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Lakeaffect

Lakeaffect
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  • On the hour [View news story]
    Gap closer
    Sep 29 11:36 AM | Likes Like |Link to Comment
  • Ford: This Is Why The Stock Is At $16.53 [View article]
    For an excellent example of how to analyze cyclical companies, take a look at BluePac Partners recent article on Deere, which was recently published on SA. Cyclicals are a whole different world than growth or dividend investing.

    http://seekingalpha.co...
    Sep 19 03:07 PM | 1 Like Like |Link to Comment
  • Lacker: Fed needs to sell its MBS holdings [View news story]
    Not gonna happen, Lacker. The FED is the greatest invention ever. There is no other tool available to mankind that can take pieces of paper, put green ink on them and then turn those pieces of paper into houses. This is leaps and bounds more effective than the prior greatest invention; that of printing up IOU's and giving them to China in order to bring over container loads of throwaway consumer doo dads.
    Sep 19 08:49 AM | Likes Like |Link to Comment
  • Rite Aid lowers guidance [View news story]
    WAG made a similar announcement a few weeks ago. It slid from $73 to $61 over the next few days. Now it's creeping back toward $64. The shakeout opened a buying opportunity for a few days. I don't follow rite aid, so can't say if its the same story or not.
    Sep 18 08:58 AM | 1 Like Like |Link to Comment
  • Ugly CPI [View article]
    I have been noticing more and more articles that higher rates will cause higher inflation. Due to the velocity component. Now that might just be the scaremonger people looking for the next story. I don't know.
    Sep 17 07:13 PM | 1 Like Like |Link to Comment
  • The Babcock & Wilcox Company: Massive R&D Obscuring Earnings Power; 80%+ Upside [View article]
    I feel that you are treating Jeff's observations too lightly. According to Value Line, utilities are approaching the end of the compliance period for the MATS mercury emissions standard. This is the reason for the decline in business in the Power Generation segment, and it is what's behind a 61% decline in environmental systems revenues during Q2 of 2014. This is not a "couple of quarters" problem. The outlook for new business in MATS projects is poor, as the compliance period is nearing an end. Anybody who wanted to get into compliance has already done so, otherwise, they're shutting down the plants which couldn't justify the investment in MATS. And new business in other areas is on hold due to confusion over environmental and EPA rules. Even if the confusion was resolved tomorrow, lead times for new projects will delay revenue recognition for at least a year, IMO. Since that confusion will not be resolved tomorrow, I suspect that 2015 is going to be an austere year for BWC.

    As an aside, it appears to me that "confusion" over environmental and EPA rules should be described more as "frustration" on the part of the utilities. Over the past several years, utilities spent billions to get into compliance on the MATS mercury rules. When they finally come to the end of that spending cycle, they're being told that new environmental rules will force them to spend even billions more on carbon and other emissions upgrades. This new information of course trashes any ROI calculations which were used to justify the MATS investments. Had the utilities been aware of the additional spending coming down the pike when they were originally weighing the MATS investments, the decision to shut down coal generators instead of invest in them would have been more compelling. Utilities, now facing another massive investment decision, are not forgetting this lesson.

    This issue may be what's behind management's decision to cut back on their "R&D" in Mpower. If that is the case, they should have made this decision two quarters sooner, as management should have been able to see the train coming simply by analyzing their backlog, instead of waiting to see the damage show up on the bottom line in Q2.

    The article starts out with a table of financial metrics showing TTM Net income of $297 million and a 10.7 PE. That PE is what induced me to dig a little bit more into BWC. My check on the last four 10Q's resulted in TTM net income of $205 million, an EPS of $1.83 and a PE of 15.4. My conclusion is that BWC may have some future upside, but there is likely more downside coming first, and thus a much more attractive entry point may be in the future.


    Sep 17 07:57 AM | 7 Likes Like |Link to Comment
  • Rhetoric turning hysterical ahead of Scottish vote [View news story]
    The Irish seem to be limping along pretty well without the benefit of UK governance. Why wouldn't Scotland do as well?
    Sep 13 09:40 PM | 1 Like Like |Link to Comment
  • Nine week streak marks longest dollar rally in 17 years [View news story]
    Agreed. And rate increases would only make it worse. That's why rate increases are not in the cards, only in some folks' imaginations. Rock on.
    Sep 12 07:06 PM | Likes Like |Link to Comment
  • Tesla's $1.3B tax breaks approved by Nevada lawmakers [View news story]
    Another tax inversion. Congress should outlaw domicile shopping. It's unpatriotic.
    Sep 12 08:28 AM | 4 Likes Like |Link to Comment
  • Global sales disappoint for McDonald's in August [View news story]
    Swamp,

    Are all your 42 comments as snarky and useless as your #42 is?
    Sep 9 12:46 PM | 1 Like Like |Link to Comment
  • Global sales disappoint for McDonald's in August [View news story]
    I got out of MCD when they started posting calories on their menus.

    My thoughts were, either they clean up their offerings to improve healthiness, or they watch SSS decline. Appears they chose the latter.
    Sep 9 10:04 AM | Likes Like |Link to Comment
  • Income Investors: It's Only A Matter Of Time [View article]
    A very good article. As my boss often told me, "Time is the only truly non-renewable resource".

    I believe that building a proper dividend portfolio takes time, possibly decades. The trick, as far as I'm concerned, is to buy into dividend stocks at the correct price and then hold on to them forever. The opportunity to get into them at the correct price only comes around during substantial market pullbacks and, in some cases, when an individual divvy stock hits a rough patch.

    I encourage my son to keep a list of divvy stocks and targeted entry points. Being young, with the perception of all the time in the world on his side, he's dragging his feet, preferring growth stocks over the divvies. Can't be too critical though, I did the same thing at his age.
    Sep 3 08:37 PM | 1 Like Like |Link to Comment
  • General Motors August U.S. sales [View news story]
    Fleets up, retail down. Would be nice to see the breakdown of fleet - Rental fleets vs commercial fleets vs Government buys. Does GM continue to be a ward of the State?
    Sep 3 10:12 AM | Likes Like |Link to Comment
  • Illustrating Why McDonald's Is Underpriced At Its Current Price [View article]
    I always get a laugh out of the ever present arguments over investment style. The thing is, one style doesn't fit all. There is an investment approach available for every kind of individual psychology. The important matter for the individual investor is to know his own psychological makeup and then find the style that fits that makeup. What works for one investor will lead to utter failure for another, due to issues of risk tolerance, approach to due diligence, time horizons, passive vs active, etc. etc.

    To brag about one style of investing over another style simply exhibits the inexperience and narrow mindedness of the one doing the bragging.
    Aug 27 09:47 AM | 1 Like Like |Link to Comment
  • Buffett to finance Burger King's acquisition of Tim Hortons [View news story]
    User 1711 - Too simplistic of an explanation.
    1. Inversion is a side benefit to making a foreign acquisition, not the "mostly" reason.

    2. The lower tax rate applies only to earnings derived from outside the United States. Earnings from business operations in the U.S. are taxed at the U.S. rate no matter where the headquarters is domiciled.

    3. Inversion is good for the U.S. economy because it opens the door to repatriate funds from outside the U.S. for investment inside the U.S. Those funds, which amount to trillions accumulated over many years, have been sequestered in foreign countries due to arcane American corp. tax law.

    4. It is not un-patriotic, as claimed by some. The move improves competitiveness and shines the light on a silly income tax rule that has been in place for decades, hobbling American businesses when they have to compete with foreign companies.
    Aug 26 08:29 AM | 9 Likes Like |Link to Comment
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