This New Budget Proposal May Limit Your Annual Retirement Income [View article]
This sounds like a revival of IRC 4980A, which was enacted in 1986, to pay for some of the Reagan Tax reforms, and repealed by Clinton in 1997.
Under 4980A, there was a 15% excise tax on "excess distributions" during lifetime and a 15% excise tax on "excess accumulations" at death. It applied to all tax-favored accounts - qualified plans and IRAs - and, of course, exempted government plans.
The 4980A annual threshhold for determining "excess" was the greater of $150,000 or $112,500 (indexed). A lump sum of 5 x that amount was allowed. At death, the present value was determined by actuarial tables, and surviving spouses could elect not to pay if they assumed the liability for their inherited accounts.
There were no ROTHs in 1986, but after-tax contributions (not earnings on them) were exempt from the 4980A penalty.
Again, the above is just a description of the Ronald Reagan law that was repealed by Clinton. My guess is that the Obama proposal is going to be close to that old law, with higher limits ($205,000 annually instead of $112,500).
Having done a partial ROTH conversion in 2012 I'll be looking at this closely. If the Roth counts as "excess" for the new penalty, I'll be undoing it and taking back those taxes I paid.
Atlantic Power Corporation Announces the Appointment of Ned Hall to Executive Vice President - Chief Operating Officer [View article]
Perhaps it's unfair, but the CEO should fall on his sword. Other than founding the company and being a liaison with initial Canadian investors, I'm wondering what real value he brings. He's a dressed up portfolio manager from an insurance company, nothing more.
I do know that under his leadership AT is bombarded wth litigation due to comments which, even if legal, were dissemblance. Under his leadership, the SE assets had to be sold for a song, because the company is debt-heavy. Finally, with all this unhappiness he engineers a "poison pill" to prevent a takeover that could cost him his job.
Ick..... He might be a wonderful person, but AT needs to rethink whether he is appropriate for a public company. Would not everyone be better off for AT to hire a new CEO, regain market confidence, and gain back share value ? The best "poison pill" is for the share value to go up, not this hocus pocus plan.
Halll was squeezed out of AES in November, when it decided it only needed one COO and was cutting costs.
Hopefully, he's a good addition to AT team. Based on the AT proxy, there does not seem to be any COO at AT. I'm curious whether there will be a departure in AT executive ranks.
Bank Of America Certainly Did Not Fail Shareholders [View article]
Assuming you want a dividend-type return of 4%, wouldn't you just sell a small number of shares equal in value to 4% of your purchase price for the full lot ?
Atlantic Power: A Tale Of Misinformation [View article]
I just don't see a risk at this point, and I do see opportunity. AT stock price is now undergoing an understandable period of short term revulsion.
Bring it on. I'm adding to my ill-timed purchases a few days ago (at 7) and hope to rebuild soon to the number of shares I used to own last year.
After getting over my initial disgust, my take is: (1) they are doing something that should have been done a year ago: cutting a ridiculous dividend and freeing up cash to expand the business, and (2) if management loses favor and gets ousted, that will be a plus for the market, which is voting on emotion, and (3) if management doesn't lose favor, they are best positioned to know the industry and the warts and beauty spots of this company.
There is not a lot of value left in the general market right now, so this ugly thing (with good underlying assets) is worth a commitment. AT is not for widows and orphans, but I expect 50% gain in 12 months, or a favorable transaction.
I hated them at 12. At 7 and below, there is cashflow, a politically favored industry, and "blood in the streets." I'll take the chance.
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
Albert, I agree.
However, buying a stock at or below liquidation value when there is (1) not a realistic threat of debt foreclosure, and (2) good cash flows, is not such a bad way to invest for the "fixed income" part of a portfolio.
That's where this one is going for me, not in the "fast growth" category. There are also some positives that could materialize. The company could be attractive to others at this price, and pills can always be voted aside if the directors and shareholders want a transaction. The cash flows at a $6 price make a transaction self-financing with extra money left over.
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
After buying back "cheap" at 7 I'm sitting now on a 15% loss in a single day. I thought I'd share that, because I hate it when people post here just to show how "smart" they are. Tried to catch the knife, and I should have waited.
I expect that this probably will drift below 6.
Longer term, there is value here, and at this price, even if they cut the dividend again, it's a decent replacement for bonds. That poison pill was put in recently because they know the underlying assets have value, and that the company would be in play without the poison. It's an indirect endorsement of underlying value.
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
Come on. Do you honestly believe that on November 23, 2012 they were unaware that they had no pricing power for the FL facilities? If that is your view, it simply means they are stupid business people, and if they are that stupid, they should not be running a company.
I don't believe that at all. The failure to recontract FL and then to dump it at fire sale prices cannot realistically be viewed as a sudden post-November 23 development. They had to have been aware of this potential issue since at least early 2012 if they are rational managers, and they also should have been more forthright (in my view) at least in the summer that things weren't looking too rosy.
And if, as you write, they were also responding to your telephone call about dividend security, rather than giving a stock answer of "no comment," that is terribly suspicious. Even though I made a lot of money on AT, I am really angry to see this type of behavior. They took down a lot of naive retirees.
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
You should read the transcripts of past conference calls. On November 23, 2012 Welch was very specific:
"In addition, we expect there'll be further contributions from ongoing accretive acquisitions and dispositions, which further support the company's continued ability to pay its dividend.....For all of these reasons taken together, we're confident in our ability to sustain the current dividend level."
In that same call, when asked whether the dividend sustainability was based on short or long term assumptions, Welch made clear that he was not speaking off the cuff. He promised that he and his board periodically met to review sutainability, and that "we look at long term projections of cash flows." Every call I can remember has had similar assurance to investors.
I don't know what he said at the Deutsche Bank conference a month earlier, but the handout stated: "Cash flows are largely contracted, producing stable cash flows to sustain a current monthly dividend (Cdn$1.15/share/year); current yield of approximately 7.8%."
I'm not saying this was illegal, These conferences are always preceded by the standard disclaimers. However, these statements do indicate either a lack of candor or a totally incompetent view of his company's prospects. Add in the poison pill, meant to entrench management, and I can't help but be cynical about Mr. Welch.
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
This is very bad for shareholders, and a bad knock on management. I do expect lawsuits, simply because the management dissembled repeatedly in the near past about security of the dividend.
This post is not about trying to seem "smart." I am really appalled for retirees who plunked money into this "safe" dividend stock. Obviously, if you read my warnings, you can see I advised liquidation when we learned of the abysmal sale of 20% of MW capacity for a mere $100M. Anyone not math impaired could have understood my simple calculation: if 20% = $100M, then 100% cannot be worth more than $500M, give or take a few bucks. However, the book value was being carried at almost $2 billion, a 400% premium. I don't buy the nonsense that it's only a Florida problem for this sale of the 20% in Florida. There is a real issue for energy resellers because gas is so cheap, plentiful, and a serious threat to those like AT who sell energy from wood chips, wind and cow dung.
What should you do now, if stuck at the higher price? Stay in for the short term. If it gets to $8 or $9, sell !!!! Management that is untrustworthy does not deserve your investment, and there is no rainbow in this company's future. It sells a commodity product. It has no pricing power. It is just a spreadsheet vehicle for guys who know very little about energy production and whose resumes are from an insurance company where they worked for a salary pushing numbers on utilities.
With all this negativity, I still bought back a pretty significant amount at $7 after dumping north of $12. Hang on at this price if you still own, or take a flutter if you locked in profits with an early sale. I do expect the announcement of lawsuits to dip this to $5 or so, but it really is worth about $9. They adopted the poison pill because they knew the company would be worth more than the current $7 after this bad announcement. There's value here at this price. Hold your nose. This was understandale for anyone who reads fine print, but a clear indication that this management does not understand good governance. They are probably good people, but whoever gave them advice should be fired.
I'm more optimistic, based on the conference call and the silly retreat because Square is entering the small retailer space. Square is a neat private company, with a symbiotic relationship with Starbucks and its founder, and a fabulous flair for publicity. (As Nuti describes Square, It's a great company for retail hobbyists.)
NCR is a service provider for big enterprises, and the nice addition of small company servicing with PayPal and NCR Silver. At the $5B value, I'm more concerned about a big company stealing it. With a maturing market, I still sees this getting into the 40s within 2 years. The payoff of pension liabilities alone will make the P/E ratio enticing, because many investors still look backwards for P/E.
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
May I repeat ?
"Although the sale of FL facilities was not a surprise, the low price (a mere $100M+) may have shocked some. All AT plant and equipment is carried at $1.7B on balance sheet, yet the sale of over 20% of the MW capacity only gets $100M ? Excellent mangement team, but the headwinds are too strong for AT to stay even at this $11 value."
Even a $1 drop is almost 10% loss. Use common sense. This is not a good play right now. For the record, I am not short AT. I'm just out of the stock and generally putting as much into cash as I can, with exceptions of NCR and BAC.
5 Factors That Differentiate Bank Of America From Other Banks Of America [View article]
I don't get the "sleezy" comment at all from one of the posters. Countrywide, a company they were basically forced to buy by the US, and for whose sins they later paid up, was a result of bad (former) management.
It's got the best ATM network, and the branches are staffed with people who clearly are paid on customer satisfaction. As the government reflates the housing market, BAC is poised to make a lot of money. Also, I see BAC in some very big commercial loans, and would be shocked not to get an additional 20-30% in near term.
Arne Alsin's #1 Pick: Amazon.com [View article]
What about NCR ? It's doing well, and was a 2 out of 10 pick not so long ago ?
This New Budget Proposal May Limit Your Annual Retirement Income [View article]
Under 4980A, there was a 15% excise tax on "excess distributions" during lifetime and a 15% excise tax on "excess accumulations" at death. It applied to all tax-favored accounts - qualified plans and IRAs - and, of course, exempted government plans.
The 4980A annual threshhold for determining "excess" was the greater of $150,000 or $112,500 (indexed). A lump sum of 5 x that amount was allowed. At death, the present value was determined by actuarial tables, and surviving spouses could elect not to pay if they assumed the liability for their inherited accounts.
There were no ROTHs in 1986, but after-tax contributions (not earnings on them) were exempt from the 4980A penalty.
Again, the above is just a description of the Ronald Reagan law that was repealed by Clinton. My guess is that the Obama proposal is going to be close to that old law, with higher limits ($205,000 annually instead of $112,500).
Having done a partial ROTH conversion in 2012 I'll be looking at this closely. If the Roth counts as "excess" for the new penalty, I'll be undoing it and taking back those taxes I paid.
Atlantic Power Corporation Announces the Appointment of Ned Hall to Executive Vice President - Chief Operating Officer [View article]
I do know that under his leadership AT is bombarded wth litigation due to comments which, even if legal, were dissemblance. Under his leadership, the SE assets had to be sold for a song, because the company is debt-heavy. Finally, with all this unhappiness he engineers a "poison pill" to prevent a takeover that could cost him his job.
Ick..... He might be a wonderful person, but AT needs to rethink whether he is appropriate for a public company. Would not everyone be better off for AT to hire a new CEO, regain market confidence, and gain back share value ? The best "poison pill" is for the share value to go up, not this hocus pocus plan.
Atlantic Power Corporation Announces the Appointment of Ned Hall to Executive Vice President - Chief Operating Officer [View article]
Halll was squeezed out of AES in November, when it decided it only needed one COO and was cutting costs.
Hopefully, he's a good addition to AT team. Based on the AT proxy, there does not seem to be any COO at AT. I'm curious whether there will be a departure in AT executive ranks.
Bank Of America Certainly Did Not Fail Shareholders [View article]
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
Atlantic Power: A Tale Of Misinformation [View article]
Bring it on. I'm adding to my ill-timed purchases a few days ago (at 7) and hope to rebuild soon to the number of shares I used to own last year.
After getting over my initial disgust, my take is: (1) they are doing something that should have been done a year ago: cutting a ridiculous dividend and freeing up cash to expand the business, and (2) if management loses favor and gets ousted, that will be a plus for the market, which is voting on emotion, and (3) if management doesn't lose favor, they are best positioned to know the industry and the warts and beauty spots of this company.
There is not a lot of value left in the general market right now, so this ugly thing (with good underlying assets) is worth a commitment. AT is not for widows and orphans, but I expect 50% gain in 12 months, or a favorable transaction.
I hated them at 12. At 7 and below, there is cashflow, a politically favored industry, and "blood in the streets." I'll take the chance.
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
However, buying a stock at or below liquidation value when there is (1) not a realistic threat of debt foreclosure, and (2) good cash flows, is not such a bad way to invest for the "fixed income" part of a portfolio.
That's where this one is going for me, not in the "fast growth" category. There are also some positives that could materialize. The company could be attractive to others at this price, and pills can always be voted aside if the directors and shareholders want a transaction. The cash flows at a $6 price make a transaction self-financing with extra money left over.
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
I expect that this probably will drift below 6.
Longer term, there is value here, and at this price, even if they cut the dividend again, it's a decent replacement for bonds. That poison pill was put in recently because they know the underlying assets have value, and that the company would be in play without the poison. It's an indirect endorsement of underlying value.
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
I don't believe that at all. The failure to recontract FL and then to dump it at fire sale prices cannot realistically be viewed as a sudden post-November 23 development. They had to have been aware of this potential issue since at least early 2012 if they are rational managers, and they also should have been more forthright (in my view) at least in the summer that things weren't looking too rosy.
And if, as you write, they were also responding to your telephone call about dividend security, rather than giving a stock answer of "no comment," that is terribly suspicious. Even though I made a lot of money on AT, I am really angry to see this type of behavior. They took down a lot of naive retirees.
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
"In addition, we expect there'll be further contributions from ongoing accretive acquisitions and dispositions, which further support the company's continued ability to pay its dividend.....For all of these reasons taken together, we're confident in our ability to sustain the current dividend level."
In that same call, when asked whether the dividend sustainability was based on short or long term assumptions, Welch made clear that he was not speaking off the cuff. He promised that he and his board periodically met to review sutainability, and that "we look at long term projections of cash flows." Every call I can remember has had similar assurance to investors.
I don't know what he said at the Deutsche Bank conference a month earlier, but the handout stated: "Cash flows are largely contracted, producing stable cash flows to sustain a current monthly dividend (Cdn$1.15/share/year); current yield of approximately 7.8%."
I'm not saying this was illegal, These conferences are always preceded by the standard disclaimers. However, these statements do indicate either a lack of candor or a totally incompetent view of his company's prospects. Add in the poison pill, meant to entrench management, and I can't help but be cynical about Mr. Welch.
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
I do expect lawsuits, simply because the management dissembled repeatedly in the near past about security of the dividend.
This post is not about trying to seem "smart." I am really appalled for retirees who plunked money into this "safe" dividend stock. Obviously, if you read my warnings, you can see I advised liquidation when we learned of the abysmal sale of 20% of MW capacity for a mere $100M. Anyone not math impaired could have understood my simple calculation: if 20% = $100M, then 100% cannot be worth more than $500M, give or take a few bucks. However, the book value was being carried at almost $2 billion, a 400% premium. I don't buy the nonsense that it's only a Florida problem for this sale of the 20% in Florida. There is a real issue for energy resellers because gas is so cheap, plentiful, and a serious threat to those like AT who sell energy from wood chips, wind and cow dung.
What should you do now, if stuck at the higher price? Stay in for the short term. If it gets to $8 or $9, sell !!!! Management that is untrustworthy does not deserve your investment, and there is no rainbow in this company's future. It sells a commodity product. It has no pricing power. It is just a spreadsheet vehicle for guys who know very little about energy production and whose resumes are from an insurance company where they worked for a salary pushing numbers on utilities.
With all this negativity, I still bought back a pretty significant amount at $7 after dumping north of $12. Hang on at this price if you still own, or take a flutter if you locked in profits with an early sale. I do expect the announcement of lawsuits to dip this to $5 or so, but it really is worth about $9. They adopted the poison pill because they knew the company would be worth more than the current $7 after this bad announcement. There's value here at this price. Hold your nose. This was understandale for anyone who reads fine print, but a clear indication that this management does not understand good governance. They are probably good people, but whoever gave them advice should be fired.
NCR: Room To Run, But End In Sight [View article]
I'm more optimistic, based on the conference call and the silly retreat because Square is entering the small retailer space. Square is a neat private company, with a symbiotic relationship with Starbucks and its founder, and a fabulous flair for publicity. (As Nuti describes Square, It's a great company for retail hobbyists.)
NCR is a service provider for big enterprises, and the nice addition of small company servicing with PayPal and NCR Silver. At the $5B value, I'm more concerned about a big company stealing it. With a maturing market, I still sees this getting into the 40s within 2 years. The payoff of pension liabilities alone will make the P/E ratio enticing, because many investors still look backwards for P/E.
Buy Atlantic Power For A 10% Yield, Paid Monthly [View article]
"Although the sale of FL facilities was not a surprise, the low price (a mere $100M+) may have shocked some. All AT plant and equipment is carried at $1.7B on balance sheet, yet the sale of over 20% of the MW capacity only gets $100M ? Excellent mangement team, but the headwinds are too strong for AT to stay even at this $11 value."
Even a $1 drop is almost 10% loss. Use common sense. This is not a good play right now. For the record, I am not short AT. I'm just out of the stock and generally putting as much into cash as I can, with exceptions of NCR and BAC.
5 Factors That Differentiate Bank Of America From Other Banks Of America [View article]
It's got the best ATM network, and the branches are staffed with people who clearly are paid on customer satisfaction. As the government reflates the housing market, BAC is poised to make a lot of money. Also, I see BAC in some very big commercial loans, and would be shocked not to get an additional 20-30% in near term.