Seeking Alpha

George Fisher

View as an RSS Feed
View George Fisher's Comments BY TICKER:
Latest  |  Highest rated
  • GasFrac: In Spite Of Results Beaten Down By Weather, Bright Future Ahead [View article]
    Thanks for all your comments. The risk here may be greater than the rewards and the company stumbles with both a management team and generating revenues. While the technology may be superior, it is not translating into higher revenues nor does the compny have a "proven" management team in place. I am looking from the sidelines.
    Nov 10 12:13 PM | Likes Like |Link to Comment
  • Why Dividend Investors Can Ignore Stock Prices [View article]

    Account cash flow can come from investments other than what is commonly called DGI. These could include utility stocks, REITs, LLCs and MLPs just to name a few. I also consider writing covered calls as a form of income, along with Treasury Inflation Protection Securities where the bond interest and principal payments grows along with inflation.
    Jun 27 10:04 AM | 1 Like Like |Link to Comment
  • Why Dividend Investors Can Ignore Stock Prices [View article]

    You are correct that properly identifying an investment objective is paramount to achieving that objective. If the objective is to generate an increasing "income" stream, a conglomeration of assets can be accumulated that satisfy this goal, and dividend growth stocks should be one of those assets. Understanding one's eventual needs for the invested capital and risk tolerance should lead to the formulation of the investment objective.

    "Income" comes in many forms and I prefer to look at it as "account cash flow". Within the objective of increasing "account cash flow", there are other opoportuities than solely DGI.

    Changes in the stated objective of course may alter the structure of the assets.
    Jun 26 02:04 PM | 1 Like Like |Link to Comment
  • Why Dividend Investors Can Ignore Stock Prices [View article]
    As a value investor, I prefer the PEG ratio over PE, in addition to using a Forward PEG for comparison. I have been using this tool long before it was given a name (dating back to trips to the library to research S&P and Valueline reviews - aka before the days of the internet). However using a Forward PEG relies on estimates for both earnings and growth rates which may or may not come to fruition, and requires consistent monitoring.

    The matrix I use to compare potential opportunities include S&P equity ranking for 10-yr consistency in eps and divy growth, consensus timeliness, Forward PEG ratio, divy growth and current yld, earnings yield, anticipated 3-yr TSR, and Graham Value based on current book value and projected earnings.

    There is the old saying that what is considered "value" today may be of greater "value" tomorrow, and value investing is not market timing. A great company that is currently overvalued is not necessarily a great investment.

    My advice is to stay nimble and diversified.
    Jun 26 11:24 AM | 2 Likes Like |Link to Comment
  • Why Dividend Investors Can Ignore Stock Prices [View article]

    "If you adopt a long-term investing horizon and spend your time searching for dividend growth stocks that grow earnings and dividends by at least 7% or so per year, then you don't have to worry about stock price."

    Your article is about searching (ie new capital investments) for dividend growth stocks without consideration of current or future valuations, only eps and divy growth. It is not about finding growth at reasonable value, it is about growth at any value. If the article was about findiing divy growth at reasonable value, there would have been comments about how to evaluate reasonable value.

    I believe investing based on ignoring current/future valuations is a mistake except for those who acknowledge their lack of concern for overall portfolio performance. Don't include me in that group, please.
    Jun 25 02:20 PM | 1 Like Like |Link to Comment
  • Why Dividend Investors Can Ignore Stock Prices [View article]
    "and buy at a reasonable valuation"

    But this is not the premise of the article, which is to ignore current valuations and focus strictly on future yield on invested capital. Even the title says, "Ignore Stock Prices".

    So which is it: "Reasonable Valuations" or "Ignore Stock Prices"? Can't be both.
    Jun 25 01:47 PM | 2 Likes Like |Link to Comment
  • Why Dividend Investors Can Ignore Stock Prices [View article]

    As a value oriented investor, I believe the opposite - it's all about current yield and anticipated total stock return (TSR). The increasing dividend should be only one factor in specific stock selections, and not the overriding singular criteria. While consistant divy increases is a great sign of past consistancy in earnings growth, overpaying for each dollar of incremental income seems to add the potential of future underperformance on a TSR basis - both with investable capital and re-investment of the divy. With a static share price, what would the TSR be for an investment yielding 3% and a dividend growing by an above average rate of 7% a yr? Taking the old fashion of Rule of 72, your annual return on invested capital will be 6% in 10 yrs.

    Individual current yields go up and go down, and I prefer to buy when the current yield is high - ie individual stock prices are depressed.

    If the goal is to increase overall wealth, TSR would be a much better indicator than future income growth.
    Jun 25 11:56 AM | 12 Likes Like |Link to Comment
  • A Fresh Look At Energy Royalty Trusts In The Bargain Bin [View article]

    You are correct that G&A operating expenses and fees total 15%. For a better description of the relationship between DMLP and it's GP, I suggest you review pages 45-48 and pg 5 of their 2011 annual report overview here:

    Overall, GP fees are 4% of the royalty income and 1% of the NPI income. G&A expenses were 9.7% of revenue. From their 10K, "General and Administrative Costs; In accordance with our partnership agreement, we bear all general and administrative and other overhead expenses subject to certain limitations. We reimburse our general partner for certain allocable costs, including rent, wages, salaries and employee benefit plans. This reimbursement is limited to an amount equal to the sum of 5% of our distributions plus certain costs previously paid. Through December 31, 2011, the limitation was in excess of the reimbursement amounts actually paid or accrued....General and administrative (“G&A”) costs increased 11.1% from $3,715,000 in 2009 to $4,128,000 in 2010 due to increased costs related to, among other things, regulatory reporting changes, increased number of unitholder accounts requiring K-1s and professional fees related to revenue audits. G&A decreased slightly in 2011 to $4,088,000."

    I don't believe management hedges and DMLP should be considered as having greater exposure to the short-term movements of energy commodities. I find that aspect to be attractive, working against you in times of weak pricing environments and working for you in times of strong environments. Currently, we know which cycle nat gas is in. Due to this, the distribution is volatile and may be unattractive to the typical divy, MLP, RT investor. In the long-term, I prefer DMLP with no debt leverage over the need to hedge to cover interest/principal repayments.
    Jun 22 11:00 PM | 1 Like Like |Link to Comment
  • A Fresh Look At Energy Royalty Trusts In The Bargain Bin [View article]
    One aspect to consider when looking under the hood is the mostly forgotten General Partnership Fees/Operating Expenses. DMLP pays a flat 4% fee - no incentive fees based on distributions as is common within the MLP world. One calculation worth doing with all of these MLPs/RTs is the % of revenues paid as distributions to investors or % of rev that goes to overhead expenses/management fees. In addition, it is worth your time with MLPs especially to look at the structure of the incentive fees down the road. I think you will find by comparison a flat 4% expense ratio is pretty low. Hence, more cash to investors from every dollar of increased revs
    Jun 22 02:03 PM | 3 Likes Like |Link to Comment
  • A Fresh Look At Energy Royalty Trusts In The Bargain Bin [View article]
    My RT of choice is Dorchester Minerals DMLP. They carry no debt by its bylaws, am about 50% oil, have been increasing reserves through organic growth with about a 3% depletion, issue shares every few years to increase their acreage, is structured as an MLP, have large tracts (about 70% of acreage) of undeveloped assets, has no UBTI exposure and fly under everyone's radar. Own them in my IRA.

    FD: Long DMLP since 2006
    Jun 22 12:57 PM | 4 Likes Like |Link to Comment
  • 4 Reasons To Buy Pope Resources [View article]

    Dahl is not what investors may typically considered an "insider" as he is an outside investor rather than an officer or on the BOD. The SEC lumps large outside investors together with functional "insiders" of officers and directors for transaction reporting purposes.
    Jun 21 09:16 AM | Likes Like |Link to Comment
  • Pope Resources: A Diamond In The Rough [View article]

    Another great timber article. I thought you may have some sawdust in your veins. With such high insider ownership, do you really think management would be open to a buyout? I like your analysis on timber valuation and shows how POPE could be considered a bit undervalued. However, much like oil companies where NAV is a bit less important than OCF for valuation, I don't think an underfollowed small cap with a very small float like POPE will trade anywhere close to its underlying timber value without a catalyst like an acquisition. Keep up the great work.

    FD: Long POPE since 2003
    Jun 20 09:46 AM | 1 Like Like |Link to Comment
  • 4 Reasons To Buy Pope Resources [View article]
    Interesting perspective. However, I take a slightly different view with this thinly traded stock.

    Look at the Feb 05 gap up and spike from $27 to $55 (some trades that day went for over $75). The reason was a single newsletter recommended the shares and investors piled on. What happened when they were satisfied - shares dropped back to the low $30s. With thinly traded stocks, events that generates higher interest can temporarily raise prices.

    Timber is a cyclical business. This is especially evident looking at the highs and lows of share prices. As a cyclical, investors should evaluate where in the cycle we are and how it is reflected in share prices. In my mind, the latest movements up to $55 puts us at late cycle valuations, ie 2007, but are not at late cycle fundamentals.

    There needs to be discussions of sustainable harvest vs current harvest and the amount of "banked" harvest that is available from under-harvests of the past few years. If there is a spike in earnings is it from an increase in sustainable or from temporary additions from "banked" harvest volume?

    There needs to be discussions on the future of Distributable Cash Flow vs share prices to determine if this rally is a fundamental change in valuations or some short-term bump in interest.

    As a commodity driven company, discussions on current and future log pricing would be helpful, especially with the impact of the recent (and possibly flightly) Chinese demand.

    I agree that the underlying business is improving with a potential bottom in US housing, the previously uninterested Chinese demand for Northwest timber, and the mountian pine beetle. However, I feel these are baked into the current share price, especially after the 22% runup in price over the past 4-6 weeks on higher volumes.

    I sold a bit today into the rally that I bought in 2009 for a nice total return. I will relook at it again if it drops back to the mid/low $40s. I would caution newcomers to do their homework before jumping in.

    Don't forget to use limit orders with thinly trade stocks so as not get caught like those in Feb 2005 (I wrote a commentary way back then on this exact trade, and think I have a copy for those are interested, send me a message with your email and I'll try to dig it up).

    FD: Long POPE since 2003
    Jun 15 02:33 PM | 1 Like Like |Link to Comment
  • The Search For Safe 4% Dividend Yields [View article]
    I believe investors should focus on Total Stock Return and Income Returns on Invested Capital in addition to current yield. My personal style is value investing with a heavy leaning towards undervalued dividend payers that have a history of 10-yr growth in eps and div (S&P Equity Ranking). I will use a few ETFs where it is difficult to replicate the asset exposure.
    Jun 14 01:39 PM | 3 Likes Like |Link to Comment
  • Caterpillar: Share Valuation By 4 Methods [View article]
    Richard, Nice article. You may want to compare Return on Invested Capital (ROIC) as a comparison as this includes total shareholder return based on equity and debt utilized. While it does not provide a specific "value" price target, it is a great method of comparing management performance with another sector competitor or the sector average.
    Jun 14 01:28 PM | 1 Like Like |Link to Comment