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2tired2talk

2tired2talk
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  • 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 | 1 Like 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 | 1 Like Like |Link to Comment
  • Short Iridium Communications: Priced To Perfection And Beyond [View article]
    I essentially agree with your concerns (although you sure took a long time to make your point).

    According to the 3/31/15 10-Q, about $30mm of non-cash interest and financing expenses were added to the debt. This may well total more than $120mm in 2015, and certainly will increase in the next few years.

    I believe the accounting is correct (legal), but if IRDM were expensing the interest expense instead of capitalizing it, 1st quarter income goes from a $20mm gain to a $10mm loss.

    I do not see how IRDM will actually be able to make money in 2018 with the full burden of expensing the interest and financing costs. I, too, expect additional capital raises, and the subsequent dilution to current shareholders.
    Jul 1, 2015. 02:27 PM | 4 Likes Like |Link to Comment
  • AutoZone Has A Bright Future Ahead [View article]
    What if the industry multiples are 25% too high, and AZO is correctly priced?

    Maybe that is why we have another writer with no skin in the game.

    If the chef is not eating his own cooking, I don't care about his opinion of the food.
    Jun 26, 2015. 09:19 AM | 1 Like Like |Link to Comment
  • Why Lamar Is My Favorite Dividend Growth Stock [View article]
    Thank you for this well presented article. You make a strong investment case for LAMR.

    I wonder, however, if the investment case is, in fact, more about the billboard business and the consolidation in the industry, than LAMR in particular.

    You make a good case that LAMR has been better run than OUT for the past few years, but both companies have been growing revenue.

    I also wonder if it is fair to conclude that the "old OUT" remains the same company as the "new OUT", now freed from the cash hungry "big brother" of CBS.

    We'll know more in a couple of years, but my guess is that both of these companies will prove to be comfortable holdings for dividend investors. Since you are paying a lot more for comparable revenue with LAMR than for OUT, I am not sure you should "eliminate OUT as a possible investment."
    Jun 24, 2015. 02:27 PM | Likes Like |Link to Comment
  • Why Coca Cola Is An Interesting Stock To Watch [View article]
    SA editors should be ashamed of themselves for letting this get through.
    Jun 23, 2015. 10:04 AM | 8 Likes Like |Link to Comment
  • Google: $510 Price Target, Downside Appears Possible [View article]
    This is awful research.

    Not only did you ignore nearly $100 per share in cash for GOOG, but you actually presented the P/E ratio for YHOO as 6, without noting the small fact of the BABA IPO.

    Embarrassing waste of time for all readers.
    Jun 13, 2015. 09:19 AM | 8 Likes Like |Link to Comment
  • Las Vegas Sands At Great Entry Point; Market Realizes Macau Downsides Baked Into Price [View article]
    I appreciate this article. I am a shareholder who has never been to, and likely will never get to Macau, so I can only read the comments of those who follow this business, collect the information from them, and formulate my own strategy.

    With regard to LVS, WYNN, and the others, I think the important demographic is the continuing growth of casino gambling, and the associated lodging and entertainment that goes with it. I expect that this growth trend will continue for decades around the globe. It is apparent that the U.S. casino operators have figured out how to successfully export this model.

    How many businesses can see a 35% plus annual drop in their primary market, and still generate positive cash flow? Once the "rear view mirror" investors have sold their stock, I think we will see a steady rise in the price of LVS, long before the earnings reports show that business is improving.
    Jun 9, 2015. 02:59 PM | 2 Likes Like |Link to Comment
  • Why Oil Will Sink to $20-$40 Per Barrel [View article]
    The greatest call on oil I have ever seen!

    In just over four years, it proved to be correct. I think Mr. Banks and a few others owe Mr. Galt an apology.
    Jun 2, 2015. 03:51 PM | 1 Like Like |Link to Comment
  • Bubble After Bubble, They All End The Same [View article]
    I simply want to ask, "Who is John Galt?".
    Jun 2, 2015. 01:13 PM | 11 Likes Like |Link to Comment
  • Bojangles' Dishes Up A Tantalizing IPO [View article]
    Thank you for the hard financial info - sales, earnings, shares outstanding, and most importantly, use of proceeds. This was an easier place for me to get that info than finding a prospectus.

    If the company were getting $100mm from the stock sale for growth and improving the balance sheet, this would be a far more interesting story.

    Unfortunately, $24 is a long way from the pre-IPO projection of $16.
    May 11, 2015. 10:36 AM | Likes Like |Link to Comment
  • Peabody Is My Favorite Idea That Everyone Knows, But That No One Understands [View article]
    What you mean to say is, "I am not really a contrarian."
    May 7, 2015. 11:01 AM | 3 Likes Like |Link to Comment
  • Peabody Is My Favorite Idea That Everyone Knows, But That No One Understands [View article]
    Thank you for this article. I have been staring at BTU for months, and I needed a nudge. Bought 1000 shares, and now I will close my eyes.

    In 2009, I bought 1000 MIC at $2.14, and this week the dividend was raised to $4.28/ year. I am doubling my initial investment every six months on the dividend!

    BTU at $50 in 10 years? If it is, everybody will be recommending the stock, and it will no longer be contrarian. It will be time to sell.
    May 6, 2015. 03:58 PM | 4 Likes Like |Link to Comment
  • Idera Pharmaceuticals: Is The Writing On The Wall? [View article]
    Per the recent proxy statement, Pillar is at 20% as of 4/15/2015, and Baker Bros is just under 6%.

    Going with the jockey(s) may be the best bet on IDRA.
    May 6, 2015. 02:50 PM | Likes Like |Link to Comment
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132 Comments
306 Likes