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ConservativeOutperformer

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  • Outerwall: A Maturing Cash Cow Offering A 17% FCF Yield [View article]
    No mention of,

    - Dutch Tender earlier this year over $70 a share (although repurchases are addressed)
    - One time gain in Q3 13 for ecoATM re-adjustment

    Those aren't show-stoppers, this is a good article, but I would have liked a more complete picture over the last 12 months.....

    Very cheap here and I do think the slowdown in good movies available at kiosks has and will hurt results this year (total garbage out right now). Relief should come in the 4th quarter. Longer term there is a specific bet investors are making with the manner in which the company deploys excess cash and that's a question mark. This is where topics like a Dutch Tender at $70+ become very important. Especially considering they used 2 years of Cash Flow (or newly issued debt, I should say) to conduct it.

    There are plenty of misses historically here. Consumables don't seem to make sense at a kiosk. When they get one right, however, the rewards are big.... Purchasing the rest of redbox in Feb of 2009 was genius. Who knows about ecoATM?

    What I do know is there are lines at Redbox when good releases are plentiful.... Even locations where multiple kiosks are available. This thing is real cheap and when a good set of releases roll out, you can expect the financial picture (and the share price) to react accordingly.

    Good luck!
    Sep 19 02:08 PM | Likes Like |Link to Comment
  • Seadrill: Lessons From The Frontline [View article]
    Down another 5%..........
    Sep 19 10:46 AM | 2 Likes Like |Link to Comment
  • What Trading Places Can Teach Us About Personal Finance [View article]
    Thomas J Stanley
    Sep 19 10:14 AM | Likes Like |Link to Comment
  • Seadrill: Lessons From The Frontline [View article]
    Good article.... I've started looking into this space and came to a lot of the same conclusions.

    One thing not mentioned, it is sort of implicit, are the risks associated with this industry. I would argue multiples in this sector should be lower than others simply because there's always the risk of a 'Macondo'. Couple that with the nature of large engineering projects.... It's tough and it's risky. Some of these names look cheap. They shouldn't really ever be expensive. Specifics regarding each companies fleet and financial posture are my biggest focuses. Times will be lean and having a good combination of both those metrics will allow for winners to separate themselves.

    Anyways, good luck!
    Sep 18 12:15 PM | 3 Likes Like |Link to Comment
  • My Dividend Portfolio: Adding Pepsi [View article]
    I read your blog and I like your portfolio a lot. It has a nice mix of growth, value and big dividends.

    I started in PEP back in 2011 around $63 and don't plan on selling. Carbonated drinks are a legit concern, but the snack business is outstanding. I would not be a holder of KO... I'm also a UG holder, although I sold out when the price got elevated. Recently sold all my CSCO as well (moved 100% in a few years, terrible stock option distribution policy offsetting all repurchases for the common shareholders).

    Check out a name like RAVN or RLI since you like big, growing dividends. Opportunistic purchases have worked out really well. Some of the drilling names are getting very interesting as well (ESV, RDC, etc)....

    Good luck!
    Sep 17 05:35 PM | 1 Like Like |Link to Comment
  • Major NFL sponsors react to off-the-field trouble [View news story]
    Let me fill you in on the easiest thing to do..... Just watch the games.

    Unless you are big into NFL betting, or own a piece of an NFL franchise, none of this has any bearing on anyone's enjoyment of the game. I could care less if every corporation pulls their sponsorship. I could care less if these guys beat their wives, are racists, kill dogs, etc. You can skip all the ESPN, the news stories and the drama. Just go straight to Fox, CBS, NBC and ESPN at the appropriate time and enjoy the greatest team sport in the world. 30 years from now when Football in it's current form doesn't exist, you'll look back and remember the good ole days regardless of the participants.

    Some of the best athletes in the world never make it out of High School. Drugs, violent crimes or whatever hold back many talented youth prospects. If Adrian Peterson and Ray Rice don't play a certain week, oh well. There are many others just like them in jail, not playing football. In the end it doesn't matter. If you're a Ravens fan or Vikings fan, this is no different than losing someone to a season-ending injury.

    Before someone explodes with, 'you are insensitive' let's review the history of some prominent NFL players of the past. I remember when Leonard Little killed someone while driving drunk. His 'sentence' was an 8 game suspension. He went on to play 12 successful years in the NFL. Right smack dab in the middle of those years was another drunk driving incident, followed up by the unusually harsh punishment of a 0 game suspension......... Don't forget Rae Carruth, Sam Hurd, Aaron Hernandez.... The list goes on and on. The truly horrific incidents are what need to be handled promptly....

    In the world of 'Social Media' where a lot of uneducated voices are very loud at a time when emotions are at their highest, people in high positions get worked up. I would chalk all this current 'outrage' up to a willingness to do something, just for the sake of doing something. 2-5 years from now, no one will remember Ray Rice punching his wife. No one today remembers Brandon Marshall or Chad Johnson doing the same thing. The family of the woman that Leonard Little killed remember an awful incident every day. Barring extreme events such as that, there's really nothing pressing about the 'issues' facing the league today. This is simply par for the course.......

    Just watch the games.
    Sep 16 05:16 PM | 4 Likes Like |Link to Comment
  • Update: United-Guardian Earnings Reveal Some Weakness [View article]
    Butters, you can check my older comments on UG to see how I value it.....

    In short, when you strip out the cash it's a business doing basically 100% ROA. This is why the Payout Ratio (in conventional measurements) is a useless statistic. All the Net Income will be distributed to you (as well as the current cash) because they don't need to pay very much to update anything.

    At the end of the day the business went from $18 a share (where I bought it) to $35 a share, with a large special dividend as well as the large bi-annual payments in the span of 18 months. A business that had large non-operating profits (Renacidin supplier payouts), historically modest growth and very little overall capital. I think it's a decent investment right now. But after following the company closely for awhile, one thing has stuck out..... In micro caps like this news travels slowly. It wouldn't surprise me to see the crowd push this name lower while they cash out and digest the roll-off of supplier payments. Once the numbers make their way into the broader databases (Google, MSN, Yahoo) the arm chair investors will probably exit....

    I look at UG as a buy for longer term investors, much like you do. When I first invested in this name I went back to a 10-k from 20 years ago and saw they were doing the same thing then as they are today. I hold it in my Roth IRA and only sold because of a huge valuation spike. I was expecting about 10% a year in perpetuity, provided the business didn't deteriorate significantly. I think with a negative quarter and a negative outlook, as the price declines that number comes back into play at a lower price than I bought it before, like sub $18....

    Good luck!
    Aug 11 02:12 PM | Likes Like |Link to Comment
  • I Feel Like A Thief Buying IBM At Today's Low Valuation [View article]
    Think about it this way.... The article about why IBM is such a fantastic opportunity probably took 10 times longer to write than selecting the equity itself. If that statement is false, then how does the author make the statement I quoted? Those observations come to light within minutes, in some cases even if you are pulling data from those sources......

    My intent is to bring to light facts. There doesn't need to be a debate (they are facts)... Hence the brevity. This author, on many previous occasions, has chosen to avoid them. The thousands of people following this author, who think looking at S&P Capital IQ or Google Finance or MSN Money for 5 minutes is the right way to evaluate individual equities, need to ask themselves a few basic questions.....

    Good luck!
    Aug 9 01:10 PM | 5 Likes Like |Link to Comment
  • I Feel Like A Thief Buying IBM At Today's Low Valuation [View article]
    It's actually a perfect example of what not to do (looking strictly at EPS numbers).

    "As the following two earnings and price-correlated graphs illustrate, since 2011, IBM increased its earnings at the annual rate of 11.5%, which was significantly higher than the 8.8% annual rate of growth of the S&P 500. This begs the question: How do you explain IBM's underperformance when earnings growth was so much stronger than the market's?"

    This would be a great question if you actually understood why IBM's earnings are showing that growth. As anyone who actually follows IBM knows (even Warren Buffett pointed it out for the reading impaired), they have done a great job bundling asset sales and other non-operating profits into their earnings to meet their '2015 Roadmap'. Couple that with a substantially lower tax rate and you have your answer.....

    As someone with over 500 shares of IBM there are plenty of reasons to own this company. A few graphs with questionable data is not one of them.

    Good luck!
    Aug 8 12:06 PM | 12 Likes Like |Link to Comment
  • Update: United-Guardian Earnings Reveal Some Weakness [View article]
    It was easy to take profits over $30..... I still have a small position left, but I probably wouldn't buy big again unless we get under $20.

    Good luck!
    Aug 8 11:45 AM | Likes Like |Link to Comment
  • Do Microsoft Bulls Have A Convincing Case? [View article]
    Pure comedy
    Aug 6 06:09 PM | 1 Like Like |Link to Comment
  • Raven Industries: Unknown Dividend Growth King You Should Know About [View article]
    I bought RAVN in the fall of 2012 around $25 and sold last Dec at $42. I didn't want to, but it was way too much of a move with modest operating results....

    I've been following it ever since and, finally, we're closer to fair value territory again. <$1B enterprise value with $60+m in cash. Sales have plateaued recently, and I would bet there's still more downside to come as the market continues to sell off. However, for younger investors, it's not hard to envision a scenario where they are doing $4-$5b in sales at some point in the next 20 years. If, somehow, we get an overreaction down to $20, that would be a fantastic opportunity to buy into this name.

    Still on the sidelines for now, but watching closely every day.....

    Good luck!
    Aug 1 12:44 PM | Likes Like |Link to Comment
  • Take The Mulligan On Callaway Golf While You Can [View article]
    Club Corp has a nice stable of clubs. It wouldn't surprise me if those assets did OK in boom years, while your middle of the road country club has to cut back on membership fees and initiation costs as participation stagnates or declines.

    The wealthy, country club, big spender types are not strapped for cash right now.
    Jul 24 05:26 PM | Likes Like |Link to Comment
  • Apple beats EPS estimates, but guides light [View news story]
    That's right milehr.....

    A membership card into the most exclusive of all clubs. You and 50 million of your closest friends are the only ones with access due to the overwhelming initiation fee ($0 - $200) and astronomical recurring expenses ($0). Only the highest members of society can be granted access with a total cash outlay over 2 years at no higher than $200.

    Good luck!
    Jul 22 06:14 PM | 4 Likes Like |Link to Comment
  • Microsoft Should Have A Strong Finish To Fiscal 2014 [View article]
    I don't care what any analysts think, but I just finished the report and this company is still cheap after a 70+% run since Feb of '13.... Once they take out the trash with NDS, expect huge EPS gains.

    I said this about 2 years ago, but every time I run the numbers on MSFT I have to go through and run them all over again. It just blows my mind how profitable this company is and how ridiculous the valuation is (was). Even Bing is doing well.....

    I am really impressed with the latest results. I'm extremely stingy on price and it has hurt me with this name. MSFT is a buy all the way past $50......

    Good luck!
    Jul 22 04:41 PM | 4 Likes Like |Link to Comment
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