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dancing diva

dancing diva
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  • Weighing The Week Ahead: What Do Higher U.S. Interest Rates Mean For Financial Markets? [View article]
    It's a 10% grower trading at 25 times forward earnings. Morningstar gives it 2 stars (out of 5) with a fair value of $46.
    Nov 8, 2015. 05:38 PM | Likes Like |Link to Comment
  • SORL Auto Parts Puts A New Meaning To "Undervalued Investment" [View article]
    That's why I bought the stock (average price $2.06). Ordinarily I don't bother with very low priced stocks or Chinese stocks (because of questionable accounting), but after looking at all the numbers felt that buying a supposedly profitable company below cash holdings was a reasonable risk. I'm amazed this morning in the premarket the stock isn't close to approaching the $2.84 offer.
    Nov 2, 2015. 08:52 AM | Likes Like |Link to Comment
  • We Like Union Pacific... Should You? [View article]
    The trouble with UNP (and the other rails) is that carload volumes continue to decline relative to last year - and it shows no signs of getting better - or even stabilizing. Last weeks figures were truly horrendous - and I'm finding it difficult to be optimistic they will turn anytime soon.
    Nov 1, 2015. 10:03 AM | 3 Likes Like |Link to Comment
  • SORL Auto Parts Puts A New Meaning To "Undervalued Investment" [View article]
    Considering SORL has net cash of about $2.4/share this offer is insulting, but you can't blame the insiders for trying to buy it as cheaply as they possibly can. After all, the market has been unwilling to place a higher value on the company.

    The BOD should reject it as too low, and an independent board probably would, but considering the buyers are on the BOD, there is a huge conflict of interest and institutional large owners aren't big enough to stop the sale.
    Oct 31, 2015. 12:56 PM | 1 Like Like |Link to Comment
  • Know When To Fold (And When To Hold) [View article]
    To me WMT was a sell. The dividend yield isn't high enough nor their p/e low enough to justify holding imho. The company has also told you that it will take at least two years to execute their turnaround and there's no guarantee it will work. Luckily I only bought wmt fairly recently - average price around $65 - so I didn't take a huge hit, but selling it just over $60 still hurt.

    I was also long IBM way back when, but sold out gradually between late 2011 and early 2012. When I realized the stock had a premium p/e to the S&P500 but revenue growth was nearly nonexistent I decide to take profits. If I was still long IBM, with it's p/e now at a significant discount to the S&P and its dividend much higher I'd probably hold. As it is I'm considering a purchase but haven't yet entered an order. If it ever trades down to $130-133 level (chart resistance in 2008 & 2009 and near a 4% dividend yield) I probably won't be able to resist getting back in.
    Oct 24, 2015. 07:11 PM | 1 Like Like |Link to Comment
  • Will 2016 Be Like 2000 Or 2008? [View article]
    Of course the pharmaceutical, hospital and health insurance companies aren't complaining - they helped write the damn bill - to their advantage, of course. They've never been more profitable.

    Yet the majority of us - those without pre-existing conditions that were unable to get insurance in the past, or those whose incomes are low so that they're heavily subsidized - are paying far more today than prior to the bill. Our deductibles are and co-pays are higher.
    Oct 17, 2015. 07:28 PM | 6 Likes Like |Link to Comment
  • King Dollar Abdicates The Throne [View article]
    Mr. Bilello - your focus on the dollar index is misplaced. It is a very narrow index consisting of 6 currencies with the euro more than half of that index.

    The dollar index doesn't come close to mirroring our trading partners. What does is the traded weighted US$.

    Note while the dollar index topped out in March, the trade weighted index continued to rise into late September, just falling the past 2-3 weeks (the data in the chart by the Fed is over a week old).

    I'm also providing a link of trade weights by country.
    While the euro is more than 50% of the dollar index, our exports to the eurozone is just under 15%. Canada and Mexico are by far our largest trading partners, yet the $CAD is weighted only 9% in the dollar index while Mexico is not represented at all in the dollar index.

    Also you have to remember that with the Eurozone and Japan providing QE, those currencies have been used to fund trades. Their strength over the past few months is indicative of trade unwinding.

    It's too early to dethrone "king dollar" imo. We've only seen weakness in terms of the trade weighted dollar in the past 2-3 weeks after spectacular rise. If US economic data improves the market will rethink its opinion that the Fed won't raise rates for awhile, taking the dollar higher again.
    Oct 17, 2015. 04:26 PM | 1 Like Like |Link to Comment
  • Very Strange Goings On In Exports And Imports [View article]
    Steve - Both exports and imports track perfectly the inverse of the trade weighted US$ (see link).

    It appears your chart of both exports and imports are in nominal dollars. When the US$ is strong, the cost of imported goods become cheaper, so unless volume increases enough to make up for the dollar strength, the value of imports will also decline.

    Also note most manufactured items we import have become cheaper over time relative to services. The cost of items like TV's and other appliances, clothing, food, etc - has not risen nearly as fast as health care, education and other services - hence the contribution to GDP has fallen.
    Oct 17, 2015. 10:22 AM | 4 Likes Like |Link to Comment
  • Coca Cola And More Lies Stock Charts Tell Us [View article]
    In order to maintain that dividend growth and buybacks KO has had to take on significant debt over the past several years because ebitda is falling and free cash flow growth isn't keeping up with dividend payment growth. According to Morningstar statistics at the end of 2009 KO had 3 billion in net debt (12 bil debt and $9 bil in cash and cash equivalents. At the end of June 2015 KO had 23 bil in net debt ($44 bil debt and $21 bil in cash/cash equiv).

    While the current level of debt is easily managed, how long do you think KO will maintain its dividend and buyback growth and premium multiple unless some miracle of earnings growth occurs?
    Oct 15, 2015. 09:59 PM | 1 Like Like |Link to Comment
  • Ford Is Going To $17 [View article]
    I hope you're correct since I'm in a calendar spread (long Jan 2016/short Nov 2015 $16 calls). That's a cheap and painless way to be long Ford; little is lost if earnings disappoint or something else comes up, yet you get to participate on the upside if things go right. But remember the annualized rate over 18 mil units isn't real since it included Labor day weekend (excluded last year). Mike Jackson of AutoNation mentioned this a couple weeks ago, expecting the real annualized rate over 17 mil but less than 17.3 mil.
    Oct 15, 2015. 09:26 PM | 1 Like Like |Link to Comment
  • Wal-Mart Just Told You It's A Value Trap [View article]
    When I heard the news about earnings I sold my wmt holdings - luckily it wasn't a big position but it still hurt. Perhaps it's a phenomenal opportunity - this wouldn't be the first time I sold out at the lows - but there are companies with better yields and cheaper valuations that appear better candidates for my money.

    My biggest criteria for maintaining ownership is having confidence that if the stock falls further I feel comfortable adding. At this point I have no confidence.
    Oct 14, 2015. 10:08 PM | Likes Like |Link to Comment
  • Sold In May, ______ In October [View article]
    I'm using the October strength to further lighten on holdings. That could be a huge mistake if the economic data gets better and earnings are a bullish surprise, but I can't get past the fact that at over 15 times forward earnings the market isn't cheap. The 2011 rally, which appears to be most peoples template came from a low of 11 times forward earnings; much lower than todays market despite having roughly the same 10 year bond yield near 2%.
    Oct 5, 2015. 04:55 PM | 2 Likes Like |Link to Comment
  • Dollar will decline on weak jobs data - Citi [View news story]
    Must be nice to have such an active imagination!

    An October rate hike is completely off the table. Perhaps if the next two jobs reports totally disagree with this one showing higher wages, a higher workweek and upward revisions to past numbers the Fed might raise rates in December. But October, no way since much of the economic data has been disappointing since the September meeting.
    Oct 4, 2015. 01:36 PM | 1 Like Like |Link to Comment
  • Was Friday's Rally A Fake Out? [View article]
    At the low in 2011 the S&P500 was trading for about 11 times forward earnings vs over 15 times at Fridays close - with the 10 year bond virtually the same as today near 2%.

    Valuations were cheap in 2011 - not today. Perhaps the market can meander for awhile in the 1900-2000 range, but I have a hard time seeing anything much more positive unless future earnings are better than they are currently expected to be.
    Oct 3, 2015. 03:44 PM | 15 Likes Like |Link to Comment
  • What The Heck's Happening To The Global Stock Markets? [View article]
    RD - DSR ratios are lower, but the reduced oil prices went into higher medical costs and the savings rate stinks.

    I see the similarities to 2011 only in the chart so far. But at the lows in 2011 the S&P forward p/e was 11; today it's just over 15 - with roughly the same 10 year yield.

    I can't get bullish. At best I'm neutral within a range of 1700-2000 barring a collapse in the dollar and much better news out of Asia.
    Sep 30, 2015. 03:41 AM | 1 Like Like |Link to Comment