies. Would you please consider international companies for your future articles?

    Thanks,
    Ruralist
    Mar 4, 2015. 02:54 PM | 2 Likes Like |Link to Comment
  • In Demand: Massive Quantities Of Craft Beer  [View instapost]
    Michael,

    Great article. I would like to get into SAM, but I may have to wait a while for it to come back to a reasonable valuation. I also wish there were more opportunities to invest in craft beer. It is definitely a mega-trend that I would like to latch on to. If you hear of any other opportunities, please let us know. I may have to just start calling up local breweries and asking them if they need any extra capital! My recent regional favorites are O'Dell and Left Hand Brewing.

    Also, I live in Wichita and my parents live in Topeka (down towards Berkshire golf course), so I visit there often. I was also disappointed about Boulevard selling out, but Duvel Moortgat seems to be a similarly family-owned operation that is concerned mainly about making good beer.

    Cheers,
    Ruralist
    Jan 29, 2015. 01:27 PM | Likes Like |Link to Comment
  • Why I Like Exxon Mobil While Others Don't [View article]
    Larry,

    Yes, indeed, XOM is for me.

    Also, if you had shown the production numbers from a "per share" perspective, you could've really blown it out of the water.

    Cheers,
    Ruralist
    Jan 26, 2015. 05:11 PM | 1 Like Like |Link to Comment
  • Investing Lessons From Rockwell International [View article]
    MGW,

    I know that you're able to edit a comment right after you post it. You'll see an "edit" button pop up under your post. But I've never been able to edit my comments after I've switched web pages.

    You won't have to worry about little things like ticker symbols too often. Most of us have the common sense to understand the jist of a person's comment. I suppose some here at SA are sticklers about that sort of thing, but we're all in various stages of the learning processes. Charity and Respect are far more important than grammer.
    Happy Sunday!Ruralist
    Jan 11, 2015. 05:46 PM | 1 Like Like |Link to Comment
  • Investing Lessons From Rockwell International [View article]
    MGW,

    At the time of the Conexant spin-off, my Conexant shares were sold off. It was probably due to my mother’s little understanding of the company. It was a wise decision of her.

    In spring of last year, I decided to purchase shares of Skyworks. If I hadn’t had Rockwell and wrote this article, I wouldn’t have known as much about Skyworks, and probably wouldn’t have purchased them.

    Cheers,
    Ruralist
    Jan 5, 2015. 09:13 AM | Likes Like |Link to Comment
  • Stock Purchase 12/30 - Rockwell Automation [View article]
    theo,

    I just saw in their 2014 report that oil and gas was their greatest growth industry for the year. I know that energy capex will decline, but energy companies will always be looking for products that save them money. Hopefully ROK will remain a key value-added component to those companies.

    As for the small portion of revenues statement, I have no specific source. My only anecdotal evidence is that I've only heard ROK mention the oil and gas industry within the last 2 years or so. I'm sure they had previous experience, but they only seemed to mention the oil & gas sector as a growth industry within the last few years. I can't imagine it's more than 10% of revenues at this point. But I have no idea, as you may know more.
    Cheers,
    Ruralist
    Jan 2, 2015. 11:20 AM | 3 Likes Like |Link to Comment
  • Stock Purchase 12/30 - Rockwell Automation [View article]
    ROK is a great company that I've held since it was combined with COL in Rockwell International. In the 28+ years that I've held these companies, it has frozen the dividend a few times, but never cut it. That's a mighty good record for a cyclical industrial company. And ROK has really taken off since the split in 2001. Earnings, revenues, and dividends have steadily been going up and shares outstanding going down. I also like that it's a small company that may be bought out some day.

    As for oil & gas capex reductions, the sector is a pretty small portion of revenues. I'd not worry about it too much.

    Cheers,
    Ruralist
    Jan 2, 2015. 09:30 AM | 2 Likes Like |Link to Comment
  • It's Official: Zoetis Belongs In Your Dividend Growth Portfolio [View article]
    RAS,

    I know that you have strict rules that you follow for DGI. In that case, just keep Zoetis in the back of your head or maybe on a "future DGI watch list". If I've persuaded you to do that, then mission accomplished.

    Have a Merry Christmas,
    Ruralist
    Dec 24, 2014. 11:14 AM | Likes Like |Link to Comment
  • Railroads Achieve Record Results In 2014 [View article]
    Oops, I didn't see NSC on your list. My apologies. I owned NSC at one point, but decided to switch it for KSU. I like its Mexico story, the potential buyout story, and the larger improvement of ROIC. Now if it'd only drop in price by a bit...

    Cheers,
    Ruralist
    Dec 23, 2014. 04:14 PM | Likes Like |Link to Comment
  • Aerie: A Brilliant Future, Derisking In Progress, And The Making Of A Major Ophthalmic Pharmaceutical [View article]
    Agreed!
    Dec 23, 2014. 03:26 PM | 1 Like Like |Link to Comment
  • Railroads Achieve Record Results In 2014 [View article]
    Michael,

    I also have a high conviction toward railroad stocks in my portfolio. I currently hold UNP and KSU and will look to add more during the dips.

    I see that you don't own either of the two east coast railways. I'm with you: the long-distance rails provide better ROIC. I may decide to purchase some NSC after UNP and KSU reach a large portion of my portfolio, but I'm not there yet.

    Merry Christmas,
    DG Ruralist
    Dec 23, 2014. 02:58 PM | 1 Like Like |Link to Comment
  • It's Official: Zoetis Belongs In Your Dividend Growth Portfolio [View article]
    Rudester,

    I appreciate the fact that you’d want to buy at a lower P/E. However, I don’t think you’ll be seeing P/E=18 for quite some time. This company will be growing real profits on the order of 17-23% for several years.

    I follow Mr. Carnevale’s rule of thumb for fair value: the P/E can range from 15 to the mid-term growth rate of the company. So if Zoetis grows profits 20%/year then paying 20x profits is approximately fair value. For Zoetis, I would also add a high quality component, typical of large-cap healthcare/drug companies in a growing industry. Mr. Ackman has the added term of a “scarce asset” in regards to Zoetis. This would raise my fair value to 22-25x profits.

    As for the dividend, well that’s up to you. If you’re in/near retirement, then you obviously care more about current yield than I do. In my mind holding Zoetis is similar to holding Walmart in the 1980’s. Yes, the yield is low, but it will be growing fast over the coming decades.

    Happy investing and have a Merry Christmas,

    DG Ruralist
    Dec 23, 2014. 12:27 PM | Likes Like |Link to Comment
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