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  • Keurig Green Mountain Is A Renewed Short Opportunity [View article]
    1. 2016 FCF fc $420-$500 vs $200ish dividend is good coverage
    2. Above includes $250 capex which could be held back in crisis mode
    3. Mgmt would be crazy to increase dividend now if at risk in short/medium term
    4. Credit agencies would put debt on credit watch if they sensed risk to payout
    5. In my view core business of brewers and pods is sound. "Problem" is unsustainable sales bursts are then extrapolated by investors who are disappointed when normalized results come back to earth. Maybe there won't be a Keurig in every home but there is no disruptive new technology destroying Keurig's legacy business.
    6. That said, no dividend is 100% guaranteed, but I wouldn't lose any sleep over GMCR's for the next 3-5 years.
    Nov 26, 2015. 12:47 AM | Likes Like |Link to Comment
  • Keurig Green Mountain Is A Renewed Short Opportunity [View article]
    Not sure consecutive quarter commentary is valid for a seasonal business...e.g. company needs to build for the holidays.

    Negativity on GMCR is getting to be a crowded trade. Everybody hates KOLD so flop will surprise no one and small success would surprise everyone. No way dividend is at risk. Pretty good value...I wouldn't short here.
    Nov 25, 2015. 02:48 PM | 2 Likes Like |Link to Comment
  • Gambling On American Capital Agency? [View article]
    How can making a leveraged interest rate bet create real economic value? mREIT historical performance has been dependent on an epic secular yield curve story which may be coming to an end.
    Nov 24, 2015. 03:31 PM | Likes Like |Link to Comment
  • Keurig Green Mountain: A Dead Cat Bounce [View article]
    Stock volatility supports my point. The stock does not have a mind of its own. For some reason investors' opinions on GMCR are binary and extreme. They think either the company is going to be the next SBUX or fall off a cliff into bankruptcy. If one looks at the history of GMCR without regard to stock price its story is not so volatile and unusual. They grew rapidly then reached saturation pressure, but their technology was not replaced by a superior one suggesting a classic growth to value transition. I believe stock will plod along between $40-60 supported by dividend and buybacks.
    Nov 20, 2015. 03:55 PM | 1 Like Like |Link to Comment
  • What Do Today's Stock Prices Imply For Future Returns? [View article]
    Good article and I agree...stocks are overvalued. If you believe low interest rates and high profit margins revert to historical ranges, then stocks are way overvalued implying low forward looking returns.
    Nov 20, 2015. 03:38 PM | Likes Like |Link to Comment
  • Keurig Green Mountain: So Now What? [View article]
    Would be interesting for you to apply this formula to all the stocks in the SP500. I think you would find few of them are "worth much".
    Nov 19, 2015. 11:56 AM | Likes Like |Link to Comment
  • Keurig Green Mountain: A Dead Cat Bounce [View article]
    Funny how people draw a line from peak to current stock price and call this company a disaster. Nobody goes back 10 years when the price was 3 and calls this company a success. Much of the backward-looking "problem" was investors extrapolating unsustainable growth rates creating a bubble.

    Forward-looking GMCR looks interesting as a value play. Strong BS, dividend yield north of 2.5% and with 21mm installed base little chance of going under. Seems like downside is limited.
    Nov 19, 2015. 11:52 AM | 2 Likes Like |Link to Comment
  • AmEx sued by San Francisco [View news story]
    Sickening shakedown attempt of a business that's been perfectly legit for half a century. How does AXP "stifle competition" when they are the little guy compared to V/MA? How do they shift extravagant reward cost to cash customers? I guess Herrera will decide for us what is extravagant? In that town?If SF merchants don't like AXP here's a solution...stop taking the card. Oh yeah, that doesn't work cause it doesn't fill the government coffers with shakedown money...and further the sleaze ball political aspirations of Herrera. Really nauseating.
    Nov 19, 2015. 11:22 AM | 6 Likes Like |Link to Comment
  • Proto Labs Is Primed For A Short Squeeze [View article]
    I think insider selling may have more to do with the founder and previous CEO exiting rather than any inside pessimism.
    Oct 28, 2015. 02:52 PM | Likes Like |Link to Comment
  • American Express: Street Sentiment Has Turned [View article]
    First, there is no correlation between analyst ratings and future stock performance, so I don't know why the analysts are a big deal. They're a herd that is usually late with their calls.

    Second, and more importantly, how can you suggest a break up when you don't identify what is being broken up or even what the parts are. Years ago with Lehman, Ameriprise, etc maybe but now its really just a card business with few if any parts that can survive outside the AXP brand umbrella.

    That said, they may do something. They like to offset gains with charges that lead to future earnings growth and a big gain may be coming when they exit Costco.
    Oct 26, 2015. 07:48 PM | 4 Likes Like |Link to Comment
  • American Express' Premium Is Unjustifiable [View article]
    I don't believe you can opine on AXP valuation metrics without considering ROE. With its high ROE AXP can grow and deliver dividends/buybacks where a low ROE bank needs to retain a lot more earnings to support balance sheet growth.
    Oct 22, 2015. 11:55 PM | Likes Like |Link to Comment
  • American Express: How Much Longer Will The Analyst Community Be Supportive? [View article]
    Based on history a likely scenario would be AXP announces a new big expense cut initiative, they drag out some asset sale that generates a gain, the gain is offset by a restructuring charge, management reorganizes and somebody senior gets sacrificed, they create breathing room, fix their problems and move on.

    Old song.

    Not sure what the problem fix is, but I doubt its a capital initiative. Maybe they cut expenses severely enough and plow the saves back into doing something big with their rewards program to generate higher usage.

    If I were working there I'd have my resume current cause they might start swinging the axe soon.
    Oct 20, 2015. 06:27 PM | Likes Like |Link to Comment
  • Bloomberg: How Bad Will It Get For American Express [View news story]
    I read the Bloomberg hit piece. Interesting how they noted average spend per purchase rather than average spend per month, but in any event the AXP average spend per month premium over V, MC and DFS has increased substantially over the last 5 years...they are improving in the high net worth segment. On a personal note I use AXP almost exclusively: good service, good rewards and no accidental revolves like the ones V uses to milk you with interest charges if you're out of town when the bill comes.

    Here's my main point though...Costco. Yeah, you can get some slightly off brand junk a little cheaper by buying more than you need there but consider the experience. You need to buy a card for a not insignificant annual fee and have it ready for the school monitor after walking through the crowded parking lot. Then you fight the crowd inside where they may or may not have what you want. Then you need to show your card again to the cashier along with your form of payment which can't be the card of your choice, but needs to be the cult card. Then after guiding your cart through a frenzy of hot dog eating, as a final indignity some aged TSA wannabe rifles through your basket and reconciles with your receipt in some sort of primitive security process.


    And now Costco says the payment form I previously chose to use is now a new revenue stream controlled by them? That's arrogant and I don't buy it. Pretty soon they're gonna make me wear a Costco t-shirt to shop at Costco. Every part of my life is not a potential Costco revenue stream. Screw you Costco, I'm going to TGT or AMZN or a million other places where I don't have to pay to be jerked around, and I can use whatever form of payment I damn please.
    Oct 16, 2015. 11:54 AM | 1 Like Like |Link to Comment
  • Keurig Kold Launches With Negative Commentary Already [View article]
    Really Seth? Your ego that fragile? Please let us know what "due diligence" you conducted to determine that the power consumption from one plugged in KK will cause "electricity costs to soar".
    Sep 29, 2015. 04:59 PM | 1 Like Like |Link to Comment
  • Alcoa’s split eventually could pair it with Alcan, analyst speculates [View news story]
    Good idea...I think it could happen.
    Sep 29, 2015. 02:36 PM | Likes Like |Link to Comment