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jstratt

jstratt
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  • This Could Be The Catalyst To Push GE's Shares Higher [View article]
    Another article dreaming about GE price gains.

    Does it never end?

    What makes one think they have competent enough management to survive another crisis when they still use Commercial Paper ie short term funding to fund long term capital needs?

    With great fast moving leadership they are still trying to recover from 6 years ago!

    When a CEO is incompetent they suggest that they are reviewing his 20 year tenure plan.

    For their $146 bil Revenue they have $379 bil Debt!

    The share price today is where it first reached in 1996!

    I nominate GE for the scourge of capitalism award!
    Sep 25 10:51 PM | 4 Likes Like |Link to Comment
  • IBM And Inspur Become Partners As IBM Seeks To Avoid Regulatory Issues [View article]
    I appreciate the article but want to suggest a different interpretation.

    China has been removing IBM from its economy and this deal is merely a technology transfer to aid that goal. Regardless the IBM share price already reflects China.

    The dividend growth rate cannot be sustained at a 14% rate. At the same time I would point out that the purchase of roughly 10% of shares over the past year reduces dividend payments by that amount.

    After eliminating IBM from my portfolio 2 years ago I have been buying it back recently. Losses in hardware which makes up about 12% of profits will continue. They mask the incredible stability of the other 88% of the business.

    I am convinced IBM will meet its $20 profit in 2015 goal. Investors will increasingly put their multiple on that target and it should bump the share price well above the current $192.
    Sep 25 09:16 AM | Likes Like |Link to Comment
  • General Electric's Oil Business Set To Thrive In The Future? [View article]
    Perhaps it is just my own outlook but Oil prices suggest more a more difficult period for margins in that business.

    Literally thousands of articles are published each year extolling the great value of GE and most are written by anonymous authors or non shareholders that see great value. I can only suspect this is part of a GE inspired share price promotion campaign in one form or another.

    As a GE shareholder I think a case can be made to hold shares for its solid dividend yield. The Synchrony move will likely add value as well.

    Unfortunately on the opposite side GE has a recent history of predicting higher earnings than they deliver. Their current strategy is unlikely to provide much in the way of share appreciation.

    Some points to consider are

    GE over the past 10 years has had decreasing Net Margin %, decreasing return on assets %, decreasing return on equity and decreasing return on invested capital. These are all part of a trend that has not reversed.

    Shareholders earned the latest dividend a few days ago which will be paid on 10/27. The .22 dividend will likely get raised to .23c in mid December for payment in late January.

    Paying a 21.44 PE (ttm) for a company that has a 2.4% earnings growth estimate in 2014 seems like a poor gamble. This is especially true given stagnant world growth prospects.

    I purchased my shares in 2009 in single digits and recently have been scaling back my position in GE. GE first reached its current share price 16 years ago in Jan 1998.
    Sep 23 11:20 AM | Likes Like |Link to Comment
  • Long-Term Outlook - Bleak! [View article]
    I just want to add that much of the time that I have invested over the past 30 years things looked bleak for the future.
    Sep 22 04:20 PM | 2 Likes Like |Link to Comment
  • Report: EMC-H-P deal could still happen [View news story]
    My suspicion is that HPQ is preparing shareholders for the future. Shareholders cringe at the thought of HPQ making an acquisition and the separation of printers is a noteworthy structural change as well.

    Otherwise EMC would not be naming names which were under a confidentiality agreement.
    Sep 22 04:08 PM | 1 Like Like |Link to Comment
  • Long-Term Outlook - Bleak! [View article]
    The author gets too caught up in trying to time the market. For a retiree to sell all stocks and stay in cash is ridiculous.

    Stocks may have risk but cash guarantees a decline in purchase power.
    Sep 22 03:56 PM | Likes Like |Link to Comment
  • Why This Market Rally Is So Unloved [View article]
    I would submit that rallies are loved by those who dont sell out and despised by those who decide investments must be sold then have to watch markets rise.

    Unfortunately the ones writing articles and responding to the author are the ones who sold and need to justify the growing damages they caused. Those who remain invested have little need to write continuously about the edge of a cliff just ahead.
    Sep 12 02:53 PM | 1 Like Like |Link to Comment
  • Update: eBay - Down 6% Since The Apple Pay Announcement, And This Is Just The Beginning [View article]
    I would just make some room for the possibility that Apple payment will open the door to much wider digital and mobile payments and the exponential growth may float many boats.

    With the worlds hackers poaching our payment systems all the banks, credit companies, consumers and the US Government are ready to transition. Apple isnt just opening the door wider it is blowing the roof off the building.
    Sep 11 01:06 PM | Likes Like |Link to Comment
  • Gilead Sciences: The Shorts Did Indeed Get Squeezed -- What's Next? [View article]
    In just 19 days GILDs 3Q will be complete and GILD will report earnings on Oct 27.

    I personally dont think many naked shorts exist. My guess is the remaining shorts are volatility plays with positions on both sides.
    Sep 11 12:21 PM | 2 Likes Like |Link to Comment
  • Apple: Pay And Watch Offerings Unlikely To Move The Needle [View article]
    I enjoyed the article!

    My own unsophisticated take is that the Watch is more sizzle than steak (ie irrelevant to profitability)

    Payments could be a different story. While I agree the near term arithmetic calculations are small, it is the geometric payment potential that will determine the value and it could be substantial.

    The article did not mention that with a software upgrade older model phones can use Passbook which runs Apple pay and a very low entry price point may emerge soon.

    Just keep in mind that mobile payments may be poised to explode and calculating a daily lunch times iPhone 6 sales may not be the best view.

    What if the reality is payment grows 1000 fold in a few years and drive phone sales as well?

    I am just asking the question because I havent been in a hurry to buy a $600 billion market cap company. But sometimes I think arithmetically when I should think geometrically!
    Sep 11 11:59 AM | 3 Likes Like |Link to Comment
  • Exactly Where We Are In This Cycle [View article]
    Thanks for the chart!

    It is interesting and worthy of consideration. I stay invested at all times regardless of market moves. My moves tend to manage risk within the portfolio.

    So today I find myself shifting more toward long term core holdings and deep value holdings, shaving off some growth holdings. Just because a company has grown the past 5 years with huge moves doesnt predict the next 5 years.

    - I am allowing IBM, HPQ, VZ back into my portfolio
    - Keeping true growers GILD, PANW, etc and still looking for true growers
    - Lightened up on banking to core holdings incl BAC
    - Cant help but notice the drop in oil prices and weak world growth prospects

    Still I see stocks growing in value as central banks are buying, the world is buying and money is everywhere on the demand side with share buybacks and reduced supply on the supply side.
    Sep 11 10:37 AM | 1 Like Like |Link to Comment
  • Update: McDonald's Sales Leaves Me With Egg McMuffin On My Face [View article]
    I looked at MCD today. Every so often I try to look at a company that on the surface seems to be the worst possible investment. Unfortunately I did not see a beaten down stock that exceeds its business prospects.

    What I see is a company in decline management that is incapable of offering consumers a message of why to eat at their restaurants. A company incapable of saying we provide our customers with the tastiest food they choose, quickly and inexpensively. A company incapable of saying that people enjoy MCD more than ever before.

    Unfortunately that means many people think of MCD as the "Supersize Me" movie. So I put a value of 14 fwd PE X $5.55 which is my estimate of 2015 EPS = $78.

    MCD will at some point become a value play, but that time isnt anywhere in sight. For now I see declining sales, at best static productivity, and with a 1.5% share buyback just about static profits.
    Sep 10 01:13 PM | 3 Likes Like |Link to Comment
  • Update: Casey's General Stores Earnings Show It Continues To Devour McDonald's Lunch [View article]
    I like Casey's leadership and growth.

    That said if Caseys tripled its business it still wouldnt be a pimple on MCD's butt.
    Sep 10 12:34 PM | 1 Like Like |Link to Comment
  • GE: Why GE Will Win In Oil & Gas [View article]
    My take is you are seeing Jeff Immelts replacement in Simonelli within 1 year.

    First came the GE statement this summer that GE was reconsidering Immelts 20 year CEO tenure plan. Which was a stupid statement meant only to signal GE was looking to change CEO while expressing great confidence in Immelt.

    GE carefully constructs its PR message and I listened on CNBC as the story started out with a future job for Immelt after GE. Then Simonelli presented his vision and the story ended with a future GE reference post Immelt.

    I could be reading too much into this but I doubt it. Also the 1 year reference is a gamble as the typical GE director probably takes a copy of War and Peace when they go to the bathroom.
    Sep 10 11:15 AM | 4 Likes Like |Link to Comment
  • Disney: Terrific Company, But Stock Currently Overvalued [View article]
    DIS has treated me well and I am reluctant to sell. The PE while higher also seems reasonable for the expected growth level.

    The other side of the story however is that DIS has had such great performance over the past several years that I question the growth going forward. Essentially they have hit on all cylinders with every movie a success, huge increases in ESPN and network profitability and theme park attendance high.

    So when I look forward the ESPN unit is suffering as the NFL has raised the cost significantly. Theme parks would seem to have had peak profits and movies once in a while in the future will fail.

    I will likely sell 30% of shares and put it into more deep value plays. As an example HPQ and IBM have low PEs and have such high cash flow that purchases of say 10% of shares are likely to yield double digit gains.

    Earlier today as an example I calculated that with the current stock price and OCF HPQ could buy every share in 5.5 years. The assumptions are just too negative and I find the risk/reward ratio skewed in favor of value over betting that consumer spending will generate significant growth.

    In growth I still like GILD, HON, PANW and several others and I wont abandon DIS. At the same time world growth is anemic and cash flow plays have more visibility to this investor.
    Sep 9 11:12 PM | Likes Like |Link to Comment
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