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John Rhodes  

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  • Low Gas Prices Will Drive This Vehicle Company Higher
    Nov. 19, 2014 THO 6 Comments

    Summary

    • Thor Industries Inc. (THO) has a long history of success, profitability and dividend stability without cuts, even during the Great Recession.
    • Over the last several years, Thor has aggressively increased its dividend while it's payout ratio is still under 30%.
    • Thor has no debt, enjoys #1 and #2 positions in its core markets, and has reasonably high margins.
    • Thor is fairly valued, or perhaps undervalued, and may be worth adding to your portfolio or watchlist.
  • Will Jana Partners Help Or Hurt McDonald's?
    Nov. 15, 2014 MCD 16 Comments

    Summary

    • Jana Partners recently invested about $100M in McDonald's, which is less than 0.1% of all MCD stock.
    • McDonald's is also less than 3% of Jana Partners' overall portfolio - not significant or highly compelling.
    • Jana Partners has a record of value investing and they are activists, but at the same time, many other players have far greater direct ownership and control.
    • Jana Partners may attempt to gain leverage in a similar fashion as their PetSmart position; vocal public letters and concrete actions aimed directly at management.
    • Jana's impact on most individual investors will depend on individual investment goals, and ultimately we are likely to see more price volatility, but dividends will continue to grow.
  • IBM Is Boring And That's The Point
    Nov. 4, 2014 IBM 43 Comments

    Summary

    • In a steadily inflating market with increasing amounts of volatility, IBM stands out for precisely the opposite reasons: It's been dropping in price and it's boring.
    • The market is punishing IBM for "dead" revenues while earnings per share and dividends are steadily increasing.
    • IBM is a tech industry outlier because it's lasted so long through decades of innovation, yet the short term market perceives it's different this time.
    • Ultimately, the long term view of IBM is bright because it's rather dull and continues to lumber on cloaking the flood of cash returning to shareholders.
    • It's easy to get emotional about any one "hot button" but overall IBM's been heading in the right direction, and should continue to do so.
  • Should You Bite Into McDonald's?
    Oct. 29, 2014 MCD 30 Comments

    Summary

    • McDonald's currently provides a historically high and rather juicy starting dividend yield.
    • Although sales have been roughly flat, dividends and margins are healthy and growing, albeit at a moderate level; this is a long-term compounding machine.
    • McDonald's crushes the competition in terms of sales, international scope and dollars-per-restaurant.
    • Investors are discounting the fact that McDonald's has a long history of creativity, with evidence that McDonald's is even more innovative than Apple.
    • Although difficult for many people to believe, there's clear evidence that McDonald's offers eating choices at least as healthy as Chipotle; McDonald's faces a war of perception.
  • Why Main Street Fails
    Sep. 29, 2014 DIA, SPY, QQQ 5 Comments

    Summary

    • Putting money into a broad-based, low-cost index fund is probably better than blindly following an investment guru like Bill Ackman.
    • If you're just finding out now that a company like Allergen is a "buy" then it probably means you've missed the chance to buy with a margin of safety.
    • Always take a step back and rationally compare similar companies to gain proper perspective on opportunities and risks.
  • Connecting The REIT Dots
    Sep. 15, 2014 HCN, HCP, OHI 27 Comments

    Summary

    • Many REITs took a dive on Friday, 12-September creating potential buying opportunities for investors.
    • Healthcare REITs were hit especially hard and there are three excellent candidates for due diligence.
    • These three healthcare REITs are especially interesting because they all made it through the Great Recession, they all yield over 5%, FFO is under 14, and more.
  • Pepsico: Buy, Sell Or Wait?
    Aug. 28, 2014 PEP 17 Comments

    Summary

    • It's unlikely that an investor like Warren Buffet would invest in PEP today due to valuation, even if he wasn't already invested in KO.
    • PEP is compared to KO and several other businesses using a 10x pre-tax profits hurdle.
    • Although both PEP and KO are fairly valued, or overvalued, there are several stocks below the 10x pre-tax profits hurdle that Buffett has recently bought.
  • Here's How I Remixed Into Verizon And Wal-Mart For Permanently Higher Dividends
    Aug. 19, 2014 VZ, WMT 19 Comments

    Summary

    • National Oil Varco is an excellent company with a reasonable dividend, but sometimes it makes sense to remix your investments depending on your goals.
    • Wal-Mart and Verizon provide solid yields, growing dividends and stability right now if you're looking to remix your investments.
    • Your dividend cash flow goals can be measured in years, months, weeks or daily to provide perspective on dividend remixing opportunities and added psychological fortification.
  • Is Kinder Morgan's Dividend Safe?
    Aug. 14, 2014 KMI 67 Comments

    Summary

    • Analysis of Kinder Morgan's EBITDA is a short-term distraction for most long-term investors.
    • Kinder Morgan's recent decision to merge companies is cash flow dilutive in the short term, but significantly accretive in the medium and long term.
    • Kinder Morgan has publicly provided very clear guidance on current and future dividend coverage backed by 14 years of promises made and promises kept.
  • The New Chowder Rule And How To Find Value In Owner Earnings
    Jun. 26, 2014 AFL, CMI, CVX 81 Comments

    Summary

    • If you're a dividend growth investor you should first look at profits and profit growth not yield or dividend growth rates.
    • A growing stream of profits provides far more income protection than dividend increases or dividend yield, plus the opportunity for capital appreciation is shifted in your favor.
    • The New Chowder Rule provides dividend growth investors with a simple view of owner earnings strength and owner earnings growth in one number.
  • PetSmart Results, Omni-Channel Marketing And Phil Bowman
    May. 29, 2014 PETM 2 Comments

    Summary

    • PetSmart produced good results in Q1 2014 but future guidance and analyst downgrades punished the stock mostly out of fear of slowing traffic and growth.
    • The company has indicated that omni-channel marketing will help drive growth in stores, online and via mobile devices.
    • The company has hired Phil Bowman as Executive Vice President of Customer Experience to drive omni-channel marketing initiatives thus putting executive resources against these growth plans.
  • Retail Investing Myopia And The Wal-Mart Is Evil Effect
    May. 27, 2014 WMT 18 Comments

    Summary

    • Firsthand experience with Wal-Mart, and virtually all other retailers, does not constitute due diligence because of anchoring, confirmation bias and other emotional pitfalls.
    • Personal experience, limited quantitative data and "hand me down" anecdotes can emotionally blind investors to investment opportunities.
    • Even positive personal experiences can cause an over-weighting of business value based on emotional impact.
  • PetSmart Has A 35% Upside Right Now
    Editors' Pick • May. 25, 2014 PETM 111 Comments

    Summary

    • Using moderate assumptions, a discounted cash flow analysis indicates that PetSmart is worth between $70-75 right now.
    • PetSmart can be considered a high conviction stock for several reasons including niche market strength, moat size, financial power, market irrationality and favorable demographics.
    • The recent selloff presents a remarkable opportunity to buy a wonderful company at a very fair price but this opportunity is probably not going to last.
  • PetSmart Due Diligence
    May. 22, 2014 PETM 5 Comments

    Summary

    • PetSmart ranks very highly compared to a universe of over 500 stocks that have paid growing dividends for 5 years or more.
    • At this time, PetSmart is most certainly a bricks-and-mortar business with a comparatively small internet and mobile web presence.
    • Comparing PetSmart's 2012 to its 2013 10-K provides evidence that it continues to become more financially confident.
    • PetSmart has made a dramatic strategic shift away from pets and more directly to pet owners.
  • Wal-Mart And Target Both Win Right Now
    May. 19, 2014 TGT, WMT 38 Comments

    Summary

    • When all dividend Champions, Contenders and Champions are ranked, it becomes clear that both Wal-Mart and Target are fairly valued, or perhaps even undervalued.
    • Given their financial strength, dividend strength, growth prospects and the current negativity in the retail industry, both Wal-Mart and Target are worthy investments.
    • Dividend growth investors are wise to also investigate Family Dollar, Ross Stores and PetSmart, but to avoid Amazon.
  • The Number 1 Risk To Berkshire Hathaway
    May. 6, 2014 BRK.A, BRK.B 47 Comments

    Summary

    • Assuming just a 10% CAGR, Berkshire Hathaway will reach one trillion dollars in market cap in 14-15 years.
    • Berkshire's culture, corporate structure and capital allocation lower financial risk, but they increase legal, regulatory, political, and even "zeitgeist risk" as their size increases.
    • The biggest risk facing Berkshire Hathaway is that it may become a trillion dollar company.
  • Why I Sold DeVry And Bought Philip Morris
    Jan. 10, 2014 PM 44 Comments
  • Why DLR Made My Brain Explode
    Jan. 6, 2014 DLR 61 Comments
  • Target The Best Dividend Champion To Buy Right Now
    Jan. 6, 2014 TGT 51 Comments
  • Stock Story Time (Part 3)
    Jan. 6, 2014 KO, NOV, PM 12 Comments
  • Stock Story Time (Part 2)
    Jan. 2, 2014 DE, DLR, DV 5 Comments
  • Stock Story Time (Part 1)
    Dec. 30, 2013 AFL, BAC, BDX 15 Comments
  • Will The Cloud Kill Digital Realty Trust?
    Dec. 28, 2013 DLR 61 Comments
  • IBM Is Not A Technology Company
    Nov. 25, 2013 IBM 71 Comments
  • Super Dividend Contenders: November 2013 Edition
    Nov. 11, 2013 IBM 6 Comments
  • Super Dividend Champions: November 2013 Edition
    Nov. 7, 2013 AFL, HRL 25 Comments
  • Apple: Owner Earnings, Owner Earnings Yield And Payback Years
    Nov. 4, 2013 AAPL 63 Comments
  • Tower Group: Toxic For Investors But Perfect For Speculators
    Nov. 4, 2013 TWGP 31 Comments
  • Intel: Owner Earnings, Owner Earnings Yield And Payback Years
    Nov. 1, 2013 INTC 6 Comments
  • IBM: Owner Earnings, Owner Earnings Yield And Payback Years
    Oct. 29, 2013 IBM 32 Comments
  • Why IBM Lost The CIA Contract To Amazon
    Oct. 22, 2013 IBM, AMZN 76 Comments
  • IBM Q3 Earnings Announcement: What Matters
    Oct. 15, 2013 IBM 11 Comments