...PE less than 10. And by the way, CNI is up 120% in total, almost matching my gain in KO.
Simple men like me can beat the indices using simply value investing. It takes some high school arithmetic, time, tuning into folks like Buffett. My thinking was always that if he can do it on a large scale, why can't I at a smaller scale?
Here's to continued solid returns in TRN. All the best to fellow investors here! I'm grateful for living in a country like the US, where one has opportunities to passively make money off of our great companies...using an ecosystem of mobile information & finance that makes this possible.
I'm very pleased with my investments in TRN. It has run up nicely. Here is a breakdown. The $4k and $5k are my basis. The rest are reinvested dividends:
date shares total_cost share_price
08/17/2007 150.0 $4,958.95 $33.06
10/31/2007 0.293 $10.50 $35.84
11/28/2007 200.0 $5,241.95 $26.21
01/31/2008 0.896 $24.52 $27.37
04/30/2008 0.79 $24.58 $31.11
07/31/2008 0.725 $28.16 $38.84
10/31/2008 1.706 $28.22 $16.54
01/30/2009 2.421 $28.35 $11.71
04/30/2009 1.886 $28.55 $15.14
07/31/2009 2.026 $28.70 $14.17
10/30/2009 1.655 $28.86 $17.44
01/29/2010 1.824 $28.99 $15.89
04/30/2010 1.139 $29.14 $25.58
07/30/2010 1.437 $29.23 $20.34
10/29/2010 1.292 $29.34 $22.71
01/31/2011 1.061 $29.45 $27.76
04/29/2011 0.819 $29.53 $36.06
07/29/2011 1.134 $33.30 $29.37
10/31/2011 1.203 $33.40 $27.76
01/31/2012 1.059 $33.51 $31.64
04/30/2012 1.143 $33.60 $29.40
07/31/2012 1.456 $41.20 $28.30
10/31/2012 1.325 $41.36 $31.22
01/31/2013 1.053 $41.50 $39.41
04/30/2013 0.997 $41.62 $41.75
07/31/2013 1.266 $49.31 $38.95
10/31/2013 1.145 $57.09 $49.86
total shares: 381.751
total current value: $20,030.47
total return: 100%
In contrast, the S&P500 has returned 20% during the same time period. Score another one for value investing in solid, profitable companies! I also want to thank Warren Buffett here.
Why? Because when he initially bought into BNI, I looked for value in railroads & the rail supply chain. Everything had already run up in response...except CNI & TRN, prompting me to buy in. I believe my main buys into TRN were at a PE
I agree as well. GTAT is simply too small a company to withstand determined market manipulation, even by concentrated retail investors, never mind institutions. Sentiment analysis around solar will continue to be a key factor in creating volatility. It is what it is.
I'm feeling a bit better about fundamentals here. Diversification in sapphire seems to lesson the odds of going belly up due to solar exposure. Don't get me wrong, as the financials are still poor. GTAT has a long way to go in order to be profitable, but at least the possibility of solid growth is here.
I'm holding through the volatility. I'm gambling that this will be a multi-bagger. I admit that this is a faith based belief in GTAT having a sustained deep in the supply chain moat in sapphire & solar. But as I said, there are better fundamentals, so this isn't as wild a fantasy pick as it once was. I don't think it will go belly up anymore & I feel my average of $4.40 a share will materialize into a multi-bagger.
This isn't my usual value investing pick, but I afford myself a gamble every now & then. Fingers crossed on this one!
I explained why I think TRN is fair value & a hold in other posts on these threads. But the notion of short term market sentiment is interesting here. Suffice it to say, a lot of institutional investors put a premium on growth, irrespective of profits or balance sheets.
The most extreme example are the likes of SalesForce, Amazon, and WorkDay. Software as a service companies have massive institutional support. However, some brick & mortar companies also get perceived similarly, where consequently investors chase growth.
The scaling is not as dramatic as with cloud companies, but chasing growth can push the PE of TRN to a higher N year average. I think it will.
Regardless, I'm a hold. This has now nearly doubled for me. It's a life hold...unless it really goes crazy high in valuation, which has frankly never happened to me...aside from the late 1990s!
I track portfolio holdings using Yahoo & Seeking Alpha. I also read finance magazines, especially when traveling on planes. With a mobile ecosystem, I am attuned to major movements & changes.
If something catches my eye, I apply value investing & an eyeball test. Then I move in big. I typically buy between $5k and $20k chunks. I don't do it a lot, but I am consistent in not losing money...which is the main point...as it's more important to avoid a bad loss than to make the highest possible gain.
I manage to well beat the S&P500. Again, value & time make it possible...as well as some interest in stocks & high school math.
I own AA. AAPL. AWK. BAC. CAT. CNI. DOW. GE. GLW. GTAT. IBM. INTC. JNJ. KO. MSFT. MSI. NOV. NVDA. TEX. TRN. V.
The only dud has been SXRZF, a uranium company which recently was liquidated for cash. I got $1 for every $5 invested. It definitely was not a value investment.
The rest have done very well, except for MSI, BAC, and TEX. I'll make my money back on all of the aforementioned except for TEX, where I am down 50%.
Most of my money is weighted in the others. I've basically beaten the S&P500 in these, especially in the long term positions. Again, it comes back to value investing & allowing time to work some magic.
It's good to take them all into account. I like looking at a variety of metrics. I definitely evaluate this also in the context of cash flow & balance sheets for as complete a picture as possible.
According to Seeking Alpha, TRN has a PS=1. That is a good signal, assuming it isn't a falling knife, which it isn't. Again, there is definitely a margin of safety here. I'll also concede that the PEG looks good, ranging .6 - 1.2 from most sources I checked. Debt = $3 billion, although I don't know the quality of this debt.
However, I still think TRN has moved up quickly, especially in terms of PE, which is still relevant. I am going to keep my powder dry & wait a little, before moving in again. In my view, TRN is a great company...but for now, I found IBM & CAT more compelling, having taken recent opening positions.
Here is the performance of my CNI investment in 2008. I initially tuned in to railroads because Warren Buffett bought shares in BNI. I immediately began to look into railroads & railroad supply chain companies. All the railroads had run up, well above their 15 year
trailing PE & PEG...except CNI. It was selling at $55 at a PE=14, fair value. However, the avg growth rate x operating earnings growth rate made it a fair value of around $67, even higher if one believed future estimates in railroads, especially as articulated by Buffett.
There was a margin of safety here, so I bought in.
Trade_Date shares total_price price/share
05/14/2008 179.194 $10,009.13 $55.86
07/01/2008 0.856 $40.57 $47.39
10/02/2008 0.842 $39.18 $46.53
01/02/2009 0.91 $34.25 $37.64
04/01/2009 1.041 $36.48 $35.04
07/01/2009 0.92 $39.87 $43.34
10/01/2009 0.892 $43.50 $48.77
01/04/2010 0.812 $44.65 $54.99
04/01/2010 0.806 $49.30 $61.17
04/08/2010 0.809 $49.48 $61.16
07/01/2010 0.839 $47.49 $56.60
10/01/2010 0.767 $49.14 $64.07
01/03/2011 0.757 $51.21 $67.65
04/01/2011 0.832 $63.32 $76.11
07/01/2011 0.803 $63.92 $79.60
10/03/2011 0.908 $59.37 $65.39
01/03/2012 0.764 $61.11 $79.99
04/02/2012 0.91 $72.28 $79.43
07/02/2012 0.843 $70.91 $84.12
10/01/2012 0.83 $74.02 $89.18
01/02/2013 0.79 $73.42 $92.94
04/01/2013 0.832 $82.88 $99.62
07/01/2013 0.817 $80.27 $98.25
10/01/2013 0.804 $82.47 $102.57
total shares: 198.578
original cost: $10,009.13
current value: $21,879.32
This is almost a %120 total return. The S&P500 returned 25% during the same time period. I did even better with KO. I got 70% total return on JNJ, MSFT, & TRN during the same time frame. I am beating the S&P500 in relatively recent positions in AAPL, NOV, AWK, V, and DOW. I have been and am accumulating CAT, GLW, IBM, and INTC.
Again, fingers crossed for GLW to yield similar results. I've asked my money tree...which now has survived my terrible green thumb for 7 years...for good fortune here.
You are correct. I bet big on GLW. I put in $20k in position #1 here since 2008. I'm now up 22%. I put $5k in position #2 at the end of 2011 and am up 36%. On a composite basis, I am up %26.
This is not horrible. The S&P500 is up 25% since 04/28/2008. So my composite is higher.
However, I don't consider this an opportunity cost...that is, yet. My window is long. I am highly confident I will crush the S&P500 over 5 - 10 years. Value is value & I have done extremely well with other value investments.
Give the market time to normalize GLW to blue chip value, which it rightfully should be. I bought KO, JNJ, CNI, TRN, MSFT, and AAPL at deep value & crushed the S&P500 over any time frame 3 years. I've illustrated this in other posts.
Lastly...at least with GLW I get the proverbial margin of safety. It's important to me not to lose money. This is kind of an optimization philosophy here. You don't have to have the best plan...just avoid bad ones!
All the best. Fingers crossed here.
PE is still at fair value, especially compared to its industry and an average fair value of 15 for all industries. Even the most conservative future earnings estimates make the PEG compelling as well. I dare say there is a margin of safety here in at least not losing money.
Ironically I was motivated to buy TRN and CNI when Buffett initially bought into BNI. I trusted his judgement on railroads and companies in this supply chain. Quick research indicated that only TRN & CNI were cheap, as all others ran up due to Buffett moving so strongly.
I am averaged in TRN at $26 a share. It has done brilliantly, giving a 90% return as of today. I'm similarly up 120% in CNI. I'm definitely holding both, because they simply are not way overvalued.
However, I am not sure I would buy into CNI or TRN right now. Again, although they might be fair value, they are not cheap. They've run up huge since 2006, reaching peak 5 year trailing PE, albeit reasonable compared to 15 year trailing PE. I need it to be cheap. It just isn't right now.
Perhaps I might be wrong if TRN is now considered closer to true blue chip status, warranting a premium PE. I doubt this. TRN needs a few more years of consistently higher earnings. CNI might actually be at this point, but TRN remains to small.
All the best.
Come on. Apply PE and PEG here. GLW is not by any means over valued. Cash flow & balance sheets remain excellent.
This is a solid company. If anything, they are a fair bet to increase top line revenue. Yes, I'd rather that the company increased profit margins, but this is a work in progress. And as I said, this is factored into a very fair current price.
I've been in CNI since 2008. I'm very happy with the %112 total return I've gotten. When I bought it was at excellent value, both in terms of PE & PEG.
However, it currently has a PE=18 & a consensus based PEG=1.6. This probably means fair value, especially as I think revenue & earnings will improve in lieu of North American energy & manufacturing expansion. I am looking to therefore add more.
Does anybody have any doubts about projecting growth? Is there a reason this isn't compelling value at this point? Any thoughts would be appreciated.
I have a basis of $25k in GLW and $5k in GTAT. They are up 25% and 95% respectively. The former is value & safety while the latter is speculation.
By the way, as others have noted, it doesn't have to be a zero sum game between them. GTAT and GLW have synergies. I also thought a buyout might be in the cards, but people has explained that GTAT can sell the manufacturing equipment whilst GLW can produce sapphire products, complementing gorilla and willow glass.
Still, at the end of the day, I weight towards value. I won't lost money in GLW but can potentially lose it all in GTAT. Nevertheless, something still tells me that GTAT will be the overall higher return in the next 5 years. I have faith that its moat deep in solar and sapphire supply chains will make the difference. I admit this is based on minimal metrics and analysis & that I'm wildly speculating.
But one has to take measured chances, right?
All the best.
Will consulting ever go away? Even with the cloud, considerable work must be done to develop applications on, for example, Amazon Cloud Services. I'm doing this kind of work right now. I still have to configure a linux OS, databases, and what not. It's no different than if the machine were on premise.
Make no mistake about it, enterprises will continue to significantly develop applications. They still need the stack of web server - app server - persistence layer, etc. Not everything is about buying a ready to go SAAS application.
And even with SAAS applications, there is a need for consulting, sales engineers, and developers. Fine, you need less of them, but bill accordingly.
Lastly, what about new applications? What if IBM revolutionizes voice based artificial intelligence backed by biological computers and biological optimized programming languages? How much will this cost, on site or in the cloud?
I think people underestimate the evolution of markets...and the ability of IBM to drive such evolution, talk less of adapting to it. 100 years of success speaks loudly here. It was loud enough to make me a buyer today.
Fingers crossed for the long term.
I started a position. At a PE=12, this is a value, assuming they will keep growing earnings. I think they can, even with flat top line revenue. And with that, significant cash flow still gives IBM enormous potential.
For me, the key issues are:
1) employee morale
2) a slower global economy
3) the transition to cloud computing
4) NSA spooking foreign buyers
The employee issue in my mind is the key. IBM needs to attract & retain bright employees and enable their bottom up product management, product development, and sales initiatives. The other issues are well within IBM's capabilities to circumvent.
Anyway, I plan on averaging down, which might be necessary. But I can't see IBM becoming a bust of a company. It remains the best company to produce seminal computer science. Again, they just have to enable their software engineers & sales folks to cleanly finish front facing social & mobile applications...which is a necessity these days...and which requires the best & brightest, especially young minds.
I'm betting on the long term.
I don't often respond to trolls. But you clearly are a moron and, most likely, a liar. If you really had meaningful wall street experience, you would understand the dynamics of money supply & debt...and acknowledge that by no stretch of the imagination could the current debt situation be attributed to President Obama.
Hell, if you understood economic fundamentals, you'd realize that there can be no long term servicing of debt without growing aggregate demand...which in turn means injecting significant stimulus after a devastating leveraged crash. 1929 & 2008 are stark contrasts about the impact of massive stimulus after such leveraged crashes.
Sorry, your racism is transparent...and pretty innocuous. But carry on making a fool of yourself.
I did some quick checks on Fast Graphs. CAT has an average PE=15.8 the last 15 years. It current has a PE=12.2. If it hits its normal PE, it will be $100 a share. If you assume 6% earnings growth & use this in a PEG ratio & multiply by 15, the share price should be $95. All these estimates are through end of 2014.
It's not huge potential. But it seems safe enough. Moreover, the above numbers also don't factor in dividend reinvestment.
The debt is an interesting issue. Most of it is indeed tied to lending to customers to finance CAT sales. I remember reading that most of this debt was owned by governments. The probability of default should be low...as should be the probability of a global recession...albeit the current shutdown & debt ceiling crises give me pause here.
In summary, I think we have slightly cheap value here. But I also look at it from another angle. Right now construction globally seems stagnant. The Indian & Chinese economies seem to in temporary stasis. This cannot continue. Additionally, I read analysis where the earth's mantle & crust contain commodities to keep us going tens of thousands of years...commodities which require extraction & processing.
I'm a long & looking to buy more.
What do you expect in light of its financials, small market cap, and tenuous solar & sapphire markets? Especially in light of volatility created by the current shutdown & debt ceiling crisis? Blue chips are getting hit, never mind a fledgling company like GTAT.
GTAT is in my highest risk category, one where I only wage money I am prepared to lose. Most of my money goes into well qualified blue chip, value plays, with money I cannot lose. With GTAT, I expect the kind of volatility you described, patiently waiting for stability...that is, if the solar market recovers soon enough.
I am gambling on solar markets recovering in time, with GTAT having a business moat deep in the supply chain here. If sapphire markets materialize & GTAT makes a presence, that's an additional bonus. But something tells me that solar will make or break GTAT in the next 2 - 4 years. Again, my gut tells me that GTAT will survive & prosper...but I acknowledge this thing can go belly up.
I have $5k in GTAT that is up 80% today. Not bad. But I have $25k in GLW that is up 2%. I definitely am putting more into GLW, for obvious reasons. I call GTAT my hedge, in light of intersection with GLW in sapphire and, yes, solar markets. I like to think it's not a zero sum game between these 2 companies, that both can prosper...and maybe even a merger/acquisition?
Fingers crossed. Best of luck.