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  • Social Security At 70: Always A Bad Idea [View article]

    I am not saying that the government is granting untold gains by waiting. Largely a person is getting an equivalent value whenever they take it except for perhaps the increased life span if that occurs.

    My point is that for those who have accumulated assets and the ability to delay SS they should consider it strongly. The ability to predict several decades in the future is highly uncertain. I would prefer to structure my benefit to come when I might need it most.
    Aug 31 09:59 PM | 1 Like Like |Link to Comment
  • Disney: Guardians Of Earnings Growth [View article]
    I have been considering what to do with my DIS.

    After riding it a long way I wonder if it isnt time for a movie to flop. For the law of good fortune to reverse a little.

    Part of my concern about DIS is short term with ESPN experiencing rising costs and reduced profit. That unit makes up 45% of DIS. Then the movie unit with summer box office industry wide down 25% this summer and no summer movies I find it hard to see growth in that unit. Theme parks, consumer products and interactive should do well.

    I Like DIS long term prospects but question a 5 year growth rate above 10%. DIS has not had a single thread of adversity in a long time. Therefore I am likely to trim my holdings and take some profit.

    Sometimes I take profits when everything looks good. Otherwise I might have to take them when things are less good.
    Aug 31 09:35 PM | Likes Like |Link to Comment
  • Verizon: Another High-Yield Telecom For Current Income [View article]
    Enjoyed the excellent article!

    I moved from T/VZ being the largest position in my portfolio by the end of 2008 to eliminating all of it a couple years ago as it just didnt have return opportunity. Recently I have begun picking up VZ shares as I find the shares undervalued to the market and historically undervalued.

    What you get with VZ today is a much more profitable company that due to the merger is carrying a lot more debt. My guess is they will be conserving cash short term.

    At this point in the economic cycle, growth has been at a premium while a steady growing performer like VZ is out of favor. Over the next 5 years I look for 7% earnings growth and a slightly increasing dividend as the author describes.

    In return should the market drop I will have a good dividend and losses in share price of perhaps 50% or less of an S&P500 drop.

    So with the undervaluation of shares at present I look for a 5 year Total Return of 9-10%. I look for a market downturn within 5 years and I will have some added protection with steady income.
    Aug 31 09:56 AM | 1 Like Like |Link to Comment
  • IBM: A Solid Investment For The Frugal Investor [View article]
    To be clear I have invested in IBM and I am looking to add to it after having sold a significant position 2 years ago so I am bullish.

    I am bullish because IBM is a stable high cash flow business that has bought back about 10% of its shares in the past year. So I project about a 10% increase in earnings.

    On the other side I also see more risk than you do as IBM has been bleeding revenue at about 4% annually since Rometty took over as CEO. You should recognize that borrowing heavily to buy back shares and large drops in revenue along with a possibly incompetent CEO presents risk. If you doubt that look at HPQ a few years back.

    Trying to fully recognize both the risk and reward opportunity will make one a much better investor. My base case is $17.90 FY2014 earnings x 12 PE = $215 in January.
    Aug 30 02:25 PM | 2 Likes Like |Link to Comment
  • Coca-Cola: Should Investors Consider This Stock From An Earnings Quality Perspective? [View article]
    I appreciate a different perspective taken by the author.

    Absent opportunities such as takeovers or risks such as legislation to increase taxes on carbonated beverages I will assess the core business of KO as a cash flow story.

    With 7.5 billion FCF / $183 billion market cap KO could buy back about 4% of its shares. Since I dont see revenue growth and KO is very productive I wont add anything else.

    So a high quality annual earnings growth of 4% is my expectation. That is higher than this years 0% but lower than the analysts 5 year projection of 5%.
    Aug 30 02:07 PM | Likes Like |Link to Comment
  • Investors In GE Should Watch Out For This Sub-Industry Peer [View article]
    GE is not a bad value today.

    It was a great value when I bought it at $7.40 in 2009.

    However if I had known that their planned recovery period wasnt 2-3 years but 7-10 years I would have moved on. I also didnt know about the Immelt 20 year tenure plan.

    Still my guess is above average performance for the next year.
    Aug 29 01:39 PM | 1 Like Like |Link to Comment
  • AT&T And Consolidated Edison A 'Tell' Of 2 Champions: Part 3 [View article]
    Chuck is an excellent author and I appreciate his work even if I disagree with his conclusion.

    I would note that T on a cash flow basis in 2013 brought in $11.7 billlon after investments to try and stem the drop in revenue. Of that $9.7 billion was spent on dividends. I should add that T borrowed $9.1 billion to buy back shares in 2013 to keep earnings per share positive.

    A new accounting policy should help revenue turn slightly positive unless they get enhanced competition. I would add that T share price is about where it was in 2006 and up to 60% of where it was at the Jun 1999 peak.

    To be fair T is not overvalued today in my mind but does have risks.

    My recommendation would be better investment opportunities exist including VZ which has the best wireless network and the best fiber network. Even at the same or higher dividend yield better opportunities exist.
    Aug 29 01:09 PM | 4 Likes Like |Link to Comment
  • Social Security At 70: Always A Bad Idea [View article]

    I appreciate your view! I too plan to be able to live off my assets and in fact intend to keep growing assets throughout my life.

    However I also dont want to ignor the fact that at age 80 SS provides the majority of income for 76% and 90%+ of income for about half of SS recipients. Those numbers are rising as well.
    Aug 29 12:41 PM | 3 Likes Like |Link to Comment
  • IBM: A Solid Investment For The Frugal Investor [View article]
    Talk about damned by faint praise!

    "Investments should have the ability to preserve wealth and possibly produce a return..."

    Your boldly going all in on this recommendation!
    Aug 29 10:51 AM | Likes Like |Link to Comment
  • Social Security At 70: Always A Bad Idea [View article]
    I am choosing to wait until 70 years of age to take SS.

    The 8% guaranteed increase in benefit each year is an advantageous investment. If on the open market a Treasury bond or government guaranteed annuity yielding 8% were offered it would be swamped and the banks would be first in the buying line.

    While I have been a good investor and had the good fortune to accumulate assets, that doesnt mean that at age 80 I will be as capable financially and at that point I would like guaranteed income.

    When I look at the advances being made in medicine I can only conclude that life spans will continue to increase and perhaps significantly.

    Part of my strategy in life has been to diversify investments among RE, Stocks, Bonds and with SS and a small pension, Guaranteed Income. Further I have noticed that many people who start out retirement with substantial assets and live say 30 years end up with few assets.

    Just curious what a burst of inflation would do to the authors plan. Or the deflation event followed by a burst in inflation that has presented throughout history.
    Aug 28 04:30 PM | 4 Likes Like |Link to Comment
  • Bank Of America - Free To Power Up To $20 By Next Year [View article]
    I enjoyed the article!

    The article and its logic appear to be fair and I continue to hold my shares in BAC.

    That said I am not a banking industry bull at this time. The drop in the 10 year rate is not bullish for banks as an example yet banking stocks have risen.

    Articles suggest the Fed raising short term rates in the future is bullish. Yet it would create a flat yield curve at the moment.

    I own a few select banks including BAC. At the same time I am underweight financials and the industry valuation could be a stronger influence than the company valuation near term is my opinion.
    Aug 28 03:46 PM | Likes Like |Link to Comment
  • Gilead: Let's Make A Deal [View article]
    I just want to add that at $107/$8.00 FY2014 = 13.41 PE at year end.

    That is a bearish view to value GILD below LLY and MRK just slightly above PFE on FY2014 PE ratio.
    Aug 28 12:54 PM | Likes Like |Link to Comment
  • Gilead: Let's Make A Deal [View article]
    Really an outstanding article!

    The more I learn about Bio the less I know but I will make a few comments.

    - GILD is unlikely to go old school and try to buy a BMY as an example

    - GILD should have further near term explosion in Sovaldi sales and a successful 1st to market advantage that will be hard to ignor

    - Not much was mentioned about GILD pipeline. Should I assume you are unimpressed?

    - about a month to end of 3Q and incredible excitement should build. The 11 fwd PE adds to that even if it would be an accurate longer term valuation estimate.

    - We live in a world that dreams of hitting Home Runs. GILD is a HR story!
    Aug 28 09:51 AM | 6 Likes Like |Link to Comment
  • Can You Live Off Of Dividend Growth Income In Retirement? [View article]
    Sounds like you provided excellent guidance.

    With a realistic view of where they are headed I am sure they will get there.

    I do wonder however about LLY with EPS over the past 5 years down -7.95% annually and forward 5 year earnings growth projected at 1.27%. Perhaps HON and DIS with 10%+ EPS growth both in history and forecasted would do better.

    In fact since the turn of the century in 2000 LLY is down -11.35%. The same is essentially true for PFE and the other old pharma. I would suggest using a stock screener for earnings growth.

    Another strategy might be to allocate 10% of the portfolio to growth. As an example when I heard GILD had developed a cure for Hepatitis C and sales were skyrocketing as 150MM+ people are afflicted I bought some. Wow! Compounding growth can really make a difference.

    Aug 27 08:09 PM | 6 Likes Like |Link to Comment
  • IBM: The Good, The Bad And The Ugly [View article]
    The key to evaluating IBM is to convert it to a per share basis. When you buy you are buying a share. The revenue per share is $93.63 today vs $79.85 in 2011. Over 2.5 years that is a 6.8% increase in revenue per share.

    Operating cash flow per share is similar $17.23 today vs $14.82 2.5 years ago. That is about a 6.5% annual increase.

    IBM has laid out clearly what they intend to do which is earn $20 per share EPS in FY2015.

    The non hardware portions of IBM are essentially stable and highly profitable. It is the Hardware business (Sys and Tech) that generates the bad headlines. That unit comprises 13% of revenue and 9% of profits.

    Finally the debt! A year ago IBM finance unit debt was $24.9 billion and it has grown. So the non finance debt is less than the annual FCF. Therefore at extremely low multiples buying stock has virtually assured that IBM will meet its 2015 goal.

    I now own a few shares after selling all IBM shares a couple years ago. If you will calculate on a share basis things look much different than the headlines. Even at todays low valuation levels $20 sh x 13.14 Trailing PE = $262.80.
    Aug 27 07:25 PM | Likes Like |Link to Comment