It isn't outlandish to think like that. Not many businesses have $100 billion in annual revenue. I will say that from a capital management perspective I've seen some similarities, but it is certainly a wait and see on whether HP can increase margins in a similar fashion as IBM did. To me, IBM is the model for slower growing large technology concerns to follow without question. Thanks for commenting.
None of your comments have one thing to do with the valuation whatsoever. You could say similar things about just about any business put in that context, as they are just general statements. HP is a leader in printers, personal systems and is second in switches. It has a reasonably strong storage business and its services business is restructuring. The debt is clearly more than manageable based on how much the company has shed in so little time, despite huge macroeconomic headwinds. The company doesn't need to grow to be a successful investment but I suspect that it will, which could make for an even bigger home run than it has been thus far. I'll take a value trap like this any day of the week. Thanks for commenting.
Thank you, I agree it is a better company than Dell. It is much more diversified and has better scale in many businesses than Dell. Certainly, HPQ isn't a great business, but it was priced at cheaper multiples than newspaper companies, which was crazy to me.
No problem. It is impressive that the company has been able to increase the dividend, while reducing the debt load so much at the same time. That speaks to the quality of earnings, which is an under-appreciated aspect of the company. Thanks for commenting.
Chesapeake Energy: New Management And Cheap Valuation On A Strong Resource Base [View article]
I think there could be quite a few synergies if CHK was sold to a larger company, in terms of shared infrastructure. For a larger company, it would be an opportunity to acquire vast natural gas resources and overall acreage on the cheap. A more well-financed acquirer such as a Chevron, would allow the combined company to focus on getting the best rate of return on the existing assets, as opposed to divesting them at inopportune times. I don't think it is far-fetched at all to see new management look at a potential sale here, but it is not needed for the stock to do well. Thanks for commenting.
Chesapeake Energy: New Management And Cheap Valuation On A Strong Resource Base [View article]
I'm not a fan of buying calls personally because it adds an element of timing, which I seek to avoid. I use the puts to dollar cost average into the stock at more attractive prices, and if the puts expire worthless they offer attractive risk-adjusted rates of returns. Thanks.
Chesapeake Energy: New Management And Cheap Valuation On A Strong Resource Base [View article]
The other activist investor are longer-term oriented than Icahn. We are selling the $20 and $18 puts for 2015. I'd be willing to sell in the money as well. Thanks for commenting.
Cisco, Not Sysco Offers A Margin Of Safety And Considerable Upside [View article]
Services and software contracts tend to have different accounting than product sales. Cisco's business has changed over the last several years and I think you'll see continued increases in accounts receivables. If you look at other services and software companies that have made similar shifts, you will see similar trends in accounts receivables. Conspiracy theories based on 1 data point seem quite questionable in my opinion with all due respect, and I find management to be quite credible in my time studying the company.
Cisco, Not Sysco Offers A Margin Of Safety And Considerable Upside [View article]
I don't believe that is enough evidence of channel stuffing, nor do I think someone who has been around as long as John Chambers would really feel the need to inflate one quarter of earnings by such a small amount, in the context of Cisco's overall earnings power. Accounts receivables fluctuate for many companies all of the time and usually it is a timing of the sales issue. It is clear the company is picking up market share despite a miserable IT environment. I think you need to substantiate your claims a little more to have merit and fortunately time will tell the story.
Assured Guaranty - Aggressive Stock Buyback At Discount To Net Asset Value Will Be Huge [View article]
Thank you very much for the compliment, I really appreciate it. Muni-bonds insurance is pretty complex and there is a lot of uncertainty so I wouldn't begrudge you at all for staying away. I'm really comfortable with the liabilities and the assets, so I believe there is very little risk of a permanent loss of capital, in addition to meaningful upside. Thanks again.
Assured Guaranty - Aggressive Stock Buyback At Discount To Net Asset Value Will Be Huge [View article]
The company seems to believe it should have about $800MM in excess capital. Now not all of that is readily available, but it also doesn't factor in future excess capital that will be created over the next two years, so your $1 billion figure doesn't seem unreasonable. It is important to note that the riskiest exposures have been running off at an accelerated rate, while the R&W settlements have reduced the uncertainty about eventual repayment of outgoing cash on the structured finance book. Because AGO isn't writing much new business, the capital that is no longer required to maintain the credit rating should eventually be able to be repatriated to shareholders'. Perhaps one day the ratings agencies will actually define and adhere to a reasonably defined capital model, as opposed to the pathetic and inconsistent mess that it has been over the last 5 years. This would make your question much easier to answer but I wouldn't hold my breath for those institutions to act in a reasonable manner. Thank you all for your comments.
Apache's Stock Has Strong Upside Potential And Management Is Finally Responding [View article]
I don't think they have anything to with each other really. I'm not invested in the preferred, nor am I following it closely. I think Apache is buying back its own stock because it is finally responding to investors feeling that the stock trades at a material discount to its net asset value. Thank you very much.
Hewlett-Packard: Successful Turnarounds 101 [View article]
Hewlett-Packard: Successful Turnarounds 101 [View article]
Hewlett-Packard: Successful Turnarounds 101 [View article]
Hewlett-Packard: Successful Turnarounds 101 [View article]
Chesapeake Energy: New Management And Cheap Valuation On A Strong Resource Base [View article]
Chesapeake Energy: New Management And Cheap Valuation On A Strong Resource Base [View article]
Chesapeake Energy: New Management And Cheap Valuation On A Strong Resource Base [View article]
Cisco, Not Sysco Offers A Margin Of Safety And Considerable Upside [View article]
Cisco, Not Sysco Offers A Margin Of Safety And Considerable Upside [View article]
Assured Guaranty - Aggressive Stock Buyback At Discount To Net Asset Value Will Be Huge [View article]
Cisco, Not Sysco Offers A Margin Of Safety And Considerable Upside [View article]
Assured Guaranty - Aggressive Stock Buyback At Discount To Net Asset Value Will Be Huge [View article]
Assured Guaranty - Aggressive Stock Buyback At Discount To Net Asset Value Will Be Huge [View article]
Assured Guaranty - Aggressive Stock Buyback At Discount To Net Asset Value Will Be Huge [View article]
Apache's Stock Has Strong Upside Potential And Management Is Finally Responding [View article]