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rogerlig

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  • Alcoa Earnings Preview: Stock At Critical Juncture, Fundamentally And Technically [View article]
    KK will, once again, say 'we'll do better next year. We'll close expensive smelting capacity, and new applications for aluminum will improve our results next year".

    The trouble is, KK (or his predecessors) have been saving this exact same thing at least for the last twenty years, and in that time, the stock price is the same now, as it was twenty years ago.

    As far back at the early '70s, autos were going to save this firm. So now, things will be different, and somehow autos (which never worked before) will work now? Or have we now moved on to planes (along with autos, of course)

    If AA isn't dead money, someone needs to explain what 'dead money' is, to me.
    An investment of $10,000 in AA in 1995, is worth $10,000 today (net of negligible dividends).
    Jul 4, 2015. 05:12 PM | 2 Likes Like |Link to Comment
  • Alcoa A Winner For The Long Term [View article]
    Aluminum is hugely electricity intensive, in fact, power is more (per pound of aluminum) than is either alumina, bauxite, or labor. Up to and including smelting, labor is just an afterthought.

    When I was in the business, we were happy to give the USW whatever they asked for in wages. On a per-pound basis, it just didn't matter what they were paid. They didn't know it then, but we'd have been okay with doubling hourly wage rates (don't tell them that).

    Labor prices becomes important only in fabrication (where AA is headed). Which is kind of troubling for AA.
    Jul 3, 2015. 03:26 PM | Likes Like |Link to Comment
  • 3 Reasons CenturyLink's 7% Yield Could Grow [View article]
    CTL management feels they can maintain the dividend, even if that means that the payout rate will be artificially high in 2H 2015. My guess would be that share buybacks would end before the dividend was reduced (we've just seen this in PM).

    Looks like a 'buy' at these levels. We'll see what they forecast when 2Q 2015 projections are out.
    Jul 3, 2015. 11:27 AM | Likes Like |Link to Comment
  • Alcoa A Winner For The Long Term [View article]
    Analysts tie the price of AA, to the price of Al, because these two move in tandem, in fact, the graphs of both are nearly congruent.

    But let's revisit 'the dividend makes it a winner' thing. T-bills pay a lot more than AA does. It's really a stretch to rely on a 3¢ (maybe a 5¢) dividend as any kind of reason that even approaches 'winner' status.

    I'd feel a little better about AA if put open interest weren't twice call open interest.
    Jul 3, 2015. 06:54 AM | Likes Like |Link to Comment
  • Alcoa Is Not A Sound Pick Going Into Second Quarter Earnings [View article]
    Of course, nothing is preventing AA from buying Al from another smelter, then using it to make their fabricated products. In fact, if they were to pursue that strategy, they could rid themselves (and the world) of excess, costly smelter capacity.

    The better question, is why don't they do this, as others in the industry do? The very first thing KALU did, when it emerged from smelter-caused bankruptcy, was rid itself of bauxite, alumina, and smelting entirely. Even the caustic-chlorine business it ran, to provide the caustic soda needed in refining alumina, was sold.

    Decide what the core business is (in this case, high-tech fabricated products), then get rid of anything not necessary to that core business.
    Jun 27, 2015. 11:14 AM | 2 Likes Like |Link to Comment
  • Alcoa Is Not A Sound Pick Going Into Second Quarter Earnings [View article]
    Dumping would be selling in the US at a price lower than in China (or in some cases, below variable cost of production). As long as Al prices stay where they are, 'dumping' would be a hard case to make.

    Anyone else notice that if you superimpose a graph of Al prices, over one of AA stock price, they coincide very nicely? If this continues to be true, then Al price will have to rise before AA stock will.
    Jun 23, 2015. 11:54 AM | Likes Like |Link to Comment
  • Alcoa downgraded to Neutral from Buy at Sterne Agee [View news story]
    Wait until 2Q 2015 earnings come in. KK will say, once more, that 'New applications will save us. We'll close high cost smelting capacity' (as he, and his predecessors have been saying for twenty years straight now, as stock price has done nothing whatsoever).

    For a few days, the Street will believe him, the stock will jump a point or two as shorts cover. Then, back to the doldrums.

    I'm sure it will be higher *someday*. But like Keynes put it, 'In the long run, we're all dead'. Until then, this will be looked at as an old-time, smokestack, commodity play, with a P/E in line with the other ones of this type.
    Jun 22, 2015. 11:24 AM | Likes Like |Link to Comment
  • Is Altria Still A 'Buy' For Income-Seeking Investors? [View article]
    The 85% may be high. But let's keep in mind that PM said that they'll pay over 100% if necessary. By that standard, 85% doesn't sound too bad.

    Since the dividend is all these declining firms have (to be honest), I don't think they'll risk jeopardizing the only thing they have going for them.
    Mar 26, 2015. 09:07 AM | Likes Like |Link to Comment
  • Is Altria Still A 'Buy' For Income-Seeking Investors? [View article]
    I'm a little confused by the logic of even entertaining the idea of buying a declining industry stock, with a too-high P/E, and a too-low dividend yield.

    I think this one has done its thing. Now would be a better time to exit and seek greener pastures elsewhere, outside this space entirely. Not the time to initiate a new position, for sure. Overpriced, if anything.
    Mar 24, 2015. 01:48 PM | 4 Likes Like |Link to Comment
  • If You Are Holding AT&T Just For The Dividend, Sell Now [View article]
    The tax treatment depends on the preferred. If it has a fixed, stated call date, then it's interest (to the IRS), rather than a dividend.

    If it's 'really' a preferred (no fixed call date), that would be favorably treated dividend income.

    Even the brokerage firms get this one wrong, and issue 'revised' 1099s (after you've already filed) :-)
    Mar 24, 2015. 10:07 AM | Likes Like |Link to Comment
  • Alcoa And Thoughts About Chinese Aluminum [View article]
    AA's fundamentals are underwhelming, at the current price. Still, so many seem to like the stock that I decided to revisit it.

    Did anyone else notice an almost perfect head and shoulders pattern over the past year? I don't trade by charts, but a lot of other people do. This may be why AAs having so much trouble this year.

    I think I'll look for an entry point below 10. If that doesn't happen, I'll try KALU instead (no upstream problems, in that one, but all the downstream benefits).

    Full disclosure: I've worked for both AA, and KALU. The industry is a bear.
    Mar 24, 2015. 09:45 AM | 1 Like Like |Link to Comment
  • AT&T - I Just Bought More Stock [View article]
    MO is in a declining industry. If you can, consider returning to T, then selling out-of-the money calls. Heck, do that even with MO.

    Nothing is quite as much fun as watching those calls expire, worthless to the buyer.
    Mar 22, 2015. 03:08 PM | 2 Likes Like |Link to Comment
  • AT&T - I Just Bought More Stock [View article]
    You need to be writing out-of-the money calls against a position of that size. You can almost double your cash flow. Just sit and watch the options expire, worthless to the buyer. In 20 years, you'd have 10,000 more, pretty much free.
    Mar 22, 2015. 03:05 PM | 5 Likes Like |Link to Comment
  • AT&T - I Just Bought More Stock [View article]
    Buy the stock, sell out-of-the-money calls against it, and raise your 'yield' to over 7%. The low-growth potential actually works in your favor. And if you're called, you've gained that way, too. Unless T cuts the dividend (unlikely), it's really hard to see much downside.
    Mar 22, 2015. 10:17 AM | 6 Likes Like |Link to Comment
  • Alcoa And Thoughts About Chinese Aluminum [View article]
    China produces aluminum for social, rather than economic purposes. They'll produce to maintain employment, regardless of price. And they have many times the capacity as does AA. Any profit will come from fabrication, rather than smelting and refining. AA's trying, but it's like trying to turn a ship around. AAs turnaround will take longer than most are willing to wait. This is a 'sell'.
    Mar 20, 2015. 03:44 PM | 1 Like Like |Link to Comment
COMMENTS STATS
30 Comments
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