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  • W. R. Berkley: Upside Is Limited at These Valuations [View article]
    Hey dealraker- I'm not an insurance analyst, so I'm sure that I am overlooking or minimizing something. If that's the case, I appreciate any constructive feedback. The information here is what I gathered by reading some analyst reports, 10-Ks, their conference calls, quarterly filings, and their financials from the past decade. If you wouldn't mind, I think readers would appreciate some specifics from you that may help all of our understanding, myself included, of WRB and the industry.
    Feb 17 06:49 PM | Likes Like |Link to Comment
  • Why We Added PDL Biopharma [View article]
    It's still trading at where it was around Jan. 19 and investors are still going to get a nice dividend this year. The company's primary purpose is to defend patent challenges, so that's nothing new.
    Feb 16 06:34 PM | 1 Like Like |Link to Comment
  • Seth Klarman Re-opens Position in PDL BioPharma [View article]
    For those interested, here is the link to the news: online.wsj.com/article...

    PDL agreed to pay MedImmune $65 million yesterday and another $27.5 million in Feb. 2012 in order to ensure they won't have to repay the entire $280 in royalties received. This is probably one of the major reasons why the company hasn't announced the dividend policy for 2011.

    I certainly wish I would have waited to open a position!
    Feb 16 09:26 AM | Likes Like |Link to Comment
  • What Are Big Investors Doing With Bank of America? [View article]
    Good points, Ravi and wcinvest. Thank you for adding.
    Feb 16 09:18 AM | 1 Like Like |Link to Comment
  • Seth Klarman Re-opens Position in PDL BioPharma [View article]
    Hey guys,

    This is a unique company and shouldn't be valued using traditional methods. It's more like a bond with no return of principle than a stock since the assets are wasting. Revenue will virtually disappear after 2014, so please don't measure this by P/E or something like that.

    There isn't any "risk" of the patents going away after 2013 and 2014, they ARE going away then. So the point of owning PDL is to wring out as much cash over the next few years to make up for the elimination of future revenue. I think it's undervalued because I think their free cash generation will make up for it. We should soon here what this year's dividend will be but, again, I want to caution you that it shouldn't be treated like a "normal" dividend. They also may pay out a special dividend this year as well, as they did two years ago.

    In terms of the litigation, the company's primary purpose is to defend its patents, so litigation will continue to occur over the lifetime of the company. The current disputes don't carry a large threat to current revenue, and may provide upside in regards to the Genentech dispute (though I think unlikely).

    Full disclosure: I actually just opened up a position about an hour ago.
    Feb 15 12:59 PM | Likes Like |Link to Comment
  • Dividend Investing: Tompkins Financial Nearing Low P/B [View article]
    You're mixing up earning and dividends.
    Feb 15 10:03 AM | 2 Likes Like |Link to Comment
  • Dividend Investing: Tompkins Financial Nearing Low P/B [View article]
    Hey notbob- They've increased earnings for 36 straight years, second to Wal-Mart's record. Tompkins hasn't increased dividends for quite that long.
    Feb 15 09:42 AM | 1 Like Like |Link to Comment
  • Why We Added PDL Biopharma [View article]
    For anyone interested in more up to date information on PDL, you can find it here: seekingalpha.com/artic...
    Feb 15 12:05 AM | 1 Like Like |Link to Comment
  • Greenlight Re: Protection From Both Inflation and Deflation [View article]
    I was of the thinking that BIOF in the future would be able to raise ethanol prices faster than their input costs. I admit to no special knowledge there, though, and I certainly could be wrong in that regard. Even without BIOF, Einhorn has a number of other (more obvious) inflation-friendly holdings in his hedge fund, and that's really more of the point I was trying to make.
    Feb 10 05:24 PM | 1 Like Like |Link to Comment
  • Hedge Fund Manager Chris Shumway to Hang It Up: Here Are His Top Holdings [View article]
    I count at least 11 different industries in those seven stocks. That's plenty diversified. Just owning more stocks doesn't make a portfolio diversified and doesn't mean it's less risky. You still have market risk. If he's done very deep research on his holdings, he's dramatically reduced market risk since he feels he knows the companies very well.

    It would be more risky to own 100 stocks that a portfolio manager doesn't know deeply (and isn't able to follow closely) than for him to own these 17.
    Feb 10 04:11 PM | 3 Likes Like |Link to Comment
  • Allegiant Has Found the Keys to Airline Profitability [View article]
    Great point igggy
    Feb 9 11:26 PM | Likes Like |Link to Comment
  • Allegiant Has Found the Keys to Airline Profitability [View article]
    Good question and I don't know for sure other than that the markets they're in just wouldn't sustain two carriers. In a price war, Allegiant would seem to be able to win because their costs are dramatically lower than any other airline. There's a neat little chart in their most recent presentation showing that.

    At the same time if, say, Delta wanted to come in to take a route from them, Delta's size could probably sustain losses longer than Allegiant could except for the fact Allegiant isn't leveraged at all. So, that's why the lack of debt is so important. It could be that the routes they run, although great margins, just wouldn't move the top line for a larger carrier. This is a good example of looking for an investment in profits rather than revenue. In the airline industry bigger is definitely not better.
    Feb 9 08:01 PM | 1 Like Like |Link to Comment
  • Lorillard Reports Smokin' Earnings, But Uncertainty Looms [View article]
    Hey Guraaf- The TPSAC report is a non-binding recommendation. If they make an anti-menthol recommendation, it simply goes to the FDA for review. That review would likely take many years.

    In my opinion, the TPSAC recommendation will likely be anti-menthol. If it's not, story over. If it is, it is very, very, very unlikely the FDA will agree with that, in my opinion. Even if they did, it is not likely it will mean a ban... it may just mean additional labeling or advertising limitations. I put the odds of an FDA menthol ban at less than 1/10th of 1 percent. That percentage is for a ban, not some other limitation.

    You have to look at why the TPSAC was ordered to carry out this study. Some members of Congress did not like that menthol cigarettes are more likely to be marketed to the black community and to younger people, so they're playing political games to score a few points. The committee will partake in that type of politically activity, but the full FDA won't.

    Absolute worst case scenario, you still have overseas menthol sales and domestic non-menthol sales. I.e, Maverick, non-menthol Newports, etc. I don't have the figures in front of me, but I think their non-menthol business is bigger than you indicate. Either way, it wouldn't be good for the company for sure. However, if the FDA overreaches in that way, The FDA is going to have other problems with Congress.

    I recommend reading their latest conference call transcript.
    Feb 9 05:33 PM | 2 Likes Like |Link to Comment
  • Allegiant Has Found the Keys to Airline Profitability [View article]
    Thanks for the clarification, John. Being an east coaster, I'm a bit unfamiliar with the area.
    Feb 9 04:49 PM | 1 Like Like |Link to Comment
  • Lorillard Reports Smokin' Earnings, But Uncertainty Looms [View article]
    RiskManager: I thought about that quite a bit, b/c I'd like to give a prediction, but I just don't know. I do think the stock will take a hit, but I also think Lorillard will come in and buy some shares. Plus, a portion of the bad results are baked into the stock price.

    If you want to take a crack at a prediction for the drop, look at a multiple of earnings specific to their menthol sales, and then subtract half or a third of that from LO's share price after adjusting for balance sheet cash. That should give you a ballpark if the market was rational, which of course it isn't.
    Feb 9 09:20 AM | 1 Like Like |Link to Comment
COMMENTS STATS
162 Comments
185 Likes