Seeking Alpha


Send Message
View as an RSS Feed
View scarlo's Comments BY TICKER:
Latest  |  Highest rated
  • Exxon Mobil Needs A Big Dividend Hike This Year [View article]
    Your perspective on this seems solely driven by a desire for immediate cash returns. Fortunately, the board of Exxon is not letting you any closer to the decision making process. Capital allocation is the name of the game here (and everywhere).

    First off, in the US markets, companies are rewarded by how consistent their dividend policy is. You aren't going to be a low beta, low cost of equity capital company by dramatically raising the dividend every time you have extra cash and then lowering it in years where CAPEX is much more favorable. This isn't Europe where that type of thing is seen favorably.

    Secondly, opportunistic capital deployment is the rule and it's one of the main reasons why CFO's get paid well and can have a major influence on a company's historical returns. Perhaps I'm oversimplifying here, but: 1 - buy back shares when they are cheap. 2 - borrow when interest rates are low. 3 - invest in CAPEX when opportunities screen favorably. 4 - divvies when nothing else to do with the excess cash flows. When companies decide to go heavy on divvies it's often a signal to the markets that there are limited other opportunities for the foreseeable future. This type of decision usually weighs heavy on the share price as the anticipated internal growth factor for pricing models must be dramatically realigned.

    Yes, I get that being a good steward requires a commitment to shareholder cash returns - but Exxon's "mantra" is sound and they do have a very long term perspective (and long term performance to back it up!). They have a great history of dividend growth and a good history of share repurchases as well. They are also strict around CAPEX spending and have a high ROIC compared to their competitors. Sounds like good decision making to me. Tillerson's Exxon may not have performed as favorably since he took the helm, but it's certainly not because of the dividend policy. And if your argument is that they should increase dividends because share price has languished you are simply putting the cart before the horse.

    Disappointed in this article, Michael. Either you lack an understanding of how the market is analyzed by professionals and high level investors or you are just speaking from emotion. This article would have been better kept in the journal under your pillow.
    Mar 8 05:07 AM | 12 Likes Like |Link to Comment
  • McDonald's Top Line May Recover [View article]
    McDonald's plan to offer customizable options for their burgers is a fools' errand. If they are trying to move away from fast service and low price, it certainly makes sense. However, this new direction doesn't align with their image, history or strengths. The choices made by this CEO trouble me - I feel he's missing the grand view of the market and competitive landscape and is thereby making incorrect assessments of where to steer the ship.
    Mar 5 07:19 AM | 3 Likes Like |Link to Comment
  • 3 Cheers For Small Banks [View article]
    How is it possible that Matthew so missed the mark on this? Has he even been paying attention during the last decade? Perhaps this industry is not his sweet spot, in which case he should retreat to his level of competency.
    Dec 13 07:09 AM | 1 Like Like |Link to Comment
  • It's Not So Much Why Buffett Bought Exxon Mobil, It's Why He Bought It Now [View article]
    I enjoyed the article and respect your commitment to a long term perspective. Capital deployment is indeed the name of the game.

    When estimated returns from buying productive assets doesn't meet your standards, refrain. Why pay divvies when you can enhance EPS by repurchasing shares at a discount to intrinsic value?

    Long XOM
    Dec 1 07:44 AM | 7 Likes Like |Link to Comment
  • REIT Focus: Home Properties, Inc. [View article]
    Long HME.

    I think the management team, particularly the CFO, has a good figure on things. They sold several larger properties in the mid 2000's before the bubble popped and started buying again after 2008. You can see over the last four quarters they've decreased their debt load by 10% and are scheduled to continue paying it down most aggressively.

    This forward thinking CFO should benefit HME share value greatly over time. While most shareholders are probably loathe to admit, HME often issues new shares only when the price is dear. This CFO is real technical fellow.
    Nov 19 07:35 PM | Likes Like |Link to Comment
  • Coca-Cola Dividend Raise Coming Soon [View article]
    My guess, $.305.

    With the cost of capital increasing management will play it safe.
    Nov 18 05:54 AM | Likes Like |Link to Comment
  • Upcoming Earnings May Catalyze This Underfollowed Spin-Off [View article]
    Looking back at David Liu's article provided the following comment about RINs, "Selling Renewable Identification Numbers ("RINs") generated by ethanol and biodiesel blending has temporarily inflated Murphy USA's revenue and earnings. Because the Company has the capability to source its fuel directly at the terminals and then blend the fuel themselves, RINs are generated in the process."

    So my question is: are the losses from MUSA's distribution system offset by the RIN credits which are produced by such a mechanism? That would help justify maintaining such a system, at least on the short term when RINs are bid up.
    Nov 7 06:10 AM | 1 Like Like |Link to Comment
  • Upcoming Earnings May Catalyze This Underfollowed Spin-Off [View article]
    Thanks for that clarification Tadpoles. Appreciate it.
    Nov 6 08:20 PM | Likes Like |Link to Comment
  • Upcoming Earnings May Catalyze This Underfollowed Spin-Off [View article]
    Under three month results I'm still puzzling over this statement, "Total product supply and wholesale margin dollars excluding RINs were a negative $14.5 million in the 2013 period compared to a positive $9.7 million in the same period of 2012. "
    Nov 6 07:37 PM | Likes Like |Link to Comment
  • Upcoming Earnings May Catalyze This Underfollowed Spin-Off [View article]
    I'm a little embarrassed to say that I don't understand how the RINs are generated for MUSA; are they from generated by their ethanol plants (that they will likely sell) or are they generated when they blend biofuels with their gasoline pre-sale at the retail level?

    Thanks, in advance, for any insight on this.
    Nov 6 07:34 PM | Likes Like |Link to Comment
  • McDonald's Peaking: A Retrospective [View article]
    Unless you are using them to hedge a general market decline I don't see the catalyst for the puts.
    Nov 4 06:44 AM | 3 Likes Like |Link to Comment
  • Dividend Buy Of The Month: Exxon Mobil [View article]
    I appreciate your philosophy about living a modest lifestyle & seeking financial freedom at a young age. I'm a fan of XOM's consistency & high returns on investment. I think a lot of folks miss the forest for the trees & neglect to remember that Exxon maintains a long term perspective with goal planning meant to span decades, not to bump next quarter's earnings.
    Oct 16 01:24 PM | 2 Likes Like |Link to Comment
  • Is It Time To Move To The Sidelines? [View article]
    Further supported by a nice divergence illustrated clearly by McClellan at: (
    Oct 11 04:54 PM | 2 Likes Like |Link to Comment
  • Investors Should Be Hungry For Potbelly IPO [View article]
    Wow, what a colossal failure by the iBankers involved in this one to fairly assess market demand. I was ready to purchase but not chasing it.
    Oct 4 10:26 AM | Likes Like |Link to Comment
  • General Mills - Solid Dividends Drive Long-Term Value Creation [View article]
    "Last year's earnings included a $0.16 per share headwind, as General Mills had a $82 million benefit from the mark-to-market valuations of commodity positions, and a one-time tax benefit."

    I think you meant "tailwind".
    Sep 18 04:12 PM | Likes Like |Link to Comment