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Simon Moore, CFA

 
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  • A Small Cap Alternative Not Quite On The Level Of Lowe's And Home Depot [View article]
    Good to see the positive sales momentum, and on the face of it the REIT deal looks promising, plus as Trae says its looking cheap. I haven't redone the analysis in full, but will likely buy a few shares, it's still a fairly risky play, but as part of a broader portfolio I think it's worth it.
    Aug 15 12:36 PM | Likes Like |Link to Comment
  • E-Trade: 17% Upside, It All Hinges On The Loans [View article]
    I do mean to write something more detailed, but the bottom line is I remain bullish on the company, though in recent quarters, the core business is performing a little worse than I had hoped and the home loan portfolio a little better. Net ETFC still appears a cheap, contrarian play to me and I continue to hold the stock.
    Aug 6 12:54 PM | Likes Like |Link to Comment
  • WPX Energy - A Natural Gas E&P Spin-Off At A Discount [View article]
    I suspect it could go either way, but there are four reasons Argentina may hold back:
    1. The reaction to the YPF seizure was strongly negative from the US and EU. Predictable yes, but perhaps harsher criticism than Argentina expected.
    2. Apco is a much smaller company than YPF in terms of both size and awareness, it may not be worth the additional hassle fo further seizure for a much smaller gain
    3. The government could have seized Apco in April 2012 and they did not do so.4. Apco appears to have taken actions to pre-empt seizure such as cutting the dividend to fund investment (the apparent reason YPF was seized)
    Now, none of the above are overwhelming arguments and I have very little knowledge of Argentinian politics, but I'm not sure the Apco seizure is the foregone conclusion the market may be discounting.
    Aug 6 12:48 PM | 1 Like Like |Link to Comment
  • Assessing The Relative Value Of Hillshire Brands [View article]
    I haven't seen the official numbers yet, just this:

    Q: HOW WILL THE CONVERSION OF MY OLD SLE SHARES TO NEW HILLSHIRE BRANDS AND MY RECEIPT OF DEMB SHARES AFFECT MY CURRENT TAX BASIS?
    A: U.S. shareholders will recognize tax on gains (but not loss) attributable to the DEMB shares they receive in the spin-off. You will need to allocate your respective basis in the shares based on the opening prices of the SLE shares and the DEMB shares post-spin. Using these prices, an allocation will be made between the DEMB and Hillshire Brands shares to determine the basis of the respective shares. The fair market value for determining any post-spin gain is the average price on the first day of regular-way trading, July 9 and June 29, respectively. We will post more information on how you may allocate your tax basis on our websites http://bit.ly/ODKRgz and http://bit.ly/Otmx3o. However, you should consult your personal tax advisor to discuss your particular situation.
    Aug 2 12:37 PM | Likes Like |Link to Comment
  • Why Natural Gas Will Outperform Oil [View article]
    Quick update, in the month since I wrote this the ratio has normalized a little with oil moving from 6x to 5x the energy equivalent natural gas price, mainly because of a rebound in natural gas prices.
    Of course, a single month of data doesn't move the argument as I would stress this is very much a long term phenomena, but things are apparently moving in the right direction, at least temporarily.
    Jul 31 05:07 PM | Likes Like |Link to Comment
  • Analyzing The Stock Buyback Kings [View article]
    Indeed, I agree RRD has something of an image problem, but I'm also tempted to believe management when they say they can leverage their customer relationships to grow a more digital centric business. The stock is up slightly with the broader market, since I wrote this article, but I wouldn't want to trivialize the risks inherent in repositioning the business.

    On SWY I totally agree with you, the leverage looks risky when growth seems fundamentally absent. I'd avoid that one.
    Jul 31 05:02 PM | 1 Like Like |Link to Comment
  • Matson: Hawaiian Shipping Spin-Off Offers Good Prospects [View article]
    That's all fair, but I'd rather not get drawn into a discussion on APPL as that's quite a different topic requiring a whole other detailed discussion, but the market P/E (as a proxy for free cashflow) is right now around 15x, so I'd agree Matson isn't particularly cheap on that basis, and, as you mention, others are cheaper. However, by the same metric Matson is not expensive and does have a very stable and secure business with good growth prospects, I think that's where the upside derives from. It's been around over 100 years and could conceivably last another 100.
    Jul 3 06:07 PM | Likes Like |Link to Comment
  • Two Near Term Catalysts For Phillips 66 [View article]
    The dividend is in the works, the CEO made the comments about a buyback assuming the dividend was in place. I wrote an article on their likely dividend here: http://seekingalpha.co...
    Jun 23 03:04 PM | 2 Likes Like |Link to Comment
  • Why Natural Gas Will Outperform Oil [View article]
    It's more about a theoretical argument than one based on charts, but if you look at the charts above the relationship is a long way away from it's 25 year mean for whatever that's worth.
    Jun 21 03:03 AM | Likes Like |Link to Comment
  • Why Natural Gas Will Outperform Oil [View article]
    Thanks Daniel, I agree with what you're saying, but it's really a question about the time horizon, a power plant has a life of, say, 30 years, but as new power plant construction comes along which fuel source would you use? And over time the substitution will play out (even with uranium, or coal or any other way to drive a turbine in this case). But as you imply, we're talking years.
    Jun 21 03:01 AM | Likes Like |Link to Comment
  • Why Natural Gas Will Outperform Oil [View article]
    Thanks Gigem, great caveat on UNG. It's irritating that there aren't more efficient vehicles out there. Buying a gas focused company such as WPX may be an alternative, but that (or any specific firm) introduces it's own independent risks.

    Both you, Daniel (below) and another reader in a private message make the point about limits to substitution between oil and gas whether due to geographical limitations or existing fixed investment. I think those are fair points and I'm not saying we'll get to complete parity on oil/gas pricing, but when you see oil at 6x the gas price it seems so divergent from a pretty basic economic principle of substitution that you have to take note. But like all economic principles, when you get into the details the argument has some limitations, but I don't believe they make invalid, they just may delay the timing in this case.
    Jun 21 02:55 AM | Likes Like |Link to Comment
  • Investor 'Social' Sentiment Turning On Apple [View article]
    Thanks for the comments, to deal with some of themes expressed in turn:

    Some of you clearly reject this line of thinking as voodoo. You're clearly entitled to that view.

    Some of you argue that other factors are likely to be more influential in the Apple investment case. I'm not disagreeing with that, but I do think measuring sentiment will be increasingly important, particularly for stocks like Apple that get such a great deal of popular attention.

    Some want more information on this field. I'd point you to the academic links in the article. It is an emerging area, so the long term studies aren't there to the degree I would like, but MarketPysch is the main site I leveraged for this article, which has a pretty good blog, also I believe Derwent Capital are investing based on analysis of Twitter data, so those are both areas for further investigation.

    Do note that this field is distinct from technical analysis. Technical forecasts a stock based on past price (and volume etc.) performance, whereas this looks as aggregate views expressed online, as a driver of stock performance.
    Jun 6 06:31 AM | 1 Like Like |Link to Comment
  • Phillips 66 Valuation Suggests 45% Upside - Part 2 [View article]
    No, Fama French (1992) provides some analysis on the ability of valuation metrics to predict stock performance in aggregate, but the exact weightings are subjective. I weighted averaged earnings and book value higher given Graham and Dodd emphasize those two, but again they don't provide weightings.

    However, the interesting thing about thing analysis relative to others is that the fair values from the different methods were all in the same ballpark, so changing the exact weightings won't change the upside too much.
    May 12 12:39 PM | Likes Like |Link to Comment
  • Phillips 66 Valuation Suggests 45% Upside - Part 1 [View article]
    Here's a source for reference, at their April 9, 2012 analyst update they make the statement "We'll pay an $0.80 annual dividend to start off with. It's about $500 million a year." The link to the transcript is here: http://bit.ly/IAJPmy
    May 10 05:25 PM | Likes Like |Link to Comment
  • Phillips 66: A Lot Of Upside Potential [View article]
    Trapper, your dividend number is correct and has been confirmed by management. At their April 9, 2012 analyst update they make the statement "We'll pay an $0.80 annual dividend to start off with. It's about $500 million a year." The link to the transcript is here: http://bit.ly/IAJPmy
    May 10 12:35 PM | 3 Likes Like |Link to Comment
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