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Lexmark International Inc. Message Board

deanmortensen 19 posts  |  Last Activity: Jun 20, 2016 11:37 AM Member since: Feb 15, 2009
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  • Reply to

    NCT earnings

    by stockguy555 May 12, 2016 10:06 AM
    deanmortensen deanmortensen Jun 20, 2016 11:37 AM Flag

    That's my gameplan. I'm particularly encouraged by the fact that 80% or so of the owned golf courses are located in the top 20 MSAs in the U.S. So, there is the possibility at some point that some of these golf courses may be repurposed and redeveloped into residential real estate developments. This provides optionality as land prices in these MSAs steadily increase over time, and as large, undeveloped chunks of land become more difficult for homebuilders to obtain.

    Sentiment: Strong Buy

  • Reply to

    NCT earnings

    by stockguy555 May 12, 2016 10:06 AM
    deanmortensen deanmortensen Jun 18, 2016 7:57 PM Flag

    Hey, stockguy, if you go back a year or so to when SNR was spun off from NCT, at that time Wes Edens stated he felt NCT's value would be in the $7-8/share area in 4-5 years or so after NCT monetized it's debt holdings, and built up the golf business. Since then, the stock price has been stuck in a rut below $5, but golf revenues and earnings continue to grow steadily. The CRE debt portfolio is being monitized, and that appears to be progressing according to plan.

    Sentiment: Strong Buy

  • ...prior to trial date. In light of Proofpoint settlement, I'm optimistic that Sophos will settle rather than go to trial.

  • Certainly the ascent in crude oil price is the main reason for it. Short covering has contributed to PGNPQ's meteoric rise. Also, the debt restructuring, which wipes nearly $1 billion of debt from PGNPQ's balance sheet means that the company becomes even more of a low-cost, high quality competitor among its peers. Paragon can now remain cash flow positive at a lower level of drilling activity, and at lower rig day rates.

    My 'best guess' is that the oil price will eventually stabilize in a range of $60-70, which is the range in which I think that North American shale oil production can gradually increase to meet global growth in oil demand over the long-term. CEO Stilley has stated in the past that Paragon will do okay with oil at $60, and since then Paragon has reduced its balance sheet debt by nearly $1 billion. So, I'm constructive on Paragon over the long-term. Paragon's operating leverage means that free cash flow can increase sharply as the price of oil rises over the long-term.

  • Reply to

    Thanks to insider_expert and deanmortensen

    by hg65207 May 26, 2016 4:12 PM
    deanmortensen deanmortensen May 26, 2016 7:15 PM Flag

    hg65207, I admire your fortitude for sticking with Paragon during dark days. And, congratulations for picking up more shares at a fire sale price of 0.30 and below!

  • deanmortensen deanmortensen May 26, 2016 12:10 PM Flag

    It's notable that Paragon has never had a negative cash flow quarter in its history as a public company. Operations continues to generate cash quarter after quarter.

  • Reply to

    low volume

    by jaxbootcamp May 23, 2016 3:10 PM
    deanmortensen deanmortensen May 23, 2016 5:02 PM Flag

    I don't think "one of these big cyber guys" would be able to accumulate a 5% position without driving the stock price way up. As you point out, there's almost no volume. More than 80% of the stock is closely held.

  • Peter Cuneo and John Haugh have ICON back on track. Cuneo picked the right man for the CEO job. If Haugh continues to meet guidance, and is able to demonstrate that ICON is a stable, sustainable business that produces consistent, predictable financial results over several quarters, investor confidence in ICON will be restored, and the stock price will revert to more normalized multiples. It's only a matter of time.

    Sentiment: Strong Buy

  • A few months back, they said the stock buyback was their highest priority because of the depressed stock price, and that they intended to execute the $500 million buyback authorization to create shareholder value. But, in the 1Q results release, they report that they spent only a modest $50 million on the buyback during the quarter, and they downplayed the buyback. Instead, they are busy disposing of property and other assets to raise cash for unspecified purposes, while pursuing a 3-way combination with NSAM and Colony Capital.

    In my opinion, the share buyback is a winning strategy to create shareholder value. With the stock price at $13, the $500 million buyback authorization will allow NRF to buy back 20% of the outstanding shares, which boosts FFO by 25%. That's a simpler, more direct route to value creation than a complex and risky 3-way merger. Remember, this is the same management that told shareholders than splitting NSAM off from NRF would maximize shareholder value. This schizophrenic management can't decide whether NSAM and NRF are better apart or combined. It's hard to conceive that a round trip of splitting off NSAM, and then recombining NSAM with NRF will create shareholder value. It would be nice if NRF management would stick with a consistent value creation strategy for a period of time longer than one quarter.

  • Reply to

    a list of independent directors

    by rolling_inflaton May 13, 2016 3:49 PM
    deanmortensen deanmortensen May 14, 2016 10:49 AM Flag

    rolling, my sense is that Hamo and his cronies have little interest in actually executing the full $500 million buyback authorization in a timely manner. Although doing so would benefit shareholders immensely, it wouldn't benefit Hamo & Co. much, since they have sold most of their NRF stock, and it wouldn't benefit NSAM either. It is sad that NRF is run for the benefit of NSAM and for the benefit of Hamo & Co. rather than for the benefit of NRF shareholders. We need an activist to take a large stake in NRF, and to agitate for a a management shakeup. Promptly executing the buyback at $13 share price or so will result in a 25% boost to FFO/share, and is the simplest and most foolproof way to boost the share price. Clearly, it is in the interest of all shareholders. NRF has the liquidity, and the share price trades at a steep discount to asset value. The only thing lacking is the alignment of management with shareholders' interests.

  • Reply to

    value

    by ruswise May 9, 2016 11:28 AM
    deanmortensen deanmortensen May 9, 2016 1:56 PM Flag

    ruswise, I agree with your thesis that internalizing the unfavorable management agreement with NSAM is a plus for NRF shareholders. But, my concern is massive dilution of NRF shareholders. Today, NRF shareholders basically own a diversified CRE portfolio valued at $30 billion or so. NRF share value at current market prices is estimated at $24-26. In a 3-way deal, that $30 billion "pie" gets split three ways. Admittedly, NSAM and Colony bring some value to the table, and their respective assets get thrown into the pot. But, look, if I wanted to own NSAM or Colony shares, I'd have bought them previously. So, I'm not convinced that the whole will be worth more than the sum of the parts.

  • deanmortensen deanmortensen May 9, 2016 1:45 PM Flag

    If management doesn't demonstrate a compelling value creation proposition to NRF shareholders, I'll vote "NO" on the deal. And, IMO, the hope that a reconstituted board might rein in Hamo's penchant for self-enrichment isn't in itself sufficient rationale for a deal.

  • ...and Hamo et all don't own a large percentage of NRF shares. So, management will have to convince the shareholders that the deal will create value, and is preferable to simply using the $800 million cash in the kitty to buy back shares at depressed prices. In my mind, the NRF share buyback makes more sense than a complex 3-way deal that dilutes NRF shareholders. The most recent appraisals of NRF's assets determined that the current market value of assets less liabilities is $24-26. Since that is the case, I'd prefer to see management execute the $500 million share buyback authorization, which is a simple, straightforward way to create shareholder value. I don't see the need for a complex, 3-way combination that might or might not deliver the goods. So, in my mind, the hurdle for voting to approve a combination is high indeed.

  • deanmortensen deanmortensen May 7, 2016 4:01 PM Flag

    I assume shareholders will vote on any proposed combination. If management can present a compelling rationale for the combination, I might vote for it. But, as of today, I feel the NRF share buyback is the simpler and more direct route to a higher share price.

  • deanmortensen deanmortensen May 6, 2016 10:37 PM Flag

    If NRF completed the $500 million buyback authorization at an average share price of $13, that would reduce the share count by 20%, and would increase FFO per share by 25%. Management should have accomplished that during the last two months, because the share price stayed under $13 for almost the whole period. Then, rinse and repeat. Management can sell properties at a 6-7% cap rate in this hot CRE market, and then buy back stock which is trading for half of its asset value. That's a no-brainer. It's a simple way to increase shareholder value, and it always works. IMO, that's much preferable to another "deal" proposed by NRF management. As I recall, the last "deal" management proposed (to split NSAM and NRE off from NRF) didn't pan out for shareholders.

  • NRF stock is way undervalued, and NRF has the wherewithal to buy back a large chunk of NRF stock at currently depressed prices. In fact, NRF management stated it would do just that a couple of months ago. Doing so will raise FFO per share, and will allow NRF to hike its dividend payout substantially. That kind of share buyback is simple, and it always works. So, I'm asking myself, isn't it better for NRF shareholders if NRF goes ahead with the NRF share buyback vs. a tricky 3-way combination deal?

  • deanmortensen by deanmortensen Apr 19, 2016 7:48 PM Flag

    Those who kept the faith got rewarded in the end. Paul Rooke's strategy of transitioning Lexmark into high-value software products ultimately created shareholder value, even though the strong dollar has eroded the value of foreign revenues. I'm guessing that some large shareholders must have gotten antsy and pushed Rooke to sell the company.

  • deanmortensen deanmortensen Apr 19, 2016 7:42 PM Flag

    Lexmark has some debt in its capital structure, and Apex & PAG will assume the debt.

  • deanmortensen deanmortensen Mar 29, 2016 12:40 PM Flag

    So far, so good. I expect NRF to complete its $500 million buyback, which will reduce the share count by 20% or so, and will increase AFFO by 25%. Rinse & repeat.

    Sentiment: Strong Buy

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