The Fourth Scenario For When Should I Transition From Capital Gain Investing To Dividend Growth Investing? [View article]
I understand. The ideal companies are those with growth and high ROE, since growth creates value if the ROE is above the cost of capital. In addition, high ROE indicates a strong moat. The real question is when the growth stops (trees never grow to the sky) and when to exit before the inevitable multiple compression happens.... I like Lynch's idea to pick retailers (or hotel chains) that replicate their business model in a growing number of geographies. This was the case of MCD, ROST, COH and others. A potential candidate today might be TLYS: High ROE, only 120 stores in 3 US states (plenty of room to grow).....What do you think ?
The Fourth Scenario For When Should I Transition From Capital Gain Investing To Dividend Growth Investing? [View article]
Chuck, Great article. Indeed, as Lynch would say: its better to own a stock with a P/E ratio growing at 20% a year than a stock with a P/E of 6 growing at 6% a year.... However, the key question is to be able to pick those very stocks that will keep growing. To what extend is there a hindsight bias in your growth stock pick ? What about the numerous fast growers 20 years ago that went bust ? Do you have a way to pick the right ones ?
Seriously, Can Hewlett-Packard Be This Cheap? [View article]
Eliott, This is a great article and when you are trying to remain objective and focus on facts, you are helping us making better decisions. HP is indeed very cheap, allas for the many reasons that the negative comments that our fellow readers mentionned. I find it psychollogically very hard to buy HP right now because it's been cheap for quite a while and kept going down. You may be right that it is a sign that the stock is bottoming.
Motley Fool's analysis looks pretty relevant to me. The PV business is a cut throat business and a blood bath, where kW costs, which depend on capital costs and efficiency is the driving variable of the game. GTAT provides equipment to lower that kW cost. Making the technology a must have to survive.
Is GT Advanced Technologies Really A Free Lunch? [View article]
Interesting news: Germany for the first time produced 22 GW of electricity last friday from solar panels. This is 33% of the total consumption on friday and 50% of the total consumption on saturday. Solar energy does not seem to be dead.
GT Advanced Technologies Inc. Announces Fourth Quarter and Fiscal Year 2012 Results [View article]
The numbers do not look bad. 2 issues that might hint at a business slow down in spite of the company's optimism: -Inventories increased substantially -Working capital (current assets - current liabilities) decreased. Why so?
Do the customers have difficulties to take delivery of GTAT's products?
Even so, the company seems to be deeply undervalued. Long GTAT
Freeport-McMoRan Will Leap Significantly Higher [View article]
I agree on all the points mentionned by Frank. FCX is an outstanding company. However, there is one big risk lingering: the price of copper is at an all time high. Regression to the mean suggests that copper prices have at least a risk of dropping to long term averages as copper stocks pile up in China. In this case, the cash flows of FCX would take a hit. That being said, I'm long FCX.
'Overlooked' Bargains In The Stock Market [View article]
Marc, It is true that many commodities companies are cheap right now on a PE basis. PAAS, IAG, FCX, SCCO etc.... However, many of the commodities that those companies are mining are priced at all time highs. This is true for copper, gold and silver.
How do you assess the risk of those commodity prices to evolve in the future and what would be the consequences of a price drop on those companie's profits ?
Recent Events Make Me More Bullish On Applied Materials [View article]
Christian, Thanks for your remark. Agreed with you on the backlog and on the analysis. GTAT is truly cheaper than AMAT, there are still remaining questions given the current situation, though. The backlog is predominantly for PolySilicon and Saphhire since PV just plummeted. -How dependant is Polysilicon on Photovoltaic applications ? -How big can Sapphire become ? Can it become a $500M business to replace the declining PV ? -What is GTAT's competitive positionning in these 2 businesses (PV and Sapphire) ? Any hint ?
Coke: An Excellent Remedy Against Inflation [View article]
Thanks for the feed-back. The advice, in my humble opinion, is probably still valid in 2012: the risks of inflation are higher than ever.
You can read this very interesting article recent by Buffet underlying why it is vital on the long run to invest in productive assets that pay dividends:
Intel: There's Certainly A Bull Case [View article]
This is really strange to me.
The Fourth Scenario For When Should I Transition From Capital Gain Investing To Dividend Growth Investing? [View article]
The ideal companies are those with growth and high ROE, since growth creates value if the ROE is above the cost of capital. In addition, high ROE indicates a strong moat.
The real question is when the growth stops (trees never grow to the sky) and when to exit before the inevitable multiple compression happens....
I like Lynch's idea to pick retailers (or hotel chains) that replicate their business model in a growing number of geographies. This was the case of MCD, ROST, COH and others.
A potential candidate today might be TLYS: High ROE, only 120 stores in 3 US states (plenty of room to grow).....What do you think ?
The Fourth Scenario For When Should I Transition From Capital Gain Investing To Dividend Growth Investing? [View article]
Great article. Indeed, as Lynch would say: its better to own a stock with a P/E ratio growing at 20% a year than a stock with a P/E of 6 growing at 6% a year....
However, the key question is to be able to pick those very stocks that will keep growing.
To what extend is there a hindsight bias in your growth stock pick ?
What about the numerous fast growers 20 years ago that went bust ?
Do you have a way to pick the right ones ?
Seriously, Can Hewlett-Packard Be This Cheap? [View article]
This is a great article and when you are trying to remain objective and focus on facts, you are helping us making better decisions.
HP is indeed very cheap, allas for the many reasons that the negative comments that our fellow readers mentionned.
I find it psychollogically very hard to buy HP right now because it's been cheap for quite a while and kept going down.
You may be right that it is a sign that the stock is bottoming.
Is GT Advanced Technologies Really A Free Lunch? [View article]
http://on.mktw.net/MJZLz6
GTAT is going to be a game of patience while waiting for the recovery.
Is GT Advanced Technologies Really A Free Lunch? [View article]
http://bit.ly/MVtYzn
Is GT Advanced Technologies Really A Free Lunch? [View article]
http://bit.ly/MhgAVZ
http://aol.it/MhgBcc
Motley Fool's analysis looks pretty relevant to me.
The PV business is a cut throat business and a blood bath, where kW costs, which depend on capital costs and efficiency is the driving variable of the game.
GTAT provides equipment to lower that kW cost. Making the technology a must have to survive.
Is GT Advanced Technologies Really A Free Lunch? [View article]
Solar energy does not seem to be dead.
More on this link:
http://reut.rs/JtnBOS
Is GT Advanced Technologies Really A Free Lunch? [View article]
GT Advanced Technologies Inc. Announces Fourth Quarter and Fiscal Year 2012 Results [View article]
2 issues that might hint at a business slow down in spite of the company's optimism:
-Inventories increased substantially
-Working capital (current assets - current liabilities) decreased. Why so?
Do the customers have difficulties to take delivery of GTAT's products?
Even so, the company seems to be deeply undervalued.
Long GTAT
Freeport-McMoRan Will Leap Significantly Higher [View article]
However, there is one big risk lingering: the price of copper is at an all time high. Regression to the mean suggests that copper prices have at least a risk of dropping to long term averages as copper stocks pile up in China. In this case, the cash flows of FCX would take a hit.
That being said, I'm long FCX.
'Overlooked' Bargains In The Stock Market [View article]
It is true that many commodities companies are cheap right now on a PE basis. PAAS, IAG, FCX, SCCO etc....
However, many of the commodities that those companies are mining are priced at all time highs. This is true for copper, gold and silver.
How do you assess the risk of those commodity prices to evolve in the future and what would be the consequences of a price drop on those companie's profits ?
Recent Events Make Me More Bullish On Applied Materials [View article]
Thanks for your remark.
Agreed with you on the backlog and on the analysis.
GTAT is truly cheaper than AMAT, there are still remaining questions given the current situation, though. The backlog is predominantly for PolySilicon and Saphhire since PV just plummeted.
-How dependant is Polysilicon on Photovoltaic applications ?
-How big can Sapphire become ? Can it become a $500M business to replace the declining PV ?
-What is GTAT's competitive positionning in these 2 businesses (PV and Sapphire) ?
Any hint ?
Here are a few articles on that subject:
http://yhoo.it/GXgNb9
http://bit.ly/HjHkm1
eBay Is Still A Strong Buy At $33 Per Share [View article]
http://bit.ly/GDdGtI
Coke: An Excellent Remedy Against Inflation [View article]
The advice, in my humble opinion, is probably still valid in 2012: the risks of inflation are higher than ever.
You can read this very interesting article recent by Buffet underlying why it is vital on the long run to invest in productive assets that pay dividends:
http://bit.ly/yoFWb2money_topstories+
Buffet, by the way, is a long time investor in Coke....