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Low Gas Prices Will Drive This Vehicle Company Higher
- 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?
- 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
- 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?
- 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
- 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
- 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?
- 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
- 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?
- 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
- 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
- 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
- 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
- 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
- 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
- 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
- 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
- Why DLR Made My Brain Explode
- Target The Best Dividend Champion To Buy Right Now
- Stock Story Time (Part 3)
- Stock Story Time (Part 2)
- Stock Story Time (Part 1)
- Will The Cloud Kill Digital Realty Trust?
- IBM Is Not A Technology Company
- Super Dividend Contenders: November 2013 Edition
- Super Dividend Champions: November 2013 Edition
- Apple: Owner Earnings, Owner Earnings Yield And Payback Years
- Tower Group: Toxic For Investors But Perfect For Speculators
- Intel: Owner Earnings, Owner Earnings Yield And Payback Years
- IBM: Owner Earnings, Owner Earnings Yield And Payback Years
- Why IBM Lost The CIA Contract To Amazon
- IBM Q3 Earnings Announcement: What Matters