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JRB24

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  • Taminco Isn't Your Typical Chemical Company [View article]
    "the amines Taminco sells are typically 10-15% of end-product costs"

    Where's your source for this data?
    Feb 19 01:16 AM | Likes Like |Link to Comment
  • How To Approach A Cheap Stock In A Pricey Market: The Case Of Deere [View article]
    Great article. I agree that options would be a good way to play DE. I'd probably go about it a different route: maybe buy some LEAPS calls and subsidizing that purchase with some short term put selling.

    I think that a key concern has to do with favorable tax laws, namely Section 179 and bonus depreciation, expiring on December 31, 2013. Section 179 allows for a tax deduction of up to $500k on equipment purchases of up to $2MM. Additionally, equipment purchasers were able to depreciate 50% of the value over and above that $2MM purchase limit. In 2014 this tax deduction will decline to a paltry $25k on purchases up to $200k and no bonus depreciation.

    Deere's growth post 08/09 was due to some economic recovery but was probably also due to this favorable tax ruling. It's likely that some farmers pulled some future purchases forward in order to take advantage of the favorable tax deductions from Section 179 and bonus depreciation on equipment purchases. If this is the case then Deere will see weaker sales growth over the next few years.

    Also with crop prices (particularly corn) declining following a record planting season and a lower-than-expected ethanol mandate in gasoline, farmer sentiment (a key driver of equipment purchases) is expected to weaken.

    I think these two issues are creating a lot of sales/earnings uncertainty going forward and these concerns are keeping potential investors at bay.

    Just my 2 cents. Would love to hear your thoughts.
    Dec 19 08:14 PM | Likes Like |Link to Comment
  • Lindsay Corp.: Irrigating The Emerging Markets With A Modest Valuation [View article]
    Excellent write-up. I agree that International Irrigation is the main growth driver for LNN going forward. My questions, however, center around the domestic market and getting better feel for factors that drove its growth.

    US Irrigation had very strong growth in '11, '12 and '13 (49%, 34% and 26%, respectively) after falling 34% in '09 and 2% in '10. While some of that growth can be attributed to the economic recovery and the '12 drought which drove crop prices up, some of that growth was probably due to the farmers taking advantage of the favorable tax deductions from Section 179 and bonus depreciation (especially in '11) on equipment purchases.

    Do you think that LNN over-earned in these years due to farmers taking advantage of these favorable tax laws and, in effect, pulled forward future sales? And if so, what growth rate do you project for US Irrigation over the next few years?

    While the Jobs Act was eventually extended for '12 and then for '13 I'm unsure whether these extensions were done during the "11th hour" after farmer equipment purchases were largely complete for the year. Can you comment on when the tax rulings were extended?

    Regards,
    Jay
    Nov 3 07:30 PM | Likes Like |Link to Comment
  • Belo Corp. - Do TV Stations Still Have Value? [View article]
    Agreed. Great write-up MD.

    One thing I'd like to add is management owns 12% of the dual-class shares outstanding. However, with only insiders owning Class B shares (entitling each holder to 10 votes per share) they control 55% of the total votes. They can essentially run the company however they see fit and with little input from outside shareholder.

    While this may not always be a negative (e.g. management may display a history of acting in the interests of all shareholders), it does raise red flags as outside shareholders have even less of a say in the general operations of the company and must (even more so) rely on the competence, integrity and morals of management.
    Mar 21 01:53 AM | Likes Like |Link to Comment
  • Shares Of Seagate Technology Could Triple In The Wake Of Thailand Floods [View article]
    Mark,
    Great write-up. I have a few questions. They all center around how well STX can take advantage of this opportunity:

    Has STX's supplier base been affected in any way that might prevent/delay delivery of key components?

    You mentioned that STX will gain market share by having their largest customers signing longer-term agreements. What is STX's current capacity and do they have enough to meet this demand?

    Is the increased capacity that you mentioned from capital expenditures or from the Samsung HDD acquisition?
    Nov 12 10:53 AM | Likes Like |Link to Comment
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