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Robin Heiderscheit

Robin Heiderscheit
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  • No Bubble, No Problems In Equities? [View article]
    The phrase is out of favor but in 2000-01 we used to talk about a "soft landing" -- which seems to be what the CAPE skeptics hope for, although a few of them are "permanently higher plateau" people.

    The more reasonable CAPE bulls say that once 2008-09 drops out, by 2020, you will have a ten year average EPS of $140 or so, and then if you put a 20 multiple on that (interest rates stay pretty low in their scenarios) you get 2800 in 2020, an annualized return in the mid to high single digits if you include the paltry dividend yield.

    I don't buy it as a base case anyway but that is the argument of what I call the "reasonable bulls". BTW, while it doesn't assume any huge pick up in earnings between now and 2020 the argument DOES assume (1) no major recession, i.e., an eleven year business cycle (!), (2) no significant spike in interest rates, and (3) maintaining current record high profit margins.

    If you assume a back up in the ten year to say 3.5% and a 2017 recession you get a ten year EPS of $135 and an 18 multiple for a mid single digit return from here dividends included (and probably a nasty drawdown in 2016).
    Aug 21 11:21 AM | 1 Like Like |Link to Comment
  • Why Solar Senior Capital Limited May Be The Perfect Retirement Stock [View article]
    Underlying earnings are now running around $1 so it will be interesting to see how far it drops.
    Aug 20 10:19 AM | Likes Like |Link to Comment
  • BDC Risk Profiles: An Introduction [View article]
    oops, my bad, honestly now that I am hiding out in the baby bonds the time I am devoting to BDCs has declined so I missed that KCAP piece . . . sorry
    Aug 20 10:15 AM | Likes Like |Link to Comment
  • BDC Risk Profiles: An Introduction [View article]
    SUNS should be at the top of your rankings Buzz, IMHO, due to the extremely conservative management approach and lack of leverage at the portfolio level. That said, it is currently earning about $1 so it is hard to say how big of a discount to NAV it could trade to.

    In the last down turn I think vintage analysis was the best predictor of portfolio performance. Hopefully your analysis will focus there. Anyone originating large portions of the portfolio in 2013 or 2014 is in big, big trouble, although I know we disagree on that.
    Aug 20 10:00 AM | Likes Like |Link to Comment
  • Deere & Co.: Plowing Its Way To Lower Prices [View article]
    Kyle, I agree. If we saw the low 70s or 60s, even in a general market correction, I think Berkshire would try to get the whole thing with an offer somewhere in the 80s. DE is managed the way Berkshire likes and doesn't have a dominant shareholder in a position to make trouble.
    Aug 20 09:48 AM | 1 Like Like |Link to Comment
  • AWF: The Recent Distribution Cut Has Created An Attractive Entry Point [View article]
    It is a nice little opportunity but if you think we stay risk on then a mix of short volatility and cash will match the performance of world bond funds with less downside risk if rates start rising again.
    Aug 20 09:46 AM | Likes Like |Link to Comment
  • Exelon: Buy The Dip [View article]
    George, you are one of the sharpest contributors to SA but please allow me to rephrase your argument in terms the poster might appreciate.

    Yes, management appears to have made some missteps resulting in poor performance the past two years BUT in fact commodity pricing is masking the fact that managment's excellent long term track record remains intact.

    Ten year average ROE is around 15% which if it continues would justify at least 1.5x book if not 1.8x.
    Aug 19 09:05 AM | 1 Like Like |Link to Comment
  • Watching The Market's Price To Sales Ratio [View article]
    I think it is going to be a big day for stocks in general as we race to new all time highs but DKS is a mixed bag for BGFV as the DKS move to California is partially targeted at BGFV.
    Aug 19 08:57 AM | Likes Like |Link to Comment
  • Deere & Co.: Plowing Its Way To Lower Prices [View article]
    Josh, I continue to disagree with almost everything you write but still follow you because I enjoy your willingness to take contarian positions.

    The problem with your analysis in my opinion is that it ignores (a) the structural changes in Deere's business that allow for much greater management control of expenses as compared to past cycles and (b) the brand moat.

    I am not banging the table for Deere here but for your short thesis to play out we would be need to be near a major deflationary cycle. Just not seeing it.
    Aug 19 08:45 AM | 4 Likes Like |Link to Comment
  • Daily State Of The Markets: The Valuation Debate - Robert Shiller Is Very Worried [View article]
    "near useless" goes too far Tack . . . while it may be different this time because maybe we have reached a permanently high plateau . . . more likely the current CAPE is showing that for broad market investors the odds greatly favor poor returns over the medium term from here
    Aug 18 10:12 AM | 2 Likes Like |Link to Comment
  • The Latest Unsustainable Trend [View article]
    In my mind, alot of the sustainability comes down to the type of debt the company is taking on. Those borrowing on ten plus year fixed rate deals I think will be happy with their share repurchases, even at these elevated levels. Those borrowing short or floating, maybe not so much . . .
    Aug 15 03:05 PM | 1 Like Like |Link to Comment
  • LeapFrog: Is Now Finally The Time To Buy? [View article]
    Was that a typo in the press release . . . are sales really down 43% y/o/y? I haven't followed this in a while but it seems like LF needs to be sold to a larger company that can take advantage of the brand. Looks to me like it is now losing money if you annualize at the current run rate.
    Aug 6 10:30 AM | Likes Like |Link to Comment
  • Ares Capital: Is It A Buy? [View article]
    I think BDCs may finally be at the point where yield compression and terrible terms can no longer be ignored. ARCC is a case in point with NII of 31 cents against a 38 cents dividend. SUNS reported 29 cents NII pro forma against a 35 cent dividend.

    I think a round of dividend cuts is at hand, at least for the smart managers. BDC managers need to follow Mike Gross at SLRC and SUNS and push away from the table until the odds get better.
    Aug 5 02:02 PM | Likes Like |Link to Comment
  • Preferred Apartment Communities Nearly Doubles Its Assets Overnight [View article]
    I think that might be optimistic. Their press release establishes a gross cap rare of 9%. Assuming one third operating costs, the FFO cap rate would be around 6%. Depending on the condition of the properties of course the real number could be around 5.5% or as high as 6.5% -- the big variable is always maintenance capex.
    Aug 1 11:33 AM | Likes Like |Link to Comment
  • Inteliquent: Upside Likely After Recent Drop [View article]
    I didn't look under the hood but I assume the big bath in 2012, which wrote off all of their historical profits and then some (!) is what you are referring to?
    Jul 30 12:14 PM | Likes Like |Link to Comment
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