Seeking Alpha

Peter Beller

 
View as an RSS Feed
View Peter Beller's Comments BY TICKER:
Latest  |  Highest rated
  • Recent Price Dip Ideal For Investors To Buy Utilities [View article]
    This is a facile analysis of a sector that's more complicated than the author seems to be aware of. First off, read the WSJ's recent analysis of the dividend tax hike (based on math not hunches) which implies a drop of 34% (not the 8% we've seen) in stock prices to correct the implied yield if the dividend tax increases. http://on.wsj.com/YeWjXU

    On top of that the author seems to ignore that the largest "utility" holdings in XLU have enormous power generation businesses which are not the regulated monopolies of their power distribution side (what we think of as power utilities). That's why their P/E ratios don't look "conservative" and why their shares don't move in lockstep with Treasury rates or the broader market.

    So while the author may be right that utilities have corrected enough, he certainly hasn't made that case here. Utilites are conservative investments, power generation is anything but. ConEd is a pure-play utility. Exelon, Duke and Southern are not.
    Nov 25 02:34 AM | 1 Like Like |Link to Comment
  • What's Next For Egypt's Economy After A Currency Devaluation? [View article]
    My takeaway from that chart is that countries that need to devalue, should! Look at how rapidly GDP growth rebounds following the devaluations in the chart above. It reminds me of nothing other than the GDP pattern that follows a brief, but sharp, recession. In other words, it's a healthy part of an economy trying to balance itself out. As for the citizens' whose life savings are wiped out by these political acts, devaluation obviously hits the poorest hardest, since they are least able to diversify their assets away from the local currency.
    May 8 12:55 AM | Likes Like |Link to Comment
  • The Glencore-Xstrata Merger: What It Means For Investors [View article]
    Thanks for your comment, Amvet.

    You're using ADRs to do the conversion, which is where the problem arises.

    Here's the latest from the WSJ: http://on.wsj.com/zJlh3Q The exchange ratio is 2.8, as stated above.

    Both Xstrata and Glencore are Swiss companies that primarily trade in London but can be bought in the U.S. as ADRs (pink sheet ADRs are typically "unsponsored," that is, issued by the company itself).

    For Xstrata each ADR is worth one-fifth of a London share so $3.72 * 5 = $18.60 per London share (latest quote on Xstrata's site is 11.27 pounds.)

    For Glencore its GLNCY.PK unsponsored ADRs are worth two London shares each so $13.15 * .5 = $6.57 per London share. And 2.8 * $6.57 = $18.40.

    I don't do (or encourage) merger arbitrage but here's a breakdown of how such a trade would play out.
    http://bit.ly/ACSdMY
    Mar 7 12:07 PM | Likes Like |Link to Comment
  • Opportunities In Renewable Energy [View article]
    Interesting take on the sector. I cringe a little, though, when people say "clean energy" because that means so many different things. Solar is one, and it's really got a lot more to do with semiconductor economics than with coal scrubbing. First Solar got beaten up for the same reasons all U.S. solar makers did in the last two years: China. Photovoltaics are essentially made the same as microchips and China offers (more than cheap labor) cheap financing, free land and no red tape, plus generous subsidies.

    One area of clean energy that deserves more attention is solar thermal (where you bounce sunlight off mirrors to hear up water and create steam). All the industrial-size solar installations going up in the U.S. right now are of this type, enjoy huge subsidies from the government (via loan guarantees and renewables requirements for utilities) and are of unproven economics. From an investor's perspective solar thermal is much less sexy: the technology isn't proprietary, the money is in doing big pre-sold deals where utilities agree to take the electricity in advance and the windfall usually accrues to the Wall Street investors who put up the money and get guaranteed returns. If only the little guy could get in on that via bonds or preferred units...
    Feb 29 01:40 AM | Likes Like |Link to Comment
  • Lay Off The High-Yield Bonds For Now [View article]
    I think there are two divergent perspectives here. One is the buy-and-hold strategy where diversified junk ETFs are just another asset added into the mix for diversification purposes. (That would be a young guy like myself). The other is a tactical, shorter-term investor looking for current yield when everything else is close to 0%.

    As for the former viewpoint, I think a slice of junk belongs in a good diversified portfolio, no matter what the current rate environment. That is if you're contributing slowly and not plowing into a big position. The latter....I'm not so sure. I remember paying very close attention to REIT yields before the crisis really hit and analysts made all sorts of arguments about spreads to Treasuries that ended up meaning nothing when the Fed simply slashed rates. Thoughts?
    Feb 29 01:32 AM | Likes Like |Link to Comment
  • Procter & Gamble Is Still Growing [View article]
    Thoughtful analysis, Jacob. I think one thing that holds back a stock like PG is that people (such as Buffett) see it less as an individual company/investment and more as a bellwether of the U.S. economy. That is, it's sort of a beta play on the overall market with the safety of a dividend. Not that I disagree with the thesis: a well-run company with solid products. But many people just see a S&P 500 index fund as a lower-risk substitute.
    Feb 29 01:22 AM | 1 Like Like |Link to Comment
  • IPOs Are More Than Just A Losing Game [View article]
    Same here. Once the buzz dies, that's when the value investor (which I believe all successful investors really are) takes a closer look. I'd be curious to know if there are any studies out there showing how IPOs do in the aggregate AFTER the hype period.
    Feb 7 12:12 AM | Likes Like |Link to Comment
  • IPOs Are More Than Just A Losing Game [View article]
    No doubt, maxmar2. GOOG is maybe the mother of all blockbusters in the modern era and there are plenty of examples of great companies that went public and continued to do well for shareholders. I couldn't agree more with your point: to invest successfully you need to do homework. Most people don't have the time or expertise but leap at IPOs because of the buzz.
    Feb 7 12:10 AM | Likes Like |Link to Comment
COMMENTS STATS
8 Comments
2 Likes