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Lake Investor

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  • Fiscal Cliff: Let's Call Their Bluff [View article]
    Dumbest article ever on this site
    Dec 20, 2012. 08:48 PM | 6 Likes Like |Link to Comment
  • Cisco: The Time To Buy Is Now [View article]
    Why past its prime? CSCO's income rises steadily. Now it has initiated a dividend. Sales increase like clockwork also. Seems to compete well with against newcomers.

    Everyone will admit the stratospheric PE of CSCO during the internet bubble was not warranted. In hindsight it was way overvalued. I believe in a few years we'll look back and realize what a buying opportunity the current period offers in CSCO shares.

    Long CSCO.
    Dec 20, 2012. 07:41 PM | Likes Like |Link to Comment
  • Smart Investors Should Ignore The Gimmick Of Intel Share Buybacks [View article]
    You are confusing share price and enterprise value. They are not the same. The buyback per your illustration does not affect enterprise value.
    Dec 19, 2012. 02:57 PM | 1 Like Like |Link to Comment
  • Smart Investors Should Ignore The Gimmick Of Intel Share Buybacks [View article]
    Well stated though it should be pointed out that it does free some some dedicated cash flow in that funds previously dedicated to paying dividends on retired shares can be used to service the new debt.
    Dec 19, 2012. 02:55 PM | Likes Like |Link to Comment
  • Smart Investors Should Ignore The Gimmick Of Intel Share Buybacks [View article]
    Again, you are confusing enterprise value with share price. Share price is affected by a lot of different things. Your comments and article use the generic term "value" when you mean "enterprise value". The term "value" could mean something else to another reader. Enterprise Value is an objective term with a subjective element (market cap). Value is subjective.
    Dec 19, 2012. 02:53 PM | Likes Like |Link to Comment
  • Smart Investors Should Ignore The Gimmick Of Intel Share Buybacks [View article]
    That's a pretty broad sweeping statement. I am one retail investor that cares about more than PE. I really like management that manages a company with the shareholders' best interests at heart. It's been a rough dozen years or so for a lot of tech companies but INTC has continued to increase dividends and share buybacks.
    Dec 19, 2012. 02:02 PM | Likes Like |Link to Comment
  • Smart Investors Should Ignore The Gimmick Of Intel Share Buybacks [View article]
    I think everyone gets your point that the Enterprise Value does not change by definition the moment after the trade. However, one can argue that Enterprise Value will be affected in the future as Intel appears to be undertaking an arbitrage that will save cash (interest carry less than dividends saved) and will gain a tax advantage from ongoing deductibility of interest payments. That should increase Enterprise Value in the future.

    Further, Enterprise Value is just one measure of value employed by investors. All investors are involved in a discounting exercise whereby they discount future earnings/cash flow to arrive at a current value. Buy/sell decisions are then made by comparing the current price with the discount model. Like many commenters on this thread, I think the future value of the bigger slice of earnings I will get after the buybacks is significantly greater than the incremental interest cost of the new debt issue.

    The arbitrage may or may not pay off. It's a bet. Plenty of articles have been written showing that companies are not particularly good at timing the market when it comes to stock buybacks.

    Many if not most of commenters on this thread are like me, long Intel. We are long because we perceive value at the current price. Most people in that camp think the debt issuance coupled with a buyback makes sense. I especially like the fact that they are fixing a good portion of the debt for ten years and longer. That alone may turn out to be a wonderful trade if interest rates go up.

    Thanks for the article.
    Dec 19, 2012. 01:12 PM | 2 Likes Like |Link to Comment
  • What Wal-Mart's Promotion Of The Apple iPhone Means For Both Companies [View article]
    Other than the crowds what is there to dislike about Walmart? Great prices on food and just about everything else. Get anything you need at any time, day or night (including trailer hitches!). Neighborhood Walmarts offer the food at the same prices but offer much more convenience than Super Walmarts.

    Walmart is also one of the biggest if not biggest employer in the US. It employs many people who need a start and haven't found employment elsewhere. They treat shareholders well. About as virtuous a company as you will find.
    Dec 17, 2012. 05:56 PM | 4 Likes Like |Link to Comment
  • Freeport McMoRan Following The BHP Model [View article]
    I'm not so sure. I was long FCX pre-deal. I don't see why FCX management thinks they have an edge in a crowded E&P space. E&P is very competitive. No one is getting those kind of premiums for their companies. The interlocking interests make it look more suspect. To do such a deal without a shareholder vote is inexcusable.

    I'd like to know the name of the firm, if any, that gave a fairness opinion on this deal. I wouldn't be surprised to see them and both boards of directors sued. Business judgment rule will not shield you when you have conflicts of interest. The arrogance of management is astounding.
    Dec 14, 2012. 04:24 PM | 4 Likes Like |Link to Comment
  • As Google Maps Humiliates Apple, The Upside Is Millions Will Finally Upgrade To iOS 6 [View article]
    Actually, after a short trial period I like theApple Maps better than Google. I haven't run into the problems others have cited. I think it's a superior product. I like the voice direction and flyover. It's very accurate in my experience.
    Dec 14, 2012. 01:10 PM | Likes Like |Link to Comment
  • Look Out Below: Apple's Unit Profits Are Falling [View article]
    Good points--also, why did the author have a $700 price target in March if unit margins were falling? Was there no evidence of unit margins falling then? So many writers and analysts seem to write to move stocks.
    Dec 11, 2012. 07:43 PM | Likes Like |Link to Comment
  • 3 Reasons Why I Think Apple Is Going To Increase Its Payout Next Quarter [View article]
    But if a business relationship with Apple really moves the needle for a company (a common occurrence), in some instances it may make more sense to buy them than to sign a long-term supply contract. Tim Cook will know what to do.
    Dec 11, 2012. 06:39 PM | Likes Like |Link to Comment
  • 3 Reasons Why I Think Apple Is Going To Increase Its Payout Next Quarter [View article]
    I'm one of the guys who bought in the 370 range so I was probably helped by his delay. He can go ahead and repurchase shares now though.

    I worry about Apple becoming a target of the envious do-gooders who always want to grab someone else's money to advance their cause of the day. Foreign governments are going after Google, Starbucks, etc. Don't let yourself get painted as a target.
    Dec 11, 2012. 06:28 PM | Likes Like |Link to Comment
  • 3 Reasons Why I Think Apple Is Going To Increase Its Payout Next Quarter [View article]
    I agree with this strategy. Defend your margins by holding down costs. If given a repatriation holiday I do hope they bring the cash back.
    Dec 11, 2012. 06:25 PM | 1 Like Like |Link to Comment
  • 3 Reasons Why I Think Apple Is Going To Increase Its Payout Next Quarter [View article]
    take your dividends and go dig a well. Corporations are meant to make profits for their shareholders.

    I do agree that cash is trash and I wish Apple would give more to me so I can redeploy cash not needed in their business. I wonder if Tim Cook isn't looking at an expensive rampup for Apple TV and that is why he is holding so much cash. Apple has earned the benefit of the doubt. I am still hoping they significantly up their payout.
    Dec 11, 2012. 06:22 PM | Likes Like |Link to Comment
COMMENTS STATS
198 Comments
308 Likes