Intel: Ahead Of Q2 Earnings, Shares Remain Cheap [View article]
Good article, Ashraf
Intel is an industrial stock cloaked in a technology wrapper. The fundamental metrics are excellent. Investors have been fretting for years over EPS growth and margins. When margins and EPS were up, they worried they would go down. When down, they wring their hands like the margins and EPS will stay down forever.
Buy the best-of-breed chip stock and be patient. In the meantime, collect the strong dividend.
Ashraf, regarding INTC option plays I wrote a S.A. instablog on May 30 with a real deal: sell the Intel Jan 2015 20 puts and buy the Jan 2015 25 calls. Even wrote you all a short note on it. The net debit for this option play was 31 cents. It's now $1.10. That was an offer an Intel bull couldn't refuse.
Aflac: Insure Your Portfolio With Value [View article]
Congrats on your first article, Agent
You kicked off writing for S.A. by picking an excellent stock for all the reasons cited. The recent move in share price has moved the stock closer to fair value, but there's still a ways to go.
Some investors worry about the USD / JPY exchange rate. It's a red herring. Virtually no cash is actually transferred back and forth.
Lastly, you mentioned calling AFL investor relations. While a secondary point to the fundamentals, I have been enormously impressed with the IR staff. Despite the large-cap title, Aflac IR will talk with any investor about the company, it's metrics, and operations.
Friedman Industries: A Microcap Steel Company Selling At Net Book [View article]
Many thanks Robin.
I agree that the short-term prognosis for the company is difficult, as with so many in the steel industry. What I will watch is whether or not the share price falls much below net book.
If it does, I may consider adding the the position.
I do not see solvency as an issue. The fiscal discipline is tight. The business effectively runs on a cash basis. Accounting is straight forward. With no debt, and modest annual capex, the book value is unlikely to fall far, barring a unique circumstance.
Therefore, buying below net book would appear to be buying towards the bottom on the range.
Friedman Industries: A Microcap Steel Company Selling At Net Book [View article]
Robin
Thanks for your comments. How did you learn about management cutting salaries in 2009 when business was tough? That is an excellent data point.
I had the opportunity to speak with some FRD management as I prepared to write this article. I liked the fact that the general philosophy is to stick with business and the stock price will follow.
Friedman Industries: A Microcap Steel Company Selling At Net Book [View article]
The steel stocks are one of the worst performing industries now. Problems include not just the languishing U.S. construction economy, but China dumping cheap steel on the market.
General Mills Dividend Stock Analysis [View article]
Thanks DG, for this article about GIS dividends.
I remain bullish on General Mills for the long run, but believe the stock is at fair value today. The Consumer Staples sector has seen a recent runup, and the General has been dragged along with it.
A pullback to $48 or less would afford an investor a better margin of safety.
Caterpillar: 15% Dividend Increase Makes It A Buy [View article]
The time period held makes a large difference with cyclicals like CAT. Over the past ten years, Caterpillar stock has trounced the S&P500: 10.1 percent annualized versus 5.9 percent. Over the past five years, the S&P500 has an edge.
Generally, the longer the view, the better a best-of-breed stock looks. The Great Recession was very hard on some Industrials and Cyclicals. They have not fully recovered even yet.
Caterpillar: 15% Dividend Increase Makes It A Buy [View article]
Thank you, Norman, for a concise article about Caterpillar.
CAT is a best-of-breed heavy machinery company on sale at a bargain price. The P/E is at low ebb, along with investor sentiment.
The dividend increase is a positive signal. A significant boost in the payout is one of the surest signs the directors have long-term confidence in the organization and its prospects.
Annaly: Waiting To Buy Still The Best Course [View article]
It's important to note my commentary also suggests that interest rates are a component of mREIT performance, but not as much of a long-term driver as the interest rate spread. Higher rates don't necessarily crush mREITs, if spreads open up and management effectively uses hedging and leverage.
What squeezes mREIT cash flow is a narrow NIM; this hurts them whether rates are high or low.
Keeping It Simple: Annaly Capital And Historical Yield Spreads [View article]
Yes, it's tough to short a stock like Annaly and have that dividend payment hanging over your head. A bit of a rebound the other day; and the stock held up well Friday despite a miserable day for the market. Some traders likely got whipsawed.
Searching For Value And Finding It In Today's Market - Sector By Sector [View article]
Another heavyweight article, Chuck. I look forward to the sector breakdown and following along with my FAST graphs subscription.
I believe these examples reinforce a comment I read from you awhile back, "It's not a stock market, but a market of stocks."
Sometimes less-experienced investors appear to "Know the price of everything, but the value of nothing." Essentially, the relative price and value are far from synonyms. Your article and graphs quantify this very well.
Keeping It Simple: Annaly Capital And Historical Yield Spreads [View article]
zino
Certainly that's one good way to protect the downside. Another interesting possibility is to use bear call or or bear put spreads.
Bear call spreads may be a choice for NLY bears looking to hedge a long position position, but don't want to risk the dividend.
The July 14/15 spreads would offer a net credit of 15 cents per share for a risk of .85 cents a share or $85 a contract. Selling the $14 at 21 cents and buying the $15 at 6 cents generates the net debt. Maximum loss of $85 dollar a contract occurs only if the stock rises above $15. However, if the stock stays below the $14 mark, the option writer keep the $15 a contract.
Caterpillar: Emerging Market Mining Equipment Not Dead In The Water [View article]
It seems that CAT is priced such that investors believe its excavating machinery markets will be down and out for years on end. Yet the directors just raised the dividend significantly.
I like to buy out-of-favor, well-managed, best-of-breed companies with sound financials and growing dividends.
Annaly: Waiting To Buy Still The Best Course [View article]
jackmaster
I believe the root cause of much of this dislocation is too many traders trying to game the system by anticipating what the Fed will or won't do. This feeds on itself as they talk their book. Folks get spooked by the volatility and start jumping around; especially since we're in the last month before the close of a quarter.
Investors with a longer view may want to see a few facts fall into place first. This was part of the message in my S.A. article that Douglas referenced above.
Not only has the Fed not tightened interest rates; all they did was hint at tapering buying long-dated Treasuries and the traders are all running to jump out of windows. Today NLY was up 5.37 percent. Does anyone really think they have an inside track on what's going on? I can divine very little from the recent price action. That's why I suggest trying to find historical context and waiting for things to play out.
Intel: Ahead Of Q2 Earnings, Shares Remain Cheap [View article]
Intel is an industrial stock cloaked in a technology wrapper. The fundamental metrics are excellent. Investors have been fretting for years over EPS growth and margins. When margins and EPS were up, they worried they would go down. When down, they wring their hands like the margins and EPS will stay down forever.
Buy the best-of-breed chip stock and be patient. In the meantime, collect the strong dividend.
Ashraf, regarding INTC option plays I wrote a S.A. instablog on May 30 with a real deal: sell the Intel Jan 2015 20 puts and buy the Jan 2015 25 calls. Even wrote you all a short note on it. The net debit for this option play was 31 cents. It's now $1.10. That was an offer an Intel bull couldn't refuse.
Very long INTC.
Aflac: Insure Your Portfolio With Value [View article]
You kicked off writing for S.A. by picking an excellent stock for all the reasons cited. The recent move in share price has moved the stock closer to fair value, but there's still a ways to go.
Some investors worry about the USD / JPY exchange rate. It's a red herring. Virtually no cash is actually transferred back and forth.
Lastly, you mentioned calling AFL investor relations. While a secondary point to the fundamentals, I have been enormously impressed with the IR staff. Despite the large-cap title, Aflac IR will talk with any investor about the company, it's metrics, and operations.
Long AFL.
Friedman Industries: A Microcap Steel Company Selling At Net Book [View article]
I agree that the short-term prognosis for the company is difficult, as with so many in the steel industry. What I will watch is whether or not the share price falls much below net book.
If it does, I may consider adding the the position.
I do not see solvency as an issue. The fiscal discipline is tight. The business effectively runs on a cash basis. Accounting is straight forward. With no debt, and modest annual capex, the book value is unlikely to fall far, barring a unique circumstance.
Therefore, buying below net book would appear to be buying towards the bottom on the range.
Friedman Industries: A Microcap Steel Company Selling At Net Book [View article]
Thanks for your comments. How did you learn about management cutting salaries in 2009 when business was tough? That is an excellent data point.
I had the opportunity to speak with some FRD management as I prepared to write this article. I liked the fact that the general philosophy is to stick with business and the stock price will follow.
Friedman Industries: A Microcap Steel Company Selling At Net Book [View article]
Better days will come.
General Mills Dividend Stock Analysis [View article]
I remain bullish on General Mills for the long run, but believe the stock is at fair value today. The Consumer Staples sector has seen a recent runup, and the General has been dragged along with it.
A pullback to $48 or less would afford an investor a better margin of safety.
Caterpillar: 15% Dividend Increase Makes It A Buy [View article]
Generally, the longer the view, the better a best-of-breed stock looks. The Great Recession was very hard on some Industrials and Cyclicals. They have not fully recovered even yet.
Caterpillar: 15% Dividend Increase Makes It A Buy [View article]
CAT is a best-of-breed heavy machinery company on sale at a bargain price. The P/E is at low ebb, along with investor sentiment.
The dividend increase is a positive signal. A significant boost in the payout is one of the surest signs the directors have long-term confidence in the organization and its prospects.
Annaly: Waiting To Buy Still The Best Course [View article]
What squeezes mREIT cash flow is a narrow NIM; this hurts them whether rates are high or low.
Keeping It Simple: Annaly Capital And Historical Yield Spreads [View article]
Searching For Value And Finding It In Today's Market - Sector By Sector [View article]
I believe these examples reinforce a comment I read from you awhile back, "It's not a stock market, but a market of stocks."
Sometimes less-experienced investors appear to "Know the price of everything, but the value of nothing." Essentially, the relative price and value are far from synonyms. Your article and graphs quantify this very well.
Keeping It Simple: Annaly Capital And Historical Yield Spreads [View article]
Certainly that's one good way to protect the downside. Another interesting possibility is to use bear call or or bear put spreads.
Bear call spreads may be a choice for NLY bears looking to hedge a long position position, but don't want to risk the dividend.
The July 14/15 spreads would offer a net credit of 15 cents per share for a risk of .85 cents a share or $85 a contract. Selling the $14 at 21 cents and buying the $15 at 6 cents generates the net debt. Maximum loss of $85 dollar a contract occurs only if the stock rises above $15. However, if the stock stays below the $14 mark, the option writer keep the $15 a contract.
Caterpillar: Emerging Market Mining Equipment Not Dead In The Water [View article]
I like to buy out-of-favor, well-managed, best-of-breed companies with sound financials and growing dividends.
Annaly: Waiting To Buy Still The Best Course [View article]
I also noted in some comment along the way that the OBV actually crossed over positive versus price early this month.
Headline news can be an investor's worst enemy. Trader crosscurrents and whipsaws are line navigating the Drake Strait.
Annaly: Waiting To Buy Still The Best Course [View article]
I believe the root cause of much of this dislocation is too many traders trying to game the system by anticipating what the Fed will or won't do. This feeds on itself as they talk their book. Folks get spooked by the volatility and start jumping around; especially since we're in the last month before the close of a quarter.
Investors with a longer view may want to see a few facts fall into place first. This was part of the message in my S.A. article that Douglas referenced above.
Not only has the Fed not tightened interest rates; all they did was hint at tapering buying long-dated Treasuries and the traders are all running to jump out of windows. Today NLY was up 5.37 percent. Does anyone really think they have an inside track on what's going on? I can divine very little from the recent price action. That's why I suggest trying to find historical context and waiting for things to play out.