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jstratt

jstratt
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  • IBM - Change Won't Happen Overnight, But Will In Due Time [View article]
    IBM may be a fair value after the earnings debacle.

    After all when the CEO states that we dont know what happened but all of a sudden orders just dropped off like we hit a wall late in the quarter. We are withdrawing our guidance and we will get back to you in January for forward guidance. (My interpretation)

    That pretty much causes a stampede of investors out of a stock!
    Oct 24 11:12 AM | 1 Like Like |Link to Comment
  • Pfizer announces stock repurchase plan [View news story]
    The only things dropping as fast as the share count are Revenue and Cash Flow.

    Since they eliminated most of their research and appear to be slowly liquidating the company I will pass on this investment.
    Oct 23 11:43 PM | Likes Like |Link to Comment
  • The Secret Junk Bond Bomb That Could Sink The Market [View article]
    Thanks for an interesting article!

    The economic risk comes when a significant portion of the Junk Bonds default on interest payments. Then with risk being more than a concept the Junk will fall and yields rise.

    If enough volume occurs it could then cause systemic issues but that doesnt appear to be anywhere on the horizon. In fact those Junk bonds would typically be sold at much lower prices to another investor who would pursue claims against the issuer and end up with assets or equity shares.

    In my mind emerging market debt is a more common and more likely source of economic calamity.
    Oct 23 11:24 PM | 3 Likes Like |Link to Comment
  • Amazon.com misses by $0.21, misses on revenue [View news story]
    AMZN did better than I thought they would do. I thought they would fall short of a 20% revenue increase.

    I sold my shares in AMZN last quarter. Very few individual investors of AMZN exist. Should the correct valuation arise I will again let AMZN provide an excellent return for me.
    Oct 23 04:35 PM | Likes Like |Link to Comment
  • IBM: A Zombie Just In Time For Halloween [View article]
    Enjoyed the article and perspective!

    I wish IBM well and think it is fairly valued given its challenges. That is to say it could rise or fall from the current price. So the question is whether you fall in the following camps.

    Negative
    - every major division now shows decline
    - stock buybacks dont fix a declining business
    - after IBM runs a business into the ground they have to pay the buyer to take it
    - all confidence is now lost in the leadership, by employees, investors, customers
    - the next news is huge layoffs

    Positive
    - Still significant FCF
    - valued at a 10 PE
    - dollar impact magnified problems in Software and Services
    - stock buybacks have given IBM 2 years to transition the business
    - Sys & Tech (Hdwe) is most of the decline and least of profits

    I must confess I find it hard to believe that the management that has brought on steep 4% revenue decline for several years is capable turning the company around. So until a change is made, IBM will likely continue to decline until it is too painful to take anymore. I have seen comments that Rometty has 2 more quarters to prove her leadership.
    Oct 23 02:35 PM | 3 Likes Like |Link to Comment
  • The Coca-Cola Company - Bye-Bye Buyer's Remorse [View article]
    I own some KO which I am keeping but I do want to offer a perspective.

    KO needs to be considered in the present vs its history. Its history is a history of significant product growth and its present is somewhere near stable depending on your view.

    I like the stability in KO and as the market started to fall recently KO didnt fall and even advanced. KO is a stock that offers a level of stability and income. That is a reason to buy.

    Expecting KO to match its history is just not realistic. Many investors fall in love with a company that made them money in the past. KO really might be more a bond type investment for those who dont buy bonds.

    Another perspective I will offer is to be tough. If you want to own KO you will go through news periods when KO is considered a toxic killer and an ally of obesity. If that is going to affect you KO is not for you.

    Personally I consider KO a $40 stock.
    Oct 23 01:52 PM | 6 Likes Like |Link to Comment
  • Gundlach: Rates not going anywhere; oil headed lower [View news story]
    I like that Gundlach offers his opinions which are well thought out and worthy of consideration.

    I take more of a conspiracy angle on Oil believing that low Oil makes many people happy such as

    - Voters prior to election in US have more money, helping all incumbents
    - European leverage prior to Russian negotiations
    - defunding ISIS Oil revenue and large contributors to ISIS
    - even helps China
    - losers ISIS, Russia and Venezuela, such a shame

    Oil stabilizes by Jan 1

    My take is buy more Oil stocks when Oil drops below $80. It is not going to $70 and if it does I can live with the consequences. Might have to act quickly to catch Oil below $80.

    Regarding Bonds I agree with Gundlach. Which world leaders want to blow their budgets with interest eating all revenue? Which want slower growth? Which want economic recessions? The money pump question is only where it comes from to meet world economic growth goals.

    On the other hand I am not worthy of offering advise on bonds. I have been 100% wrong for my entire life always thinking rates would rise again during 30+ years of investing. Before that I remember telling my father that buying a 2 yr CD at 16% interest was a bad move!
    Oct 23 12:27 AM | 5 Likes Like |Link to Comment
  • IBM Is A Poster Child For The Value-Destroying Relationship Between Corporate America And The Federal Reserve [View article]
    I appreciate the opportunity to consider the authors perspective.

    Clearly share buybacks dont replace functioning as a business that grows value and maintains its viability.

    IBM has horrible disgusting leadership that immediately began to deteriorate the Systems and Technology group. In the latest quarter it became apparent that the Services group was deteriorating and the software group is showing signs of falling into decline.

    Meanwhile adding $12 billion in debt this year alone didnt help IBM use resources to turn around business. That said they wouldnt have known how to properly use the cash anyway by the looks of things.

    I feel sorry for the people who have to work in a continually negative environment. By the looks of things IBM with different leadership could turn things around. However they probably need something on the order of 100,000 less employees. Rometty was so proud that they had an in house meteorologist last year as an example.

    The point remains that IBM can right size the business. They probably need someone on the BOD that is young enough to not use an abacus and a CEO that is not ridiculously incompetent.
    Oct 22 08:23 PM | 1 Like Like |Link to Comment
  • Update: IBM Misses On Earnings But Is Still A Buy [View article]
    I just wanted to add that earlier this year the CFO stated in an earnings call that the debt was all financing and IBM was not borrowing to buy back stock which was a ridiculous statement given the Cash Flow Statement.

    Reading the earnings release and listening to the 3Q call the non financing debt is now stated as $17 billion. So I would just make the statement that IBM purchases of stock must slow while they make a difficult transition.

    A severe drop in cash flow along with increased debt does reduce flexibility. Burning through another $17 billion in about 6 months isnt an option moving forward.
    Oct 22 05:40 PM | Likes Like |Link to Comment
  • It's Still Time To Sell Verizon [View article]
    I was happy with VZ revenue, EPS and customer additions as reported.

    VZ will face a little competition but historically they have been able to fend off minor competitors. T is not in as good a position as VZ and a quick read of their results confirms that view.

    I will take an excellent dividend yield in a company that is growing its usage per customer and both its wireline (FIOS) and its wireless customers. It also bought back the other 45% of its wireless business accretive to 2015 earnings.

    For the record I have just been getting back into VZ after being out of it for several years. As the rest of the market has soared VZ is now a much better value with its 10 PE valuation.
    Oct 22 05:20 PM | Likes Like |Link to Comment
  • Disney Is A Great Long-Term Investment [View article]
    As a DIS shareholder I have been very happy with the results and the leadership.

    I would point out that DIS has excellent projected 5 year growth of 16.30% after growing at 19.36% for the past 5 years. At the same time the PE is reasonable for that growth at 20.92 and a 18.52 forward PE.

    On the other side DIS has hit on all cylinders with every movie seemingly a hit and huge ESPN and broadcast growth. Higher sports programming costs are pressuring the ESPN forward earnings. On the toys and licensing side the hits like Frozen should continue to drive increased earnings in that unit.

    DIS is a great company and is a fair value even if the growth doesnt hit the projected 16.30% rate. Looking at history I wouldnt dispute DIS growth rate but pragmatically an investment would be a hit on much lower levels of growth.
    Oct 22 04:22 PM | 2 Likes Like |Link to Comment
  • Update: Honeywell Q3 '14 Earnings Update [View article]
    Thanks for another excellent article!

    HON is one of the best managed companies in the world. It has provided excellent returns for my portfolio. For anyone interested, some positive attributes for investors include

    - a low PE 17.5 trailing ttm, 15.04 fwd PE
    - 10.3% EPS 5 year growth projected after growing 17.58% over the past 5 years
    - 2% dividend yield with 8% annual growth rate
    - a history of innovation

    So a relative low PE for a diversified company offering solid growth. After another increase in EPS projections HON has the wind at its back. As we probably move away from expanding PE multiples growth could become more valuable and HON is one of the few companies with growth.
    Oct 22 03:55 PM | 1 Like Like |Link to Comment
  • Gilead Sciences: Pricing, Politics And Profits [View article]
    Thanks for an excellent article!

    Harvoni is priced significantly below Sovaldi combinations and it is a large savings over allowing Hep C to progress and destroy a persons liver. I suspect total care costs for Liver transplant and care exceed $1MM when Livers are available. Death is probably less costly!

    Right now investors are investing in an easily administered, low risk in terms of side effects, cure for a major disease.

    A close inspection of competitive threats is just as bullish with less effective, more side effects and more difficult to administer regimens.
    Oct 22 09:25 AM | 1 Like Like |Link to Comment
  • Is Coca-Cola Still A Tasty Investment After Poor Q3 Results? [View article]
    I have some KO shares and was surprised to see it rise to where it was. I kind of thought it was worth about $40 sh.

    For a company with minimal growth why would you pay 23 PE? Secondly if you want to trade you surely can find a better company to trade.
    Oct 21 08:02 PM | 1 Like Like |Link to Comment
  • Gilead Sciences: Clear The Dockets And Settle With Merck Already [View article]
    Thanks for an interesting article!

    I am no expert but as an investor one needs to allocate an investment in GILD knowing that legal claims or an adverse side effect may develop in Harvoni. Risks are always present.

    Were I to be asked I would say defend the claims vigorously and let the parties get their rightful rewards. A part of the decision should consider that GILD and only GILD brought into the world a cure for a major disease saving many lives.

    I could sue tomorrow saying that I was the first to identify and use the word Harvoni several years ago. All in all I am comfortable with the risk I have taken in purchasing GILD.

    I just hope I am that comfortable after earnings next week.
    Oct 21 04:10 PM | Likes Like |Link to Comment
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