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lorddarley

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  • Danger Zone: NCR Corporation [View article]
    The conference call was not pristine. Losing John Bruno to the much larger AON was a loss, no matter how it is glossed over by platitudes like strength on the bench, etc. There is a replacement already announced for some of his functions, and a search for the rest of his job description. If he were the CFO, I'd panic. However, I've rationalized as follows: he knows he will not be CEO, and this is simply a better deal, with a much larger company. In a way, this endorses NCR for having had so much talent. But it is still a downer.

    On the upside is the math. The most important ratio is debt to earnings, and they project the bloated 3.7 (at 1/1/2014 reflecting DI acquisition) to be down in just 12 months at 12/31/2014 to 3.0. That's staggering improvement.

    As for the announcement last week that Target had cancelled the NCR relationship, Nuti was fast out of the blocks and opined that NCR and Target had mutually agreed to say this "announcement" was inaccurate. Who knows. My guess is that they deferred the NCR rollout to be sure Target has the enhanced security features in place due to its huge embarrassment. Nuti volunteered later in the call that he was eager to speak more on this, but was restricted by agreements with Target.

    Otherwise, it was a good call. Nuti is frank to acknowledge his sales team does not fully get it, so that closings are sloppy, causing slippage from one quarter to the next. As a long term investor, I'm not real concerned about short term sentiment.

    Let's see over the next two years. My horizon as a searcher for companies out of favor with good long term prospects NCR is an undervalued gem. Let others quibble about quarterly "results." In one good day, with reversed sentiment, a small company like NCR can make that all up, and then some.
    Aug 4 05:34 PM | Likes Like |Link to Comment
  • Danger Zone: NCR Corporation [View article]
    Good discussion, and although we disagree, let's parse this.

    1. You said: The growing trend is less shopping in stores and more shopping online.

    I say: Assuming the US market remains stagnant, and that new arrivals on our shores suddenly become computer-literate, and that the retiring class, with time on their hands, decide to spend less time in banks, agreed. Look past our shores. The world is way behind the US. A lot of the world is still hoping for a car. NCR, with its new commitment to India production and Asian market penetration is a play on billions of consumers, just learning that banks are a better place for savings, and that retail goods can be bought without cash.

    2. You say retail banking is moving on line.

    I say: Agreed, for sophisticated US consumers. But even for them, the whole point of branch transformation is to make those low profit transactions less expensive for banks, and to free up a bank's best employees to promote and close on high profit deals, like mortgages for purchase, reverse mortgages for retirement, mutual fund purchases, and even commercial loans.

    3. You said that the low interest NCR "debt" (in actuality, a combination of preferred and real debt) has a greater present value than the income streams it has purchased. I've made a 7 figure investment which disagrees, so perhaps one or the other of us picks up a bar tab (Boston or NY, your choice) in a few years. I have a hard time thinking NCR's very focused management, heavily invested in NCR stock, can't make a lot more than 6% on these purchased assets to break even, based on what we see so far with DI and Retalix. These are very well integrated acquisitions. DI seems like a home run after only a few months. Retalix seems sleepy only because of the "compare" against last year's WalMart sale.

    4. Free cash flow is not negative. Where does that come from?

    5. I agree that GAAP is hardly a reflection of true earnings. I'm not sure what your point is. For investors, we always look at non-GAAP, which Management reaffirms is at $3 - $3.10 for 2014. That's about 10 x earnings for a company shifting production to a higher margin business.

    Regards.
    Jul 31 05:54 PM | 1 Like Like |Link to Comment
  • Danger Zone: NCR Corporation [View article]
    I read nothing in this article that was a new thought or that would not be already discounted in the stock price. A few impressions, because this article was so superficial it does not deserve more than that.

    People will stop shopping in stores? Hardly. Consider that this is a worldwide business. Consider that many businesses (airline check in, hotels, groceries, etc.) are not internet purchases.

    US banking is slow. How long can that last? Not forever.

    Branch transformation is a fad. Watch over the next few years. Totally disagree on this one.

    Debt is bad. Come on. A smart business uses low interest debt to buy higher yielding businesses.

    Not mentioned. Worldwide market and retail penetration by NCR.

    Not acknowledged: cash flow growth

    Not acknowledged: no retreat from 2014 earning estimates.

    Not acknowledged: strong stock performance since 2008. It has retreated from a too high number in the 40s. So what? This is just a pause that refreshes.

    LD
    Jul 31 09:20 AM | 1 Like Like |Link to Comment
  • Sirius XM: Deal Or No Deal? You Win, But You May Be Waiting [View article]
    This is fabulous analysis of Siri. Were it not for Malone, it's a buy. With Malone in the picture, who wants the intricacy when there are so many less complicated opportunities? I was ready to pull the trigger until reading this extremely well-reasoned article, and thanks to the author. I love my Sirius, but not Siri.
    Mar 5 01:12 PM | 1 Like Like |Link to Comment
  • How To Retire At 30! [View article]
    And one other thing about being "self-funded." Let's ignore for a second that they got born in the right place, in a system that others created.

    At the $25,000 income level, this couple gets a subsidy of approximately $4,618 towards a $5,747 silver health plan under the ACA.

    They may not want to be federal parasites, but I doubt they will turn that down.

    The powers in Washington are doing their best, for votes, to create parasites. Self-respecting Americans should fight this, and certainly not admire the ones who are takers.
    Jan 29 07:45 PM | 6 Likes Like |Link to Comment
  • How To Retire At 30! [View article]
    This country makes it possible for citizens (with less talent and language skills than the average overseas person) to prosper.

    Anyone blessed with that fortunate circumstance, to be born here, and who does not contribute to make this country more prosperous, has dropped out.

    They should not be condemned, but are hardly role models. A country populated with people like this would not survive very long.

    Bring on the immigrants if this is the best we can produce.
    Jan 29 07:35 PM | 8 Likes Like |Link to Comment
  • How To Retire At 30! [View article]
    Anyone with a smattering of history in their belt knows that thousands lived this way in England in the 19th century. As parasites, they benefited from a strong currency and the dominance of the British Empire, paid for with the blood and money of others.

    It was a clean life to be a non-working Brit in the 19th century with a bit of capital. Some just destroyed their livers. Others wrote great books.

    Nothing has changed too much. History repeats. Folks like this current hippy couple in the USA are fortunate enough to live in a country which dominates the world economy, and to have a safety net in case things go wrong.

    It's just the 19th century (Britain) redux, before the collapse. I don't condemn them for dropping out. However, they are not part of the country's future, just sweet parasites.

    Let them be. There's tolerance for indolence in a prosperous country.
    For others of us who believe that you should not devolve to a state of vegetable dependency, abjure this and be part of the future. Fortunately, we have immigrants (and many young people who are not on the media charts) who have huge ambitions.

    This is still the best country for ambitious people. We just need to observe the wisdom of Thomas Jefferson, the "liberal" who understood things: "I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them."
    Jan 29 06:29 PM | 8 Likes Like |Link to Comment
  • NCR Management Discusses Q3 2013 Results - Earnings Call Transcript [View article]
    Almost 6 million shares and it's not yet 1 PM. Lots of profit taking. Maybe these sellers thought that NCR would announce the cure for cancer.

    I hate to see some of the short term profits evaporate, but the long term story is so good, and the price seems so reasonable, it makes no sense to sell.
    Oct 25 12:53 PM | Likes Like |Link to Comment
  • NCR Management Discusses Q3 2013 Results - Earnings Call Transcript [View article]
    It's an excellent report. I'm also pleased with the explanations for slightly lower volume this quarter: mixed execution on one or more sales and seasonality.

    As an accrual taxpayer, it sounds like not quite enough paperwork was done to bring a pending large sale into this quarter; I'm glad they are not accrual cowboys and it sounds like this just shifts into next quarter. The explanation that the last quarter will get a bunching of revenue also makes sense, because customers put off purchases until they know they have room in budgets, and salesmen hustle to make their bonuses.

    I'm concerned a bit about the reluctance to discuss the WalMart relationship. Maybe Walmart is not using NCR for the 600 new stores? If so, the announcement of two new deals for check-out technology, each of them bigger than the 10,000 unit sale to Walmart this year, will overcome that. WalMart is so tough to deal with, I'm amazed anyone can make a profit with them anyway. I'm also a litle concerned with lower US ATM volume, but that may reflect the nature of the banking industry and the continued strong competition from Diebold.

    Bottom line: the revenue sources are more balanced, higher margin sources (software and servicing) are predominate and are growing, and the dollar (which hurt the currency translation) won't be strong forever. With all the froth about NCR prospects, the stock won't take off, but it's still a good investment at this price.
    Oct 25 09:08 AM | Likes Like |Link to Comment
  • A Nobel Prize Winner On Alpha [View article]
    Glenn,

    As a fellow horse-player who also enjoys Andy Beyer's books, I could not agree more. I pick companies, not markets, and the idea of owning shares of 50 companies, or even 10, seems imprudent. How can anyone really pretend to know the details of that many companies, read all their issued public reports, and also follow the industry in which they compete or (ideally) do not compete because of a dominant position?

    Regards.
    Oct 16 06:20 AM | Likes Like |Link to Comment
  • A Nobel Prize Winner On Alpha [View article]
    The open end mutual fund model is so outdated, it's hard to see why anyone with a brain buys the things. The manager of an open end mutual fund carries heavy weight:

    1. liquidity concerns, because investors move in and out with a phone call, and require unanticipated sales and purchases;

    2. tax concerns, because of the bizarre tax rules which pass through realized gains to taxable investors when profitable positions are sold, even if the investor never benefited from those gains. Frenetic tax balancing activity is a drag on returns, even for tax exempt investors (like 401(k) participants);

    3. compensation bonuses, and year end manipulation by managers which has nothing to do with performance, and everything to do with getting paid for beating peers in their short term compensation models. Translation: managers, who rarely invest where they eat, will lock in early winners due to calendar year compensation models and will put it all on red if they are behind as the year end approaches;

    4. and fees. They add up over the years.

    LD
    Oct 15 07:37 PM | 2 Likes Like |Link to Comment
  • The Leveraged Buyout Of America [View article]
    It is obscene to hear these banks declare they paid off their federal assistance.

    My mother and the nation's savers paid off the banks' federal assistance, with forced devaluation of their savings. Less than 1% interest rate on a lifetime of savings that were planned for retirement, and not even a thank you from the CEOs or Congress. Greedy B#@s&ds took the money without even a thank you.

    When a middle class of savers lose their life's work through manipulation, it used to be the starting point for revolution. But these folks are too old. And, with the competing demands of CEOs who make big contributions, and the yells from the gimee gang that would not dream of saving for the future, the old-time savers, from the former middle class, have no one representing their interests.

    Nations decline with the corruption of middle class morals. An enlightened aristocrat like Montesquieu knew that. An evil opportunist like Hitler knew that. The gang that controls this great country could care less.
    Aug 26 02:39 PM | 11 Likes Like |Link to Comment
  • Is The Financial Crisis Over For Financial Stocks? [View article]
    Chuck and fellow investors,

    Look at small cap Cambridge Bancorp (CATC). It's the owner of Cambridge Trust Company.

    Facts at a glance at this link: http://bit.ly/13Dogam

    4% dividend, branches in the best suburbs of Boston, trust operation here and in So. NH. Over 100 years in business and loved by its customers.

    It's not for sale to my knowledge. Disclosure: I have a lot of shares accumulated patiently over the years. I never worry about this bank's management, nor do I expect an overnight triple. This is just a good solid bank that doesn't roll the dice with owners' money.
    Aug 3 11:27 AM | Likes Like |Link to Comment
  • Cambridge Bancorp: Nice Dividend With Long-Term Catalysts [View article]
    Darn it, Jacob. (<:

    I already own 5,000 + of this little gem and was hoping to pick up more on the cheap. The float is so thin, you can only nibble when buying.

    This is a very well run and diversified operation for which there is a lot of customer loyalty. Its branches are in some of the best locations in prosperous suburban Boston (which includes So. NH).

    I am hoping they stay independent, but I am sure there would be interest from buyers if they ever decided to go that route.
    Jul 26 12:40 PM | Likes Like |Link to Comment
  • What iPhone 5 Discounts Could Mean [View article]
    Who knows ? I hated the stock at 25 and just bought some at $400.
    Jun 25 05:57 PM | 1 Like Like |Link to Comment
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