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  • How Microsoft Could Raise Its Dividend By 96% [View article]
    "Transcripts, no I'm not."

    Was responding to the comment above mine, not your article...
    Feb 19, 2015. 10:08 AM | 3 Likes Like |Link to Comment
  • How Microsoft Could Raise Its Dividend By 96% [View article]
    "A 75% payout would limit the amount they could spend on R&D."

    You're double counting - the payout ratio already adjusts for increased R&D spend by lowering income. Look at the income statement and the calculation and you'll see what I mean.
    Feb 18, 2015. 11:25 PM | 2 Likes Like |Link to Comment
  • Reverse Engineering IBM's Fair Value [View article]
    "While Kastenelson recommends using the expected EPS growth rate to determine a fair P/E, I'm going to use net income to remove the impact of buybacks."

    Where do you make an adjustment in your work for the tens of billions that IBM will spend on repurchases going forward?

    "This earns IBM a fair value P/E of 7. Kastenelson's method graciously awards 2.5-3 points for IBM's 2.75% dividend yield, so 10 is the fair P/E."

    So using that method, let's assume all repurchases instead became dividends: that would result in a ~100% payout ratio on EPS (based on historic results for the past 5-10 years, IBM has returned more than 100% of Net Income to shareholders), and a yield of 9.8% ($15.69 GAAP EPS / $160 stock price).

    So using your method with an adjustment to account for the billions of dollars you simply wrote off, value is 7 + 9.8 = 16.8 (p/e) x $15.69 = $263 per share
    Feb 17, 2015. 03:18 PM | 1 Like Like |Link to Comment
  • DuPont: A Short Seller's Dream [View article]
    That statement - "Train isn't gaining traction" - bridges the two divides; essentially you believe it's likely that DD's entrenched management will hold up against Trian's push for change. Thanks Dallas!
    Feb 12, 2015. 10:52 AM | Likes Like |Link to Comment
  • DuPont: A Short Seller's Dream [View article]
    He's recommending an immediate short of DD based on the research done by Trian - an investment firm that has a significant long position in the company. He's also recommending changing that position (potentially) based on what might happen down the road; but let's focus on today:

    Why you would short a company based on research done by investors that you appear to agree with that are long the name; do you see the disconnect Eli?

    Seems like he has looked at Trian's work, agreed 100% with what they've said, and then concluded to do the exact opposite of what they've done; unless he's arguing that Trian will not be successful in their efforts?

    Something there doesn't quite add up for me...
    Feb 12, 2015. 10:14 AM | Likes Like |Link to Comment
  • DuPont: A Short Seller's Dream [View article]
    Dallas - You're entire article is essentially copied from Trian's white paper / website; however, your conclusion ("recommend an immediate short of this name") is the exact opposite of what Trian has actually done (buy a ton of stock). There's a disconnect between the two...
    Feb 12, 2015. 09:25 AM | 2 Likes Like |Link to Comment
  • Why Starboard Value Won't Be Sticking Around At Staples [View article]
    What about the commercial side of the business?

    http://bit.ly/1ITKZc4
    Feb 11, 2015. 11:26 AM | Likes Like |Link to Comment
  • Positive U.S. comps back for McDonald's, Pay with Lovin' report next [View news story]
    "Comp sales fell off an alarming 39% in Japan during the month."

    39%!? Would you mind citing a source - that does not sound accurate...
    Feb 9, 2015. 02:36 PM | 1 Like Like |Link to Comment
  • Microsoft Insider Mason Morfit Buys ~$43 Million In Stock [View article]
    "There is only one reason to use a Windows product now, that is if you can get it really cheap, like I just did. So except for Xbox, MSFT's whole lineup has become low end commoditized."

    Meanwhile the Commercial business, which accounted for 57% of Microsoft's sales and 67% of gross profits in fiscal 2014, has seen sales increase at a 7.5% CAGR over the past two years and has 80%+ gross margins. Try reading a 10-K sometime buddy...

    That business reported $23.47 billion in operating income in FY14 as well - a two year CAGR of 8.4%. I know you're a "value expert", but let me interpret those results for everyone else - that means operating margins are expanding in that business, as well as outpacing industry growth.

    So here's the question "expert" - how much would you pay for a business growing the top line mid-single digits and the bottom line mid-high single digits that generated $23.47 billion in operating income last year?
    Feb 9, 2015. 11:34 AM | 2 Likes Like |Link to Comment
  • Microsoft Insider Mason Morfit Buys ~$43 Million In Stock [View article]
    No problem cjay; same here - long and no intention of reducing (will buy in low-mid 30's, though doubting we'll get there)
    Feb 8, 2015. 09:10 PM | Likes Like |Link to Comment
  • Microsoft Insider Mason Morfit Buys ~$43 Million In Stock [View article]
    "Morfit is not only a partner in the largest MSFT stockholder (Value Act), but he is that stockholder's designated director on the MSFT board. Morfit is a very smart guy and his commitment of $42+M out of pocket to buy MSFT is, for me, a screaming bullish sign."

    I agree this is a good sign, but some clarification is in order: this isn't a personal purchase from Mason Morfit; as the filing shows, Mason is the reporting person for ValueAct (note the "I" in section 6 of the filing).

    ValueAct has added another ~1 million shares, bringing their position to 67.9 million shares - worth $2.88 billion at $42.41 per share.

    Still a good sign - but not Mason Morfit buying $42 million personally...
    Feb 8, 2015. 06:29 PM | 1 Like Like |Link to Comment
  • Microsoft Severely Undervalued After Earnings Dive [View article]
    Important update - free upgrades don't apply for customers running Enterprise versions of Windows:

    http://bit.ly/1CvxaMY

    "Windows 7 Enterprise and Windows 8/8.1 Enterprise are not included in the terms of free Windows 10 Upgrade offer we announced last week, given active Software Assurance customers will continue to have rights to upgrade to Windows 10 enterprise offerings outside of this offer..."
    Feb 4, 2015. 12:24 PM | Likes Like |Link to Comment
  • Aggressive/Defensive Investing And Market Timing: How To Profit From A Shift In Market Sentiment [View article]
    Interesting - thanks for taking the time to respond Matt!
    Feb 2, 2015. 02:46 PM | 1 Like Like |Link to Comment
  • Aggressive/Defensive Investing And Market Timing: How To Profit From A Shift In Market Sentiment [View article]
    "As far as the long term outlook, I expect that once Frozen's popularity drops, Mattel will be the ones to profit the most."

    What about the issues with Barbie dating back well below Frozen's release, with sales down ~25% in the prior 15 years? Or are you suggesting the importance of Barbie to MAT as a whole will continue to decline?

    "Believe it or not, I'm actually kind of grateful for the chance to get more cheaply now."

    As long as intrinsic value isn't contracting, the chance to buy a business cheaper is always something to be grateful for :)
    Feb 2, 2015. 12:50 PM | Likes Like |Link to Comment
  • Aggressive/Defensive Investing And Market Timing: How To Profit From A Shift In Market Sentiment [View article]
    "And going into the 3rd quarter of 2014, I started buying shares of Mattel. To date I have put more than half of my entire net worth behind that stock...."

    Really?! Wow, that's an interesting piece of information; all in call options or a mix of shares & options?

    What are your thoughts on Barbie and Fisher Price? Are they in a state of perpetual decline (as they've been doing for some time), or on the path to stability / growth?

    Thanks Matt!
    Feb 2, 2015. 11:57 AM | 1 Like Like |Link to Comment
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