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depraved_miscreant

depraved_miscreant
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  • Why Buy Annaly? [View article]
    You wrote "negative nabobs". Safire penned "nattering nabobs of negativism". Maybe you're no Safire (I really do miss his writing), but I keep reading your stuff anyway and manage to enjoy most of it.

    I be long NLY. Forgive the grammar, Bill.
    Oct 30, 2011. 08:35 AM | 2 Likes Like |Link to Comment
  • Exelon Is Ready To Take Off [View article]
    After re-reading what I wrote, you're right, RS. Good one. It is fuzzy writing. I hate when that happens.....

    I'm looking to add long positions in a utility or two. The sector has had a nice run lately, so there's time for additional DD (that's due diligence and, in the interest of clarity, has nothing whatsoever to do with DuPont).
    Oct 28, 2011. 05:19 PM | 1 Like Like |Link to Comment
  • Exelon Is Ready To Take Off [View article]
    Thanks for the info. I only own one utility (PPL) and I want to add another (or two) and EXC is on my short list.
    Oct 28, 2011. 07:58 AM | Likes Like |Link to Comment
  • Exelon Is Ready To Take Off [View article]
    In the interest of completeness, the author should have mentioned EXC's underfunded pension liability. I have seen it estimated @ $5.8B or @24% of total liabilities. Opinions on this are mixed: some consider it manageable, others do not. I consider it a large enough issue to at least be mentioned in any serious opinion piece. BTW, I have no position in EXC, so I'm not certain about the exact numbers.
    Oct 25, 2011. 08:21 PM | Likes Like |Link to Comment
  • 3 Potential Multi-Baggers For Long-Term Investors [View article]
    The debt is indeed in the billions and is due to large acquisitions. But it's there and the debt number is a far cry from the $18M total debt the author cites for BIP. Another SA author not to trust.
    Oct 22, 2011. 01:21 PM | Likes Like |Link to Comment
  • Loans: Currently The Most Viable Choice For Long-Term Fixed-Income Investors [View article]
    Thanks. BTW, what ING calls Weighted Average Reset, Eaton Vance calls Average Duration.
    Oct 22, 2011. 08:42 AM | Likes Like |Link to Comment
  • Loans: Currently The Most Viable Choice For Long-Term Fixed-Income Investors [View article]
    Steven, now that I have everything sorted out (I think), I agree that these funds might be perfect income investments for this environment. Interest rates should hold steady for a while, although they could decline a bit more in an economic slowdown. But when rates rise, if the loans are reset in terms of months, the income stream of the funds should rise with little lag. And since they are senior, they probably beat some floating rate preferreds. And, the larger funds I have looked at hold hundreds of these securities, also lessening the impact of any defaults and making it easier for me to live with the generally lower credit quality.

    Again, good article. Thanks....
    Oct 21, 2011. 09:51 PM | Likes Like |Link to Comment
  • Loans: Currently The Most Viable Choice For Long-Term Fixed-Income Investors [View article]
    I think Bryce threw me with "at least 80% of their assets in floating rate securities", not floating rate loans. If multiple lenders participate in the loan, they would, of course, create securities, which are the assets the funds hold; the fund is not the lender. Also, I had read an article (in Forbes, I think), which may or may not have stated that the duration of these loans was in months, not years. At least that's what I remembered, perhaps incorrectly. The article probably referred to the reset frequency, not the maturity.

    As for the use of leverage, that made more sense after a couple of Jameson's. In the case of PPR, the fund issued a preferred and took on one other form of debt.

    I still would be interested in knowing a source for finding the Weighted Average Reset for these funds. Any help is appreciated.
    Oct 21, 2011. 09:42 PM | Likes Like |Link to Comment
  • Loans: Currently The Most Viable Choice For Long-Term Fixed-Income Investors [View article]
    Bryce I don't follow. On CEF Connect, I see an average maturity listed, but not Reset. Also, you say 80% of assets are in floaters. Yet CEF Connect's portfolio allocation shows almost all assets in loans. I also don't understand their leverage description.

    Could you clarify or recommend another source for fund specifics?
    Thanks...d_m
    Oct 21, 2011. 05:26 PM | Likes Like |Link to Comment
  • 3 Potential Multi-Baggers For Long-Term Investors [View article]
    I looked at BIP's balance sheet from 3 different sources (AdvFN, MSN, and Morningstar). While the numbers all differ, they all show an explosive growth of LT debt (in the billions). Explanation ? Disagreement ?
    Oct 21, 2011. 05:12 PM | Likes Like |Link to Comment
  • Loans: Currently The Most Viable Choice For Long-Term Fixed-Income Investors [View article]
    I have seen the 'B' word tossed around re Rite-Aid, but these loans are senior to all debt, including secured bonds, are they not ?
    Oct 21, 2011. 04:55 PM | Likes Like |Link to Comment
  • Loans: Currently The Most Viable Choice For Long-Term Fixed-Income Investors [View article]
    I believe these funds and those mentioned by 'birder' are called Participation Loan Funds. Of the 23 'birder' speaks of, I have a watch list of the 10 with the largest portfolios which I have taken my eye off; I will now take another look. Thanks to Mr. Bavaria for the timeliness of his article, since nice discounts currently prevail.

    Essentially, what Participation Loan Funds are is short-term junk (not that there's anything wrong with that). Looking at the top holdings of PPR and EFT, the loans have maturities ranging from 2012 to 2018. There are some recognizable names in the lists, along with obscure companies and a few not-so-stellar firms, e.g., Rite-Aid.

    A negative for me is that most, if not all, of these funds have no track record in a rising rate environment. With holdings having maturities of 1-7 years, I tend to look at these funds as kind of variable-rate short/intermediate term secured bond funds, so they should be OK when interest rates rise, provided the increase is slow and steady and not gap-up.

    Good article.
    Oct 21, 2011. 04:24 PM | 1 Like Like |Link to Comment
  • EasyLink Services: Easy Path To Capital Gains [View article]
    Interesting article, Philip. Once FCF went positive in 2006, it has grown very nicely, as has shareholder equity. Current FCF yield of >15% and Levered FCF Yield >12% tell me ESIC is, at worst, fairly priced.

    The thing that troubles me most when looking at sequential financials is the number of shares. Have there been frequent offerings to raise capital or is management raiding the share cookie jar ? And would you know why the share count doubled, then halved again, between 2007 and 2009 ?

    Other things I like to look at with small caps are the Piotroski Score (3 or 4 -- take your pick) and the Altman Z-Score (1.56). Neither of these scores exactly inspire confidence. Still, I might look into this company.
    Oct 15, 2011. 01:44 PM | Likes Like |Link to Comment
  • Valero Looks Like a Steal At Its Current Price [View article]
    Using my own DCF model with a discount rate of 12% and a conservative growth rate (declining from 4.85% to 3.1% over 10 years), I come up with $47.72. Also noteworthy is the levered FCF yield of 12.5%, as well as strong growth rates in FCF (@11%) and shareholder equity (@15%) over the past decade.

    I've been (kinda) watching VLO for some time, but I've taken my eye off it lately. This article prompts me to take a harder look.
    Oct 12, 2011. 10:58 AM | 1 Like Like |Link to Comment
  • Intel: A High Quality Company, And Fairly Cheap Today [View article]
    My Piotroski F score for INTC agrees with the author's: 7 (down from 9 in 2010). However, I calculate an Altman Z-Score of 6.51, which matches the value I get from another source. The Altman # is used to predict the probability of bankruptcy within 2 years. Since the probability of that is rather low, I don't think it's relevant for INTC, even if the author's number is correct.

    Nice article. Some of my favorite significant metrics are highlighted. I think the author's website might be worth a look.
    Sep 30, 2011. 09:24 AM | Likes Like |Link to Comment
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