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Donald Johnson  

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  • Seadrill: A 10% High-Yield Alternative To REITs And MLPs [View article]
    Just read a very respected analyst who says Seadrill shouldn't be paying any dividends because it's cash flow and debt don't justify it. FYI.
    Mar 2, 2014. 06:46 PM | 2 Likes Like |Link to Comment
  • The Pain Has Only Just Begun [View article]
    6% is not a big deal. It's the 15% to 20% that has people turning more bearish.

    What I haven't figured out is whether fee-driven portfolio managers and hedge funds can or will get out of the way and let the market correct? Or will they continue to pour money into the markets? Cash flow numbers for mutual funds, ETFs and hedge funds are critical given the small participation of individuals. Don't you think?
    Feb 7, 2014. 11:01 AM | Likes Like |Link to Comment
  • Exelon Revisited [View article]
    EXC already is one of the largest utilities. It's advantages are its nuclear expertise and plants. I think its acquisition of Consolidated was a big mistake. It should focus on its core nuclear plants, which it can expand relatively faster than a competitor can build a greenfield nuclear plant. EPA regulations stand to give EXC a competitive advantage despite natural gas, which is at seasonal highs that probably won't last long.
    Feb 6, 2014. 11:06 AM | Likes Like |Link to Comment
  • Exelon Revisited [View article]
    The reason I'm not very bullish on utilities is that power prices are depressed and, because of the increasing efficiency of commercial customers and competition from natural gas, those prices look like they'll need years to recover.
    Feb 6, 2014. 11:02 AM | Likes Like |Link to Comment
  • Exelon Revisited [View article]
    I'm under water on this stock. My yield's around 3.5% at this point. Morningstar's estimated FV is $42. That's what keeps me in the stock until something better comes along. It's up YTD.

    My comments simply are reactions to statements that do or don't make sense to me.

    I'm not a stock groupie.
    Feb 6, 2014. 11:00 AM | Likes Like |Link to Comment
  • Exelon Revisited [View article]
    You might want to read up on the history of utilities and how the current approaches to regulating and managing utilities evolved in the 20s and 30s. You can't compare the managers of utilities to those of CAT, GE, AAPL or other non utilities.

    The expertise of a utility manager is in dealing with regulators and keeping the lights on at a price that maximizes the profits utility regulators allow.
    Feb 6, 2014. 10:57 AM | Likes Like |Link to Comment
  • Good Luck Satya! Good Luck Microsoft! [View article]
    For me, she's easier to understand and follow.
    Feb 6, 2014. 10:52 AM | Likes Like |Link to Comment
  • A Few Reasons Why I Am Bullish On Caterpillar [View article]
    I think CAT has written down some of that Bucyrus good will. Check the year end earnings report. Most acquisitions are bad deals for acquiring companies and their shareholders. The last number I saw said 70% of deals hurt the buyers' earnings at least over the near term.
    Feb 6, 2014. 10:48 AM | Likes Like |Link to Comment
  • A Few Reasons Why I Am Bullish On Caterpillar [View article]
    Frauds happen. Mistakes are made. Good companies survive those who cheat them and fraud. Bad companies can be destroyed. HPQ also is dealing with fraud or accounting errors on its Autonomy acquisition. Due diligence sometimes can be foiled by people who don't have integrity. CAT has been very open about it's problem with that acquisition and says in its fourth quarter report that it has reached a settlement with the seller who has paid CAT several million dollars, I think it was. Check the year end press release.
    Feb 6, 2014. 10:46 AM | Likes Like |Link to Comment
  • A Few Reasons Why I Am Bullish On Caterpillar [View article]
    If you have an online account, you probably can find a tab that shows you the "greeks" on a stock's option chain. The delta tells you the probability that a stock will finish in the money on a call or put in a given expiration month. You might want to search SA and the web for "stock options greeks" and for #stock delta or "stock options probabilities."
    Feb 6, 2014. 10:44 AM | Likes Like |Link to Comment
  • Procter & Gamble Is Still Expensive But Investors Have Options [View article]
    Well, USG up $3.43. I'll be called. About a 25% annualized return in 104 days. I'll take that. Of course, if I'd time the USG market better, I wouldn't have written calls and my gain would be $1.82 / share greater. Covered calls can be risky in terms of the chance you'll lose a gain because your strike is too low as mine is on USG and may be on CAT, up $1.62 to $93.55.
    Feb 6, 2014. 10:29 AM | Likes Like |Link to Comment
  • 2014 Strategies And Stocks: Part 5, Caterpillar Inc. [View article]
    What a good article about my favorite stock, CAT. I've owned the stock a long time, think it's worth between $75 and $85 and have written covered calls at the $95 strike. As of today's close, there's a 25% chance that the Feb. 95 calls will close in the money and my stocks will be called unless I buy back the calls, which I will if I have to, as I did last month at a tiny .11/share loss on the options and big gain on the stock.
    There is about 50% chance that CAT Jan 15 92.50 calls will close in the money, 45% for 95 calls, and 27% for $105. At the same time, there's 50% chance CAT Jan. 15 92.50 puts will close in the money. The Jan 92.50 calls are $7.20b. So buyers think the stock will be at $100 or better by the middle of next Jan. Jan. 92.50 puts are at $9.30. Put buyers think the stock could be at about $83.20 when the option expires. The open interest on the calls is 1,502 contracts for 100 shares each. OI on the puts is only 45 contracts.
    So speculators are more bullish than bearish on CAT, according to the options market, as I read it.
    CAT's point and figure chart has a hard to believe $111 price objective, which is based on recent momentum. Strong stocks beat their bullish PNF price objectives. Weak ones never make it.
    Morningstar's estimated fair value estimate is $94. Valuentum's discounted cash flow FV estimate is $84.
    After spending hours researching the stock after the 4th quarter report, I continued to feel bearish on the stock as well as the markets and economic outlook. I probably should contribute an article, but writing comments is more fun.
    With a beta of 1.82, according to my broker's web site, CAT should fall in line with the correcting market sooner than later. It might be a buy at $70 or $75, I'm thinking.
    But no one can predict stock prices. We just have to place our bets and manage our risks, losses and, hopefully, profits.
    Feb 5, 2014. 07:27 PM | 1 Like Like |Link to Comment
  • Hold It! Caterpillar, Don't Buy Back Shares... Yet [View article]
    CAT's point and figure chart has a price objective of $111. Valuentum's fair value estimate, last I looked, was $84. Morningstar's FV estimate was $94.

    Technicals mostly are bullish on the stock, but it tends to move with the market, which appears to be correcting fairly quickly.

    After spending many hours researching the company, which I happen to know very well, I concluded that the stock belongs in the 80s, if that high. At the moment, I own the stock and have written CAT Feb. 95 covered calls against it.

    I think the stock would be stronger if CAT raised its dividends and paid off debt rather than buy back stock to raise executive bonuses, assuming that they're pegged to earnings per share.

    CAT's recent acquisitions show how bad it is at timing the market. If it buys back stock, I hope it does so in the 70s or 80s, not in the 90s or 100s.

    CAT's one of the best managed companies in the world. And it's in some of the toughest markets in the world right now. There are few signs that demand for its equipment will pickup this year.
    Feb 5, 2014. 05:51 PM | 3 Likes Like |Link to Comment
  • Good Luck Satya! Good Luck Microsoft! [View article]
    MSFT needs to lay out its opportunities and strategies. My fear is that the new CEO's accent will make it difficult for him to talk to employes, customers and speculators in public appearances that count. I have trouble following him. Obviously, he's been great with institutional customers.
    Feb 5, 2014. 12:16 PM | Likes Like |Link to Comment
  • Good Luck Satya! Good Luck Microsoft! [View article]
    I'm not sure MSFT is the problem. I'm wondering if mixed up, confused and unhappy stock holders and analysts are the problem for the stock?
    Feb 5, 2014. 12:15 PM | Likes Like |Link to Comment