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2tired2talk

2tired2talk
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  • Coca-Cola's Clock Is Ticking [View article]
    Who is John Galt?
    Aug 18, 2015. 01:44 PM | 4 Likes Like |Link to Comment
  • Coca-Cola's Clock Is Ticking [View article]
    "strategic shifts KO is making to stay relevant"???

    With $46bb in sales, and 20 brands with over $1bb in sales, it is safe to say that KO is relevant.

    It is the author who should be concerned about staying relevant.
    Aug 18, 2015. 08:04 AM | 6 Likes Like |Link to Comment
  • Low P/E Stock Of The Day No. 15: The AES Corporation [View article]
    Fair request. I will give you specific feedback.

    It is apparent that you are doing a P/E screen to identify companies to write about. It is also apparent that you do little research into the operations or the history of those companies. I have owned both MIC & AES for several years, and for that reason, I recognize how little historical perspective you bring to these articles.

    Regarding MIC: In it's years of existence, the P/E of this company has been basically between 40 and infinity. Imagine my surprise to see it screened as a low P/E stock because a one-time restructuring gain in 2014 skewed the earnings report. That it showed up on your screen is not your fault, but your not addressing the fact that it was a one-time gain is very poor (embarassing) research. Your subsequent conclusions were then based on a complete falsehood. (MIC may or may not be a good investment at current prices, but it is not for any of the reasons you gave.)

    Regarding AES: Your charts show historical sales, and cash flow numbers, but you once again do not address that these cash flow numbers are skewed by a history of buying and selling assets. You say management is not doing the right things, yet this company is one of the few strong survivors of the utility deregulation business that took down Enron, Calpine, Dynergy, Reliant Energy, and a host of others.

    In addition, any article about AES should also comment on the 2011 purchase of DPL. This purchase provided AES with a stable source of cash flow for the first time in its history. They may have paid too much, but because of this purchase, AES is a different company today than it was before the purchase.

    You say the company needs a "management shakeup", but are you really qualified to make that statement?

    I see management that weathered the utility deregulation meltdown, that survived the 2008 financial crisis although admittedly overleveraged, that bought for itself a stable source of cash flow (DPL) to enable it to grow its international electric generation business, has repurchased more than 14% of its stock in the last 5 years, while increasing its divdend from 0 to $.30, and is growing earnings while facing a strengthening dollar that hurts since most of the operations are non-US. Not to mention the fact that low rainfall in Brazil is negatively affecting the hydoelectric production in Brazil. All, or most of these could/should have been addressed in your article.

    My specific feedback is that you should know much more about the companies you write about, or your articles are not worth reading
    Aug 17, 2015. 09:59 AM | 2 Likes Like |Link to Comment
  • Low P/E Stock Of The Day No. 15: The AES Corporation [View article]
    When I read your "Low P/E Stock of the Day No. 2: MIC", I thought you didn't know what you were talking about because you used a one-quarter, one-time restructuring gain to call a stock "low P/E".

    This article removes all doubt. You don't know what you are talking about.
    Aug 13, 2015. 01:47 PM | 2 Likes Like |Link to Comment
  • The Bear Is Alive! [View article]
    Cramer says, "There's always a bull market somewhere."

    You used an awful lot of words to say, "There's always a bear market somewhere."

    Not much help to me.
    Aug 4, 2015. 09:25 AM | 8 Likes Like |Link to Comment
  • Pipelines Still Offer Dividend Shade In The Broiling Oilpatch [View article]
    I wonder how much of the current sell-off in the pipeline stocks and MLP's is related to the leveraged mutual funds/ETF's that came into being in the past three years.

    They have been able to borrow at basically 0%, and use the debt to be 25%-30% leveraged in stocks paying 6%-10% dividends. Like any leveraged position, it is a money machine......until it's not.

    With investors dumping the falling pipelines, the selling is exacerbated by the selling of the leveraged funds/ETF's who are getting killed due to the leverage.
    Aug 3, 2015. 04:03 PM | 7 Likes Like |Link to Comment
  • Macquarie Infrastructure's BEC Purchase May Be A Step In The Wrong Direction [View article]
    The external management group of MIC is "Macquarie Investment Mgmt, LTD". (Also the largest shareholder with 6.5%.)

    Although I do not have enough history to explain things accurately, it is my understanding that per the terms set up at the origin of MIC (in 2004), this group is entitled to 1% of the market value of the company, plus an "outperformance fee" based on how the MIC stock price performs against the MSCI Utility Index. This fee is determined quarterly.

    For the 6/30/15 quarter, the just announced performance fee is $135.6mm, to be paid 50% cash & 50% stock (which is why they are the largest shareholder.) This fee plus the performance fees paid for the 3/31/15 and 9/30/14 quarters total about $400mm, for a company that generates about $500mm per year in cash flow.

    The good news for shareholders is that this fee is not an issue unless the stock outperforms the index. The bad news is that this $400mm plus the $300mm being paid in dividends exceeds the cash flow of this company.
    Jul 29, 2015. 10:03 AM | 1 Like Like |Link to Comment
  • Macquarie Infrastructure's BEC Purchase May Be A Step In The Wrong Direction [View article]
    I think you are making noise about nothing here.

    Although I am by no means an expert on this subject, I believe Direct Energy is paying for 62.5% while using less than 30%, so that they have the extra capacity available for peak demand or in case of a disruption of service from another power source. I do not think this is bad for MIC.

    I am far more concerned about MIC paying their external management group 100% of cash flow in the past nine months, while continuing to pay a large dividend to shareholders.
    Jul 28, 2015. 02:52 PM | 1 Like Like |Link to Comment
  • Peabody Energy Q2 Results: It's Still Alive [View article]
    BTU is the very definition of a speculative investment.

    The market may be right, and the stock is going to zero, BUT if they get a break in the next two years, $20+ is a legitimate possibility a few years out.

    Nobody knows, for sure, what will happen to coal/nat gas prices, so nobody knows what will become of BTU.

    Thank you for this article. You assess the situation well.
    Jul 28, 2015. 11:08 AM | 3 Likes Like |Link to Comment
  • Kinder Morgan: Why Not Take Advantage Of The Sell-Off And Buy This 5%+ Yielding Dividend Powerhouse? [View article]
    ... and your natural gas gets to your home by teleport?
    Jul 20, 2015. 02:12 PM | 5 Likes Like |Link to Comment
  • Do Not Be Deterred By Discovery Communications Shorts [View article]
    Is the short interest ratio for DISCK similar to that of DISCA?

    It is possible that there are those who are long DISCK & short DISCA who wish to do an arbitrage play should the premium ever get squeezed.

    Thanks for the article. This is a fascinating company with the John Malone connection, the Newhouse connection, and the different classes of stock. If they keep buying back $1bb-$1.5bb per year of (primarily) K shares, there are a lot of good things that can happen for shareholders.
    Jul 14, 2015. 01:51 PM | Likes Like |Link to Comment
  • The Case For Preferred Shares - Income [View article]
    For an individual investor, there is ALWAYS a better place to go with your money than preferred stock.

    Preferred stock exists because dividends are 70% or 80% tax free for corporations due to the IRS dividend exclusion. So a corporation has a huge incentive to buy a 5% preferred rather than a 5% bond from the same company.

    Maverick, just because something has been OK for the past 30 years, it does not mean it was good choice. Interest rates have been falling since 1980, and most investments have worked well. Preferred investors, however have had their 10%, 12%, 15% preferreds called away while common stock investors have seen their income increase annually. But, when rates move higher, and the preferred trades at $18, the company will let you sit with it for as long as possible (forever, in some cases).

    One more thing, almost every company that issues a preferred stock, is also issuing high yield debt, to which the preferred is subordinate. Preferred stock is actually junkier than junk.

    This format does not allow me to respond fairly to your comment, but as I said earlier, "one on one, I could talk any thinking person out of" buying preferred stock.
    Jul 8, 2015. 09:27 AM | Likes Like |Link to Comment
  • The Case For Preferred Shares - Income [View article]
    There is NO long term investment strategy for an individual that should include preferred stock.

    Preferred stock is neither "preferred" nor "stock". It is a debt instrument, and should more aptly be named "trashy bond". Worse yet, they are extremely long dated bonds: 50, maybe 100 year bonds. In some cases they have no maturity date, and can only cease to exist if the issuer calls them (guaranteed to be when you would most like to keep them). In almost every case where a preferred has been issued, the company has a bond available that is higher quality, and a better investment with dramatically less risk.

    I know there are falling interest rate environments when people have made money on preferreds, but the bond (often the common) would still have been a better choice.

    Eli, if you were older, you would have seen the carnage that hit preferred holders in the 1970's-80's. For myself, with more than 30 years of investing history, I will never buy a preferred stock, and I know that, one-on-one, I could talk any thinking person out of doing so.
    Jul 7, 2015. 02:32 PM | 2 Likes Like |Link to Comment
  • Buying Opportunity: Coca-Cola [View article]
    KO is a money machine, often bringing 20% to the bottom line.

    Unfortunately, current management has determined that an embarrassing amount of that money should go to enrich them, rather than go to the owners of the company. Ironically, the largest shareholder, Warren Buffet, has supported them to a certain extent in this behavior. One has to wonder why.

    This money machine is worth owning, because some companies are so great that even management can't screw them up. But I do wonder if Buffett's silence is because he would love to LBO Coke with a partner like 3G Capital, and he alone would then be the beneficiary of this company without current management?
    Jul 2, 2015. 10:30 AM | 13 Likes Like |Link to Comment
  • AES Corporation - A Long-Term Bet [View article]
    Thank you for writing this article.

    I cannot believe AES is not at $18-$20.

    Fifteen times earnings gets you to $19.50.
    Enterprise Value/EBITDA of 9 (like DUK, SO, NEE, etc) gets you to $24.

    Shares have been reduced from 795mm to 690mm in less than five years.

    Dividend has gone from zero to $.60 in three years, and the payout ration is less than 25%.

    Yes, there is $18bb in LT debt, but all but $4bb is non-recourse debt.

    Every plan for growth, every where in the world, requires more electricity, and AES is already in many of the growing areas of the world. When management decides earnings are more important than growth, I think this stock moves sharply higher.
    Jul 1, 2015. 03:43 PM | 2 Likes Like |Link to Comment
COMMENTS STATS
144 Comments
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