Q3 2009 Earnings Call

November 5, 2009 11:00 am ET

I wrote about Nacco Industries Inc. (NC) back on 2/6/09 and 3/13/09 when the stock was trading between the $20 and $40 range. Please note that during the time of the write up, the market went through a major breakdown. March 2009 marked the low in the equity market.

Because the company’s stock price at year-end was significantly below the company’s book value of tangible assets and its book value of equity, accounting rules effectively required that the company take a non-cash write-off of goodwill and certain other intangible assets totaling $436 million or 431.6 million net of taxes of $4.1 million.

The 2009 list of Dividend Achievers consists of 284 companies. Many of these companies are in the banking, finance and real estate arena. The above timeline excludes most banking, finance and real estate companies and instead focuses on all other sectors of the economy. I routinely avoid falling industries or sectors of the economy that are breaching new highs (highest relative strength).

What should be noticed is that the remaining stocks (after excluding banking, finance and real estate) provided us with 166 companies to invest in with 9 months and 35 different days in the year to (theoretically) buy low and sell at whatever price suits our needs. All of this could be done within a one year time frame allowing the investor to get out when and if necessary. Below I have a table with Dividend Achievers performance from their 52-week low (the left column has the best performing and the right the worst performing).

Several notable companies raised their dividends last week. Dividend raises are not only getting more frequent, but they also seem to be spreading globally as well. A dividend raise in this tough environment indicates confidence in the business and the ability to generate free chas flow. A strong cash flow also enables companies to fund future growth internally, rather than relying exclusively on the capital markets for growth. The companies which decided to share their continued growth with shareholders by rewarding them with a dividend raise include:

Vodafone (VOD), a mobile telecommunications company with operations in Europe, the Middle East, Africa, the Asia Pacific, and the United States., raised its final dividend by 3.5% to 0.052 GBP per share. ADR holders are expected to receive a dividend payment of $0.80 for the second half of 2009 based off current forex rates. Vodafone is an international dividend achiever, which has rewarded its shareholders with an uninterrupted streak of increased dividends for over ten consecutive years. The stock currently yields 4.30%.

The past several months have been characterized by tremendous volatility and a lot of negative news regarding the state of the economy as a whole. Given the uncertainties in the global economy, investors are wondering whether they should cash out their portfolios and simply wait for the storm to end.

I think that this would not be a good move, especially for the dividend investor who already has a diversified portfolio of income producing stocks. Such an investor will be more focused on the dividend raises that his or her stocks deliver.

This is the 4th Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

Next up is Jeffrey Gendell's Tontine Associates. If you're unfamiliar with Tontine, they specialize in macro investing and take very large, concentrated positions in companies Gendell feels will benefit from those macro themes. Additionally, he will take on an activist role when necessary, to ensure shareholder returns. The fund has posted returns in excess of 100% in both 2003 and 2005. Conversely, 2008 was the year from hell for Tontine.

F4Q and Year End 2008 Earnings Call

March 13, 2009 11:00 am ET

The stock market has been rallying despite the bad news. The talk of deflation dissipated and the concern over the credibility of the dollar rose. My thesis is that the next thing that we will experience in the market will be inflation. The charts below will help navigate my theory a little better.

The charts below shows the XLB (Materials Select Sector) and $CRX (Commodities Related Equity Index). Both charts show sign of "bottoming". I can never be too sure because I don't know the future and they may just be resting before another leg down. However, this is a good sign. I have been waiting for this index to stop going down as a sign of deflation easing. In present time, the charts are telling me to look further. Let's move to the 30 Year T-Bill.

Q3 2008 Earnings Call

November 4, 2008 11:00 am ET

There is a commonly told myth that says that companies that pay a dividend misallocate funds that could be used to generate new revenue or grow the company. According to this myth the lack of growth in the company will keep the stock's price low over the short and long term. This is the most fascinating misconception that exists about dividend paying companies. The theory seemingly makes sense, yet after critical examination, the truth comes out.

The following is the performance of Dividend Achievers in the last year from August 8, 2007 until August 8, 2008. These stocks either hit a new low within the year and moved higher from there, or they have started the year at a low and continued upward. Keep in mind that the percentage change of these stocks does not include the annual dividend that would have been received over the same period of time and just looks at stock appreciation.

Q2 2008 Earnings Call

August 8, 2008 11:00 am ET

NACCO Industries, Inc. (NC)

Q1 2008 Earnings Call Transcript

NACCO Industries (NC)

Q4 2007 Earnings Call

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Nacco Industries Inc. (NC)

Q3 2007 Earnings Call

I have watch-listed Nacco Industries (NC) and plan to buy some if it trades below 100. Nacco is a holding company that operates three unrelated businesses- coal mining, lift trucks and housewares.

Because Nacco doesn’t fit nicely into a single industry group, it has almost no analyst coverage and seems to fall between the cracks. It is usually categorized in the Construction/Machinery Industry since a majority of its revenues comes from the lift truck business. But the profit margins are much higher from its housewares and mining businesses. Here are some year-end figures for 2006:

TWST: What is NACCO Industries?