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financexec2

financexec2
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  • American Realty Capital Properties: Heading Towards Multi-Year Lows In Light Of Defamation Lawsuit? [View article]
    From the independent auditor perspective, the $0.04 misstatement of a nonGAAP number was not material. The fallout of that uncorrected item was of course very material.

    These type of auditor judgments happen frequently with most large and small public companies. There is typically a summary of unadjusted audit differences that are evaluated by management, the auditors and often the Audit Committee of the Board.

    We will be learning more info when the co files its 10-Q in early January. For me, in the short run there could be more pain, but I do not think so. I am long with a position established after the problem arose, will collect dividends and will think about selling several $$ higher.
    Dec 19, 2014. 02:15 PM | 2 Likes Like |Link to Comment
  • Some Thoughts On Berkshire's Procter & Gamble, Duracell Swap [View article]
    US corporate capital gains are taxed at 35%. There is no preferential rate for corporations, as there is for individuals.
    Dec 11, 2014. 12:54 AM | Likes Like |Link to Comment
  • Prospect Capital's Challenges And Opportunities [View article]
    The author states "... instead of retiring those shares, they should keep them in treasury for future capital needs - ideally buying the shares at a discount and re-issuing them at a premium (or at least a lesser discount) to NAV."

    There are a few minor legal differences but no substantive difference between treasury shares and retired shares. Net equity is the same; it is not easier to sell or otherwise reissue treasury vs. new or retired shares.

    Long PSEC with varying size positions for well over 10 years.
    Nov 18, 2014. 01:17 PM | 1 Like Like |Link to Comment
  • Could Gramercy Double Again? [View article]
    tuliptown, REITs must distribute at least 90% of TAXABLE income to be in compliance with applicable regs to avoid income tax at the REIT itself.

    However, taxable income can vary sharply from GAAP net income or cash available for distribution. Differences in a REIT are generally due to depreciation expense deductions in arriving at taxable income.

    Chris, thanks for the initial recommendation and for this follow-up. I plan to continue to hold GPT for at least another 2-3 years to achieve an additional 50-100% gain from the current level.
    Nov 14, 2014. 11:49 AM | Likes Like |Link to Comment
  • Gramercy Property Trust: The Trustworthy REIT Keeps On Chugging [View article]
    As a minor clarification, a REIT is required to pay out as dividends at least 90% of taxable income as kadison states, not GAAP income. Then as Yarak states, depreciation and other items are added back to arrive at FFO or AFFO.
    Nov 11, 2014. 01:28 AM | 1 Like Like |Link to Comment
  • Gramercy Property Trust: The Trustworthy REIT Keeps On Chugging [View article]
    As "kadison" stated, a REIT must pay out at least 90% of taxable income as dividends, not GAAP income. However, the reasons stated by Yarak (depreciation, etc.) are valid differences between taxable income and FFO and AFFO.
    Nov 10, 2014. 09:18 PM | 1 Like Like |Link to Comment
  • Accounting Irregularities Knock Down ARCP: Buying Opportunity Or Enron Part 2? [View article]
    Even though I believe in the cockroach theory (there is always more than one), I bought yesterday at just under $8.00. Why?
    * While not downplaying it, this was an accounting mistake, not fraud or intentional. Errors do happen.
    * The error was clearly not material -- yes, more so to the quarters but very little to the full year 2014.
    * Errors/mistakes/judgments happen in any closing of the books. In most cases, they are then adjusted/corrected in the following quarter at all public companies.
    * There was no effect on cash or cash flow.
    * The decline in price seemed like a major overreaction by the selling institutions and others, considering the small amount involved.
    * The enterprise value maybe declined by a couple % but certainly did not decline by 30+% overnight.
    * There should be no impact on the dividend.
    * Broad insider buying during the year.
    * I like the triple net lease business.
    * This seemed much like the overreaction to accounting issues at PSEC earlier this year. Again, no effect on cash or cash flow at PSEC.
    * Management reached aggressively and quickly.
    * This too will pass. The PPS should gradually return to its former level over the coming months.

    Just my thoughts.
    Oct 30, 2014. 03:33 PM | 9 Likes Like |Link to Comment
  • VF Corp: Not To Be Owned For The Dividend [View article]
    VF has 5 brands having sales in excess of $1 Billion each, not 3 as stated in the article. They are The North Face, Vans, Timberland, Wrangler and Lee.

    The dividend has been increased each year for well over 25 years. I agree with the premise that one should not purchase it for its dividend, and it is at the high end of its range based on most metrics such as sales, PE, book value, etc. VF has, however, grown very well, both via internal and acquisition, for 20+ years in a tough industry.
    Sep 29, 2014. 10:34 AM | Likes Like |Link to Comment
  • Gilead: A Growth Story [View article]
    You appear to be getting mixed up regarding Q2 and first half revenues and earnings. Therefore, your full year conclusion is incorrect.
    Aug 7, 2014. 03:25 PM | Likes Like |Link to Comment
  • A Quantitative Look At IDRs And Their Impact On MLP Growth [View article]
    Wash rules only apply to a disposition at a capital loss.
    Apr 21, 2014. 03:01 PM | Likes Like |Link to Comment
  • I Hit Apple's $7.47 June Quarter EPS, Here's What I Expect For The September Quarter [View article]
    Weighted average shares for quarterly EPS, with a separate weighted average shares calculation for annual EPS. The 4 quarters may not necessarily add to the year number, as is often the case when there is a significant increase or reduction in share count during the year.

    However, book value per share at any date is computed using the ending shares outstanding.
    Oct 22, 2013. 12:24 PM | Likes Like |Link to Comment
  • Microsoft Dividend Raise Debate: 2013 Edition [View article]
    Re repurchase of shares using European cash, as suggested by previous poster kbphysicspy:

    That would be considered by the IRS as effectively a repatriation of foreign cash and would trigger a US tax at 35% less a credit for the amount of foreign taxes already paid on those funds.

    Effectively, this is the same IRS reasoning to not allow the foreign subsidiaries' cash to be loaned to the US (except in very limited, short-term circumstances).
    Jun 18, 2013. 12:34 PM | 1 Like Like |Link to Comment
  • Healthcare: The New Value Sector [View article]
    IRY -- International Health Sector fund.
    Sep 4, 2012. 10:35 AM | Likes Like |Link to Comment
  • HP's Bad Quarter Is A Buying Opportunity [View article]
    Question was raised about "The impairment stems from the recent trading values of HP stock ..."

    One of the accounting tests to determine if a goodwill impairment charge MIGHT be required compares is a comparison of market cap with stockholders' equity. The theory is -- if the market cap is less than stockholders' equity (which it is for HPQ), then there is likely an impairment of goodwill. This is only one of the considerations for an impairment charge, but it may well have been the reason here.
    Aug 26, 2012. 05:27 PM | 2 Likes Like |Link to Comment
  • Supervalu Versus RadioShack: A Comparison Of Struggling Retailers [View article]
    "Depreciation and amortization is a non-cash operating expense. Part of the reason why the company saw a rapid increase in these expenses was because new acquisition accounting rules require these assets to be revalued at its current market value when the acquisition takes place. More often than not, this increases the value of the assets and increases the depreciation and amortization expense allowances of the combined company versus if each company was separate. This actually benefits acquirers since these expenses are tax deductible as an ordinary and necessary business expense and can save companies up to 40% of the purchase price."

    The first 3 sentences above are true, but the increased dep/amort expense from the new higher fair value of assets is not tax deductible in MOST acquisitions. For accting purposes, a deferred tax liability is recognized at the acquisition date and then amortized as a partial offset to the higher dep/amort expense. Thus, there is an accting benefit for reported P&L but not a cash flow benefit (i.e., no reduction in cash taxes).
    Aug 2, 2012. 11:03 AM | Likes Like |Link to Comment
COMMENTS STATS
17 Comments
21 Likes