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TORM A/S Message Board

j0n_48195 60 posts  |  Last Activity: Aug 25, 2015 8:34 AM Member since: Apr 2, 2001
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  • Reply to

    When Bad News is Good

    by investor7777 Aug 24, 2015 6:06 PM
    j0n_48195 j0n_48195 Aug 25, 2015 8:34 AM Flag

    I think you meant to say over $2B increase in BV. Solid post otherwise. Monetizing DTA's will also also continue to free up cash for buybacks- more so than the AER sale even.

    Sentiment: Buy

  • Reply to

    AIG does not pay tax for long time

    by song_me_hae2003 Aug 9, 2015 12:04 AM
    j0n_48195 j0n_48195 Aug 16, 2015 10:44 AM Flag

    I lost money on GNW, but at least got out a couple weeks before the last plunge on earnings. I've gotten burned on pure value "plays" like that before. Management has no credibility in my opinion. Yahoo's stats have little value if you can't trust the numbers. Buyouts are hard to predict- both timing and price. They only usually benefit shareholders. But they always benefit management.

  • Reply to

    AIG does not pay tax for long time

    by song_me_hae2003 Aug 9, 2015 12:04 AM
    j0n_48195 j0n_48195 Aug 10, 2015 12:47 PM Flag

    cha ching... thanks again

  • Reply to

    AIG does not pay tax for long time

    by song_me_hae2003 Aug 9, 2015 12:04 AM
    j0n_48195 j0n_48195 Aug 10, 2015 11:23 AM Flag

    Thanks you. That suggests there are no profits that aren't enjoying the DTA offset. Is AIG paying any income tax at all then?

    Sentiment: Buy

  • Reply to

    AIG does not pay tax for long time

    by song_me_hae2003 Aug 9, 2015 12:04 AM
    j0n_48195 j0n_48195 Aug 10, 2015 9:40 AM Flag

    I'm a bit confused about how those DTAs are used. I get the impression that claiming them offsets some, but not all of their taxes- with, as you mention, positive effects for cash flow, largely invisible to those just looking at income statements. But maybe somebody here with more accounting experience could answer a few questions? How much of current income is being offset by DTAs? How long should it take to retire/claim the remainder? Are they in any danger of expiring, or are there specific terms under which they must be claimed? Thanks in advance to anyone who can shed light on this.

    Sentiment: Buy

  • Reply to

    900,000 shares a day

    by jtirich Aug 7, 2015 10:34 PM
    j0n_48195 j0n_48195 Aug 7, 2015 11:45 PM Flag

    The irony, of course, is the worse we fare in the short run, the better the buybacks for the long run and vice versa. It's hard to know what to cheer for sometimes- except for that elusive 10% ROE. That will be the real game changer. The stock will remain at some level of discount till we get there.

    Sentiment: Buy

  • Reply to

    Guru(Out-Of)Focus article.

    by j0n_48195 Aug 5, 2015 4:00 PM
    j0n_48195 j0n_48195 Aug 5, 2015 7:17 PM Flag

    kb, you have shown great restraint in recent months. Play nice. I respect your ideas, but personal attacks are unflattering to us all.

  • Reply to

    Guru(Out-Of)Focus article.

    by j0n_48195 Aug 5, 2015 4:00 PM
    j0n_48195 j0n_48195 Aug 5, 2015 7:14 PM Flag

    My outrage is not that the article is negative. Rather, it has to do with people crunching numbers they don't understand. Had the buyback dollars been distributed as dividends, there would be zero difference if you owned all the shares of the company (the correct way to view the transaction). Yet tens of billions of dollars in repurchases are totally unaccounted for by someone who appears to be too clever by half, but still stupid about the big picture. I'm supposed to be the idiot here. If I can't trust these guys to get their day job right, that means I have to think for myself more than my lazy nature finds congenial.

    Sentiment: Buy

  • By their discounted cash flow model, AIG is overpriced by 17%. Like my ex, they're better at math than arithmetic. The gorilla in the room they don't acknowledge is the buybacks and the cash flow used by monetizing DTAs. AIG is more about free cash flow than earnings (not that those don't matter, or that there's not work to be done there). There is NO effective difference between cash distributed as dividends vs buybacks. The only difference is which shareholders get the payout. Long term holders are, in effect, reinvesting their dividends by not selling. Either the buybacks are put into the cash flow model on a per-remaining-share basis (messy) or you have to factor the decreased float into the per share earnings growth rate. Guru doesn't. As Warren Buffett often says, it's a mistake to price a stock without looking at it as a piece of an entire company. How can Guru use a long term growth rate of 6% PER SHARE, when the buybacks alone shrink the share base by almost twice that rate? Profitability would have to shrink at almost 6% for that math to work. How can so-called professionals work a whole page of numbers and equations, based on 10 different assumptions, and miss the big picture? If a lazy amateur like me can get that, what kind of incompetent professional can't?

    Sentiment: Buy

  • Reply to

    I added more on the big drop.

    by captnhairpiece Aug 4, 2015 3:34 PM
    j0n_48195 j0n_48195 Aug 5, 2015 7:57 AM Flag

    Can't say I agree with that level of optimism, but I like it. If there's one message that did surface in the CC, it's that profitability metrics have a long slog uphill. Keep thinking positive though.

    Sentiment: Buy

  • Reply to

    CC response?

    by j0n_48195 Aug 4, 2015 9:08 AM
    j0n_48195 j0n_48195 Aug 4, 2015 11:45 AM Flag

    Thanks... I needed to hear that. There are weird rules about buybacks around earnings. That's been discussed here in the past. I think we concluded that "ongoing" buybacks can proceed through earnings season and that 10% of the volume was considered within regulators safe zone, but that up to 25% is allowed under some (unspecified, or I forgot) circumstances. Let me know if you think I'm wrong about that. I'd like to see them get 25% of this action.

    Sentiment: Buy

  • Reply to

    CC response?

    by j0n_48195 Aug 4, 2015 9:08 AM
    j0n_48195 j0n_48195 Aug 4, 2015 10:28 AM Flag

    Begs the question though, what is CS seeing? I know there's a sense that the "core business" is stuck in second gear, but still. Down $2.90 now. Really? Let's hope that $6B gets put to good use in todays market, though I'm not sure they are allowed to buy within a 2 week window around earnings. Oh well....

    Sentiment: Buy

  • j0n_48195 by j0n_48195 Aug 4, 2015 9:08 AM Flag

    Somebody didn't like the CC. We're down about a buck in pre-market. I didn't hear anything that negative. Anybody have some insight there?

    Sentiment: Buy

  • Reply to

    Q2 Buybacks

    by momentum_play Jul 22, 2015 12:17 PM
    j0n_48195 j0n_48195 Aug 3, 2015 11:22 PM Flag

    Who's the idiot that posted this? Oh yeah, never mind. Didn't see that $5B coming though. Hope I'm wrong about the buybacks drying up.

    Sentiment: Buy

  • Reply to

    It's RED AH this is probably because

    by kored35 Aug 3, 2015 4:16 PM
    j0n_48195 j0n_48195 Aug 3, 2015 11:14 PM Flag

    Yes, I'm with you on all counts. The analysts' $66 average price target seems a bit ridiculous right now, doesn't it?

    Sentiment: Buy

  • j0n_48195 j0n_48195 Aug 3, 2015 11:09 PM Flag

    Thanks for the shout out. I've been too lazy to check the adjustment based on previous dividends. I haven't gotten any and never expected them to exceed the threshold so soon. Cptave did that for us below. It's based on 67,5 cents on a rolling twelve month basis. What is more subtle and keeps getting dropped from the discussion is that the number of shares each warrant converts is also adjusted. The best way to get a handle on this is to exaggerate. Let's say AIG paid $22.50 above the $.675 threshold. Not only would the new strike be $22.50 ($45 minus $22.50) but each warrant would now be able to convert TWO SHARES at that new price. In other words,each warrant converts $45 worth of new strike price regardless of how many shares that means. If the strike were adjusted down to $5, each warrant would convert to NINE shares (approximately) with a $5 strike on each. These examples are ridiculous, I know. But the point is that the warrants are doubly adjusted. If the strike adjustment matters, then the share conversion numbers matters just as much. Clear as mud? Thought so.

    Sentiment: Buy

  • Reply to

    It's RED AH this is probably because

    by kored35 Aug 3, 2015 4:16 PM
    j0n_48195 j0n_48195 Aug 3, 2015 9:33 PM Flag

    Now that I've seen the 10Q, I can understand the muted response. Revenues were down slightly, combined ratios up slightly (heading in the wrong direction). Book value was also down, despite good earnings. I can afford to be patient, if these buybacks continue to shrink the float by a few percent each quarter at a massive discount. But there will come a day when excuses about ROE and profitability won't convince. The analysts have remained skeptical. I've been more optimistic. But let's hope Peter can deliver the operating profit to back his bullish words.

    Sentiment: Buy

  • Reply to

    It's RED AH this is probably because

    by kored35 Aug 3, 2015 4:16 PM
    j0n_48195 j0n_48195 Aug 3, 2015 6:11 PM Flag

    On what planet is this not a great earnings release? Yes, it is possible to "manage" the earnings. That has been discussed here by myself and others, with some expressing moral outrage that that was even suggested. But cash doesn't lie. $5B in buybacks and a massive increase in the dividend? Are you kidding? Whoever is selling in the AH market is clueless.. I can't wait to see where we go tomorrow.

    Sentiment: Buy

  • Reply to

    i say crashand burn AIg

    by kopach Jul 29, 2015 3:06 PM
    j0n_48195 j0n_48195 Aug 3, 2015 10:31 AM Flag

    As a follow up to my response below. Check out TCRD. Leon Cooperman (sp?) recommended them in a Yahoo interview a few days ago. I respect his level headed approach. This is a smaller company that would be easier to understand. It lacks AIG's (and LYG's) franchise, scale and global footprint, but it's cheap and pays a ridiculous dividend (if it's safe).. I'm just beginning to look into it, but it almost seems too good to be true. Let me know if you get a grip on it.

  • Reply to

    i say crashand burn AIg

    by kopach Jul 29, 2015 3:06 PM
    j0n_48195 j0n_48195 Aug 3, 2015 10:22 AM Flag

    Thanks for your kind remark. I confess I know a lot less than you give me credit for. I had a quick look and here are some "Blink" impressions- the kind I criticize Cramer for all the time.
    1) I like financials generally, but prefer insurance specifically for reasons I've posted in the past- I have no idea what banking will look like in 5 or 10 years. I don't even know what money will look like then: virtual currencies, direct internet financing, credit card "almost" banks, banking apps for phones, etc... That shyness about banks kept me out of trouble with BAC, which is where most of my money would have been had I not decided that the business model for insurance is more stable and less subject to disruption. 2) LYG is a sprawling $100B company with a fair amount of leverage. If LYG stumbles, don't expect a quick turnaround. Citigroup took years to get out of the woods, BAC is still struggling to do so 7 years after the meltdown. LYG would require great patience and it's too complicated for me to understand. 3) On the positive side, I'm more comfortable with a company doing business mainly in British pounds than dollars. If LYG is a good investment, it might also be a good currency hedge against the dollar. While I generally support the Fed's actions, there's no guarantee this won't end badly. I hope this helps and won't give you cause to regret asking for my opinion.