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Stryker Corporation Message Board

DONEDEALER 50 posts  |  Last Activity: Jul 1, 2014 8:30 AM Member since: Jul 2, 1998
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  • Reply to

    The 20% rule: Options vs Buybacks...

    by arthaiss Jul 1, 2014 6:54 AM
    donedealer donedealer Jul 1, 2014 8:30 AM Flag

    Yes, and they present restructurings as a better alternative than buybacks when buybacks were off the table. Kept hearing that buybacks were out because we need the cash for restructurings.

  • donedealer donedealer Jun 30, 2014 11:33 AM Flag

    NMB

    Is that 7-8 cents Q total or incremental?. Does it consider the loss of the NOI that the $1.2B of equity was previously earning?

  • Reply to

    Wow!!

    by lenyw Jun 27, 2014 4:04 PM
    donedealer donedealer Jun 27, 2014 4:27 PM Flag

    This was the Russell rebalancing.

  • Reply to

    Somebody knows something!

    by tobypharma Jun 27, 2014 12:50 PM
    donedealer donedealer Jun 27, 2014 4:04 PM Flag

    Yes, they know there is a Russell rebalancing.

  • Reply to

    What is your view on ACAS chart technical

    by wenh Jun 22, 2014 12:26 AM
    donedealer donedealer Jun 22, 2014 2:25 PM Flag

    wenh

    I see ACAS sitting on its 200 Day Moving Average which average is continuing to slope upward. Technical indicators aside, it appears there should be little risk of a significant move below the 200 DMA because this level is about 75% on NAV. A move significantly lower would probably require bad news on earning or NAV.

  • Reply to

    Need 13.5% gain to $16.88 to match S&P 500 YTD

    by donedealer Jun 20, 2014 4:55 PM
    donedealer donedealer Jun 21, 2014 1:12 PM Flag

    lenyw

    The progress reports will be the quarterly earnings releases. Prior to the announcement of the plan to restructure many posters on the board who anticipated such a move hoped that the announcement of the plan would move the stock price up. This has not happened as the market price has been declining year to date. I have yet to see any financial projections on this board or elsewhere as to the results of the restructuring: NAV, EPS, PE ratio and projected price per share.
    My concern is that "some market participants" have made such projections and are voting with their money. Much that I have read on this board is that restructuring is "a magic bullet" and have faith. I hope they are right. I have seen the buybacks, which were increasing NAV per share, suspended while restructuring included divesting equities at a 10% discount to NAV. Hopefully, other aspects of the restructurings will be more positive. My fall back position is that if all this fails then stock buy backs can be resumed.

  • Year to date ACAS down 4.9% v S&P 500 with dividends up 7%. This is after ACAS has announced plans to restructure. Hopefully this gap will narrow with 2Q earnings release.

  • Reply to

    Acquired Premier Foods to raise cash?

    by donedealer Jun 15, 2014 8:02 AM
    donedealer donedealer Jun 16, 2014 5:09 PM Flag

    NMB

    I understand that all the equity investments need to be unencumbered in order to divest them. . Further, I understand that additional cash is need to add to some of these divested equity interests. But that leaves ACAS with substantial debt investments and ACAM, which should support a substantial line of credit.

    In either event this issue is not central to my concern, which is essentially the
    merits of the restructuring and the time table to successfully implement it.

    I find it interesting that you and other supporters of the restructuring would probably be the least likely (and rightly so) to want to invest in ACE 111 and these other entities with up front fees of 1.5%+ and profit sharing of up to 20%.
    If I am incorrect and you would be interested in such an investment please advise. If not, this underscores my reluctance to award a high PE ratio to ACAM'

    I will continue to hold my position and hope for the best.

  • Reply to

    Acquired Premier Foods to raise cash?

    by donedealer Jun 15, 2014 8:02 AM
    donedealer donedealer Jun 16, 2014 12:08 PM Flag

    Jeffy

    No, I do not think management is lying. These are judgement calls. I don't see the need for that much cash, especially considering their lines of credit. Yes, I do believe that most corporate managements do not favor liquidating their business. There is a natural tendency to want to grow and get bigger.

    I am a long term holder who would be faced with about $3 in taxes per share if I sold. Although I am questioning the benefits and timing of the restructuring I believe that there is little downsize risk at present levels. I would be very hard pressed to find a better investment with the $12 in after tax proceeds I would have if I sold. Unless something very unfavorable happens I am holding for the long term.

    My concern is that the upside may be less and take longer than I had hoped.

  • Reply to

    Acquired Premier Foods to raise cash?

    by donedealer Jun 15, 2014 8:02 AM
    donedealer donedealer Jun 16, 2014 10:58 AM Flag

    NMB

    Maybe others on this board are in LaLa Land. I suspect that many like me have ACAS as their worst performing stock year to date. Down about 5% and off about 11% v S&P 500. This in a period when they have announced this exciting news about restructurings - which the market is not rewarding. We have gone from buy backs which were increasing NAV to divestitures of equities at a 10% discount to NAV. We are seeing large charges to earnings for stock awards. We are now awaiting some positive results from restructurings which .we have no idea as to the results or the timing. Some assume it is a year or two and that it will be driven by a higher valuation for ACAM. They hope for a double digit PE for ACAM. Yet, ACAM is no TROW which has an outstanding record on relatively low fees. ACAM is a high fee - share of profits model with a questionable track record. What if restructurings result in a single digit PE ratio, like KKR? I clearly do not know the answer but unlike some am able to consider the possibility. Further, although I believe the market is frequently wrong, I respect its opinion - which is clearly negative.

    I hope for the best. But have yet to see any positive evidence. It is also possible that restructuring will be a success but in a longer time frame - one that could take us through another market cycle.

    .

  • It will result in taxation of appreciation to stockholders holding in taxable accounts. I will respond by selling my shares. I would assume I am not alone.

  • Reply to

    Acquired Premier Foods to raise cash?

    by donedealer Jun 15, 2014 8:02 AM
    donedealer donedealer Jun 15, 2014 1:34 PM Flag

    I am now comforted by your assurance that no cash was provided by ACAS to SMG.

  • We were told that buy-backs were suspended to raise cash for restructurings. Yet now we see an acquisition which if used for a buy-back would have produced an immediate 33% gain on that cash. I do not believe that a cash surplus is needed for restructurings. Is is possible that buy-backs were suspended because although they were increasing NAV per share, they were slowly liquidating the company thereby threatening layoffs and compensation increases?

  • Reply to

    Stock is stuck in a trading range

    by allenstanson Jun 3, 2014 4:19 PM
    donedealer donedealer Jun 10, 2014 9:21 AM Flag

    NMB

    You are correct. The asset management business and growth could tilt the PE ratio upward and a $20 price could be achieved with less than $2 EPS per share. I certainly hope this is the case.

    However, will ACAS receive the double digit PE ratio of money managers such as BEN and TROW. ACAS model appears closer to that of KKR which has a singe digit PE ratio.
    Growth in EPS would help tremendously but I have yet to see much evidence of this.

    I am hopeful but want to see some results that would support a double digit PE ratio.

  • Reply to

    Stock is stuck in a trading range

    by allenstanson Jun 3, 2014 4:19 PM
    donedealer donedealer Jun 6, 2014 7:30 AM Flag

    NMB

    I don't care if the $2 NOI is in two or more pieces as long as it is there. The "earnings don't matter" school of investing has proven to be not too successful..

  • Reply to

    Stock is stuck in a trading range

    by allenstanson Jun 3, 2014 4:19 PM
    donedealer donedealer Jun 5, 2014 2:11 PM Flag

    I agree that we need to be patient and hopeful. But we better seen a Q2 or Q3 report that shows a trajectory toward a $2 NOI. The market continues to be skeptical. That doesn't mean he market is right. It does mean that one has to at least respect that point of view and that the market will not reward ACAS based on promises or plans. It wants to see the goods: NOI..

  • Reply to

    Stock is stuck in a trading range

    by allenstanson Jun 3, 2014 4:19 PM
    donedealer donedealer Jun 5, 2014 7:08 AM Flag

    art

    I agree. In order to achieve a market price equal to an NAV of $20 will require an NOI of at least $2.
    Look at PSEC, AINV, etc. I am awaiting Q2 to determine if their is an earnings trajectory that can achieve this result in the next year. I continue to lament the loss of the stock buybacks which together with NOI were increasing NAV by about 10% a year. Even if the discount continued this pushed stock selling price up by 10% per year.

    Clearly, the market is aware of the planned restructurings and the stock continues to languish.
    What ACAS plans to do with its cash, other than buy some 4% to 5% liquid debt investments, is a mystery to me. I continue to be hopeful that the restructuring plan will work but need to see some NOI.

  • Reply to

    Maybe a dividend would help?

    by allenstanson May 28, 2014 2:44 PM
    donedealer donedealer May 30, 2014 7:52 PM Flag

    I am with you completely as to the past situation whereby the assets of the controlled investments have not produced EPS for ACAS. Further, the market has not rewarded ASAS for the true value of those assets.

    Fast forward to the planned restructurings which are designed to correct this situation. It appears that the result ought to generate EPS for ACAS and a higher stock price. All I am saying is that the EPS better be there or we are still in trouble. The lack of EPS has been the problem. Hopefully, you are not suggesting that this will continue but the market needs to accept another metric. Clearly, EPS is needed to support a dividend.

  • Reply to

    Maybe a dividend would help?

    by allenstanson May 28, 2014 2:44 PM
    donedealer donedealer May 30, 2014 4:07 PM Flag

    NMB,

    PS
    I hope you are correct and the market will value ACAS for at least NAV even if the resulting ROE is mid single digits. So far the market doesn't appear to be on that wave length.
    However, I would be delighted to see the market prove me wrong and move toward NAV with a mid single digit ROE AS you can guess I would view that as a selling opportunity.

  • Reply to

    Maybe a dividend would help?

    by allenstanson May 28, 2014 2:44 PM
    donedealer donedealer May 30, 2014 3:33 PM Flag

    NMB

    You appear to be suggesting that earnings either don't matter or that the market will value on another metric and will tolerate a single digit ROE. I have seen very few examples of companies that can trade at or above book value with a single digit ROE. I can understand that some earnings might not surface on a GAAP basis for various reasons such as in an unconsolidated subsidiary. Nonetheless, the market needs to be able to identify and calculate the economic earning power of the enterprise. This appears to be presently lacking in the case of ACAS. ACAS is no AMZN which gets a high PE with little EPS because the market likes the high revenue growth rates that the market believes (rightly or wrongly) will result in significant profits.

    I am from the old school. I don't pay for eyeballs or any other metric than free after tax
    cash flows with solid ROE's. I have yet to encounter an investor with an above average long term record who has a different approach.

SYK
84.02+0.34(+0.41%)Jul 11 4:00 PMEDT

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