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  • Apple unveils iPhone 6S/6S+ with 3D Touch sensors, A9 CPU, improved cameras [View news story]
    ha, no there weren't any issues, but having watched a number of these rollouts, I expect to hear the conversation break out soon. What is newsworthy is Apple's semi design team. They continue to bring in 50-100% jumps in each generation. I really expected this generation to level off to a more normal increase, sort of like Intel. But, they have figured out a way to get another huge improvement. The franchise is taking on a lot of value with each win. Also, when you keep getting these numbers each year, the jump on older generations becomes significant. Somebody with the iPad 2 (we still have one) can look forward to perhaps a 50-100 fold increase in performance in some metrics, so it makes the upgrade more likely. What I have seen in the past is people saying the S won't increase sales, but each S model has increased sales. I agree the big screens were a key hurdle. I think the TV may be the big winner in the rest of the lineup. I agree with Dennis that the iPad Pro is a smaller target. Great product, but aimed at a smaller crowd--just a segment of the iPad customers. The TV is cheap and a lot of people will buy one, and it is likely to lead to very high margin service and software sales in the future. Think inkjet printer on the TV; think expensive ink on the services and shows.
    Sep 9, 2015. 09:12 PM | 3 Likes Like |Link to Comment
  • Apple unveils iPhone 6S/6S+ with 3D Touch sensors, A9 CPU, improved cameras [View news story]
    The story that will have legs out of this, once again, is the performance of the A9/X CPU. It appears to be quite remarkable based on what they said. Apple has pulled off another 80-90% increase this year! Intel hasn't been getting nearly that much for the last few years, and how Apple keeps doing this is quite the engineering mystery. Engineers will be writing about how they did it, and the geek sites will be raving over how well it does. This one gets up into the desktop with a nice video card range from not too many years ago--crammed into a phone that lasts all day on a charge. The camera looks like a big improvement, as does force touch. Typical S year by Apple; they will set new records from last year's 74 million phones in the holiday qtr most likely and make enough money to buy Ft. Knox.
    Sep 9, 2015. 05:43 PM | 19 Likes Like |Link to Comment
  • VXX Benefiting From Backwardation, For Now [View article]
    I think the surprise Chinese devaluation, which created a massive increase in the VIX and a flight to safety/bonds, could simply have been a move to save China a pile of money on bond sales. It has given them an elevated price and lots of volume/liquidity to dump US bonds before the increase. Once they have dumped as many bonds as they want, I suspect they will calm the markets. We could have gotten a signal last night. At any rate, the VIX is at major financial crisis levels (like JPM and WFC teetering on bankruptcy levels), but there is no major crisis. It should be in the teens imo. GLTA.
    Sep 9, 2015. 06:34 AM | 3 Likes Like |Link to Comment
  • VXX Benefiting From Backwardation, For Now [View article]
    I find the Contango vs. Backwardation chart helpful. Is Vixcentral free, or is it behind a paywall? Also, as with all trading, the best time to make a move in a turn-around is just before the reversal. Of course, one never knows that point until viewing from hindsight. Friday might have been the optimal time...
    Sep 9, 2015. 06:23 AM | 1 Like Like |Link to Comment
  • VXX Benefiting From Backwardation, For Now [View article]
    PONR's comment is typical of everything I dislike in a weak SA comment. It is mostly insult, and no substance! It is fine to criticize an article; that helps everybody, especially the author, if it is constructive.
    Sep 9, 2015. 06:19 AM | 3 Likes Like |Link to Comment
  • Medical Properties Trust: 65% Capital Appreciation Potential With A 7.75% Yield [View article]
    A couple of points: most of the debt is fixed for several years, so if you think we are going back to 6-8% long term, then over the next ten years they could be pressured. However, if you think that the economy can't sustain higher rates, then finance rates might actually drop long term. With deflation creeping through the dike just about everywhere we look, I don't see sustainable rate increases in the near future. Here is the key point: inflation has to return to support meaningfully higher rates long term. That should cause the value of the real estate to increase if it, in fact, emerges. REITs are a good investment because they can respond favorably to high inflation or low inflation, producing good income in either scenario. The current REIT price collapse/give-away is counting on substantially higher rates and lower inflation, which isn't sustainable imo.
    Sep 7, 2015. 09:24 AM | 3 Likes Like |Link to Comment
  • American Airlines Group: Watch For Upward Earnings Revisions Ahead [View article]
    Nice article, Falcon, but one important point on this paragraph:
    "In its 2014 10-K, American estimated that each $0.01 move in jet fuel prices would mean a savings or cost of $43 million on an annual basis. With jet fuel prices currently around $1.50 per gallon, American could save about $4 billion to $5 billion on an annual basis compared to pre oil crash levels."

    It is actually a good bit better than you supposed. In the same 10-K, they gave their average fuel price per gallon paid for the year. For '14 it was $2.91, and it was $3.08 for '13!! If fuel prices are $1.50, that would be an annualized savings of just over 6Bn from '14 prices and more for '13, or almost $9 a share over '14! Of course, it hasn't been that low all year and I was annualizing for effect. I don't need to point out that they were making a lot of money with $3 per gallon jet fuel. Mgmt has lowered costs to be profitable at $100 oil and that still holds true. Mr. Market is in extreme denial over this fact. People just can't accept a profitable airline model, despite the facts! Fuel prices were actually a lot higher last quarter when they made $2.60/sh and that is what is so stupid about the recent price collapse--not correction, the price has imploded to ridiculous levels imo. AAL should have a fantastic qtr. PRASM will be down a bit, but costs will really drop, and the current estimate of $2.63 is way too low. Even at these low estimate levels, the forward PE is lower for AAL's stock on just this quarter's earnings than the S&P 500 earnings for the entire year. GLTA.
    Sep 7, 2015. 08:50 AM | 5 Likes Like |Link to Comment
  • Medical Properties Trust: 65% Capital Appreciation Potential With A 7.75% Yield [View article]
    Bulls-eye! I like several qualities about MPW, but valuation is #1. This is a radical idea, but I advocate actually thinking about the real estate you are buying in a REIT, rather than just the fundamentals. Owning a diversified slice of high quality hospitals appeals to me. Although they have risk, hospital use is pretty resilient. The current price gives you a big margin of safety, as you argued well.
    Sep 5, 2015. 07:38 AM | 2 Likes Like |Link to Comment
  • Do Not Short Highly Levered REITs With Strong Fundamentals [View article]
    I agree, Dane. Some of these names have been punished beyond reason, and I doubt shorting them will do anything but lose money. SIR is selling for less than 7 times FFO right now! The incredible yield is only because the shares have gotten insanely cheap, and it will make shorting this pig very expensive. If SIR were to return to a highly distressed, 10 times FFO, the shares would go up roughly 50% from here. What is crazy is that they have fantastic real estate, by all accounts. They have a great and well covered dividend, and they have already paid for spinoff shares that will be distributed to shareholders soon. I don't know too much about RMR, but they must be worse than the plague to command this kind of discount. Totally irrational price on the assets and FFO.
    Sep 3, 2015. 03:40 PM | 1 Like Like |Link to Comment
  • More on Select Income REIT Q2 results [View news story]
    Great points, and I love boring. I think you meant 2c per qtr for 4%? 2 per year would be 1%. Any regular increase in FFO/sh and divvy should make this one a great investment, assuming the macro doesn't unwind. Five good years of modest increases (even 2% per year FFO increase), along with a return to 12XFFO on the stock, would make this a double from here. Add in the 11%, and you are in the mid 20s% per year.
    Sep 3, 2015. 03:20 PM | Likes Like |Link to Comment
  • More on Select Income REIT Q2 results [View news story]
    Thx for the thoughtful and informative reply, nsolot! I own some SIR, and it has been frustrating watching the price go down; however, I actually added some on the way down for many of the reasons that have been mentioned--this is one seriously cheap REIT! And, I think I could manage it to greatness, and I'm not a RE guy! I see it as a tremendous opportunity, which makes it more frustrating to watch. This reminds me a bit of Apple in '12/'13. The stock was getting hammered and management didn't seem to have a clue, but the company was actually in very good shape with solid products. To Cook's credit, he listened and made changes to take advantage of the mis-pricing, and Apple has been on a tear ever since. The answer here looks just as easy to me. When the market puts your dividend at almost 11% there is no better investment out there than your stock! SIR needs to #1) - lower costs as much as they can while managing the RE and debt well. #2) - start buying back stock with the excess cash. Forget more RE, unless it is a better deal than buying back stock. I doubt they will find anything close. I figure they could buy a million shares a qtr, or just under 5% of outstanding shares a year at this price. #3) - keep the payout stable (as a total) and adjust the dividend for the amount of outstanding shares. If they buy 1% back each qtr, they raise the divvy by the appropriate percentage to maintain the same payout. This should result in FFO/sh going up 5-8% yr (all else being stable and assuming 1-3% organic rent growth), and the buyback going up each yr with the increased cash, and the dividend increasing by the amount of share decrease. If the market starts trading SIR at 20XFFO and RE is cheap, they could look at expanding via equity, but when Mr. Market is giving away SIR stock, take advantage of his stupidity for the sake of the shareholders! Five years of the FFO/sh going up high single digits, and the divvy going up 5% per year would make SIR a homerun investment imo. Finally, to your chase point: everything I have read says the property is very strong from Cole and HI. I agree it is the most important point, and I'm assuming that is your belief?
    Sep 3, 2015. 02:29 PM | Likes Like |Link to Comment
  • Fool's Gold And The 10% Dividend Yield [View article]
    angry, I own some SIR, too, and I agree there are a number of positives. The real estate is quite good from what I've read. It is insanely cheap, at less than 7XFFO. The dividend is covered solidly, and it is yielding almost 11%, and if they just chopped up the company and sold it we would make money from here, if I'm not mistaken. All management has to do is start behaving wisely and do things in the shareholders' best interest and this REIT could double in price--if they perform well for the next few years! Add the dividend, and you would have a homerun. What you are saying is that the RMR discount is legit, but there comes a point when it is overdone and Mr. Market has put too big a discount on the shares, and I agree we should be past that point by several bucks. If they can grow FFO/sh for a few qtrs and increase the dividend, I think the stock could jump 50%. No kidding. They are just so poorly regarded because of their past, that the shares are being given away. Will they start doing things that benefit shareholders? Time will tell. Also, SIR shareholders should receive some RMR shares going forward in the spinoff, if I'm not mistaken. That is small, but another positive on valuation. At this yield, if the share price just stabilizes, then SIR is a very solid investment. It is all about management credibility and performance going forward.
    Sep 3, 2015. 12:45 PM | 2 Likes Like |Link to Comment
  • Fool's Gold And The 10% Dividend Yield [View article]
    I feel your pain, Angry. FFO/sh down in Q1, down in Q2 (YOY), and that is on the weighted average, so shares headed up in the future. Leverage up to lose that per share earnings amount. All bad. Wasn't it well over $3/sh back in 2012? They are issuing more shares to pay RMR more money for their shares, so I don't see it going up very easily, moving forward. If they have just used their dry powder to increase leverage, and they have lost roughly 10% of their FFO/sh in just 3+ years, what does that say about the future? Dividend covered now, but a steadily falling FFO per share will certainly lead to dividend cuts sooner or later. I think Mr. Market will reward SIR when FFO/sh starts rising. Has it gone up any since they went public, or has it fallen every qtr? Increasing leverage with these low rates should have increased FFO/sh. I think Mr. Market is worried about what the future holds if rates are going up. On the last earnings CC, they were pressed by one of the analysts on the possibility of an impending dividend cut. The answer wasn't that forceful, I didn't think. The SA transcript says that SIR's mgmt said that a dividend cut is not in the current plan. I wish the guy had been more emphatic rather than saying it wasn't in the current plan.
    Sep 3, 2015. 10:27 AM | Likes Like |Link to Comment
  • REIT Showdown: Team SA Vs. Team VNQ [View article]
    SC, I thought it was a great article. Small issues of accuracy are easily corrected, but the discussion had great substance. One of the problems with a high yield REIT is that it may be reflective of a discount applied to poor management, or other problems. I think that long term FFO/share growth is one of the key metrics to follow. With most non-REIT companies you see revenue growth as a big positive, but maybe that isn't such a big positive with REITs if they are diluting for that growth. Dividends follow FFO/sh, so the DGR tells you how well management is doing. The problem with yield is that it can be inversely related to FFO/share growth--high yields (lower stock prices) are placed on companies with poor/no FFO/sh growth.
    Sep 3, 2015. 08:21 AM | 1 Like Like |Link to Comment
  • Fool's Gold And The 10% Dividend Yield [View article]
    You nailed it Rubicon! The key is looking at the long term charts. O and VTR have roughly doubled over the last ten years. Compare that to a chart that looks like a downhill olympic ski slope and you immediately see why investors demand 6-8% more yield out of the dog. Even with a 12% yield on many of these, I suspect the long term cap. app. of the well managed REITs will win over the long term--because the dogs go down in price, discounting the effect of the high yield. This appears to be the case with many externally managed REITs. If you look closely, you realize that FFO/share is flat to going down over time (beware total growth percentages, as they are going up dramatically while per share amounts drop), debt is going up, and the *only* positive metric is fee income going to the external manager. It is usually exploding higher. The really slick REITs with external mgmt have set up outside entities to siphon more fees out of the cash cow--and that is likely why the stock prices go down over time--the cash is getting siphoned off because management doesn't represent shareholders. BTW, I believe it is possible for an external manager to work for shareholders, but they are often working toward internal mgmt. I think your FFO is off on SIR. GLTA.
    Sep 3, 2015. 06:36 AM | 3 Likes Like |Link to Comment