I started getting interested in XRX a few years ago when it was in the 7s.
Obviously it has challenges. What business doesn't?
But it also has great cash flow.
Also obviously, the copier business is in secular decline.
They need to milk it for cash flow and longevity and find things
that they can invest in that will be a bit more forward looking.
The ACA deal basically saved the company. without it, they would be
in really big trouble. Unfortunately, the company is not being well managed.
I don't expect the current management team to be around all that long.
The vultures are already circling.
But at the end of the day, a $1.1 to $1.2 billion annual FCF position
will not decline as fast as the company can buy back its own shares if they can't find any good M&A opportunities.
The company filed with the SEC for a delay in the filling of their Form 10-K.
I beleivve the deadline for filing was December 15th (75 days from end of the FY).
Obviously, it was going to be difficult, given that they were still working on the restatements for the first 40 days after the end of the FY.
They cited "resource constraints" including the restatement of segment reporting (because the payday lending business is gone).
However, they have given a December 21 date as the date by which they expect to make the filing.
Of course, the stock is selling off on this news, and we are now at $4.83, down 30 cents on the day.
Frankly, I thought this was a good probability, but I couldn't put 2 and 2 together when I started the previous threeaad about the "Other Shoe Dropping."
AS for 2016 earnings, with expected tangible book value of about $7.33 per share, and analyst estimates averaging $1.35, I would say the "downside" to 2016 earnings is in the range of 10% of tangible book value, or, around $70 cents per share.
So, even if you get 70 cents per share in earnings, this stock should NOT sell below book value.
Thus, as it drops here, it is becoming alot more attractive!
Of course, perhaps the business is not generating any real profits or cash flow at all, and it has been obscured by the restatement process. That's the downside.
There is almost no such thing as "price manipulation."
perhaps one reason the board is not buying back stock is that the company is presently somewhat overleveraged and overly indebted and the intend to and need to reduce their debt.
Please tell me what sequence of events could possibly come about that might constitute "price manipulation."
Thanks in advance.
I feel your frustration but I also have alot of confidence in this management team
How ya doin' oldtimer?
1) I believe there is a share repurchase authorization in place.
2) A lower share price makes it possible for you to buy new shares more cheaply.
3) Who the H-E-Double Toothpicks (quoting Cpl. Radar O'Reilly) is "Springfield Bulletin."
Is that some newspaper in Springfield Illinois? But seriously, nobody takes something like that seriously, right?
4) I see ALOT of stocks going down. the market appears to be anticipating that the Fed tightening cycle will result in a recession next year. Apparently Citi's economists have a 65% recession for 2016 call out there.
5) what is your comparison of "industry P/E" based on?
6) Do you see any insiders spending their own money to buy the stock?
I feel your frustration, and frankly, the stock is now actually in a long-term downtrend and I am considering selling some or all of my position. I've seen too many times where hanging on too long is not a good idea. Thankfully, after taking into account all of the shares I have sold, the shares that I own are essentially "free."
You are still having trouble with basic English.
A decline in something just means that it is lower.
The absolute amount of FCF is still strongly positive, and the company's share count is dramatically reduced.
Rates are going up? Yeah, they're going to soar so much. NOT.
XRX is NOT heavily leveraged (again, you don't understand the financial statements). half of the debt is funding the company's leasing receivables. I actually expect them to jettison the leasing business because anybody can finance a copier lease, just like anybody can finance an auto lease.
Without that debt, XRX's debt is less than 2X its EBITDA. A low number.
You are also looking just at purely reported numbers. These are rather distorted by the strength of the dollar. They also have alot of assets they can divest like Fuji-XRX that can raise cash.
Even a really bearish analyst on the Street expects $1.1-$1.2 billion of FCF (after capital spending, mind you) in both 2015 and 2016. With a market cap of just $10 billion, that's an 11% FCF yield. Thank you very much.
Your comment is really ignorant.
The company funded it's growth by raising new capital for years.
Nothing has changed at KMI.
The capital markets are what cganged.
The company's profits and cash flow continue to rise as they finish new projects.
Energy market conditions have had little impact outside of the availability of capital.
In Friday's press release, the company stated
"KMI will construct its 2016 [financial] plan to maintain an investment grade credit rating with all three agencies. Further KMI does not plan to issue equity at current prices."
So here is what we know from the cmopany's press release:
1) The will not issue equity to help fund growth capex.
2) They have maintaining IG credit ratings as an absolute priority, even over the dividend.
3) Their 2016 distributable cash flow for 2016 will be "slightly over $5 billion, which would be sufficient to support dividend growth of 6%-10% as discussed in the Q3 earnings conference call. They implied that the dividend would increase by that amount if the financial markets had remained willing to fund their company's investment in growth projects with the usual combination of equity and debt on acceptable terms."
By implication, we can expect the following:
1) If no other solution can be reached, KMI will reduce the dividend in order to help fund growth capital projects to which it has already committed to customers that it would build.
2) The company will delay projects to which it has not committed to customers that it will build
3) the company may seek additional capital outside the bond and equity markets by either a) selling assets or b) contributing assets to joint ventures in return for cash.
The board is reportedly meeting today and I think we will get an announcement tonight or tomorrow morning.
You still need to learn basic English.
A decline in free cash flow still does not mean that free cash flow is negative.
It means that growth is negative.
During the past few years, XRX has reduced its share count from 1.3 billion shares to 1.0 billion. How is the free cash flow on a per share basis? Is it still falling?
There is ZERO risk of insolvency.
In addition to more than $1.25 billion per quarter of operating cash flow, the company has a $4 billion revolving credit facility that is unused.
They also have PLENTY of financial flexibility via obtaining term loans, selling assets, putting assets into joint ventures, forming a new MLP and dropping assets down to it in exchange for cash that the MLP would raise in the equity and debt markets on more favorable terms.
The decision to forego the dividend rather than issue new stock in order to finance capital spending on new projects that will increase the level of future cash flow can be seen as the equivalent of buying back stock.
yes, it saves time, but the posts of others responding to the trolls is still there.
I'm happy to listen to a reasoned bear (or bull) who gathers facts and has a reasoned opinion,
but Yahoo! is SO bad they can't even control the spammers.
When you buy a house do you make a downpayment?
When they build a pipeline they make a downpayment (issue equity).
They also take out the equivalent of a mortgage.
The equity is usually close to have the value of the pipeline.
do you pay all cash for your houses and cars?
If so, you don't belong on a Yahoo! message board.
The market will take care of itself.
He and management likely are tending to the company's business.
The company is scheduled to make a conference presentation tomorrow at a wells Fargo conference.
They would do well to arrange to have it webcast.
This is one of those stupid naive amateur questions, right?
if it were ONLY their stock it might make sense.
it is all of the stocks in the industry.
What is there to say?
if you can't stand the heat, get out of the kitchen