Seeking Alpha


Send Message
View as an RSS Feed
View 2tired2talk's Comments BY TICKER:
Latest  |  Highest rated
  • 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 | 2 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
  • 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