Seeking Alpha
View as an RSS Feed

Paul Boland  

View Paul Boland's Comments BY TICKER:
Latest  |  Highest rated
  • Combining The CAPE Ratio With The PEG Ratio To Find The Cheapest S&P 500 Stocks [View article]
    The PEG Ratio has many variations some are forward and some are backwards. There are even PEG's that take TTM P/E divided into 10 years of growth. In any event, it's probably not proper to characterize the situation as misapplied.

    In any case, your point is well taken. Originally I had put together a list of just one year over year growth. Utilizing forward expected growth would also be smart, but getting that data in a format that is easily manipulatable for the entire NYSE and NASDAQ requires a hefty subscription fee. So I'll have to find a way to scrape it from somewhere.

    While I tend to actually agree with you on this, the contrary argument that I have discussed with several manager's out there is that the CAPE is defined through it's historical leaning. In other words, the whole point is that your giving a large weight to historical items. To them, the value of the metric lays in uncovering what the price was in context of events that occurred long ago and that might re-surface and cause the price to go up again. So the idea is that 'value' is timeless and is present regardless of current issues. If one adheres to that argument then I suspect that one wouldn't want to tamper with it at all in its current form.
    Thanks for the comment!
    Sep 30, 2014. 08:59 PM | Likes Like |Link to Comment
  • Combining The CAPE Ratio With The PEG Ratio To Find The Cheapest S&P 500 Stocks [View article]
    Good points - yes in some ways one would almost think that because they have had such high growth in the past they are even less likely then other companies to have further high growth in the future.
    Perhaps it's simply better to do lists of 10, 5, and 1 year both previous and forward.
    Thanks!
    Sep 30, 2014. 08:50 PM | Likes Like |Link to Comment
  • Combining The CAPE Ratio With The PEG Ratio To Find The Cheapest S&P 500 Stocks [View article]
    Good points - I actually have considered simply taking the CAPE and weighting the denominator more heavily towards recent earnings. Perhaps we could just do that and avoid the rest of equation. What do you think?
    Sep 30, 2014. 08:43 PM | Likes Like |Link to Comment
  • The Dirty Dozen Value Plays Of The Entire NYSE And Nasdaq [View article]
    Yes - I'm starting to wonder if a bulk purchase of the entire offshore sector would be smart.
    ESV actually has a somewhat high P/E though - around 23. Looks like it's good on everything else. P/B is around 0.77, dividend yield is about 7%, drop over the last 52 weeks is around 24%. (Good in the sense that it isn't doing well).
    SDRL has the opposite situation versus ESV. Low P/E at around 3.2, the P/B however is 1.7 which is just over our threshold. Dividend Yield is about 14%. Drop year to date is about 40% (ouch). Hopefully not too much further south to go for SDRL!
    Sep 30, 2014. 12:16 AM | Likes Like |Link to Comment
  • The Dirty Dozen Value Plays Of The Entire NYSE And Nasdaq [View article]
    Thanks!
    Sep 30, 2014. 12:08 AM | Likes Like |Link to Comment
  • The Dirty Dozen Value Plays Of The Entire NYSE And Nasdaq [View article]
    Thanks - appreciate the input on TEU. I'm sure the other's reading are also appreciative.
    Sep 30, 2014. 12:07 AM | Likes Like |Link to Comment
  • The Dirty Dozen Value Plays Of The Entire NYSE And Nasdaq [View article]
    Pomperj - Good point - Altman Z Score is very helpful with these stocks. This is a risky bunch, nothing pretty about them!
    Sep 30, 2014. 12:06 AM | Likes Like |Link to Comment
  • The S&P 500's Historical Relationship With The Price Of Oil [View article]
    Good point - not exactly applicable here however. This would be true if the independent variable was being matched up against a dependent variable in the future. I've done a lot of analysis like that and perhaps I should have here, but in this case we are just looking at a 'snapshot' in time approach. So in other words the independent variable (in this case oil) for a single day (lets say 12/31/2005) was matched up against the dependent variable (in this case the S&P 500) on the same day. This was done several thousand times during the course of every day for 10 years. If any adjustments were made it would have effected both variables equally and the net effect on the correlation would have been null.
    However if we took the independent variable as the average price for the previous year and projected the S&P 500 price for the coming year and did that for the 10 year period then yes - the value of the dollar would have needed to be adjusted. I've done this secondary type of analysis in a lot of other articles on here especially in the area of CAPE Ratio's or earnings and their impact/connection with the equity market. In all of those cases I have made the necessary adjustments. Even in those cases however, the accuracy would be diminished without doing the adjustment, but the general direction of the correlation (whether it's inverse or not) would still hold.
    Good point - Thanks!
    Sep 29, 2014. 11:59 PM | Likes Like |Link to Comment
  • The S&P 500's Historical Relationship With The Price Of Oil [View article]
    Tom, I agree with you. One of the reason's I looked into this was because I really think those $4.00+ gas prices all summer long in 08 was what caused the crash in September of that year. I think the graph shows that somewhat but you also got me thinking that I should really do an analysis of the impact of Oil's growth rate on the S&P 500. Most likely a sharp increase impacts the equity markets negatively - but of course I'd have to look into it.

    I also agree on the 'weeding' out of the variables so to speak. I sort of thought it was somewhat shabby work on the part of the EIA to leave the analysis at a simple link of correlation between the S&P 500 and the price of oil without trying to at least weed out the entire energy sector. But at the same time, doing all that work is a lot of trouble. It's sort of like taking your stock XOM's beta as measured against the S&P 500. Everybody talks about a given stocks beta, but technically if that stock is also contained by the index that a stock is measured against then there is a violation of the independence assumption with respect to measuring the correlation. I know a lot of quant funds account for this but for the most part I don't personally and I think most investors on here probably don't either.

    Thanks for the points - much appreciated!
    Sep 29, 2014. 11:50 PM | Likes Like |Link to Comment
  • Attention Income Investors - Beware Of High-Dividend Stocks [View article]
    Yes, a company that consistently buy's back shares will generally have a good dividend as well. I prefer to see a track record for both - not just a 'one-time event' share repurchase. If the company also pays down it's debt at the same time, then it seems to stand to reason that the capital structure is improving in favor of the investor. However the group of companies doing all three are generally relatively mature and within industries that aren't seeing a great deal of expansion (broadly speaking). So one might lose out on the opportunity presented by companies that are young and expanding where the acquisition of additional debt makes a great deal of sense.
    All good points - Thanks for the comment!
    Sep 28, 2014. 09:39 AM | Likes Like |Link to Comment
  • Attention Income Investors - Beware Of High-Dividend Stocks [View article]
    Y-Charts provides it. Also Gurufocus.com.

    But the method which TF17 provided also works and might be cheaper. I'm not sure if the above two websites charge for that information.
    Sep 28, 2014. 09:34 AM | Likes Like |Link to Comment
  • Attention Income Investors - Beware Of High-Dividend Stocks [View article]
    Just ran a report this weekend for the NYSE and NASDAQ and then cross referenced it with the S&P 500 - the following ticker's on the S&P 500 had negative earnings for the last twelve months but continue to issue a dividend: APC, PXD, AA, BTU, ATI, NRG, NEM, CTL, AVP, QEP. In full disclosure I'm long on AA.
    Clearly the number of stocks on the S&P 500 are much less likely to issue a dividend and also have negative earnings. However there are only 14 stocks on the S&P 500 that have had negative earnings during the last 12 months so maybe that helps put it in context? Also as a quick look at that list will suggest some of these companies have had negative earnings solely as a result of recording negative one-time event write-offs. Additionally CTL which has had negative earnings over the last 12 months continues to purchase shares back, issue a dividend, and even reduce it's debt to asset ratio. CTL appears to be the anomaly in that respect, but I thought it was worth mentioning that.
    Sep 28, 2014. 09:30 AM | Likes Like |Link to Comment
  • Misperceptions About Hayek: A Response To Soros [View article]
    Good article - I believe at the heart of investing one should clearly outline their philosophy. Having had the privilege of studying economic theories through the context of entrepreneurship research at the graduate level I really feel that there is a lot contained in simply understanding and delineating different ontological views and understanding how that impacts one's entire approach towards investing and everyday action.
    Most people who invest and actively trade are clearly acting under the ontology of a person who thinks a stock is undervalued and hoping to see an eventual gain through the 'discovery' of value. This is much different then some prevailing theories of economics such as the efficient market hypothesis (which Soros opposes) which dictate that prices are essentially representative of actual value.
    In a slightly different vein then your article - Based on his seminal work in 1945 which eventually earned him his Nobel Prize, I believe that Hayek would have been a believer in the individuals ability to invest in a wiser manner then the aggregate of market participants. Hayek was really the first who outlined that price conveys not only gain, but also information to market participants and that some participants are capable of acting differently and with greater speed then others. He also outlined that sometimes this would result in a loss for the trader, but that this too would convey useful information to the market participant. From this, I think that Hayek would have believed in the individuals capacity to trade and in the usefulness to the overall efficiency of the market, for individuals to trade. In this way, I think there is some connection between Soros and Hayek with respect to overall philosophy even if there are clear differences.
    I can't understand exactly why Soros would identify Hayek in the manner that you quote him as doing. Clearly this is a misinterpretation of Hayek and I appreciate your article for outlining that.
    Sep 26, 2014. 06:23 PM | 1 Like Like |Link to Comment
  • Attention Income Investors - Beware Of High-Dividend Stocks [View article]
    Just took a list of the NYSE stock exchange from 7/29/14 - there were 3785 stocks listed on the exchange, 2417 of which were paying a dividend. Of those 2417, 571 had a TTM EPS that was negative which is therefore roughly 1 in every 4 stocks paying a dividend. Naturally this list would need to be weeded out and some differentiation made between 'one-time' events that led to the possible negative earnings. I am also sure that the 'nature' of the stock/company itself has some bearing on the dividend despite negative earnings. I am not about to put that much time into this. But here is the excel list that shows this data if you care to do the additional research. I look forward to seeing your thoughts. If you want updated lists such as this you can send me an email and I'll be glad to sign you up for the periodic updates of NYSE and NASDAQ.

    And now for the download - http://bit.ly/1myXfUN
    Sep 26, 2014. 03:58 PM | Likes Like |Link to Comment
  • Attention Income Investors - Beware Of High-Dividend Stocks [View article]
    Yes, buyback yield, if negative is not always a reason to walk away from an investment. However I would simply avoid a company that has a strong tendency to always issue new shares on a consistent basis.
    This being said, I have invested in the past in companies that used stock issuances as a means to bring new life to their capital structure. If done correctly, the company can take on new life as a result.
    Sep 26, 2014. 02:46 AM | Likes Like |Link to Comment
COMMENTS STATS
165 Comments
89 Likes