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  • TARP Warrants Again Worth Watching  [View article]
    COP has significantly grown its credit card receivables, primarily by issuing cards to those having lower FICO scores. Hence, their credit card receivables will likely have growing uncollectible balances and resulting charge-offs and reduced earnings. COF's risk of an earnings decline is much higher than several months ago, probably explaining the decline in stock price over the past month. I would not want to be long going into the 4th quarter earnings announcement.
    Jan 10, 2016. 08:00 PM | Likes Like |Link to Comment
  • Adcare Health Systems: Transitioning To REIT Brings It Back To Life  [View article]
    Paying common stock dividends is certainly a major factor in bringing the common stock back to life. They paid a first dividend of $0.05/quarter per share for Q2, raised to $0.055 for Q3. And there is a stated intent to continue the increases, although the 1/2 cent increase is not quite at the rate of increase originally stated by mgt.

    I realize of course that a common dividend does not improve the safety of the preferred.

    Ultimately, I see the pfd getting redeemed, the common dividend increasing (covered by NOLs for some time), REIT status, modest appreciation and finally (hopefully) a sale of the company.
    Jul 20, 2015. 10:18 AM | Likes Like |Link to Comment
  • VF Corporation Earnings Preview - Strong Momentum In Spite Of FX Headwinds  [View article]
    They and most multinationals do hedge, as explained in the 10-Q and 10-K footnotes of those cos.

    Well over half of the multinational companies reporting results this quarter are talking about currency effects in their earnings releases. The rev and earnings guidance for these cos should take into consideration those FX effects. Those cos are trying to reconcile changes in reported GAAP revenues and profits from 2014 to 2015 that are caused by changing FX rates. Typically for these cos:

    Reported GAAP 2014
    Plus/minus reconciling items such as organic growth/decline; acquisitions/dispositi... FX effects
    Equals reported GAAP 2015
    Jul 15, 2015. 10:31 AM | 1 Like Like |Link to Comment
  • 5 Reasons McDonald's Shrinkage Is A Bullish Move  [View article]
    My understanding is that MCD is planning to close about 1/2 of their company-owned stores, not franchised stores. After those actions, only about 10% of the total 36,000 (owned and franchised) stores will be company-owned stores. Then with only 10% of total stores owned by MCD, they will derive the vast majority of their revenues and profits from rents, royalties and fees from their franchised stores. This can be a lower admin cost, very profitable, capital efficient business model, more like a royalty company instead of an operating business.
    Jun 19, 2015. 02:23 PM | 1 Like Like |Link to Comment
  • The Roth Advantage No One Talks About  [View article]
    Roth IRAs can stretch out the tax-free compounding and tax-free distributions for possibly decades depending on the remaining life expectancies of the beneficiaries. If that is the goal, this can be the best form of wealth to pass to offspring or other younger beneficiaries.
    Feb 26, 2015. 01:39 AM | 3 Likes Like |Link to Comment
  • Dan Loeb Likes AIG And So Do We  [View article]
    $0.675 per share is the maximum dividend in any 12 month period without causing a downward adjustment in the warrant exercise price. And the warrants do not expire until early 2021.

    There is a lot of upside potential in both the common and warrants over the next 6 years, even with operating performance below its peer group.

    Long both common and warrants.
    Feb 17, 2015. 01:21 PM | 1 Like Like |Link to Comment
  • The Security I Like Best: Atlas Energy, LP  [View article]
    I agree that there is significant value in the stub, far more than $2.85, represented by the general and limited partnership interests in ARP, plus other producing oil/gas interests and investments in Lightfoot/other MLPs. The expected yield on the stub will certainly result in a large upward valuation in the stub.

    The negative is that it requires a high capital investment ($27.43) to purchase ATLS to obtain the stub security.
    Jan 30, 2015. 11:11 AM | 1 Like Like |Link to Comment
  • VF Corp Will Benefit From Cotton Prices And A Strong Dollar  [View article]
    The stronger USD negatively impacts its reported international revenues, costs and margins. International operations make up about 40% of total revenues.
    Jan 30, 2015. 10:14 AM | Likes Like |Link to Comment
  • 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