Buffett's 50-Year-Old Principles Are Still Sound [View article]
DVK, another worthwhile read, as usual (I have come to expect no less). (:-D)
IMO, if one takes only one thing from your article, it should be this: "A trigger for this article was the comment to a young investor that at his age he should be taking on more risk. The implication was that more risk leads to greater rewards. Value investing posits quite the opposite; the best rewards come when you minimize risk and create margins of safety."
BTW, among the young authors on SA, Tim McAleenan is a definite standout.
Annaly: I Am Looking For A Big Quarter [View article]
RS, NLY came in at 0.55, even higher than your optimistic 0.53 estimate. Was that a Will-Ass-Guess or did you get down and dirty with the numbers? Either way, consider yourself 'saluted'....Pete
Annaly: I Am Looking For A Big Quarter [View article]
"The share price has been on a significant run up along with all of the mREITs in this sector"
RS, couldn't the runup in share price just as likely be due to yield-seekers piling in as to any anticipation of improved numbers ? I do like the insider buying, though.
The book is 'Streetsmart Guide to Valuing A Stock'. Here's a link: http://bit.ly/NjQxtW
I like the approach of this method and the book lays it all out. I set up my spreadsheet to use either the ValuePro data or data from a different source. The results usually differ, although mostly only slightly. But lest I appear to be a shill for Value Pro, I will say that I also use several other different DCF analysis methods and then compare the results. But I still prefer the reverse-engineering technique I mentioned earlier, as well as a several different wrinkles with Free Cash Flow analysis. In fact, my absolute favorite valuation metric is historical Free Cash Flow yield.
See Kapusta Kid's comment above. I have his sheet and the add-in he mentions is free. The caveat is that the add-in has a bit of a learning curve. I have also read the same Value Pro book.
No, DVK, I wrote a spreadsheet to do it. Essentially, it uses the GoalSeek function in Excel. I read a few articles on Investopedia and used them and the examples shown to build the sheet.
If you're interested, I suggest Maubossin and Rappaport's book: 'Expectations Investing'. http://bit.ly/MXMEir The website allows you to get a feel for what the book is about to see if it's a tack you want to pursue.
I think I also have links to the Investopedia articles somewhere, if you wish.
DCF analysis is fine, and I use it, but the major input -- growth rate -- is a guess (except for those elite few who know exactly what the future will be). The author is correct to take the most pessimistic view. I also like to use multiple scenarios: best case, worst case or middling. Also, there are multiple ways to perform DCF analysis (use this metric, remove that metric, etc.).
I prefer reverse-engineering. Plug in the numbers and determine the growth rate (ranges) implied by the current share price. Is that growth sustainable or even possible? Then pass, buy or watch for a while depending. I find this to be a simpler way to go and I am less likely to be deluded into thinking that there is actually precision in my results.
Bret, any opinions on PFE's legal issues ? Just yesterday, we received some paper on a class action alleging that mgmt made false statements re Celebrx and Bextra in order to artificially inflate the share price. There are also issues re Lipitor and company efforts to prevent competition from generic manufacturers. We inherited Warner Lambert shares decades ago and (thankfully) sold most of our PFE shares @ year 2000, but we still retain enough shares to be concerned. Or is the worst-case for PFE just a drop in the bucket ? The market seems to think so, at least today, but that can change if matters worsen.
Banco Santander - Strong Results Support Investment Thesis [View article]
Thanks, Michael. Great coverage.
I bought STD-pB (a floating rate preferred with a 4% floor at par) in October 2009 @ $17, but exited less than a month later when a 14% gain was handed to me. I reentered in July, 2010 (now SAN-pB), also @ $17, before Europe was in the news everyday, so I'm a bit underwater. My YOC is 6% and the yield today is @ 6.7%, but I can't bite. I've got all the risk I need in the financial sector (banks, insurers, mREITs). The SAN common does look as if it has the potential for some very attractive total return, but I think I'll hold off until the bad news really subsides. Who knows when that will be? Of course, by the time it does happen, the total return won't be as promising, will it?
CenturyLink's Newest Achievement Could Boost Stock [View article]
I invest on fundamentals, but I do look at charts. CTL is very near its decade high. If it breaks through resistance (just a hair below $42), it could continue to run higher, compliments of the MO-MO crowd.
I see Net Income (ttm) of $549M, but FCF(ttm) of $2,236M. Also, 5-year median FCF margin is 16.8%, although it has been declining since 2007 (due to merger and acquisitions?). Could a dividend hike be in the cards?
Buffett's 50-Year-Old Principles Are Still Sound [View article]
Not commando YET. Hanes tagless (color pack), if you must know.....
Buffett's 50-Year-Old Principles Are Still Sound [View article]
IMO, if one takes only one thing from your article, it should be this:
"A trigger for this article was the comment to a young investor that at his age he should be taking on more risk. The implication was that more risk leads to greater rewards. Value investing posits quite the opposite; the best rewards come when you minimize risk and create margins of safety."
BTW, among the young authors on SA, Tim McAleenan is a definite standout.
Annaly: I Am Looking For A Big Quarter [View article]
Annaly: I Am Looking For A Big Quarter [View article]
RS, couldn't the runup in share price just as likely be due to yield-seekers piling in as to any anticipation of improved numbers ? I do like the insider buying, though.
I am long NLY.
Blue Chip Is The New Alpha [View article]
http://bit.ly/NjQxtW
I like the approach of this method and the book lays it all out. I set up my spreadsheet to use either the ValuePro data or data from a different source. The results usually differ, although mostly only slightly. But lest I appear to be a shill for Value Pro, I will say that I also use several other different DCF analysis methods and then compare the results. But I still prefer the reverse-engineering technique I mentioned earlier, as well as a several different wrinkles with Free Cash Flow analysis. In fact, my absolute favorite valuation metric is historical Free Cash Flow yield.
Blue Chip Is The New Alpha [View article]
Blue Chip Is The New Alpha [View article]
If you're interested, I suggest Maubossin and Rappaport's book: 'Expectations Investing'.
http://bit.ly/MXMEir
The website allows you to get a feel for what the book is about to see if it's a tack you want to pursue.
I think I also have links to the Investopedia articles somewhere, if you wish.
Blue Chip Is The New Alpha [View article]
I prefer reverse-engineering. Plug in the numbers and determine the growth rate (ranges) implied by the current share price. Is that growth sustainable or even possible? Then pass, buy or watch for a while depending. I find this to be a simpler way to go and I am less likely to be deluded into thinking that there is actually precision in my results.
Nice article.
Revisiting Pfizer's Value Story [View article]
Banco Santander - Strong Results Support Investment Thesis [View article]
I bought STD-pB (a floating rate preferred with a 4% floor at par) in October 2009 @ $17, but exited less than a month later when a 14% gain was handed to me. I reentered in July, 2010 (now SAN-pB), also @ $17, before Europe was in the news everyday, so I'm a bit underwater. My YOC is 6% and the yield today is @ 6.7%, but I can't bite. I've got all the risk I need in the financial sector (banks, insurers, mREITs). The SAN common does look as if it has the potential for some very attractive total return, but I think I'll hold off until the bad news really subsides. Who knows when that will be? Of course, by the time it does happen, the total return won't be as promising, will it?
CenturyLink's Newest Achievement Could Boost Stock [View article]
CenturyLink's Newest Achievement Could Boost Stock [View article]
I see Net Income (ttm) of $549M, but FCF(ttm) of $2,236M. Also, 5-year median FCF margin is 16.8%, although it has been declining since 2007 (due to merger and acquisitions?). Could a dividend hike be in the cards?
CenturyLink: 2 Huge Reasons To Avoid Now [View article]
What Procter & Gamble's Warning Means For The Market [View article]
Federated Investors (FII) is an asset management firm.
NorthStar Realty Re-Opens Preferreds At A 9% Yield [View article]