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  • A Fundamental Analysis Of American Realty Capital's Likely Dividend Cut [View article]
    Mike, the difference is that the rent is not collapsing. Oil prices have dropped below many of the deepwater breakeven points. I think you are confusing a sea change with a wave. If ARCP suddenly announces that rents have collapsed then $6 is reasonable. If ARCP affirms anything close to Brad's numbers, it will likely rally, even with a small dividend cut.
    Dec 8, 2014. 10:30 AM | 4 Likes Like |Link to Comment
  • A Fundamental Analysis Of American Realty Capital's Likely Dividend Cut [View article]
    Gratian, I enjoy reading your comments, but I don't think that is a fair depiction. I bought a lot of REITS after the big drop last year on Brad's advice and some have rallied so much I sold them for valuation reasons alone. ARCP was the one loser he came up with (that I bought), but there were a lot of winners. Brad is a real estate guy, not a day trader. I would read his very solid advice on real estate issues and try to figure out the trading yourself, and I wouldn't confuse the two issues. BTW, I agree ARCP is a buy right now, but there is a lot of risk. If Brad is correct and they have .90-1.00 of AFFO then it is almost half the going rate of comparable REITs. We will see.
    Dec 8, 2014. 10:07 AM | 9 Likes Like |Link to Comment
  • Weak global comps for McDonald's across major segments [View news story]
    People just don't want mass produced food as much as they did in yesteryear. Dollars are moving toward fresher food--even if it simply perception. CMG and WFM are taking a slow toll on MCD customers. Even in the burger space, many are moving toward a fresher approach. I am sure McD will adapt, but it may take time.
    Dec 8, 2014. 09:53 AM | Likes Like |Link to Comment
  • American Airlines Group Reports November Traffic Results [View article]
    mark, I think they will beat the analyst numbers this qtr. of 10.3Bn and 1.54 pretty easily. I suspect this has more to do with the unusually early snow and cancelled flights, especially the bad weather around T'Giving.
    Dec 8, 2014. 09:31 AM | Likes Like |Link to Comment
  • American Airlines: Monster Fuel Savings [View article]
    Stephen, what is the "typical average PE" of the S&P 500?
    Dec 6, 2014. 11:02 AM | Likes Like |Link to Comment
  • American Airlines: Monster Fuel Savings [View article]
    Me too, on the value. I also appreciate the dialogue! What ideas do you have that are more undervalued than AAL? I'm having a tough time getting my cash level down because I can't find bargains. Oil companies are cheap, but they may get a lot cheaper. TIA.
    Dec 5, 2014. 11:13 AM | Likes Like |Link to Comment
  • Good Times Restaurants Trades At A High Valuation [View article]
    TPV, It is also possible that the 2.09MM shares were holding the stock down over the last three months as they were sold off! It was filed about three months ago with an expected max price of less than $5. They release earnings next week, and the huge spike in volume and price could be an early indication of a very strong report. A couple of points for your readers: remember, they are adding both GT and Bad Daddy's restaurants. I believe about 8% growth on GT and 3 new Bad Daddy's (from zero) in CY 14. Adding in the SSS produces very solid growth. They have also announced aggressive plans for next year, as well as possibly working deals with third party franchisees. Any announcement could cause a huge spike. Finally, assuming GT is at the start of a high growth surge, we might look at some other valuation standards. Using Price to Sales, GTIM could run a long way to catch up to other popular/growth restaurant stocks. All that being said, it could certainly pause as you suggest.
    Dec 5, 2014. 07:00 AM | 1 Like Like |Link to Comment
  • American Airlines: Monster Fuel Savings [View article]
    Mitch, that should be a nice divvy if it doesn't get called away. The next big catalyst is likely to be the earnings report just before they expire (assuming nothing bad). If oil stays down, it will be a shocker, but 60 is a big move from here in two months. I might prefer selling Jan for that reason.
    Dec 4, 2014. 09:44 PM | Likes Like |Link to Comment
  • American Airlines: Monster Fuel Savings [View article]
    >>Remember these are very very good times for airlines (low oil price, strong economy).<<

    Maybe you are overthinking this, abdullah. Generally we want to get into companies that are doing well. You are working under the assumption (which may or not be true) that things will soon be bad for the airlines. The problem I have is that the price and estimates don't reflect either the low oil prices or the strong economy. If oil stays in the mid 60s, I think AAL will make over $10 a share next year. The NOLs will be there for at least a year or two. That is quite a windfall, and they can do a lot for their balance sheet. It is possible that oil will run back up to $100 and the economy will slow way down, but it is also very possible that the economy will continue in its current lumbering growth phase, and oil will stay here or go down a little. The airlines should do very well. That is contrarian thinking, I admit.
    Dec 4, 2014. 08:45 PM | Likes Like |Link to Comment
  • American Airlines: Monster Fuel Savings [View article]
    abdullah, If we put your 8X valuation on the S&P 500 right now the index would be in the 800s! That is just a little above the 2009 lows. Not realistic. 8X just doesn't work over the long haul. I had this argument with people who felt Apple should be valued at 8 times earnings when it was in the low 400s. It is a tech company, and, like airlines, many people feel they deserve an extra discount. Here is the problem: if mgmt is paying attention, they can buy so much of the company back that it can't stay there for long. On the NOLs--going from memory, but I think they have a little under 10Bn available. That is significant. On the EPS estimate, it was close to $7 back when oil was at $95/brl. Oil is obviously the big variable, but if we stay below $70, they will likely make a good bit more than $8.50/sh. On the valuation, the DJ Trannys are carrying right at a 20 PE today, like the S&P 500. There just aren't many huge bargains like AAL out there. All of those companies have risks, too. I agree that airlines should carry a discount, but a 60% discount is overboard imo. I think 35%, or a PE of ~13 is more reasonable, although airlines have a lot of structural differences when comparing to their past. But, assuming AAL makes $9 next year, and we disregard the NOLs completely we are still looking at ~$75-$80 with the discounted 13 PE. I believe the airline landscape has changed, and the sheer size and gate limitations will make the cut-throat competition of the past less likely in the future. Airlines have adjusted their business model and they are making a lot of money with lower fares.
    Dec 4, 2014. 07:17 PM | 1 Like Like |Link to Comment
  • American Airlines: Monster Fuel Savings [View article]
    I don't always agree with the Stone Fox, but I couldn't have said it better here! I figure that they use about 350 million gallons a month (very roughly). Assuming prices plunged $1 per gallon, they would save about $4.2Bn a year on gas alone. Think of it like this: falling gas prices are a printing press for dollars for the airlines-->10 million every stinking day in the ex. above, just as rising prices suck the life out of them. The numbers don't really reflect lower prices, though, as Stone Fox pointed out so well. I think $8.50 is too conservative, but it is always easier to raise them later. The airlines were making great money at $100 oil. That is different, if you are new to this game. (As always, airlines do have unique and varied risks, too)....GLTA.
    Dec 4, 2014. 01:25 PM | Likes Like |Link to Comment
  • I Wouldn't Get Used To $65 Oil [View article]
    It helps to adjust those numbers for inflation, too. We are looking back pretty far in some of the examples. In the light of increased N. American production and increased automotive efficiency, the price seems pretty reasonable to me. Maybe a range of 60-80 dollars? Something is different this time, and that is increased N. American supply. Don't miss that. Remember, demand can cause fluctuations down hard, and so can supply. A lot of people are talking as if they were the same cause of plunging prices. It may well be different this time, and all while the economy thrives on lower prices. We don't want to go too low on the prices, as that could cause serious economic damage, although it would be muted by lower oil. There is a happy middle ground, and I suspect we are close to being there now.
    Dec 2, 2014. 04:23 PM | Likes Like |Link to Comment
  • Apple -3.6% in volatile trading [View news story]
    Just reporting here, so don't get mad at me. Digitimes ran a couple of very negative stories today. They have been very accurate with their supply chain calls through the run-up, so I suspect it is due to their articles. Basically, one said iP6 chip orders were going down for next qtr and could be at their peak. Apple is finally pulling back on 6/6+ production going into the slower Q2 if they are correct. They made it sound like Apple had caught up with demand pretty much. The second was mixed, but it said Apple is ordering for drastically lower iPad sales next year--maybe 15MM less iPads than this year, or so. That is with a new iPad pro in the mix! The positive part was that Macs are gaining ground. Mentioning the possibility of leveling iPhone sales and cratering iPad sales likely did their trick. Again, they have a spotty record, but lately they have been right on, as their sources are the suppliers of Apple in Asia. GLTA.
    Dec 1, 2014. 10:26 AM | 10 Likes Like |Link to Comment
  • American Realty Capital Properties' Dividend: What We Know, What We Might Know, And What We Can't Know [View article]
    It moved up rather mysteriously on no news ahead of the dividend announcement. This one appears leaky to me, so I suspect the big move today could be some good news on the way. Not actionable, but worth watching.
    Nov 26, 2014. 02:21 PM | Likes Like |Link to Comment
  • Long Rubicon Technology Inc.: The Time Is Right [View article]
    Blake, nice job and here is an interesting development: several sapphire producers in Taiwan are rallying on speculation of a new deal with Apple. If it ends up as a phone cover, you can put the rally cap on for RBCN. The sapphire demand will outstrip supply significantly, as it is likely to spread to all high end phones. It could be manipulation, but it is very interesting. RBCN is so cheap, it could double very, very quickly on a short squeeze from good news. Not a reason to buy, but worth mentioning. GLTA.
    Nov 26, 2014. 01:49 PM | 1 Like Like |Link to Comment
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