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  • Reuters: EU likely to approve GE deal to buy Alstom power unit [View news story]
    It seems like good news, but until we hear about the final terms and the concessions that had to be made to get this approval it's hard to say for sure.
    Aug 14, 2015. 01:34 PM | Likes Like |Link to Comment
  • Tesla affirms 2015 delivery guidance; margin growth boosts EPS [View news story]
    Well put. In my mind the biggest issue with Tesla is burning cash. The company is generating plenty of revenue and still burning 100s of millions of dollars in cash each quarter and weakening the balance sheet. They have $1.5B in cash which at current rates could last no more than 6 months. Obviously they may be able to generate some savings, but if they raise more cash through equity they dilute the investors they have today. If they raise $1B in debt, expenses go up 10s of millions of dollars in debt servicing every year. As they introduce new products to market expenses are going to climb.

    The balance sheet is not a positive in anyway. It's a company with $1.5B in cash, $1B in inventory of an inherently depreciating asset, $1B in accounts payable. The only significant asset they have is their plants, equipment, and property.

    How long can TSLA continue burning cash at these rates? And how much value can an unprofitable company burning cash so quickly have?

    The concepts behind Tesla products are great, and Musk is a great marketer, unfortunately the economics of the business are less supportive of future success.
    May 7, 2015. 12:04 PM | 2 Likes Like |Link to Comment
  • Greenbrier beats by $0.37, beats on revenue [View news story]
    More signs of strength in the railcar manufacturers. ARII could be the best of the bunch for investors. http://bit.ly/1GQA4dD
    Apr 7, 2015. 07:25 AM | Likes Like |Link to Comment
  • Toyota announces 'global architecture' initiative [View news story]
    Sounds a lot like "One Ford"
    Mar 26, 2015. 09:05 AM | Likes Like |Link to Comment
  • Railcar Makers: Deep Value In An Overbought Market [View article]
    Bret and Matthew,

    Appreciate the analysis on this. I agree that railcar manufacturers are one of the best values out there, but think you left of what may be/have been the best value altogether. American Railcar Industries, Inc. (ARII), started the week around $48/share and has already rebounded about 5%.

    http://bit.ly/1GQA4dD

    I do share your same outlook on the long term profit potential for investors in railcar stocks based on the current values.
    Mar 20, 2015. 11:48 AM | 7 Likes Like |Link to Comment
  • American Railcar Industries: Bargain Buying Opportunity For Capital And Dividend Growth [View article]
    Barkeater,

    You seem pretty knowledgeable on ARII, and I appreciate your view on the variability of earnings and the cyclical nature of the industry warranting a lower PE. One of ARII's primary competitors, GBX, currently trades with a PE of 14+. Is there something about GBX that warrants a PE near 15, whereas ARII would only warrant a high single digit low double digit PE?

    Any thoughts on this would be appreciated.
    Mar 20, 2015. 11:42 AM | 1 Like Like |Link to Comment
  • American Railcar Industries: Bargain Buying Opportunity For Capital And Dividend Growth [View article]
    Chancer,
    While I'd certainly love to be able to get into a stock like ARII at a price under $40, I have a hard time envisioning a company with a book value of $23.20/share, earnings near $5/share, and 2014 free cash flow near $200M (1/5 of current market cap) trading at such a low valuation. Trading at $40/share, ARII would have a P/E near 8.
    Mar 17, 2015. 11:59 AM | 4 Likes Like |Link to Comment
  • American Railcar Industries: Bargain Buying Opportunity For Capital And Dividend Growth [View article]
    Interestingly enough, GBX announced $1B in new railcar orders. (http://seekingalpha.co...).

    I am uncertain on the percentage that could be cancelled, but of the backlog 24% are intended to remain "in-house". Again, I would anticipate rather than cancel, many of those railcars scheduled for delivery would be deferred and "replaced" with a lease.
    Mar 17, 2015. 07:37 AM | 1 Like Like |Link to Comment
  • American Railcar Industries: Bargain Buying Opportunity For Capital And Dividend Growth [View article]
    The biggest short term risk for ARII is shipment of crude, and the unknown costs associated with updating manufacturing facilities and procedures to comply with any new regulations that are put in place. Additionally, the current low oil prices may encourage companies to push out receipt of new railcars, but large scale cancellations do not appear to be an issue at this point. In fact, I would anticipate that in the event of order cancellations or deferrals, those produced railcars would be turned over to the lease fleet and would begin generating revenue, often from the company who was scheduled to take delivery.

    This represents a short term hurdle for the company, given that new guidelines for shipping crude by rail will result in a need for new railcars and retrofits of existing rail cars to comply.

    Risks are always part of an investment decision, but in the case of ARII the risks appear to be strongly outweighed by the long term value, and current low valuation.
    Mar 17, 2015. 07:34 AM | 1 Like Like |Link to Comment
  • Bloomberg: GE likely to increase dividend [View news story]
    And the award for least surprising news of the day goes to Bloomberg
    Dec 12, 2014. 08:09 AM | 7 Likes Like |Link to Comment
  • Looking At Rails Through A Warren Buffett Lens For 2015 [View article]
    Jimbaux, excellent point. Too often with investing, we look to oversimplify, which can be dangerous. Like you said, not all freight moved by rail competes with trucking. While higher fuel prices may lead to higher conversion to rail, those higher fuel prices will have an impact on the bottom line.

    Everything should be made as simple as possible, but not simpler.
    Nov 10, 2014. 04:07 PM | 1 Like Like |Link to Comment
  • Buffett wins again on BNSF purchase [View news story]
    Rails aren't going to become less valuable either. http://bit.ly/1tTJW1t
    Nov 10, 2014. 08:47 AM | 1 Like Like |Link to Comment
  • Looking At Rails Through A Warren Buffett Lens For 2015 [View article]
    Very true, and the railroads that exist are in no danger of going away.
    Nov 4, 2014. 05:38 AM | 1 Like Like |Link to Comment
  • Looking At Rails Through A Warren Buffett Lens For 2015 [View article]
    J,

    I agree that UNP, as a company is positioned for the greatest growth over the long term. I feel at this point, however, that the valuation is stretched to the point of limiting gains for some time. I would need UNP to pull back significantly to get the entry point I would want. I believe CSX offers the best value as an investment TODAY.

    What do you think is a fair earnings multiple for UNP?
    Nov 3, 2014. 09:59 PM | Likes Like |Link to Comment
  • Looking At Rails Through A Warren Buffett Lens For 2015 [View article]
    That efficiency you mentioned is why rail becomes so much more attractive as oil prices rise.
    Nov 3, 2014. 08:58 PM | Likes Like |Link to Comment
COMMENTS STATS
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