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Bob Carl

Bob Carl
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  • Glatfelter Rolls With The Punches And Changes With The Times [View article]
    Over many years, I have literally made millions in GLT stock. I one time I owned 200,000 shares. For years, management struggled to overcome the challenges associated with the loss of the cigarette paper business and the slow decline in uncoated and book publishing papers. Former CEO George Glatfelter started the transition that Dante Parrini is overseeing now.

    Good mangement, good strategic planning are helping to offset what is truly a difficult business. GLT is a buy on any market weakness.
    Apr 11 09:24 AM | Likes Like |Link to Comment
  • Magellan Partners shifts focus to crude oil pipelines [View news story]
    Totally agree. This company is best of class and I am happy I have owned for over 10 years.
    Apr 10 09:39 PM | Likes Like |Link to Comment
  • Pfizer: It Never Rains, It Pours [View article]
    Mathematical formulas are all very nice, but they do not drive stock prices. Over the short run, prices are driven by investors' emotions, fear and greed. Over the long run, supply of shares becomes a major driver of stock prices. If a company like PFE can systematically reduce the number of its shares outstanding while gradually increasing earnings, then the stock can rise very nicely. But to do so requires that the company maintain its cash flow engine and doing that means continued success in operations. Continued success for a drug company means new products, and that depends on R & D productivity. So, look carefully at the new drug pipeline because everything else follows from that.

    I am long 10650 PFE.
    Apr 9 09:36 AM | 2 Likes Like |Link to Comment
  • Danger Zone: Value Investors [View article]
    Your definition of economic earnings is essentially excess economic gain produced by the differential between return on invested capital less the cost of invested capital. Ergo, companies with higher costs of capital will inevitably have a larger gap between GAAP earnings and economic earnings. Likewise, the larger a company's equity base, the larger this differential. Since the cost of equity capital derives from discounting market risk, companies trading at relatively lower valuations will inevitably have higher relative costs of equity capital. This injects a measure of tautology into your analysis. Combining a large equity base trading at a below market valuation is why your table shows XOM and CVX with huge gaps between GAAP and economic earnings.
    Apr 3 10:11 AM | 6 Likes Like |Link to Comment
  • Bloomberg: Rosneft discussing taking stake in Exxon Kurdish blocks [View news story]
    And Tillerson is an old Russian hand. Whether that means anything today is debatable, but it should help. But, yes, as Lee Raymond once said (in so many words), "XOM is not an American company and management is accountable only to its shareholders not the US Government." In effect, XOM has its own foreign policy.
    Mar 26 11:30 PM | Likes Like |Link to Comment
  • Exxon In 2014: What's New? Not Much [View article]
    I think Charlie is really insightful regarding Lee Raymond's legacy. It is very hard following this type of CEO. Likewise, Jeff Imelt at GE has spent years cleaning up the sainted Jack Welch's legacy of financial gimmickry. I suspect Warren Buffet's successor at Berkshire will have a similar problem when folksy Warren passes. I give Rex Tillerson a break because he is much more realistic about climate change, carbon costs, and the future role of natural gas. Unfortunately, the XTO purchase was made a year or so too early and we XOM have to share in its costs. Longer term, the events in Russia/Ukraine/Crimea may well lead to an increased push for LNG exports which will really benefit XOM and that is not discounted into the current stock price.
    Mar 25 09:58 PM | 1 Like Like |Link to Comment
  • Exxon In 2014: What's New? Not Much [View article]
    Basically, I agree. Low risk, moderate return. Good enough for me.

    One thing I think is overlooked by the market is that XOM's vertical integration with strong downstream and chemical operations that work to XOM's relative advantage when crude oil prices decline. Likewise, were crude prices to drop into the low 80s, many high flyers will crash and XOM, although hurt, will be ready to expand countercyclically by buying when others are selling.

    I continue to buy XOM on a regular basis through its DRIP program.
    Mar 24 01:08 PM | 1 Like Like |Link to Comment
  • Exxon Mobil: High-Profit, High-Tech IP Company [View article]
    What you describe in this fine analysis is XOM's heritage from the days of John D. Rockefeller's Standard Oil Company of which XOM is the direct descendant. Unlike many technology companies that are liable to have their technological edge destroyed by new innovations, XOM is unlikely to see oil and natural gas displaced over the foreseeable future. This gives investors an unusual ability to sleep at night.
    Mar 20 11:18 AM | 2 Likes Like |Link to Comment
  • Exxon sells $5.5B in first bond sale in two decades [View news story]
    This is a smart move. It locks in today's low interest rates and reduce dependence on commercial paper borrowing.
    Mar 17 05:58 PM | 6 Likes Like |Link to Comment
  • Exxon Mobil Corporation: Recent Dip Is An Entry Point [View article]
    Tillerson bought XTO a year too early. In retrospect, that ill-timed investment has certainly depressed XOM's return on capital invested for the past three years. However, remember that XOM paid in shares of treasury stock for XTO (but also paid off $9 billion in XTO debt. Since then, it has retired more stock than it issued for XTO. Result: while natural gas prices are rising, we XOM shareholders now own XTO and have fewer shares outstanding.

    Perhaps a CEO with a better "gut" feeling about the direction of natural gas prices would have had better timing, but this is mostly second guessing. Overall, the XTO induced decline in ROE and ROIC is now mostly behind us, the stock is mostly out-of-favor and I am buying as is Mr. Buffett.

    I would like also to comment on dividends: if you pay too much out in dividends you condemn your company to low growth. If and when XOM has few investing opportunities in its business, only then should it dramatically increase its payout ratio.
    Mar 11 08:02 PM | 1 Like Like |Link to Comment
  • Kazakhstan sues foreign oil majors over struggling Kashagan field [View news story]
    Actions like this hurt IOCs operating in such a kleptocracy. However, they also tend to ultimately reduce international oil supplies and, accordingly, drive oil prices upwards. That benefits the IOCs. It's an interesting dichotomy.
    Mar 7 03:54 PM | 2 Likes Like |Link to Comment
  • Exxon Mobil Needs A Big Dividend Hike This Year [View article]
    XOM grants no options. It does reward management with long vesting restricted stock. XOM management is thus more closely tied to long-run performance.

    Look up the historical record of an old company called Teledyne run be Henry Singleton to get an idea of the power of buybacks applied consistently for decades. Frankly, I like the idea of buying back 3-4% of your shares every year with excess cash flows. I pay a combined 31% tax (state and federal) on income from dividends and I can't invest my spare after-tax cash at anywhere close to the earnings yield (inverse of p/e) of XOM stock, which is 7.78% right now. Therefore, as a long term investor in XOM, I would prefer buy backs as they maximize my wealth.

    It's a free market out there. If you want a higher yield, sell your XOM, and invest in something more suitable to your requirements.
    Mar 7 12:50 PM | 8 Likes Like |Link to Comment
  • Exxon Is A Sell After Weak Guidance [View article]
    Should we buy when everything looks right and the analysts bullish and the stock at new highs? If so, you might get lucky, but more often you will have disappointing results. The best results are, to quote Buffett, "Be fearful when others are greedy and be greedy when others are fearful."

    I have been an investor for over 40 years. I see nothing in the analyst day presentation that makes me change my opinion on XOM. In fact, today I added 1,000 shares to my existing substantial position which is about 5% of my networth. If XOM drops another 2% or so, I may add more. It is a buying opportunity whenever XOM sells off.

    Might I add that I find it odd that authors, who have no disclosed positions in the stocks they write about, even bother. I would rather hear from authors who have a stake in the companies they write about.
    Mar 5 05:50 PM | 10 Likes Like |Link to Comment
  • Exxon -2.9% on flat production forecast, Ukraine risks [View news story]
    I bought more XOM today (another 1000 shares). I have been regularly buying $20,000 a month in XOM's investment plan but like to add on days like this.

    Anyone, who studies the 144 year history of The Standard Oil Company will recognize that over that period, the company, whose current name is Exxon Mobil Corporation, has had plenty of ups and downs, but has returned 9% per annum compounded over its history. I look for 7% total return from XOM over the very long run.

    Political instability in the Ukraine and Crimea and Russia is a concern and one can understand today's selling in that context. I am not concerned about the updated production forecast because of the long-term nature of energy business.

    Investors should remember that even if - and I think this highly unlikely - that XOM's holdings in Russia were nationalized - XOM would remain financially sound, with mostly equivalent cash flows, actually lower capital expenditure requirements, and more intermediate flexibility to increase dividends or buybacks. The company would increase its investments elsewhere in the world. Those investments would be less remunerative but also less risky from a geopolitical perspective.

    Fortunately, other than Sakhalin, Exxon's investments in Russia are mostly prospective and pending. And thus my bottom line conclusion is that the Crimean crisis is not a game changer for Exxon.
    Mar 5 03:04 PM | 4 Likes Like |Link to Comment
  • Merck: 7 Different Insiders Have Sold Shares This Month [View article]
    And the author's point is what?

    At best we can conclude they insiders don't think MRK is undervalued as there are no insider buys, but the insider selling is not unusual in a company whose stock has appreciated in recent years.
    Feb 16 11:31 AM | Likes Like |Link to Comment
COMMENTS STATS
171 Comments
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