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  • American Realty Capital Properties Issues the Following Statement Regarding Recent Market Rumors [View article]
    Booyah!! I guess someone started the NorthStar rumor so they could buy shares on the cheap. Must have come from Morgan Stanley or Goldman.
    Apr 29 08:56 AM | 3 Likes Like |Link to Comment
  • Is American Realty Capital A Monster Or A Machine? [View article]
    glorysk87: Thanks for the news. Maybe that's why the premarket price is up 3% this morning.
    Apr 29 08:54 AM | Likes Like |Link to Comment
  • Is American Realty Capital A Monster Or A Machine? [View article]
    Should be another interesting day for ARCP after yesterday's sell off on high volume (some 20K shares traded yesterday). ARCP currently up 3% in pre-market trading.

    As for me, while it would have been nice to wait a few more days so I could have got shares even cheaper, as a long, I have no worries about the current volatility. As UTA pointed out, there is a lot of uncertainity due to the aggressive acquisitions and spinoff, thus the volatility. But so far I like what Schorcsh has been doing and I think these moves will likely be accretive to the company and shareholders. Meanwhile, the REIT pays me 7.5% annually (and tax free), so I can handle the volatility.
    Apr 29 08:44 AM | Likes Like |Link to Comment
  • UPS: Take Advantage Of Irrational Pricing [View article]
    I'd wait to buy UPS at current prices. S&P and M* both have fair value on UPS and a patient investor can likely pick up shares cheaper on broad market pull back.
    Apr 28 10:15 AM | 1 Like Like |Link to Comment
  • Waiting For The Correction That Might Never Occur [View article]
    Forward earnings are nearly meaningless because they rely on many assumptions. Even a slight error can result in large differences in projections.
    Apr 28 09:08 AM | 1 Like Like |Link to Comment
  • Waiting For The Correction That Might Never Occur [View article]
    As a follow-up to my comment above, there was interview with Doug Kass in the April 26 issue of Barron's where he discusses his concerns with record corporate profit margins influencing the P/E ratio. An excerpt of the interview is pasted below:

    Barron's: What concerns you about projected earnings growth?

    Kass: The consensus is looking at $120 a share this year for the S&P 500. But these are anything but normal earnings. They are inflated because corporate profit margins are at a 60-year high, and they are 70% above the average of the past six decades. So normalized earnings are well below that estimate of $120 a share, just as normalized earnings back in 2009 were well above the deflated estimate of $45 a share, which was the 12-month trailing number. So the S&P 500 might appear to be trading at only 16 times stated earnings. But against reasonable margin assumptions and normalized earnings, the market is probably trading closer to 19 times. Based on my analyses for different cases for growth, interest rates, and valuations, the S&P's fair market value is about 1650, 12% below where it traded recently.

    Barron's: What concerns you about corporate profit margins?

    Kass: Corporate profits are the mother's milk of stock prices. First, we've had this lengthy improvement in corporate productivity, and that's likely near complete. We've had years of fixed-cost reductions by corporations, and that's also likely over, because they've cut to the bone. If the employment market gradually tightens, labor costs will rise, pressuring margins. Both interest expenses and effective tax rates will have to rise as central banks normalize monetary policy and the U.S. sees the need to reduce its deficit. And a very costly regulatory policy is likely to continue, increasing corporate costs. And finally, the quiescent capital-spending cycle will ultimately be awakened. With that, amortization and depreciation costs will ascend.

    Source:
    http://bit.ly/1k3v9tg
    Apr 28 09:04 AM | Likes Like |Link to Comment
  • What Is 'Quality' In A Stock? [View article]
    Ptstanford: I agree and I'm sure most on here would as well. It all boils down to two things really: 1) identifying quality companies and 2) buying them at a good value. Nothing really new about that if one is familiar with Benjamin Graham at all.
    Apr 25 02:55 PM | 1 Like Like |Link to Comment
  • What Is 'Quality' In A Stock? [View article]
    Great article, especially in providing some metrics to use in building one's own stock screener.

    I did want to point out, as its not clear in your article, that the MorningStar "star" rating system indicates the current valuation level of stock and is not a rating of the particular stock (although their system takes into account many fundamental and quality factors). Based on their valuation system, a 3-star stock is fairly valued while 4 & 5-star stocks are considered undervalued (1 & 2-star stocks would thus be overvalued). Thus based on your "quality" MorningStar screen, one can guage current valuation levels of the hitlist. Note that MorningStar updates its rating system nightly. I personnaly find it very useful and I use it in conjection with other company ratings such as S&P (in fact, S&P and MorningStar are my two favorite ratings companies).

    For more info on the MorningStar rating system, see:
    http://bit.ly/1jHPyH0
    Apr 25 09:16 AM | 1 Like Like |Link to Comment
  • The One Growth Stock To Own In A Declining Market [View article]
    I read your article based on TJX. I've been holding this for a few years now since it was at $39 and wish I had bought more. I did just recently add more to my position when it dipped from its previous high at around $64 and got in at $57.81 (1.06% below your fair value calculation). TJX is the only retail stock I own and I plan to hold this one for a long time. It is has outstanding managment, strong growth potential (is making inroads in Europe, which has been tough for other U.S. retailers), and is a share-holder friendly company (recent 21% dividend increase). If you are a dividend growth investor, buy TJX for the potential dividend growth and total returns, not for current income.

    BTW: MorningStar currently lists TJX with four stars (indicating it is undervalued).
    Apr 24 08:50 AM | 2 Likes Like |Link to Comment
  • Waiting For The Correction That Might Never Occur [View article]
    But what if, god forbid, the economy really does pick up and earnings actually start to increase on real sales rather than on manipulation (cost cutting, layoffs, buybacks, fed, etc.)?
    Apr 24 07:52 AM | Likes Like |Link to Comment
  • Waiting For The Correction That Might Never Occur [View article]
    Adam,

    IMO, another factor that could lead to a substantial broad market correction would be a reversion to the mean for corporate profit margins. Companies have been generating record profit margins, which results in a larger denominator in the P/E ratio. Reversion of margins back to normal levels, due to rising interest rates, e.g., would result in stocks appearing much more expensive due to the smaller denominator and larger numerator in the P/E. Thus stocks that appear fairly valued today would suddenly appear overvalued.

    That said, I did recently pick up more shares of ARCP at $13.22.
    Apr 23 02:24 PM | Likes Like |Link to Comment
  • Intel Just Flashed A Bullish Move [View article]
    Mike: I hope you get well soon. Let us know when you get out. And don't forget to take your meds.

    Long INTC.
    Apr 23 01:46 PM | 2 Likes Like |Link to Comment
  • Tony Soprano to land on Amazon Prime [View news story]
    Netflix does not have the Sopranos for streaming. Its only available on CD.
    Apr 23 12:34 PM | 3 Likes Like |Link to Comment
  • Waiting For The Correction That Might Never Occur [View article]
    bud: Who said anything about this time is different? Everyone agrees there will be market correction, but no one knows when. Same as it ever was.
    Apr 23 10:51 AM | 3 Likes Like |Link to Comment
  • Is American Realty Capital A Monster Or A Machine? [View article]
    raykrv6a: Thanks. I thought the 5,086 shares seemed rather low. 196,635 seems more reasonable. But nonetheless, the purchase price and date are correct.
    Apr 22 10:49 AM | Likes Like |Link to Comment
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