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charliezap

charliezap
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  • Is Chevron Right For Your Dividend Growth Portfolio? [View article]
    Sasol's revenues are primarily based on the US$, whereas expenses are in ZAR. When the ZAR is weak, the operating leverage boosts profits by far more than the ZAR lowers the stock price. This is confirmed by past analyst reports, including that from Citigroup. (Recent rating, a BUY, with TP 56)
    Apr 15 03:03 PM | Likes Like |Link to Comment
  • Will The Cloud Kill Digital Realty Trust? [View article]
    Michael, this and some other REITs were in a momentum bubble prior to May 2013, when taper talk started. I would never have touched it in the 70 range. My holdings were acquired from October through December 2013, and my average price is $48.25. That's why I'm interested in the trend since December.

    I would be interested in why the CEO was dismissed, but I think the accounting issues have been dealt with. Otherwise, the stock would not be so far off its December low. Yield is 6.4% and FFO multiple is under 11. That's good enough for me to continue to hold, pending upcoming quarterly.
    Apr 15 02:52 PM | Likes Like |Link to Comment
  • Will The Cloud Kill Digital Realty Trust? [View article]
    Michael, your bias showed when you compared DLR to an extreme case like Enron. You either have a short position in the stock, or you are posting for the shorts.

    That Jacobson has been short is not new news -- its been out there or some time. Jacobson is a generalist. Shorting a REIT is always questionable -- in this case, Jacobson is stuck with paying the 6.7% dividend yield. I'd rather go with the analysts who understand the REIT business model, who are projecting an 8% growth in FFO in 2015 over 2014, and who have a median TP of 54 (Source: Yahoo).

    Re "company has been been crumbling", the stock price of DLR is actually up by 23% from the low of 43 that it hit in early December. There are 31 million shares short, with 19 days to cover based on recent share volume. The need for shorts to cover will provide support for the stock, as the accounting issues have already been addressed. There is a slight degree of uncertainty due to the demise of the CEO, but it may turn out that the change will be positive. I'm staying long.
    Apr 15 10:29 AM | Likes Like |Link to Comment
  • Is Chevron Right For Your Dividend Growth Portfolio? [View article]
    south, its true that the decline in the value of the ZAR over the past year would appear to affect the US$ NYSE price of SSL. On the other hand, the price of Sasol's oil products sold in South Africa is based on a formula that uses the $price of Brent crude as input. Plus, Sasol's chemical exports from South Africa are priced in US$. The result is the the profit effect from the ZAR decline more than offsets the share price effect.

    http://yhoo.it/1jHNy1s
    Apr 15 09:57 AM | Likes Like |Link to Comment
  • Is Chevron Right For Your Dividend Growth Portfolio? [View article]
    sg, here is formula for CAGR for 2013 to 2017 (4 years), 2.6 to 3.1 million boepd.

    Compound Annual Growth Rate = (3.1/2.6)^(1/4)-1 = 4.50%.

    I simply plugged the formula into an Excel spreadsheet.

    I think your oil choices are sound, though I am underweight the oil sector at present. CVX is on my dividend list, and I went into SSL (Sasol, which may build a gas-to-liquids, GTL, plant in Louisiana) recently for a short term trade. SSL has 3.8% yield, and I may hold on pending favorable news developments.
    Apr 14 11:56 PM | Likes Like |Link to Comment
  • Is Chevron Right For Your Dividend Growth Portfolio? [View article]
    southgent, you said: """One of the main differences is production growth over the next few years. COP believes that it can consistently generate 3% to 5% compounded annual production growth . ."""

    According to the Reuters article that you link, CVX cut its estimate of 2017 production to 3.1 million boepd. CVX also expects to produce 2.6 boepd in 2014. By my calculations, that is represents a compound growth rate of 6% p.a. for 2014 to 2017, exceeding the 3% to 5% that you cite for COP. My point: COP may be a good investment, but CVX will not be a laggard if it meets its lowered production goal.
    Apr 14 10:38 PM | 1 Like Like |Link to Comment
  • Is Chevron Right For Your Dividend Growth Portfolio? [View article]
    Price/Sales is a useless indicator when evaluating large/integrated oil companies. The P/S ratio depends more on the degree of integration (crude oil production vs crude oil refined) and on the mix of other businesses (e.g., chemicals) than on, say, operational efficiency. If CVX sells crude oil to its own refineries, these sales are eliminated in consolidation, distorting the P/S ratio, for instance. Repeat, a useless indicator by which to compare companies.

    I would rate CVX as a Buy, but not for any of the reasons cited by the author (mostly backward-looking financial data, and little else). There is no mention, for instance, of the enormous capital expenditures made by CVX in recent years, in Australian LNG projects, offshore oil production, etc. These will bear fruit over the next 5 years, and CVX will show increasing production and profit growth!
    Apr 14 04:27 PM | 1 Like Like |Link to Comment
  • Another $800 Million Down The Drain For Bank Of America Shareholders [View article]
    Buffett has added nothing since his sweetheart deal (BAC needed a confidence booster) with BAC for a 6% preferred + warrants. Berkowitz added just 0.05% in the latest quarter, i.e., virtually nothing.

    Buffett has underperformed the market in the last 5 years.
    http://tinyurl.com/oqr...
    Apr 10 01:46 PM | Likes Like |Link to Comment
  • Intelligent REIT Investors Must Stay Focused On Dividend Dependability [View article]
    No. The number on the summary page is P/E. The number on the Price/Earnings line of the Analyst Estimates page, which is 16.27, is Price/FFO.
    Apr 10 01:41 PM | Likes Like |Link to Comment
  • Intelligent REIT Investors Must Stay Focused On Dividend Dependability [View article]
    vocuer,
    Yes, its the Yahoo "Analyst Estimates" page. For equity REITs, Yahoo shows FFO per share estimates on this page. And the "Price/Earnings" line actually shows Price/FFO (at least, for the company concerned). Here is a link to the Realty Income page:
    http://yhoo.it/WMFpv8
    Apr 10 07:02 AM | Likes Like |Link to Comment
  • How Buffett Picks Them: Taking The Long-Term View [View article]
    Too bad that Buffett has lagged the S&P 500 over the last 5 years!

    http://tinyurl.com/mlz...
    Apr 9 04:45 PM | Likes Like |Link to Comment
  • Realty Income: One Heck Of An Ark That's Prepared For The Storms Ahead [View article]
    Thanks, Palladium, for the clarification. I checked the 10-K and I believe that you are correct.
    Apr 9 11:53 AM | Likes Like |Link to Comment
  • Citigroup And Its $62 Price Target [View article]
    Josh, I like your analysis, although it is sensitive to assumptions -- discount rate, etc. Credit Suisse, has the same price target, 62, which would be just 13% over the current TBV. Their EPS estimates are $4.85, $5.70, and $6.00 for 2014 through 2016. Citi is at the lowest P/E of all of the big banks and there is no reason why its prospects should be any worse in the future.

    All of the preceding comments above are backward looking, IMO. The bailout caused a lot of dilution, hence the reverse split, but that's past history. Hopefully, Citi learned from its mistakes, and there is no reason to believe that the current CEO will repeat the past. C is a safe buy at its current level below $46.50, IMO.
    Apr 9 10:14 AM | 2 Likes Like |Link to Comment
  • Realty Income: One Heck Of An Ark That's Prepared For The Storms Ahead [View article]
    Bryce, the main difference between CFO and FFO is that interest expense is deducted to get to FFO. This makes sense for equity REITs, as interest must be paid before dividends are paid -- FFO therefore gives a good indication of cash available for distribution -- AFFO gives a better indication, but AFFO must be estimated and is not as rigidly defined.

    FCARONE, the Schwab, Fidelity, Ned Davis, and other reports you cite are not done by humans -- they are simply spit out by computers. It is a case of Data In, Garbage Out. The Davis rating, for instance, appears to be based on Price/Book, Price/Sales, and EPS trends. The Price/Sales ratio is compared with the P/S of other so-called "Financials", which makes no sense at all.

    On Price/Book, I once owned a REIT (Town and Country Trust, a Baltimore-based apartment owner) that had a negative Book Value -- but it got taken out in a merger at a price around $40 per share.

    On EPS, the Davis report shows that only 2 analysts have EPS estimates for 2014. On the other hand, the Yahoo Analysts' page shows that 9 analysts have estimates for 2014 FFO -- yes the Yahoo estimates are for FFO not EPS -- you can confirm this if you compare the numbers in "earnings" reports. This shows that serious REIT analysts stress FFO, not EPS.
    http://yhoo.it/WMFpv8

    Also, the Yahoo Analyst Opinion page shows 5 Strong Buy ratings, 7 Holds, 1 Underperform and 1 Sell. Median Target Price is 44. The only full service brokerage report that I have access to is Citigroup, which evidently has the 1 Sell rating. Citi's TP is 27, but I have gone through Citi's numbers and it is my belief that they miscalculated the NAV, which is in part the basis for their TP.
    http://yhoo.it/PQUqzh

    See also my comment above as to why GAAP numbers distort equity REIT analysis. The link below may get you there.
    http://tinyurl.com/l89...

    The Schwab, Fidelity ratings, etc, may work for 80% of stocks. They don't account for the equity REIT business model, and simply don't work for REITs.
    Apr 9 07:54 AM | 1 Like Like |Link to Comment
  • Will The Cloud Kill Digital Realty Trust? [View article]
    How can you compare this with Enron? This is a solid company, with solid assets that pay rents on long term rent contracts!
    Apr 8 10:14 AM | Likes Like |Link to Comment
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