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jstratt

jstratt
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  • 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
  • Gilead: Price Dip Offers A Strong Buying Opportunity [View article]
    I have to admit I am looking forward to GILD reporting 1Q earnings!

    I am an owner and properly bullish but I see a lot of indications that GILD may just blow away revenue projections. With GILD indicating GMs of 87%-90% this is a revenue story.

    As an example I will be surprised if revenues are below $7 billion and think they could be higher. What I think isnt of much importance. What really happens is important and I still think GILD should have a $135 target.
    Apr 6, 2015. 10:29 PM | 3 Likes Like |Link to Comment
  • AT&T And Rooting For Lower Prices [View article]
    Timo

    I agree if you eliminate pension obligations from T expenses it increases reported income. In other countries where pensions are a national obligation they do not have the same problem.

    I am not trying to be a T basher. At the same time tough questions may be warranted. Some things I dont understand about T are

    - Why it seems to have to spend so much more than competitors (ie $21 bil) annually to invest in its infrastructure with no business growth to show for it?

    - Why the 10%+ annual drop in Operating Cash Flow the past 2 years will not continue in 2015

    T is a good long term company and a good investment at some level. I do question whether that level is here and now.
    Apr 5, 2015. 10:16 AM | Likes Like |Link to Comment
  • AT&T And Rooting For Lower Prices [View article]
    Fred in reply to your ques

    I referenced the 2014 T Cash Flow statement where the Net Income for T was reported at $6.22 billion and the dividend payout was $9.55 billion.
    Apr 5, 2015. 09:41 AM | Likes Like |Link to Comment
  • 3M Is Undervalued On A Discounted Dividend Basis [View article]
    I am a long term owner of 3M so I obviously would like it to rise.

    I would want a better valuation to purchase additional shares. The past 5 year growth of 6.5% is actually accomplished with a slight tail wind. Given the currency impact on earnings I think 3M may face some earnings headwinds ahead.

    As a long term shareholder I tend to use a PE on 2015 expected earnings which is currently about 20. Using a long term view I have historically been presented with opportunities to acquire 3M below 18 on a regular basis.

    Great company and I am not selling, but I also try to maintain a discipline which allows for appropriate returns. My view of 3M is based on 25 years experience as a 3M shareholder.
    Apr 4, 2015. 08:20 PM | 3 Likes Like |Link to Comment
  • AT&T And Rooting For Lower Prices [View article]
    I understand the ramblings of a proud owner whose stock hasnt performed.

    My point is every good company has its time and T is a good company. It is not in my category of forever owns as it once was. My concerns are as follows

    1) Year after year T has to invest $21 billion back into the business just to try and break even on sales. They actually have to acquire companies to stay stagnant with minimal revenue growth.

    2) The dividend has exceeded profits for years and T was forced to lower prices in the past year to compete effectively. Competition is intensifying and I can only suggest that churn will rise and perhaps a 1% projected rise in revenue will turn to a loss.

    3) So NI at $6 billion and at best stagnant is supporting a $9.5 billion dividend. Which is why I say T is paying a 3.6% dividend and borrowing to give a 2.1% return of capital.

    I invest long term in growing businesses and that is not T. When T drops back to $25 share I might consider owning it because it is a long term stable business offering fair value. A dividend cut will likely precipitate the return to $25 a share.

    Does everyone really think T is a free lunch offering a high return over other alternatives with no additional risk?
    Apr 4, 2015. 05:54 PM | 1 Like Like |Link to Comment
  • General Electric Has A Diverse Business Model To Keep It Out Of Trouble [View article]
    So just from memory and no research to add exact numbers...

    GE takes a dividend of $6-$7 billion each year from GE Capital which allows it to meet earnings targets and pay $8+ billion in dividends.

    Regulators finally appear to be forcing GE to reduce its GE Capital assets which I would say GE has been giving lip service to for 7 years without making any real progress.

    I think the regulators are correct in doing so as we are now long in the recovery tooth and GE is still unprepared should a financial event arise, forcing risk to taxpayers again. Dont forget we live in a world swimming in debt some of which may come to be valued far below its face value.

    It is fine to examine news on some barely relevant things to valuation like a Lufkin plant. The bigger story is likely how much GE Capital lending is related to energy.

    GE shares are about where they were 18 years ago, yet each day someone discovers what a great value GE is and writes an article based on the most flimsy and minute (mahy-noot) logic.

    Were I acting as a regulator, GE Capital dividends to GE would stop until capital levels improved and better risk management was in place. Then GE could announce a dividend to shareholders based on its mismanaged industrial businesses.
    Apr 4, 2015. 10:12 AM | 7 Likes Like |Link to Comment
  • Bank Of America: Debunking The Merrill Lynch Myth [View article]
    I will add a few thoughts as I disagree with the conclusions of this article

    - Merrill is significantly undervalued in this article and would command a premium should it be on the market some day.

    - BAC has generated at its peak $129 billion of Operating Cash Flows. So lets not make silly suggestions that it is worth marginally more than its peak Operating Cash Flow.

    It is not a time when banks are valued highly with historically low NIM's and regulators rightly in my mind forcing attention on risk management and maximization of capital.

    Lets just acknowledge that this isnt a moment of excessive bank valuations. It is left to investors to decide if over a 3-5 year period banks value could be much higher and whether to take that risk.
    Apr 2, 2015. 11:47 PM | 1 Like Like |Link to Comment
  • A Pre-Earnings Update On Gilead [View article]
    Enjoyed the article!

    It will be nice someday when GILD begins to trade in a rational manner.

    I have a full position of GILD shares so I am not in the market to buy, but at the same time I would not sell any shares without proof of a longer term decline in revenues/profits. So I wait for earnings to validate my thesis.

    I do see both sides of the GILD pipeline with a rich history of billion dollar drugs brought to market and a solid pipeline. On the other hand much of the pipeline is improvements to keep current revenue streams going in HCV and HIV. Oncology is a bright spot but name a biotech that isnt working on oncology? The key in my mind is the pipeline doesnt currently have any valuation. I think it has some value.

    The problems affecting GILD valuation are as follows

    - Wide variances exist in the revenue potential of HCV and GILD HCV beyond 2015
    - Wide variances exist in the profit generated from HCV starting 1/1/2015
    - The pipeline gets no respect or valuation because it isnt sexy
    - Biotech investors dream of 300%+ 5 year valuations and that isnt GILD any longer while value investors havent warmed up to GILD yet
    - Investors want big gains and havent been burned in years by even a small decline
    - Today a Biotech company with the potential to deliver $15 billion FCF is worth 2 X a GILD that will likely deliver $15 billion FCF.

    Heck I have been wrong many times in the market. More often however I have taken a short term approach and cheated myself. I will let the weak hands fold!
    Apr 1, 2015. 11:52 PM | 4 Likes Like |Link to Comment
  • Bank Of America: Reasons To Be Bearish [View article]
    Enjoyed the article!

    I take a different view regarding BAC and believe it is severely undervalued. BAC has resolved many issues most of which were brought on by Ken Lewis ill advised purchase of Countrywide.

    I am not heavily weighted in financials but do have BAC and believe that it can soar over a 10 year period.
    Apr 1, 2015. 09:05 AM | Likes Like |Link to Comment
  • Gilead Versus Celgene: Value Play Versus Reinvestment Opportunity [View article]
    Enjoyed the article!

    I own both GILD and CELG, and over the weekend reviewed the valuation of those and my other biotechs.

    GILD is at my maximum investment level as I feel it is a great value. At the risk of repeating some comments I have previously made an 11 PE assuming 1st quarter numbers meet expectations is too bearish.

    Biotech investors dont really see GILD as an avenue for biotech type growth any more and value investors look askance at biotech names. So GILD is like a man without a country at the moment. I note that a couple of 100+ Million money managers I have run into this year seem to have minimal knowledge of GILD as an example.

    Analysts meanwhile are wildly positioned on GILD some seeing great decline while others great growth opportunity. Which makes for a great opportunity in my eyes. I am comfortable waiting for GILD to be recognized.

    On CELG I am a happy LT owner but would be interested in adding at or below $108. I find 2015 expected results to generate a PE of 24 which is fair for an expected 25% 5 year annual growth. Both Revlimid and Otezla are growing rapidly reducing near term earnings risk.

    Where I think most investors are failing is in treating both GILD and CELG as short term trades. Both have a winning track record in a growing business and even if CELG was a little highly valued today, in 10 years an outstanding return should be expected.

    I like BIIB as well but find most of the $10-$50 billion market cap biotech companies overvalued. Preservation of capital has been forgotten in the chase for growth.

    Mar 31, 2015. 11:37 PM | 5 Likes Like |Link to Comment
  • Gilead Sciences Faces An Uncertain Future After Patent Loss In India [View article]
    Just a few points to make

    I havent seen any valuation for 3rd world sales included in GILDs numbers as it is mostly irrelevant. In G7 countries and some others, patents will be respected.

    GILD's ttm PE after 1Q gets reported will be about 11 if EPS expectations are correct. The valuation suggests GILD will lose a large portion of its Hep C profits in the years ahead. As a GILD shareholder I am betting against that view.

    I remain bullish on GILD, its earnings and its future prospects.
    Mar 30, 2015. 04:47 PM | 5 Likes Like |Link to Comment
  • Does Cisco Systems Belong In A Dividend Stock Portfolio? [View article]
    A few thoughts on CSCO...

    It doesnt seem to me that CSCO management should be held accountable for its shares being hugely over priced in the tech bubble. That was a function of the time and CSCO did not force investors to buy shares.

    I own a few shares of CSCO and note that over the past 10 years it has doubled its revenue and grown EPS at about a 7% rate over the past 5 years. It seems CSCO is continually threatened by obsolescence and yet keeps on chugging ahead. The forward PE of 12 reflects the uncertainty despite analysts projecting continued growth.

    Last fall I significantly scaled down my technology investments keeping a little CSCO, ORCL and a couple others. I just no longer understand most technology valuations as well as I should.

    I do admire John Chambers for guiding CSCO with vision thru what has seemed like a cyclone during the past 10 years. Perhaps I am in the minority as I have heard lots of criticism, but I dont think anyone else would have done better.

    Even today few people have a good handle on the value of CSCO!
    Mar 29, 2015. 08:51 PM | 1 Like Like |Link to Comment
  • Paychex: Q3 2015 Earnings Review, Out-Performance Should Continue [View article]
    Thanks for an interesting article!

    I own and like PAYX because it is well managed, growing an excellent long term investment.

    I think I will wait to add more to my position but I do want to add to my position when the opportunity arises. Both V and ADP have been good to me over the years as well.
    Mar 29, 2015. 05:12 PM | Likes Like |Link to Comment
  • A Buyback Or Biotech Bubble? [View article]
    a few thoughts...

    What is wrong with stock buybacks that are well planned with capital beyond LT business needs? eg Apple or Exxon. How much is Apple going to earn on $100 bil sitting in cash?

    Cyclical businesses like GM may be a different story and undoubtedly some examples of bad buybacks will emerge.

    On to biotech investing I own several mostly as long term holdings. The potential in biotech is large, hopefully as large as the value already priced in.

    Some of my favorite biotechs are up 500% - 1000% in 5 years. If you just now looking to invest in biotech you might heed the words of Mike Tyson who famously stated "everyone has a plan until they get punched in the face"
    Mar 29, 2015. 09:05 AM | Likes Like |Link to Comment
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