IBM will post $20 a share in EPS. What if they don't? In your particular case it would probably be and insignificant decline in price. But what about the folks that have a cost basis of $190+.
I doubt they are going to be happy. So the point is, determine a value in advance, compare your valuation to current pricing to help determine a risk, and the make the investment decision that's right for you.
Just because you believe my $80 valuation is wrong, and it well may be, then it's wrong for you, not for me.
I have no idea how many shares you have now, but whatever the number I am very glad things have worked out well for you. I hope you continue.
But consider for a moment that you are talking about one stock, while in my portfolio I have 66,122 shares spread out over 27 stocks, meaning we are not talking the same thing.
Learning together, it's what we should all strive to do. And in that light I am very glad that you have been enlightened.
As to financial statements, generally, I learned a very long time ago to think of them as food. A chef starts with different ingredients. It isn't until those ingredients are rearranged, that we see what has been prepared.
The analogy works for financial statements, when the many financial metrics are applied.
I can appreciate your irritation. But the rules of accountancy, while adjusted from time to time, are what they are, and the trick is to use them to your benefit.
As to seasonally adjusted, what does that mean. If, as I do, I examine an entire year of financial information, why do I care about the seasonally adjusted anything?
It's the same thing as GAAP and non-GAAP financial reporting. Intended only to make crappy sales numbers look like good sales numbers.
You are correct...sort of. Yes the stock could be exchanged for cash, but what about the shares of stock the company is authorized through its Articles of Incorporation to issue, that have not been issued?
Those shares are not shown on the balance sheet as an asset so conversely retired shares, or more importantly the money spent to retire the shares needs to be accounted for, which is how the reduction in cash is handled.
The important thing to me, and the reason I like to highlight it, is to make investors ask themselves why the company is spending money on share repurchases as opposed to reducing debt or paying a dividend.
It is those sorts of things that my article and my worksheets are intended to do...get potential investors to ask themselves questions.
I hope this makes sense since I am not an accountant.
When a company buys back its own shares, a reduction in company cash occurs which lowers cash which in turn lowers shareholder equity.
To account for this reduction in equity, the repurchased shares are carried on the balance sheet as a negative number. It is what is part of GAAP, Generally Accepted Accounting Practice.
The idea is since it is the company that issued the stock in the first place that has now removed the stock, the value of the stock is fixed at the time of repurchase and cannot change, while at the same time allowing the balance sheet to remain...balanced.
I simply figured out which financial metrics I believed added value to my research.
Once I had that down, I went through a number of consolidated financial statements from company 10K filings and figured out which financial information from which financial statement would provide me the metrics I wanted.
From that I built a spreadsheet with financial statement information on one side and all of the metrics I wanted on the other. Looking back on it, I wish I had built a database instead of a spreadsheet.
As to back data, yes, I have one for each year I have been following the company.
As for predictions, I would need to replace the light bulb in my crystal ball.
As to indicators, anything can be modified to publish indicators, but indicators are for a different sort of investor, one like I used to be 25 years ago, because they rely on mathematical probability to work, where as I rely on getting up and driving everyday.....to work.
Most go back five years, but the financial statements that go back into the late 90s is available in several places.
None of this is very complicated, but it took me almost three years just to work through all of the formulas, formatting, testing, etc. And while I don't mind sharing at all, I simply don't want to make it easy for someone to take my hard work and make it there own.
Perfornance - Week Ending 05/10/2013 [View instapost]
Wax
IBM Does Not Compute [View article]
IBM will post $20 a share in EPS. What if they don't? In your particular case it would probably be and insignificant decline in price. But what about the folks that have a cost basis of $190+.
I doubt they are going to be happy. So the point is, determine a value in advance, compare your valuation to current pricing to help determine a risk, and the make the investment decision that's right for you.
Just because you believe my $80 valuation is wrong, and it well may be, then it's wrong for you, not for me.
Wax
IBM Does Not Compute [View article]
I have no idea how many shares you have now, but whatever the number I am very glad things have worked out well for you. I hope you continue.
But consider for a moment that you are talking about one stock, while in my portfolio I have 66,122 shares spread out over 27 stocks, meaning we are not talking the same thing.
Wax
IBM Does Not Compute [View article]
Learning together, it's what we should all strive to do. And in that light I am very glad that you have been enlightened.
As to financial statements, generally, I learned a very long time ago to think of them as food. A chef starts with different ingredients. It isn't until those ingredients are rearranged, that we see what has been prepared.
The analogy works for financial statements, when the many financial metrics are applied.
Wax
IBM Does Not Compute [View article]
I can appreciate your irritation. But the rules of accountancy, while adjusted from time to time, are what they are, and the trick is to use them to your benefit.
As to seasonally adjusted, what does that mean. If, as I do, I examine an entire year of financial information, why do I care about the seasonally adjusted anything?
It's the same thing as GAAP and non-GAAP financial reporting. Intended only to make crappy sales numbers look like good sales numbers.
Wax
IBM Does Not Compute [View article]
You are correct...sort of. Yes the stock could be exchanged for cash, but what about the shares of stock the company is authorized through its Articles of Incorporation to issue, that have not been issued?
Those shares are not shown on the balance sheet as an asset so conversely retired shares, or more importantly the money spent to retire the shares needs to be accounted for, which is how the reduction in cash is handled.
The important thing to me, and the reason I like to highlight it, is to make investors ask themselves why the company is spending money on share repurchases as opposed to reducing debt or paying a dividend.
It is those sorts of things that my article and my worksheets are intended to do...get potential investors to ask themselves questions.
Wax
IBM Does Not Compute [View article]
To be really quite honest I have no idea what my annualized portfolio return is. I never really figured it out.
I it every week, so if you would like to see it, just go here.
http://bit.ly/TD6FhA
Wax
IBM Does Not Compute [View article]
I hope this makes sense since I am not an accountant.
When a company buys back its own shares, a reduction in company cash occurs which lowers cash which in turn lowers shareholder equity.
To account for this reduction in equity, the repurchased shares are carried on the balance sheet as a negative number. It is what is part of GAAP, Generally Accepted Accounting Practice.
The idea is since it is the company that issued the stock in the first place that has now removed the stock, the value of the stock is fixed at the time of repurchase and cannot change, while at the same time allowing the balance sheet to remain...balanced.
Wax
IBM Does Not Compute [View article]
Thank you for your comments.
As to the negative number, treasury shares are nothing more than stock issued by the company that the company has repurchased.
If the company wants to hold them for re-issue at some later date, then often times they are referred to as Treasury Shares.
They are shown on the Balance Sheet as a negative number because they reduce Shareholder Equity.
As to the debt discussion, that is going to involve a fair amount of digging along with a fair amount of time.
While I am curious, perhaps one of the other folks on this thread can chime in about the company's debt structure.
Wax
IBM Does Not Compute [View article]
The company is focusing on developing nations for future growth, how can you ignore the global economic impact?
Wax
IBM Does Not Compute [View article]
They are the leader in what?
Wax
IBM Does Not Compute [View article]
Year to date my return is 13.4%. With my current basket of stocks, my return is 68%.
Just remember, you are talking about 1 stock and I am talking about 27-33. That makes it hard to compare.
Wax
IBM Does Not Compute [View article]
Of the 27 stocks in my portfolio, the average hold period is 4.6 years, with the oldest one held for 11 years and the newest one held for 2.5 months.
Wax
IBM Does Not Compute [View article]
I simply figured out which financial metrics I believed added value to my research.
Once I had that down, I went through a number of consolidated financial statements from company 10K filings and figured out which financial information from which financial statement would provide me the metrics I wanted.
From that I built a spreadsheet with financial statement information on one side and all of the metrics I wanted on the other. Looking back on it, I wish I had built a database instead of a spreadsheet.
As to back data, yes, I have one for each year I have been following the company.
As for predictions, I would need to replace the light bulb in my crystal ball.
As to indicators, anything can be modified to publish indicators, but indicators are for a different sort of investor, one like I used to be 25 years ago, because they rely on mathematical probability to work, where as I rely on getting up and driving everyday.....to work.
Most go back five years, but the financial statements that go back into the late 90s is available in several places.
None of this is very complicated, but it took me almost three years just to work through all of the formulas, formatting, testing, etc. And while I don't mind sharing at all, I simply don't want to make it easy for someone to take my hard work and make it there own.
Wax
IBM Does Not Compute [View article]
No I cannot. Which proves what? There is more to valuing an investment than PE.
Wax