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  • 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
  • AT&T: A High-Yield Telecom For Current Income [View article]
    Most investors I think would benefit by purchasing VZ instead of T. VZ has a slightly lower dividend yield of 4.2%. Here is why

    - VZ has the best wireless network and the best fiber network with FIOS

    - VZ has better 5 year earnings growth rates both past and forward looking.

    - VZ has much higher FCF of $28.29 billion

    - I notice Berkshire Hathaway takes the same view and has been buying shares of VZ.

    After several years of underperformance I do think large cap telecom is below historical fair value. T just has too many questions surrounding its future returns including possibly trying to buy DTV to support its dividend.
    Aug 27 06:52 PM | 6 Likes Like |Link to Comment
  • Can Hewlett-Packard Deliver More Upside? [View article]
    Interesting article!

    I bought more HPQ prior to earnings and intended to sell those additional shares. I think I will hold on as I view HPQ as a cash flow story selling now at just above 10x FY2014 earnings.

    In 2013 Cash flow from Operating activities was 11.6 billion. Reinvestment of roughly $3 billion, $1 billion dividend, $1 billion of shares purchased and $5.5 billion of debt paid down.

    Now at this point in 2014 Cash is nearing the debt level and Operating Cash Flow of 11.5 billion might look more like $4 bil Reinvestment, $1.2 bil Dividends, $4 billion stock repurchase, $1.3 billion Debt payoff and $1 billion excess cash.

    All of a sudden you have up to 6% earnings increase from share repurchase, 2% productivity, 2% dividend and you are getting a 10% return which justifies a higher share valuation.

    Anyway should HPQ drop I think the company will be an active buyer of shares supporting your investment. You may not get rich but a good return on a lot less risk than the average alternative. Great cash flow has its advantages!
    Aug 27 06:14 PM | Likes Like |Link to Comment
  • Why I Will Start Social Security At Age 62 [View article]
    I want to add another thought regarding SS.

    SS is an asset that some say is worth $350k. It is a complicated asset and some married people may best be served by taking one at 62 and the other at 70 as an example.

    Given that this is a major asset it should be worth getting a professional analysis or at least devoting significant time to understanding SS. The lifetime income can vary by $100,000 depending on your choice.

    PS A divorced spouse in some circumstances can delay their SS and get SS from the prior spouse early.
    Aug 27 08:24 AM | 2 Likes Like |Link to Comment
  • Is It Time To Wake Up And Smell Burger King's New Coffee? [View article]
    Sorry, I have no intention of setting foot in a BK again.

    It is wrong for US companies to move to a different country to avoid taxes. When I think of BK I recognize that I am going to get a tax increase.

    You see someone has to pay taxes. The people who are on this site as an example have generally been successful in life and saved money for a bright future for their families.

    The world is a much better place because of the inventions and ingenuity of the US. We are in a very special place in a special time. The march of capitalism and freedom championed in large part by the USA has raised living standards across the world.

    Some of your relatives probably fought and died for our way of life. I will let other people eat shitty BK products. The only thing I have to say to BK is GO TO HELL!
    Aug 26 10:34 PM | 1 Like Like |Link to Comment
  • Gilead: Earnings Forecast Justifies $140 Price Target [View article]
    Good article!

    If you cant buy one of the greatest cures developed in our lifetime and its exploding sales what can you buy?
    Aug 26 01:44 PM | 2 Likes Like |Link to Comment
  • High-Yielding StoneMor's Value Masked By GAAP Reporting Complexities [View article]
    Great article!

    It was very well constructed and explained.
    Aug 26 11:47 AM | Likes Like |Link to Comment
  • Why I Will Start Social Security At Age 62 [View article]
    I just want to point out that I intend to take SS at 70 and get an 8% annual increase in benefit. Why?

    I retired at 55 and I have my retirement in buckets. The years after I turn 80 when I may not be as financially capable I want guaranteed income maximized. In fact I may use some of my excess stock gains to add a deferred life annuity which for 10k I can get $3600 of additional income at 80.

    If you cant afford to delay SS you should take it. If you can afford to delay SS you will get 77%+ more income when you might need it. I should add you might live a long life as it is scary some of the medical advances that are taking place. Life expectancy will continue to grow!

    PS I might even get a room with a window in the retirement home at 84 or a nicer place to live out my days.
    Aug 26 11:10 AM | 7 Likes Like |Link to Comment
  • Burger King And Tim Hortons: More Than Just A Tax Inversion? [View article]
    Someone else can eat their shit! Boycott!
    Aug 26 10:51 AM | Likes Like |Link to Comment
  • Nobel Prize Winner Shiller Is Damaging His Reputation With CAPE Ratio Talk [View article]
    Yes I think that got published in Jun, well after the fact.

    I remember clearly buying stocks in March 2009 and the Shiller indicating stocks were still to high and it was not a good idea.
    Aug 25 06:40 PM | 1 Like Like |Link to Comment
  • A Few Reasons Why IBM Can Recover From A Flat Performance [View article]
    Thanks to the author!

    I agree with the conclusion but differ on the calculation. First I will ask a question Is IBM growing Revenue?

    Most will immediately answer no that its revenue is falling. I would answer that revenue per share is $93.63 vs $79.85 in 2011 for an increase of 17% over 2.5 years or about 6.8% annually.

    Now another queston. What valuation should one give to a company with large FCF that has been growing revenue per share 6.8% over the past 2 years and earnings at 11.37% over the past 5 years, and projects 8.7% earnings growth over the next 5 years?

    Last year IBM had $24.9 billion of finance company debt so the current business debt of IBM today is less than $10 billion or to put it different likely less than the annual cash flow.

    The biggest negative on IBM is the Sys and Technology (Hdwe) division. This division only drives 13.5% of the revenue or 9.2% of the Gross Profit. Yet this division is shaping the view of IBM in a very negative manner and I think IBM should deal with it rather than let it slowly disintegrate.

    My conclusions regarding IBM are

    1) I believe IBM will meet the $20 2015 non GAAP EPS goal
    2) I believe IBM is using debt wisely to raise shareholder equity
    3) IBM is an insanely profitable cash flow generator
    4) I do worry about the CEO capability

    When all is said and done IBM stock 18 months from now should be valued above $240 per share for a 17.5% annualized return and with dividend a 20%+ return.
    Aug 25 06:31 PM | Likes Like |Link to Comment
  • How Johnson & Johnson Is Helping Me With My Coca Cola Investment [View article]
    I would suggest the author is using a torturous logic to justify buying KO.

    How about acknowledging that you dont want to take much risk and you feel comfortable that KO can use its large cash flow to grow earnings by at least the 5% projection of analysts and get a 2.9% dividend as well. Perhaps you would recognize that preserving principal is more important than extra return.

    That at least would be logical.
    Aug 25 01:13 PM | 3 Likes Like |Link to Comment
  • Transocean's 8% Yield Can't Even Help A Tough Offshore Drilling Complex [View article]
    I continue to watch RIG and I am looking for an entry point. My comment is to the authors statement

    "I will admit, this may have been the worst trade I've ever made, but at this point I'm committed to it."

    That is a dangerous statement given the history of the Oil industry. I am not predicting a crash but history tells us they can be brutal and last much longer than one would expect.

    Just remember people dont drill for Oil or need rigs in an Oil glut.

    I remain hopeful that I can invest in RIG for great returns. For that to happen I need to see an end to the drop.
    Aug 25 08:16 AM | 2 Likes Like |Link to Comment
  • What If The Fed Has Created A Bubble? [View article]
    Of course the Fed has floated assets on lower rates. So has every major economy in the world. If they hadnt we would have had massive deflation like in the Great Depression.

    Will stocks and bonds go down? I would say yes but it may be in a few years or tomorrow. I have always believed that one needs to stay invested. Getting too conservative and selling out of investments may be as dangerous as over investing.

    If you keep your mental state out of a depression things will work out.
    Aug 24 10:37 PM | Likes Like |Link to Comment
  • Why Hewlett-Packard Stock Is Still A Good Investment Opportunity [View article]
    Enjoyed the excellent article!

    I will just add some thoughts on why I am holding HPQ.

    HPQ is undervalued and the huge cash flow signified best by the EV/EBITDA of 5.6 will force the stock higher. In the quarterly call HPQ indicated it will buy $2.5 bil in shares in this quarter amounting to just under 4%. In the short term the value from HPQ will come from a forward PE rising to 11, share buybacks and investor realization that HPQ is not going to collapse. On that last point HPQ has rapidly improved and cash nearly equals LT debt.

    Longer term leave some room for the thought that HPQ could transition into a company with revenue growth. I dont mean a one quarter positive during a PC refresh cycle but a consistent longer term top line growth. That is far enough away that I wouldnt invest on that basis. Still I see the seeds being planted.

    The best view of HPQ value is to convert everything to a per share basis. Revenue, Cash Flow, Earnings and even Cash and LT Debt. It will help investors understand better what is happening when encountering mixed information.
    Aug 24 11:32 AM | Likes Like |Link to Comment