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jstratt

jstratt
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  • General Electric: Sale Of GE Capital Real Estate Assets And $50 Billion Share Repurchase Plan Open A Buying Opportunity [View article]
    I will just make a few points

    - That jump from $1.10-$1.20 to $2.00 EPS ? really!

    - I remember when GE bought all that RE at 2006-7 peak prices

    - Freezing the dividend for 2 years doesnt match your EPS estimates

    - A 17% share reduction vs losing 35% of profits

    Finally I think the decision to restructure GE is bold and deserves an award. Since GE and its directors have fought this action every step of the way I give the award to the SIFI regulators. They realized that after 7 years of minimal action change would only happen if they put a stop to it and they did.
    Apr 14, 2015. 09:13 AM | 2 Likes Like |Link to Comment
  • GE: Setting An Example [View article]
    I was a shareholder back then and I would remind you that during the Immelt tenure GE shares are still down 41% vs the S&P500 which is up 68%.

    Almost any other alternative would have provided a dividend or interest as well. If mediocrity or decline makes you happy keep defending GE. Just note that your dividend at best has just been frozen for 2 years because of the expected decline in earnings.
    Apr 12, 2015. 04:41 PM | 1 Like Like |Link to Comment
  • GE: Setting An Example [View article]
    Since you have such admiration for Immelt perhaps you should become a shareholder of GE.

    The reason I know you arent a shareholder is because if you were you would be livid about the lack of returns rather than celebrating his 20 year CEO employment plan.

    Isnt it amazing how very little happened over 7 years until the SIFI regulators got involved?

    Perhaps you should ask GE for a raise!
    Apr 12, 2015. 02:00 PM | 2 Likes Like |Link to Comment
  • Bank Of America Has 35-40% Upside, Reports Next Week [View article]
    Thanks for an interesting article!

    I am long BAC and believe it to be undervalued. Still I would caution that I am not sure I see any current evidence that this earnings report will initiate a move.

    As far as the regulators go, they were embarrassed last year by a huge error in BAC capital literally days after they approved BACs capital plan. So I am not expecting them to bestow praise on BACs internal controls.

    The key is BAC is well capitalized and undervalued. A patient investor should benefit from that combination.
    Apr 12, 2015. 01:39 PM | 3 Likes Like |Link to Comment
  • General Electric: A Golden Dividend Growth Opportunity Is Never Offered Twice [View article]
    Tell me you are kidding!

    They were dragged kicking and screaming into this by financial regulators.
    Apr 12, 2015. 10:33 AM | 5 Likes Like |Link to Comment
  • Moody's Has A Cow, Slams GE's Masterful Financial Engineering [View article]
    Enjoyed the article!

    I dont find the $210 billion in mostly Airplane leases/Health Equipment and Energy Infrastructure to be overly risky. Yet I will add that $1.5 billion of projected annual profit from such enterprise is insufficient.

    GE is becoming much easier to value with existing ongoing business earnings for 2015 at $1.15 plus .15 of retained GE Capital businesses for $1.30 of 2015 EPS. I put an 18 PE on that and get $23.40 of share value just as an easy quick computation.

    I should add that after reading the GE presentation it appears that shareholders are signing up for another 4 years of GE raising its capital levels and providing minimal growth. As an example the profits from the remaining financial units are projected as flat.

    Moody's is playing to its audience, but also knows that creditors are better off with this plan that reduces risk for all parties.
    Apr 12, 2015. 10:10 AM | 5 Likes Like |Link to Comment
  • What I Am Looking For From Gilead Sciences' Earnings Release [View article]
    I think you make an excellent point.

    While it isnt possible to predict actual new products and revenues, one can note the following...

    - Biotech is a long term growth industry
    - GILD has a history of developing many billion dollar drugs
    - Hep B and NASH look like great opportunities
    - Oncology is promising at GILD
    - The leadership and skill is in place to grow long term.
    - The pipeline is active and robust
    - In a competitive world many risks also exist

    My conclusion is that GILD should be included in a portfolio of companies that offer growth. Given the valuation and the long term opportunity I judge it to be a good risk to take for long term investors.

    As with any investment you must manage your risk and risk tolerance.
    Apr 11, 2015. 11:20 AM | 4 Likes Like |Link to Comment
  • A Nice Day To Be Long GE [View article]
    I am glad for the long suffering shareholders of GE. Mostly however I am happy that a major US employer and corporation is finally restructuring back into a long term sustainable structure.

    It is probably time to sell my last few remaining shares of GE. A time will come to reinvest in GE but it isnt now. Here is why!

    The RE sale sounded impressive at $26+ billion until one hears about the $16 billion in write downs they will take immediately. Sounds more to me like assets that were being carried at nearly 40% above fair market value.

    When the smoke clears it sounds like GE will buy back 17% of its shares and eliminate 35% of its earnings. Then it will freeze the dividend for at least a year.

    Shareholders can thank the regulators for demanding action from GE. I view it as important for GE to have scaled down its financial risk.

    Only in GE land is a 40% loss on RE considered a great success!
    Apr 11, 2015. 09:03 AM | 7 Likes Like |Link to Comment
  • What I Am Looking For From Gilead Sciences' Earnings Release [View article]
    I would just say that my expectation for GILD is to have 2015 revenue of $29 billion and EPS of $10.00 per share.

    I could be wrong but I believe revenue will stay above $7 billion each quarter in 2015. Logic tells me the HCV market is increasing in the US and World revenue is kicking in. What GILD did with 1Q results on 2/2/15 was leave room for negative events. Instead GILD has marched ahead quietly and consistently each week. Analysts are starting to move back toward higher revenue numbers but are afraid to be caught overestimating EPS.

    When I look at EPS I see $2.50 per quarter as a good estimate. I enjoy seeing lots of analysts and now amateur analysts lower their estimates in the name of conservatism. I am fortunate as I dont have to be viewed as conservative or shade my numbers to avoid criticism. I live quite well basing my opinion on reasonable estimates.

    As a recap in November the issue was perhaps GILD revenue had peaked in 2Q which we now know was false. In December ABBV was going to steal 20% of the market and we now realize that was false. We also confronted the concern that several competitors would enter the market in 2015 which we now know is false. Now the competition in 2016 is being called into question.

    I will leave with just one last comment. It is easy to underestimate the drive of someone afflicted with a deadly disease and the drive of their friends and family when a cure is available.
    Apr 10, 2015. 11:18 PM | 10 Likes Like |Link to Comment
  • General Electric: A Big Move [View article]
    It finally seems that GE has begun taking moves to properly structure itself for the long term. What does it mean?

    - It will be a challenge to replace nearly 50% of GE's profits

    - The initial stock surge from this move while understandable will likely evaporate

    - 2018 is up to 4 years away so I would recommend GE not wait to get value from these assets as they have strong value at present.

    - An upside for shareholders could be the SYF share exchange

    Unfortunately I dont see great near term value to GE shares except through risk reduction. At the same time the path toward a brighter future for GE is being laid.
    I am not sure an entry point for an investment in GE will be in 2015 but that time will come.
    Apr 10, 2015. 09:35 AM | 3 Likes Like |Link to Comment
  • Is General Electric Finally Getting Some Respect? [View article]
    The $30 billion sounds suspiciously close to the $40 billion of RE GE Capital bought at peak prices just before the collapse in 2008.

    The Alstom deal is another example of the great GE financial acumen as the French government owns Alstom and GE gets to operate it.

    With the regulators finally appearing to demand action from GE to increase its capital I expect a deal will go through. Debt of $365 billion either needs to be reduced or equity needs to be increased. Currently I note $2.66 of debt exists for every $1 of equity.

    After all a 1.96% return on assets is miniscule. The operation of a SIV was horrible. The collapse of GE after financing itself on 30 day commercial paper was rapid in 2008 until saved by the government.

    The real issue is that after 18 years of decline GE directors cannot bring themselves to act in any comprehensable manner to replace Jeff Immelt and bring this dark chapter of GE to an end.

    Through it all another of the daily articles about the great GE prospects is written on almost zero relevant data.

    In a predictable manner some will comment that a previous century's CEO is responsible for all the troubles. Others will suggest that having bought shares 50 years ago they have profited in an excellent way.

    I have profited handsomely from GE selling most shares for $40 in late 2007 and buying back at $7.40 in 2009. I have since sold my holdings. Good luck if you buy GE. It could do well... but it carries more risk than most understand.
    Apr 9, 2015. 11:43 PM | 2 Likes Like |Link to Comment
  • Biotech Beat: Valeant To Continue Its Strong Run [View article]
    I would add that just for my own investment purposes I draw the following conclusions.

    - VRX is a good company

    - A 75 PE for 15% forward growth is expensive and I think I will wait for an opportunity to invest in the future.
    Apr 8, 2015. 10:48 AM | Likes Like |Link to Comment
  • Merck HCV combo med tagged a Breakthrough Therapy for HCV-4 and HCV-1 dialysis patients [View news story]
    This doesnt sound like it is very important. I am no expert but HCV 4 has only 20% of HCV patients and is concentrated in Africa. Meanwhile patients with end stage Kidney disease would seem to be a very small population.
    Apr 8, 2015. 08:33 AM | 3 Likes Like |Link to Comment
  • Gilead: Price Dip Offers A Strong Buying Opportunity [View article]
    I meant to add that it was an excellent article!
    Apr 6, 2015. 10:38 PM | Likes Like |Link to Comment
  • Gilead's CEO John Martin: Worth The Money? [View article]
    Thanks for an interesting article!

    Martin is worth every penny for shareholders who have had the confidence to own the shares. My concern would be for CEOs like at IBM or GE that have liquidated shareholder value and continue to get huge pay packages.

    Anyone who held shares like he did over this century would have huge gains of 4600% or some equally ridiculous level of gain.
    Apr 6, 2015. 10:35 PM | 2 Likes Like |Link to Comment
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