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Michael Loeb  

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  • Tandy Leather Factory's Shares Are A Great Value After The Recent Sell-Off [View article]
    I used a limit at or just above the market price.
    Nov 10, 2015. 03:28 PM | Likes Like |Link to Comment
  • Ally Financial: Value In A Growing Direct Banking Platform [View article]
    CEO is Jeff Brown.
    Oct 20, 2015. 04:48 PM | Likes Like |Link to Comment
  • Investing With An Edge: Capital Southwest [View article]
    Why not leverage the trade if risk is so low?
    Oct 19, 2015. 09:24 AM | Likes Like |Link to Comment
  • Roper Technologies - Quality Pays Off Over Time, Driven By CRI [View article]
    If you look back at ROP during 2008, it did sell for a 10% FCF yield, which is unseen in almost any business today, especially one of such high quality.
    Sep 28, 2015. 11:15 AM | Likes Like |Link to Comment
  • Tandy Leather Factory's Shares Are A Great Value After The Recent Sell-Off [View article]
    The company authorized a 1 million share repurchase authorization in February 2009. So, a pretty opportunistic authorization. However, they only repurchased 60k shares for $200K in 2009, and 2.3K shares in 2010. So, their bark is worse than their bite.
    Sep 8, 2015. 05:06 PM | Likes Like |Link to Comment
  • Dividend Stock Analysis: Aflac Incorporated [View article]
    I've been long AFL since mid-2012, seeing a PE in the 7 or 8 range. I am having an increasing level of difficulty understanding how AFL can continue to grow while its main market shrinks by the day. In addition to that, Japan has decided to inflate its way out of its unsustainable debt problem, hurting the value of the yen. Mgmt likes to point out its constant currency revenues but if the yen's most likely path continues to be devaluation, that is a real impact on AFL earnings power. I am considering selling out as I think I was wrong on this one.

    The saving grace would be if the US turns into Japan because of Obamacare and Aflac increases penetration in the US to supplement healthcare plans that don't offer as much coverage as they used to. They are doing things to take advantage of this opportunity, but it will take years, not months or quarters to play out.

    Additionally, Dan Amos has shifted the organizational structure to give headquarters more control over its sales force by making regional directors company-salaried employees rather than commission-based contractors. This should be positive for the ability of the organization to act cohesively.

    Its investment team which has been built out over the last few years has been a disappointment in my view, as they have not really dramatically shifted the asset allocation and have increased overhead. I'm much more worried about these Wall Street types now inhabiting the investment office trying to do something "smart" and shooting the company in the foot.

    Aflac has a good business, but its business results over the last few years suggest it is only a middling performer in the future.
    Aug 22, 2014. 02:36 PM | 1 Like Like |Link to Comment
  • Aflac's Japanese Risks Are Overstated [View article]
    If all you care about is Aflac's ability to pay its dividends and share buybacks without exchanging its currency, then yes, focus on the US numbers. That will give you a very limited picture of the company, as nearly 80% of revenues originate in Japan, and by extension, so do their investments.
    Mar 13, 2014. 05:35 PM | 2 Likes Like |Link to Comment
  • Aflac's Japanese Risks Are Overstated [View article]
    This is one point of tension for me as I think about Aflac. A significant portion of my wealth is in Aflac for many of the reasons you cited, but I have a difficult time believing the "currency doesn't matter" as an investor. Dan Amos cites it in his numbers every quarter, and it's a valuable measure for tracking whether the business is actually growing or not.

    But, investing is about maintaining purchasing power. As Buffett might say, if I can buy 10 hamburgers today, I want my investments to allow me to AT LEAST buy 10 hamburgers in the future.

    So, let's take the "currency doesn't matter" argument to an extreme and say the yen continues to slide against the dollar, to say 200 Yen/ 1 US Dollar. But Aflac still grows operating earnings 7% a year in constant currency terms. The folks at Aflac may still not convert yen into dollars, but your purchasing power has still been impacted, and perhaps permanently in this extreme case.

    So, I think the currency value is vitally important. This does not mean I think the yen will continue to weaken, but I think the currency value absolutely needs consideration.
    Mar 13, 2014. 11:40 AM | 6 Likes Like |Link to Comment
  • TiVo: Heading Into A Cloud Of Profits [View article]
    TiVo has been losing money for years on its DVR products. What makes their current growth profitable?

    I can buy 10 Cokes at $1.00 from the vending machine and sell them for $0.80 today, and do the same with 20 Cokes tomorrow. It's 100% revenue growth, but who wants that kind of growth?
    Mar 3, 2014. 03:35 PM | Likes Like |Link to Comment
  • Despite Downgrades, PetSmart Is A Good Value [View article]
    I've been looking recently at this stock knowing that pet products do tend to be recession-resistant as you pointed out. A big plus for this company in my eyes has been its capital allocation, through a combination of investing in new stores, creating new store formats, paying dividends, buying back shares, and paying down debt. Any additionaly insight from your research on these topics I would find interesting.

    Feb 18, 2014. 04:54 PM | Likes Like |Link to Comment
  • TiVo Shares Look Undervalued With Growing Subscribers And Future Patent Litigation Cash [View article]
    Hi Chris,

    Great article, and don't disagree with any of the facts you laid out. Any idea what TiVo's underlying earnings/cash flow are? The litigation payments are great, but TiVo doesn't seem to make any money or even positive CFO when excluding litigation payments.

    It's absolutely insane this company trades at $1.5BN when it has $1BN of cash and $700M NOL's. At first glance, its absolutely screaming to be bought out.
    Feb 8, 2014. 05:44 AM | Likes Like |Link to Comment
  • Michael Kors Is Found Eating Coach's Lunch [View article]
    At what price does Kors get too expensive? Do you see multiples expanding further along with the expected increases in earnings?
    Feb 4, 2014. 10:37 AM | Likes Like |Link to Comment
  • Post Holdings - Not Attractive After Dakota Growers Deal [View article]
    While you are generally correct that Depreciation and CapEx should move closely together, it does depend very much on the industry. More stable industries such as cereal should probably have lower CapEx than coal or oil and gas. Look to Warren Buffett's example of See's Candies for confirmation.

    Also, refer to the end of Berkshire Hathaway's 1986 annual report for a discussion of owner's earnings and why all depreciation should not be treated the same. In the report, Mr. Buffett shows how a company he bought at over book value needs to reflect a depreciation charge to get rid of the premium over book value. To him, the assets still generate the same level of income, so they should not be depreciated any more heavily than before the acquisition.

    There are definitely some points to be argued here, especially on the point that book value for an asset bought a long time ago is not necessarily indicative of replacement value today, but I believe Mr. Buffett's point on owner earnings applies well to Post.
    Jan 3, 2014. 12:48 PM | Likes Like |Link to Comment
  • Why Procter & Gamble Is No Longer A 'Buy And Forget' Stock [View article]
    How are you calculating Invested Capital? I didn't do the calculation, but it seems P&G continues to invest in its business over the last 6 years. Its CapEx from 2008 to 2013 was (3,046), (3,328), (3,3067), (3,306), (3,964), (4,008). Asset sales meanwhile were 928, 1087, 3068, 225, 2893, and 584 over the same period. It seems like they are still investing, although this is obviously just a regurgitation of their Annual Reports. What numbers are you seeing?
    Dec 23, 2013. 05:38 PM | Likes Like |Link to Comment
  • Renaissance Re Will Not Lead To Enlightened Value For Shareholders [View article]
    How do you come up with estimates for RNR if its earnings are dependent on low frequency, high cost events not happening? How many points on their combines ratio will they lose as the result of the increasing prevalence of ILSs?
    Dec 19, 2013. 05:26 PM | Likes Like |Link to Comment