Mansij Hans, E.I.T.'s Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/232945/comments http://seekingalpha.com/news/market_currents/post/36723?source=feed#comment-765148 765148 Wed, 18 Nov 2009 08:42:54 -0500 http://seekingalpha.com/article/113187-four-reasons-to-own-dow-chemical?source=feed#comment-346662 346662
If you look at net cash flow for the last 3 quarters, their total cash flow from operating activities minus the total expenditure from investing activities - the net cash flow - is less than their dividend liability.

In other words, the only way they have been able to pay their dividend for the last three quarters is because they have been borrowing money to do it.

So, perhaps they can keep borrowing until the economy turns around, but most of their businesses are in sectors which have no patent protection AND face increasing competition from China.

Furthermore, while Dow has payed its dividend for 96 years, most people don't realize it has borrowed money 3 of those years to pay for it. This is the fourth time they are doing it. Its another reason they are cutting employees - severance payments are one time charges which are generally excluded from EPS numbers, where as salaries directly influence the overall EPS number.

Dow has almost no growth buisnesses and no desire to drastically reduce its size. Unless cost of manufacturing in China goes up significantly and Dow immediately starts selling of its dead divisions, I view Dow with significant going problems and would chose a Certificate of Deposit over Dow stock. ]]> Mon, 05 Jan 2009 14:39:00 -0500
If you look at net cash flow for the last 3 quarters, their total cash flow from operating activities minus the total expenditure from investing activities - the net cash flow - is less than their dividend liability.

In other words, the only way they have been able to pay their dividend for the last three quarters is because they have been borrowing money to do it.

So, perhaps they can keep borrowing until the economy turns around, but most of their businesses are in sectors which have no patent protection AND face increasing competition from China.

Furthermore, while Dow has payed its dividend for 96 years, most people don't realize it has borrowed money 3 of those years to pay for it. This is the fourth time they are doing it. Its another reason they are cutting employees - severance payments are one time charges which are generally excluded from EPS numbers, where as salaries directly influence the overall EPS number.

Dow has almost no growth buisnesses and no desire to drastically reduce its size. Unless cost of manufacturing in China goes up significantly and Dow immediately starts selling of its dead divisions, I view Dow with significant going problems and would chose a Certificate of Deposit over Dow stock. ]]> http://seekingalpha.com/article/86184-the-agriculture-boom-goes-bust?source=feed#comment-215126 215126
While, I think you're discussion of the fundamentals of these companies is impeccable, I worry you may be ignoring the fact that the trading dynamics of these stocks are not only influenced by fundamentals. While these companies are in fact still booming, their stock prices can only sustain 100% growth rates for so long. These stocks(just look at Monsanto) have gone up around one thousand percent since 2002. Their major market drivers - the devaluation of the dollar lead to the heavy buying of their products abroad and increase of oil price which caused farmers to want to use chemical treatments instead of tractors - are now likely to lose steam because of the reinvigoration of the dollar and the decrease in the price of oil. The ag sector is not going to go insolvent, but its growth rate into the future is not simply attractive enough for the use of capital meant for value investing.

Personally, I would consider shorting far out of the money calls for the Jan2010 expiration on price spikes.

As a side note, I am a frequent reader of seeking alpha and think highly of the analysis at this website. ]]> Sat, 26 Jul 2008 12:47:50 -0400
While, I think you're discussion of the fundamentals of these companies is impeccable, I worry you may be ignoring the fact that the trading dynamics of these stocks are not only influenced by fundamentals. While these companies are in fact still booming, their stock prices can only sustain 100% growth rates for so long. These stocks(just look at Monsanto) have gone up around one thousand percent since 2002. Their major market drivers - the devaluation of the dollar lead to the heavy buying of their products abroad and increase of oil price which caused farmers to want to use chemical treatments instead of tractors - are now likely to lose steam because of the reinvigoration of the dollar and the decrease in the price of oil. The ag sector is not going to go insolvent, but its growth rate into the future is not simply attractive enough for the use of capital meant for value investing.

Personally, I would consider shorting far out of the money calls for the Jan2010 expiration on price spikes.

As a side note, I am a frequent reader of seeking alpha and think highly of the analysis at this website. ]]>