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browndlee

browndlee
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  • Worried About Exxon Mobil? Are You Kidding Me? [View article]
    Something to be said for both arguments here. I believe XOM's long term edge in ROCE employed and 100 year record of excellence means it deserves a place in conservative investors portfolios. I'm approaching 60 and like this company very much. On the other hand the XTO acquisition, at least for the first 5 years, looks to have been poorly timed and contributed to underperformance. Recent exploration results have not been great. I'd prefer less buybacks and a greater dividend myself. At this point however, I think we're facing less buybacks and a continued 7-10% yearly dividend increase since current cash flow won't support this level of buybacks without increasing the debt load.
    Mar 8 10:57 AM | 7 Likes Like |Link to Comment
  • Warren Buffett's Portfolios Don't Reward Investors For The Added Risks [View article]
    The line about 2000-2003 being when Buffet made his reputation jumped out at me as well. Buffet made his reputation from 1955 to 1995. By then the size of Berkshire had made it very difficult to significantly outperform. I first heard his name as a 15 year old when I read Goodman's book Supermoney. He was know on Wall Street at that time as the perhaps the best investor of all time. Unfortunately the general public didn't become aware of him until much later when it had become much more difficult for him to outperform. I still hold BRBK and have for 15 years. But don't expect more than modest outperformance going forward with underperformance in big up years and outperformance in down years.
    Mar 6 09:14 AM | 7 Likes Like |Link to Comment
  • Deere Remains Deeply Undervalued: Above-Average Cash Flow Growth And Shareholder Remuneration [View article]
    Although debt to equity looks high this is because they have produced a lot of free cash flow and bought back shares. This tends to skew the debt/equity ratio. If you look at EBIT to interest payments (I don't like the use EBITDA because depreciation is needed to offset capital expenditures) you will see the ratio is over 7 to 1. That means they have $7 of income to pay each $1 of interest expense, a very strong coverage ratio. Also their pension is well funded which isn't always the case with these mature manufacturing companies.
    Sep 28 06:56 PM | 6 Likes Like |Link to Comment
  • Buy This Oil Stock Now While The Price Is Low [View article]
    I'd be suprised if they are looking at anything short term on gas demand. XOM is very long term oriented. If you get the chance it's worth listening to the 25 year energy outlook they do each year. I only listen to it once every 3-4 years but it's very comprehensive and has worldwide outlooks for all energy types (including alternative energy) on a worldwide basis.
    Apr 28 11:30 AM | 5 Likes Like |Link to Comment
  • Buffett Vs. Icahn [View article]
    Icahn has had a great record but an investment in IEP is very different than one in BRK/B. Icahn's partnership is deal oriented. He only has a few investments he's owned long term, the partnership is much smaller than Berkshire, and most of the returns come from a series of one off transactions. BRK/B's performance comes from owning companies with good fundamentals for the long term. BRK/B will have to work hard to achieve outsize returns now because of their size, but the companies they own produce the results. Buffett only adds to the returns by capital allocation. With IEP it's all about capital allocation decisions by Icahn. If Buffett goes the performance of BRK/B will not be much impacted in the short run. (Long term it will be) If Ichan is gone there's really nothing left of IEP.
    Apr 12 10:34 AM | 4 Likes Like |Link to Comment
  • Supervalu: Should I Stay Or Should I Go? [View article]
    I think this board would love to get out from under the mess they created. But since no matter what happens there will likely be lawsuits they are covering their rears with Goldman and other advisors. And no matter who ends up with the various parts of SVU there will be lots of store closings and job cuts. Failure creates much pain for shareholders and employees but senior management always walks away OK.
    Nov 13 02:01 PM | 4 Likes Like |Link to Comment
  • Exxon Mobil: The Dividend Growth Picture Looks Unusually Bright [View article]
    Agree. I used to run an equity mutual fund (before I retired) and XOM holds a once a year meeting (conference call) where they share their views on energy sources and uses on a 25 year time scale. Very informative. Puts people who believe in magic outcomes from alternative sources in proper perspective. Not that we won't see higher contributions from alternative sources, just that those sources will still be very small in 2035. This company is very well run, and very oriented to projects that produce a high ROIC over longer periods of time.
    Mar 11 04:03 PM | 3 Likes Like |Link to Comment
  • Supervalu: Should I Stay Or Should I Go? [View article]
    Richard, nice analysis. I suspect the company will sell off at least several units to buy time even if Cerberus doesn't want the whole thing. Save a Lot ($1.9-2.2 biliion), Jewell-Osco ($1-1.2 billion) and the western Albertsons would take alot of the pressure off and provide funds to buy back debt at a discount and reinvest in dropping prices and updating the remaining stores. I would still prefer a sale of the whole company because this board appears to consist of morons who have an inaccurate view of their own ability to fix things.
    Nov 13 10:44 AM | 3 Likes Like |Link to Comment
  • Why Citigroup Will Not Be a Multibagger [View article]
    Reading these comments there has to be more morons responding to this article than any I can remember. Besides the fact that massive dilution has reduced the upside is the fact that C has a long record of incompetence. If it wasn't for BAC they would be by far the worst run large bank in history. There may be some modest stock buybacks in years to come but new regs will keep them small. You've already made the largest part of the gain to be had here, move on from the POS.
    Jan 27 10:29 AM | 3 Likes Like |Link to Comment
  • Berkshire Hathaway Is Not A Sell [View article]
    One thing not mentioned in this or other articles this weekend is Buffett's measurement method. He compares his book value increase to the S&P 500's total return. He does this to keep the focus on the improvement in the business over time, not the short term stock price. However, if we look at what Berkshire's stock price did last year (it rose to 89.70 from 76.30) it outperformed the S&P 500 again. (17.5% to 16%)
    Mar 4 10:00 AM | 2 Likes Like |Link to Comment
  • A Win-Win Deal For Struggling Supervalu [View article]
    Not anymore, they sold all the best real estate with this sale to Cerberus.
    Feb 3 05:43 PM | 2 Likes Like |Link to Comment
  • Exxon Mobil: Valuation Discussion [View article]
    Not sure I buy the analysis that buybacks don't add to return for the long term investor. They have recieved a bad reputation in recent years because they tend to be used heavily by tech companies that issue stock options by the boatload in place of salary/bonus compensation. XOM has actually used their buybacks to significantly reduce the number of shares outstanding. This means more EPS for the remaining shareholders. I own XOM bacuse it has the best long term history of return on capital employed in the business. Very long term oriented and careful about the projects they take on.
    Dec 31 09:56 AM | 2 Likes Like |Link to Comment
  • Altria Will Slash Its 6% Dividend And Here's The Reason Why [View article]
    Greg, I would suggest they could just sell a few shares of SAB Miller if they get in trouble. In fact they could sell all of it and pay off 100% of their debt. Then there's plenty of cash flow to support the dividend and your concerns about the debt disappears.
    Nov 16 03:59 PM | 2 Likes Like |Link to Comment
  • Supervalu Versus RadioShack: A Comparison Of Struggling Retailers [View article]
    "For a company that is struggling with maintaining and growing it's sales, we believe that hiring a guy with the last name of Sales is a good sign." Jesus, talk about grasping at straws. I bought this stock at $4 a couple of weeks ago and think it could recover as pieces of it are sold off. But let's stick to fundamentals here.
    Aug 2 09:06 AM | 2 Likes Like |Link to Comment
  • Berkshire: What Did Sokol Really Do? [View article]
    As Berkshire becomes larger it's obvious to me that the company should be broken up following Buffetts resignation or death. Only he and Munger really understand all the pieces and few people would have the ability to command the same loyalty. What he has accomplished is amazing, but who has the same skills he has to reinvest the earnings across the world and still create value? I hope his ego doesn't get in the way here by trying to retain a corporate structure certain to fail after his passing at the helm.
    Apr 4 12:48 PM | 2 Likes Like |Link to Comment
COMMENTS STATS
55 Comments
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