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CVX, FHCO, MCD, O, PG, PM, TIS, UNP, WMT
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  • Can UNP's Dividends Keep Chug Chug Chugging? [View article]
    Great points. Actions such as delaying capex to fund dividends usually come alongside other symptoms such as limited revenue growth and deteriorating debt ratios. Given UNP is strong on those fronts, the risk is low, but still worth double clicking into for the prudent investor.
    Aug 28 09:01 PM | 1 Like Like |Link to Comment
  • Update: The Female Health Company Strategy Decision [View article]
    I used to be a fan of this stock as I thought it had potential, but was definitely a high risk bet. Making an abrupt change like this is not shareholder friendly. A dividend cut ... okay, but an outright suspension is hard to digest.

    Pivoting an entire company strategy is difficult. Building new products organically is difficult, and for a company of this size, I don't see many attractive M&A opportunities that they can act on.

    I cut my losses and canned it today. I will be moving elsewhere.
    Jul 15 01:34 AM | Likes Like |Link to Comment
  • Philip Morris: The Dividend Will Eventually Be At Risk [View article]
    Hmmm. Interesting read, but a few items to take as food for thought:

    1) cigarettes carry a convenience factor that expensive e-cigs don't. I can buy them impromptu, share one with a friend, lose them without it being that big of a deal on a per cig basis

    2) Altria and PM have much better distribution capabilities than the small mom and pop e cig providers. They can acquire to make a king maker or build on their own

    3) big tobacco is well versed at dealing with the FDA, lobbying politicians, and handling legal risks. Once they put support behind there horses, they can make it cost prohibitive through various channels for others to operate

    Will they face short term pressure ? Probably so. Is there imminent dividend cuts... I don't buy it.

    Long PM and Mo
    Jun 27 09:01 PM | 4 Likes Like |Link to Comment
  • How Much Could Procter & Gamble Raise Its Dividend? [View article]
    PG sells premium brands and made some falters in a handful of international markets. It will be interesting to see if its newly focused efforts on a handful or countries bear fruit and how they will perform as the global economy picks back up.

    I am long PG and will remain so, but have started shifting new investment funds towards other consumer goods stocks such as CL and CHD that provide additional exposure to value-oriented consumers.
    Jul 10 03:31 PM | Likes Like |Link to Comment
  • My Mad Method: What Next To Buy, And Why? - July 2013 [View article]
    Nice portfolio. I am a huge fan of LMT, PM, and NGG. However, I expect a fairly rough patch for NGG's dividend growth based on their recent policy for the next couple of years.
    Jul 10 03:28 PM | 1 Like Like |Link to Comment
  • The Threat Of Amazon To Wal-Mart's U.S. Operations Is Real, But Overplayed [View article]
    1) Warehouse costs are significantly cheaper than the cost to operate a retail center and come with significantly less restrictions / permits.

    2) Free shipping is never really free =)... as the price of oil goes up... the price of goods go up as well. Shipping is a real cost that the supplier will bake into the cost of goods.

    3) I am not sure how sound your margin argument is. Margin is a function of both revenue and cost. Amazon sells for lower price so by default it is going to have lower margins.

    4) Several studies done by the retail institute have stated AMZN's lower cost structure. Given the in depth access they have ... I would tend to believe their word over those of us with jus access to AMZN's annual reports. Look up the one completed by the Retailer Institute

    5) Retailers are rushing to create smaller store footprints and shift volume away from products that AMZN is a market leader in. If their cost structure is lower... why not look to cut AMZN on price... WMT has been fantastic at doing that in the past.

    Happy to take the discussion offline... but you cannot pinpoint the cost structure to sell a specific product by looking at financial statements unless AMZN provides you that visbiility or you have access into their supply chain.
    Jul 9 05:37 PM | 3 Likes Like |Link to Comment
  • The Threat Of Amazon To Wal-Mart's U.S. Operations Is Real, But Overplayed [View article]
    Several articles have been published on this. An apples to apples comparison must be made which then means...

    The overarching question becomes... who can sell a TV, camera, or larger ticket item for less and still break-even? Intuitively, COGS (what they actually purchase the item for) would be similiar for both major retailers. Shipping costs would be potentially higher for AMZN but not negligble for WMT (i.e., WMT needs to get it to its store). However, WMT would have higher overhead costs from its brick and mortar footprint.

    I would be hard pressed to believe that WMT could do so better than AMZN given they have similiar expenses and the cost of an overhead store. Anecdotally this is why several major brick and mortar retailers (i.e., Barnes and Noble, Circuit City, Best Buy) have been put out of business or have had to modify their behavior (i.e., have smaller store footprints). This has been why WMT has moved away from electronics and towards items AMZN cannot reasonably compete in (small ticket items and groceries).

    My question to you is, can you prove WMT can sell a TV or camera for less than AMZN? The follow-up would be if they can, then why are they decreasing their electronic store footprint?

    Having experience with retailer supply chains... not impossible... but highly unlikely WMT could do it for less. Hence the movement towards items that are not economical for AMZN to ship.

    Would I believe AMZN's overall cos structure is higher... yes absolutely... they have to pay more engineers, analytical staff, pay for TV / movie content, cloud servers, etc.

    Would I believe that WMT could sell a TV for less that AMZN... I would need to see hard evidence of this as it goes against any business intuition.
    Jul 9 05:00 PM | 1 Like Like |Link to Comment
  • The Threat Of Amazon To Wal-Mart's U.S. Operations Is Real, But Overplayed [View article]
    I think the neighborhood market will be a bigger threat to the likes of convenience stores (i.e., 7-11s) and CVS-type shops. Dollar General still offers significant value to more economically challenged consumers.
    Jul 9 02:19 PM | Likes Like |Link to Comment
  • The Threat Of Amazon To Wal-Mart's U.S. Operations Is Real, But Overplayed [View article]
    Good point. I think these stores have a alot of potential, particularly internationally as well.
    Jul 9 12:41 AM | Likes Like |Link to Comment
  • The Threat Of Amazon To Wal-Mart's U.S. Operations Is Real, But Overplayed [View article]
    Thanks for the comment. You are exactly right. One of the key points of this article is that WMT has made a concentrated push towards items that cannot be easily and efficiently sold by Amazon and other retailers such as toothpaste, groceries, and other goods.
    Jul 8 09:03 PM | Likes Like |Link to Comment
  • The Threat Of Amazon To Wal-Mart's U.S. Operations Is Real, But Overplayed [View article]
    Good points. However, you are looking at AMZN as an entire entity. AMZN is much more than an online store these days. You would need to look at AMZN's core operations. Intuitively one would expect WMT to have all of those same expenses as well in addition to the cost to run a brick and mortar store.

    It is pretty well documented that AMZN's core operations (i.e., running an online store) have a lower cost structure than brick and mortar stores.

    Additionally margin is not correlated to cost at a 1 to 1 ratio. If I sell the same item you sell for $100 at $95...by nature will have a lower margin if I have the same cost.

    However, net net we are saying the same thing (WMT is a more attractive investment).
    Jul 8 06:43 PM | Likes Like |Link to Comment
  • The Threat Of Amazon To Wal-Mart's U.S. Operations Is Real, But Overplayed [View article]
    Thanks for the comment Tim.

    Looking purely at the cost to operate AMZN's online store operations it does have a lower cost structure and more operational flexibility. This would remove things such as R&D (i.e., product development for things such as the Kindle, content for Amazon Prime, etc.). Looking at AMZN before these items were included shows that they do in fact have a lower cost structure. Several publications out there (i.e., from the Retail Institute) also confirm this.
    Jul 8 11:01 AM | Likes Like |Link to Comment
  • Retired Investors: Is It Time To Consider A New Investment Strategy? - Part 2 [View article]
    Nice article. I think it is also important to consider industry and other factors as well. Certain industries will have higher capital expenditures, revenue volatility, and balance sheet risk. This can lead to volatility in cash flows which is one of the leading causes of dividend cuts
    Jul 6 01:35 PM | Likes Like |Link to Comment
  • Energizing Your Dividend Portfolio With Chevron [View article]
    Hi Kmhunt.

    Operationally these companies are basically the same. RDS.B held its dividend constant fr 3 years between 2009 and 2011 at 84 cents a share. They increased it by a token amount to 86 cents in 2012 and to now 90 in 2013.

    Agree with the need to diversify. I'd opt for XOM and CVX over RDS. I personally have chosen a mix of quality (CVX) and opportunity / risk (BP).
    Jul 5 07:03 PM | 1 Like Like |Link to Comment
  • Energizing Your Dividend Portfolio With Chevron [View article]
    Thanks for the comment. I think this will really depend on the global price of nat gas and oil. Hope you are right... I would love to pick up more!
    Jul 1 04:24 PM | Likes Like |Link to Comment
COMMENTS STATS
35 Comments
23 Likes