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  • Head To Head Battle: Caterpillar Inc. Vs. Deere & Company [View article]
    I agree that there is a good chance that we won't see $70-75 prices anytime soon and there appears to be a floor ~$86/share.

    Thank you for the insights Michael.
    Dec 19, 2011. 09:59 PM | Likes Like |Link to Comment
  • Exxon Mobil Is A Solid Core Holding For Value Investors [View article]
    Thank you for the comments Blue Horse Shoe and alphagabby.
    Nov 15, 2011. 11:02 PM | Likes Like |Link to Comment
  • Merck Gets Vote Of Self-Confidence, Ups Dividend [View article]
    Thanks ArtfulDodger.
    Nov 13, 2011. 12:08 AM | 1 Like Like |Link to Comment
  • Merck: Safe Stock For Turbulent Times [View article]
    Good points Bret.

    A couple quick points:
    Reason 8: They have a fine pipeline.
    Reason 9: Manageable patent exposure.
    Reason 10: They have a solid emerging market strategy (the best for US-based big pharma).
    Nov 5, 2011. 03:24 PM | Likes Like |Link to Comment
  • Transocean Q3 Update: Operational Performance Disappoints [View article]
    I agree with the first statement!
    Nov 5, 2011. 09:47 AM | 1 Like Like |Link to Comment
  • Cisco's Remarkable Turnaround: It's Only The Beginning [View article]
    Well written article.

    I can't agree more with the following:
    "I can’t help but credit the company’s recent success to its earlier re-dedication to its core routing and switching business as well as streamlining its decision making process."

    Continued focus on its core competencies and reorg will be key. Getting away from commoditized consumer segment was a great step.

    Do you agree that it is only the beginning and CSCO still faces execution risk with its new course?
    Oct 31, 2011. 04:04 PM | Likes Like |Link to Comment
  • Is Abbott About To Unlock Value Or Throw Out The Baby With The Bathwater? [View article]

    I don't disagree with most of the points that you make, I obviously disagree with your conclusion. Thanks for the insights.
    Oct 23, 2011. 04:28 PM | Likes Like |Link to Comment
  • Transocean: Cheap Value Stock With 'Jacked-Up' Dividends [View article]
    you can send me an email at research@marginofsafet...
    Oct 19, 2011. 07:34 PM | Likes Like |Link to Comment
  • Transocean: Cheap Value Stock With 'Jacked-Up' Dividends [View article]
    Arthur, thank you for the comments.

    At Margin of Safety Equity Research, we eat what we cook.(

    Oct 18, 2011. 02:54 PM | 1 Like Like |Link to Comment
  • Transocean: Cheap Value Stock With 'Jacked-Up' Dividends [View article]
    "That seems a wee bit high."
    gatsbymm: I like a good sense of humor so thank you and thanks for the comment.

    You raise a very fair point that perhaps I should have elaborated upon this in the article. But first, recognize that the cited payout ratio of 718% is skewed given that RIG just went through (what I see as) a cyclical bottoming of earnings.

    In the short term, yes this is safe. In the long-term, time will tell and this is something that should be watched very closely. My thesis on the topic is as follws: CEO Steven Newman went through major hurdles to arrange a $1 billion dividend to shareholders. On February 11, 2011, the BOD recommended the dividend of ~U.S. $1 billion to be payable in four quarterly installments of $0.79 per outstanding share. The first two payments were in June and September, with subsequent payments set for December 2011 and March 2012.

    2012 average earning’s estimates are~$6 and RIG has a $25 billion backlog. This provides sufficient free cash flow to cover the remaining payments in addition to the debt maturities coming due in 2011-2013. Management committed to monetize this backlog by committing to returning $15 billion to shareholders through dividends and buybacks. I therefore believe that dividends will continue beyond the March 2012 payout but, again, this is something to follow very closely as it impacts our valuation targets.

    Excellent question.

    Oct 18, 2011. 02:52 PM | 1 Like Like |Link to Comment
  • Transocean: Cheap Value Stock With 'Jacked-Up' Dividends [View article]
    Thank you for the comment and well said Jeffrey, I am in agreement. For patient investors, the 6% dividend yield doesn't hurt either!
    Oct 18, 2011. 06:20 AM | 1 Like Like |Link to Comment
  • Transocean: Cheap Value Stock With 'Jacked-Up' Dividends [View article]
    Thanks for the comment. SDRL has a modern and impressive deepwater fleet and they have made some very bold and aggressive moves to grow to nearly 50 rigs in the fleet from a dozen just 6 years ago. Its really amazing.

    There is a lot of upside if their big bets on deepwater drilling projects at good dayrates payoff. However, they don't have much room for error given heavy debt burden and I think their dividend will be difficult to sustain. And I agree with olddoc74 that SDRL wont have anywhere near the 23-25 billion (the current value of RIG's fleet) needed to make a bid for RIG.

    Its a nice company with a good story but the risk is too high for my blood.
    Oct 17, 2011. 06:43 PM | 3 Likes Like |Link to Comment
  • Generic Drugs Continue To Challenge Big Pharma [View article]
    Gentlemen. Great points both. I have a question and a few comments.

    MG- "One could even argue many of these less innovative products were developed merely to drive revenues in a healthcare market that was less demanding of innovation than we have today."

    MG, I am not sure I understand this. Aren't all compounds developed to "drive revenues" in the private sector? The market was less demanding of innovation? Are you saying that the market was more accepting of me-too's? Can you elaborate?

    And MG, while I am not going to argue that industry is doing discovery very well as a whole, I see some truly innovative compounds getting approved (particularly in oncology) that address unmet medical needs. In 2011 alone:

    Granted, some of these were acquired inorganially (JNJ acquired abiraterone, BMS acquired ipilimumab etc), but there are a panoply of novel, innovative monoclonal antibodies, immune therapies, vaccines, recombinant proteins and targeted small molecules in the development portfolios today of big pharma companies. Again, I understand that some of these are in-licensed.

    Translational medicine and understanding of underlying disease processes is making amazing steps forward so I don't think we are having a crisis of science. Industry has a long way to go to harness this to identify druggable targets and compounds. Our arcane regulatory approval process that still requires that we develop drugs like we did 20 years ago needs a major overhaul as well. PEhrlich pointed out the size, cost and complexity of clinical trials today. PEhrlich also points out the fact that the bar has been raised and many scientifically innovative compounds never reach late-state development let alone the market.

    Thanks again for the thoughtful discussion.
    Sep 25, 2011. 04:30 PM | Likes Like |Link to Comment
  • Generic Drugs Continue To Challenge Big Pharma [View article]
    Excellent insights. Thank you for sharing. I enjoyed your Wordpress site as well.
    Sep 24, 2011. 09:26 AM | Likes Like |Link to Comment
  • Intel Is Making More Mobile Inroads [View article]
    Hi Neal, This was very informative.

    I recall a case study (from B-school) on Intel and how they leveraged their unparalleled R&D platform to drive the strategic shift away from SRAM DRAM memory chips and into microprocessor's in the 1980's. This secured their competitive position when PCs were king.

    I think their R&D platform still gives them a formidable advantage.

    Do you think that we are seeing Intel making the right strategic choices to tap the cloud and mobile computing and therefore secure their competitive position for the next decade? This move suggests so.

    I agree that the dividend and growth rate are very appealing.

    Thanks again!
    Sep 22, 2011. 11:59 AM | 1 Like Like |Link to Comment