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Microsoft Corporation Message Board

puzzled48 22 posts  |  Last Activity: Jan 23, 2015 1:26 PM Member since: Nov 30, 1999
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  • Reply to

    Actual Earnings

    by frank.goudreau5 Jan 22, 2015 10:19 AM
    puzzled48 puzzled48 Jan 23, 2015 1:26 PM Flag

    Yahoo key statistics show forward P/E ratio =13.5x and analyst estimates of $11.11 for FY2015.

    It seems to me the $11.11 should be in $Canadian, since CP reports in Canada and earned C$8.46 for FY2014, and stated that EPS would increase by 25% in 2015., and 1.25xC$8.46=C$10.57.
    So forward P/E should be calculated from the $Canadian share price, which is about C$220/share.
    So forward P/E=220/10.57=20.8x. So the Yahoo statistic is a fabrication.

  • Reply to

    Actual Earnings

    by frank.goudreau5 Jan 22, 2015 10:19 AM
    puzzled48 puzzled48 Jan 22, 2015 5:37 PM Flag

    Using the metric you have suggested, "cash earnings", numbers look worse if measured in $US. For example, CAD/USD=$0.72 January 2015, and CAD/USD=$0.91 January 2014. Then "cash earnings" in 2014=$0.72x674=$485 mn, and in 2013 $.91x714=$650 mn, so it appears "cash earnings" dropped in 2014 by 25%.

    Also, shareholders' equity diminished from $7.1 billion to $5.6 billion, which resulted mainly from a huge decrease in the "pension asset" from $1.03 billion to $0.30 billion due to lower interest rates and a lower assumed rate of return for defined benefit pension plans.

    On the bright side, property value of Canadian Pacific is vastly understated. Market value of the shares is $30 billion, and properties are carried on the books at $14 billion. But the property--a right-of-way from ports on the coastlines of two oceans and the Great Lakes, to large North American cities, has incalculable value compared with replacement cost. The special nature of the property, railway right-of-way, will permit a 4% increase in revenue for CP next year simply from freight rate increases,

    Also, if a U.S. railway were permitted to merge with CP, it's corporate tax rate would drop from the 35% US statutory rate to the 26% Canada rate, like the Burger King and Tim Hortons deal. So Canadian pacific has a valuable asset in it's Canadian domicile. We know that shareholder William Ackman has a keen awareness of the CP tax rate, since he was involved with the Walgreens-Boots and Valeant-Allergan discussions.

    Summarizing, valuation of railroads seems like pretty tricky business to me....

  • Big Sky Business Journal--New regulations in ND will place greater pressure on oil production.

  • Search for the following article:

    Shale Oil Production In Bakken & Eagle Ford Up 1.6% in December: Platts' Bentek Energy
    Production from these Prolific Shale Plays Up 36% Compared to Year Ago Levels
    Denver, Houston - January 15, 2015

    Platt's says that ND Bakken shale oil was 900K b/d in December 2013, and 1.2 mn b/d in Dec 2014. Price/barrel for Williston basin shale oil was $38.43 on Jan 13, 2015.

    If Brent crude is $45/b, producers will want to transport this oil to Vancouver and Prince Rupert and export it.

  • Next year will be a great year for Canadian Pacific, compared with all other railroads, because:

    ( 1) Rail carload pricing +3.7% in 2015

    From the Journal of Commerce:

    "Shippers say the sharpest price increases among domestic modes will be in rail carload transport. Rail carload pricing is expected to rise on average 3.7 percent, the healthiest pace in three years, according to survey results. Railroads enjoy strong carload pricing power as there are few competitive options and some shippers only have access to the network of a single Class I railroad."

    (2) CSX conf call explained that oil-by-rail and frac sand traffic are strong as ever, since drillers already have made the front-end capital expenditure, and this situation will persist at least until early 2016.

    (3) CSX conf call said traffic in the Chicago hub the last 11 weeks has been "normal" despite cold weather. [Not very snowy in Chicago compared with last year--almost no snowfall, I have observed.]

    (4) High demand for rail transport, no matter what happens with oil price, according to multiple sources..

    (5) Low corporate tax rate in Canada, 24% vs. 35% in U.S. gives Canadian companies a higher ROE, and an advantage in merger and acquisitions. This advantage belongs to CP and CNI in equal measure.

    (6) Hunter H. retrofits locomotives, instead of buying them new. BNSF announced a big locomotive order, and CSX is buying new locomotives, and these cost estimated $2.5 million each. He also pays close attention to headcount.

    (7) CP shares sold off heavily when oil price dropped, more than other RR's, because everybody "knows" how it carries so much crude-by-rail which is supposed to be 10% of freight and irreplaceable.

    (8) CP had a bad fourth quarter in 2013 because of a non-operating $240 million write-off for its disposal of the.western part of the Dakota, Minnesota & Eastern line. Many investors look at the trailing P/E ratio of 33.85x, and don't realize the distortion from the write-off.

  • Reply to

    Lac Megantic settlement

    by unclelarry66 Jan 12, 2015 12:06 PM
    puzzled48 puzzled48 Jan 16, 2015 2:52 PM Flag

    Thanks,

    That is a fascinating explanation. Is there a reason the tank car could not be vented to the atmosphere? Would the crude oil vaporize?

  • puzzled48 puzzled48 Jan 14, 2015 7:48 PM Flag

    CSX conf call this AM:

    Low oil prices have no effect in 2015 on frac sand and oil-by-rail in our markets, because the investments by the producers have already been made. Maybe in 2016, if prices for oil remain low, frac sand and oil-by-rail volumes may diminish, because the main investment for [shale oil production] is at the front end, and depends on the crude oil price.

    Very cold in Chicago, but that hub has been operating "normal" for the last 11 weeks, which is outstanding! Much better compared with last winter.

    Competition from trucking? Shortage of truck drivers is the big issue. Lack of capacity. Most people don't want their sons to grow up to be to be truck drivers--away from home for 5 days--drug testing--high cost to enter the business--our intermodal business is still growing.

    We need more power to get better service levels, but we are unable to order any additional locomotives (?shortages), so we're repairing the ones we have. We will gradually improve service levels as the locomotives arrive.

    Pricing for renewal business? "You will be very pleased when we report our numbers for first quarter of next year."

    Lower fuel price does not affect operating ratio, because fuel is a pass-through expense--fuel surcharge cancels out much of the benefit-not a profit driver.

  • Reply to

    Lac Megantic settlement

    by unclelarry66 Jan 12, 2015 12:06 PM
    puzzled48 puzzled48 Jan 13, 2015 7:43 PM Flag

    How does this case involve CP? They are named as a defendant for some reason.

  • Reply to

    their guidance was decent, but predicated upon

    by retailbaloon Jan 13, 2015 4:15 PM
    puzzled48 puzzled48 Jan 13, 2015 7:02 PM Flag

    That's false. Guidance doesn't say that. here's the guidance:

    "CSX expects continued strong growth across its diverse business mix and is poised for sustainable business expansion. The company continues to expect to generate double-digit growth in earnings per share and margin expansion in 2015, progressing toward a mid-60s operating ratio longer term."

  • The CVS exclusive contract with GILD encompasses four formularies, including the "standard formulary", which covers 25 million lives. Assuming the other three formularies, which include Medicaid and Medicare Part D are of significant size, the number of patients affected becomes quite large. The ESRX exclusive involved only one formulary, Nat'l Preferred, which contained 25 million covered lives.

    http://www.fiercepharma.com/story/gilead-hits-back-abbvie-exclusive-cvs-hep-c-deal/2015-01-05

  • Reply to

    Express scripts is NOT an insurance company, right?

    by czl2004 Dec 31, 2014 11:50 PM
    puzzled48 puzzled48 Jan 1, 2015 8:40 PM Flag

    Express Scripts states they take no actuarial risk, and therefore are not an insurance company. They offer many different formularies, including the Nat'l Preferred Formulary(NPF), that covers 25 million patients, and excludes Harvoni & Sovaldi. There is a different formulary for Medicare Part D patients called "Choice", and one called "Value". ESRX claimed in 2013 that NPF covered 30% of their "covered lives", implying roughly 80 million "covered lives". The exact numbers are top secret.

  • A large fourth quarter charge is pending, compared with YTD pretax income of $82 million:

    From the October conf call:

    The Company previously disclosed that it expects to terminate its frozen defined benefit pension plans in the fourth quarter of 2014. The settlement and termination of the frozen pension plans are expected to result in a pretax cash payment of approximately $8 million and an income statement expense of approximately $40 million in the fourth quarter of 2014.

  • puzzled48 puzzled48 Dec 3, 2014 9:21 PM Flag

    You saved me about $10 per share since October 4 when RGR was @$47. Thanks! Whenever I think about placing a buy order now, I just bite my hand.

  • Reply to

    Another insider buy

    by libertee4all Oct 31, 2014 5:13 PM
    puzzled48 puzzled48 Nov 2, 2014 2:06 PM Flag

    Date Shares Stock Transaction


    J30-Oct-14 5,000 SWHC Automatic Purchase at $10.10 per share.
    Jeff Buchanan has been selling far more shares than he has been buying:

    (Cost of $50,500)
    17-Sep-14 20,368 SWHC Disposition (Non Open Market) at $10.06 per share.
    (Value of $204,902)
    17-Sep-14 43,200 SWHC Option Exercise
    2-Jul-14 1,964 SWHC Disposition (Non Open Market) at $14.47 per share.
    (Value of $28,419)
    2-Jun-14 1,356 SWHC Disposition (Non Open Market) at $16.30 per share.
    (Value of $22,102)
    2-May-14 1,356 SWHC Disposition (Non Open Market) at $15.88 per share.
    (Value of $21,533)
    29-Apr-14 19,500 SWHC Acquisition (Non Open Market) at $0 per share.
    28-Apr-14 2,495 SWHC Disposition (Non Open Market) at $14.90 per share.
    (Value of $37,175)
    2-Apr-14 1,356 SWHC Disposition (Non Open Market) at $14.89 per share.
    (Value of $20,190)
    10-Mar-14 25,000 SWHC Automatic Sale at $13.90 per share.
    (Proceeds of $347,500)
    10-Mar-14 25,000 SWHC Option Exercise at $1.48 per share.
    (Cost of $37,000)
    3-Mar-14 1,341 SWHC Disposition (Non Open Market) at $11.62 per share.
    (Value of $15,582)
    3-Feb-14 1,407 SWHC Disposition (Non Open Market) at $12.61 per share.
    (Value of $17,742)
    2-Jan-14 1,577 SWHC Disposition (Non Open Market) at $13.58 per share.
    (Value of $21,415)
    2-Dec-13 1,358 SWHC Disposition (Non Open Market) at $11.43 per share.
    (Value of $15,521)
    4-Nov-13 1,358 SWHC Disposition (Non Open Market) at $11.23 per share.
    (Value of $15,250)
    2-Oct-13 1,358 SWHC Disposition (Non Open Market) at $10.97 per share.
    (Value of $14,897)

  • Reply to

    Not time to buy yet

    by puzzled48 Oct 31, 2014 4:14 PM
    puzzled48 puzzled48 Nov 2, 2014 1:14 PM Flag

    Conference call transcript says California microstamping law caused a loss of about $10 million semiautomatic revenue. Ruger willing to borrow to repurchase shares, when time is right.

  • puzzled48 by puzzled48 Oct 31, 2014 4:14 PM Flag

    When investors realize RGR will suffer a 4th quarter loss due to pension expense, they are going to sell shares once again....

  • puzzled48 puzzled48 Oct 30, 2014 11:19 PM Flag

    Reuters says the rocket was insured for $50 million, and the value of the Antares rocket and Cygnus cargo ship was $200 million, and it is unclear how much Orbital Science's loss will be from the accident.

  • puzzled48 puzzled48 Oct 30, 2014 11:13 PM Flag

    Press release October 28:
    "The transaction is expected to close by the end of calendar year 2014 or in January 2015, and is subject to customary closing conditions including regulatory approvals and the approval of each of ATK's and Orbital's stockholders....."

  • puzzled48 puzzled48 Oct 30, 2014 6:04 PM Flag

    Maybe an institution, such as London Co, with huge holdings of Ruger and ATK, is in a forced iiquidation scenario (margin calls). Conference call and earnings report did not contain any startling news. Remember ATK shareholders still have the opportunity to vote against the Orbital Sciences merger.

  • Reply to

    Q3 results

    by puzzled48 Oct 29, 2014 5:49 PM
    puzzled48 puzzled48 Oct 29, 2014 7:49 PM Flag

    Mr. Fifer showed remarkable good judgment in deferring share repurchase until the crash, which seems to be upon us.

MSFT
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