Seeking Alpha

Matthew Lewis

 
View as an RSS Feed
View Matthew Lewis' Comments BY TICKER:
Latest  |  Highest rated
  • Recent Events Show Challenges Facing Corning [View article]
    I think we are just looking at different time frames for the investment. I agree that you won't see spectacular earnings growth from GLW, but I do expect earnings to normalize to 2010-2011 levels of $1.80-$2.00 EPS (pre-buyback). A 10 PE is a fair value. The company has $6.5 billion in cash, enough to buyback 1/3 of the shares outstanding. My expectations over the next 5 years include -

    1. Buying back 25% of the shares outstanding. This is already possible with their cash hoard, and with conservative income estimates of $2 billion a year they can pay the dividend, buyback the shares, and do capex without touching the cash.
    2. Normalize earnings to $1.80 - $2.00 due to improvement in display pricing (probably 2-3 years away) and better income in other segments.

    There is nothing terribly aggressive about either of these two assumptions in my opinion. The 25% share reduction puts normalized EPS at $2.40 - $2.67. Slap a 10 PE on it and you get around a 100% capital gain in 5 years plus dividends. I will gladly take that.

    You may disagree with my opinion of EPS in 5 years or so, but to argue that GLW isn't "going anywhere" because they don't have "growth" is silly.
    May 23, 2012. 07:38 PM | Likes Like |Link to Comment
  • Recent Events Show Challenges Facing Corning [View article]
    A years worth of earnings declines doesn't make me believe their PP&E is permanently impaired. When I look over the next 5,10,20 years those assets still have the same ability to produce earnings to me as they did a year ago (in the very long run). Prices in Corning's business segments will rise and fall numerous times over business cycles, but over the very long term the carrying value of these assets does adequately reflect their ability to produce earnings in my mind.

    Book value also does matter because studies show that in the long run stock price is highly correlated to book value. Price to book for Corning is close to an all time low right now, I am betting it moderates back to its historical average over the longer term, which means an increase in PPS.
    May 23, 2012. 12:24 AM | Likes Like |Link to Comment
  • Recent Events Show Challenges Facing Corning [View article]
    The display business is absolutely their cash cow, but price declines are slowing and management guided for higher volumes this quarter. The bears act like the price declines are going to go on until Corning is losing money quarter after quarter, that simply isn't possible when you are one of the low cost producers for display. I believe that the analyst projections of $1.36 for 2012 and $1.51 for 2013 are easily attainable and give Corning a PE of 9-10. That is dirt cheap when you have 6.5 billion in cash, trade under tangible book, and are buying back shares rapidly.
    May 22, 2012. 07:09 PM | Likes Like |Link to Comment
  • Hugoton Royalty Trust: The Natural Gas Play I Like Best [View article]
    A modest decline in distribution? Didn't the trustee estimate 18 months of restricted payments? Are you aware there are two other similar (yet larger) cases against XTO/HGT right now? I'm not sure if anyone can accurately value HGT right now. Good luck to you all the same.
    May 22, 2012. 03:58 PM | Likes Like |Link to Comment
  • Hugoton Royalty Trust: The Natural Gas Play I Like Best [View article]
    Also, this article was not in depth enough to warrant you buying this trust. Please, please, please do more research on your own next time. Much of the posted information in the article is misleading (see the comments by me and others several months ago).
    May 22, 2012. 03:35 PM | Likes Like |Link to Comment
  • Hugoton Royalty Trust: The Natural Gas Play I Like Best [View article]
    "More on Hugoton Realty Trust: The company disclosed late Friday it will bear ~80% of a $29.6M XTO Energy (XOM) settlement, which is expected will cause costs to exceed revenues for HGT in its Oklahoma and Kansas properties and affect the Trust's distributions going forward."
    May 22, 2012. 03:33 PM | Likes Like |Link to Comment
  • Shares of Hugoton Royalty Trust (HGT -22.9%) plunge as a Sir Perfluis analysis on Seeking Alpha says "purchasing HGT units at current prices is like buying 60 cents for a dollar... Quite literally, unless natural gas prices stage a rally, a current HGT unit-holder can expect to receive total cash flows of less than the current share price."  [View news story]
    Come on SA...do some research. It's clearly due to the legal settlement.
    May 22, 2012. 01:08 PM | Likes Like |Link to Comment
  • Recent Events Show Challenges Facing Corning [View article]
    Even after the huge cuts in margins for the LCD business, the company is still insanely profitable and trades below tangible book value. With the amount of cash they have, they can really boost EPS by buying back shares. Heck, buying back shares under book will actually increase book value as well.
    May 22, 2012. 09:29 AM | 1 Like Like |Link to Comment
  • 3 Reasons To Consider Metlife [View article]
    Book value excluding AOCI is about $47. Subtract out the Goodwill you get to $38.
    May 22, 2012. 09:05 AM | Likes Like |Link to Comment
  • 3 Reasons To Consider Metlife [View article]
    Around $38 per share.
    May 21, 2012. 02:41 PM | Likes Like |Link to Comment
  • 3 Reasons To Consider Metlife [View article]
    You aren't calculating book value correctly either. Insurance companies should have book value calculated at BV excluding AOIC to better show hedged positions. The feds also will not allow them to increase the dividend or deploy repurchases until the get rid of their bank charter, which will happen within the next year.
    May 20, 2012. 11:32 PM | Likes Like |Link to Comment
  • Fed Regulation Of Non-Bank Financials Developing Very Poorly [View article]
    Great article. You clearly have done your homework on insurance companies. Curious on your "worst case regulation scenario" thoughts on MET. Even under much more restrictive regulation, its tough for me to justify their current valuation. I am long MET.
    May 20, 2012. 10:31 PM | Likes Like |Link to Comment
  • Facebook (FB) will likely boost its offering price range to $35-$40 tomorrow, a source tells CNNMoney's Maureen Farrell. The rumor comes shortly after Bloomberg claimed Facebook will stop taking IPO orders two days ahead of schedule, due to strong demand.  [View news story]
    I'm advocating immediately flipping the stock if you can get in at the IPO price. Nothing more. PE ratio will be meaningless when that stock opens for trading.
    May 14, 2012. 06:26 PM | Likes Like |Link to Comment
  • Facebook (FB) will likely boost its offering price range to $35-$40 tomorrow, a source tells CNNMoney's Maureen Farrell. The rumor comes shortly after Bloomberg claimed Facebook will stop taking IPO orders two days ahead of schedule, due to strong demand.  [View news story]
    You really think this won't spike at least 40% when it opens? Anyone who has the opportunity to buy at the IPO price absolutely should.
    May 14, 2012. 05:35 PM | Likes Like |Link to Comment
  • Facebook (FB) will likely boost its offering price range to $35-$40 tomorrow, a source tells CNNMoney's Maureen Farrell. The rumor comes shortly after Bloomberg claimed Facebook will stop taking IPO orders two days ahead of schedule, due to strong demand.  [View news story]
    So much for the low demand.
    May 14, 2012. 05:15 PM | Likes Like |Link to Comment
COMMENTS STATS
347 Comments
411 Likes