i look at it this way. Is apple a good company? yes
is it cheap? In my mind yes
in 6 months will apple be higher then it is now ? in my mind yes
they have over 120/share in cash. they earned 44/share
their products are so popular there is a wait to get them.
people line up to buy their new products.
do hedge funds sell for stupid reasons? yes
after all what has changed in the past week as far as apple is concerned? nothing. the hedge funds all want out at teh same time to protect their profits. could apple fall another 10% from here? yes but that would make it just a better buy.
Sentiment: Strong Buy
its mindless selling. people are so scared of the fiscal cliff they are selling anything they have thats a winner. i think in a year this will turn out to be the buy of the year.
the fact remains.
apple has 120 a share in cash
thats 390 a share when you back out the cash. the company earned 44/share thats a p/e under 9 ex cash. next years earning are expected to be 50+ a share. thats a p/e under 8
If you in apple for teh short term then get out. but if your like me and think its a great long term investment then BUY
Sentiment: Strong Buy
it appears to be panic selling over the fiscal cliff and a possible change in taxation . MLP's in general are down over 11% in a month. for perspective after the halloween massacre of canadian energy trusts in 2006 they dropped 25% .
in addition I thinkj a lot of people have large cap gains in MLP's and they are selling to protect them and plan to buy then back in a month or after the first of the year. add to that dividend tax anxxiety and te fact the MLP's as a whole are relatively thinly traded and teh result is wholesale price slaughter.
now fast forward to 2013,assuming no change in tax treatment. where would you want to invest. bonds paying a negative real rate of return or an MLP paying 6,7,8% or more and growing its payout year after year.....
my opinion for what its worth.
1. AGNC has already said they will buy back stock under bok value. right now its under book so thats a little support.
2. lets say they cut the dividend by 25% down to 3.75/share. so in one year you will make back 3.75 on any capital lost. in late jun/early july AGNC was trading for 33/share so after 1 year your back to the june levels.
IMHO a lot of bad news is priced into the stock. a 25% dividend cut would imply a yield of 12.7% still a good deal. My hunch is its a solid hold at these levels. I think a lot of selling pressure this month is fiscal cliff tax related. people are scared and want to protect profits and reduce potential taxes.
as warren buffet says,when others are fearful be greedy.
i sold my NGG and bought more AT with some of the proceeds. Ill buy more tomorrow if it continues dropping.
looking at a worst case scenario lets say that the div is 120% of distributable cash flow. lets assume they slave the div so that the ratio is only 100% (my worst case,i dont see them cutting it more). that implys a div cut to about .96/year. thats still a 7.1% yield and thats after poor performance
Sentiment: Strong Buy
it looks like there was one big drop on the open on big volume (usually a sign of a hedge fund getting out). there are 2 other big blocks today also. I've seen this with MLP's before. it doesnt take much to casue a big drop. Im going to sit tight for a few days and if it drops again ill add to my already outsized AGNC position
take out their cash hoard and expected earnings in the low 50's for next year and you get a p/e under 10 for one of the fastest growing large companies in the world..... extremely cheap
its even better.. after buying motorola they have 27B plus in cash. thats $80+ a share (27B/322m shares)
subtract that from a 485 price and you get a p/e under 10
and the bids only cost you $60 to make...
so you paid $61 for $30 worth of silver.. great buy :)
i use a different hedge that works better.. when AGNC was 28.00 I sold the 29 calls and bought the 27 puts.. net cost was .10 If AGNC craters like it has I lose only $1.... if AGNC returns to what I consider fair value I make money. I consider fair value around 29
ARR is down 15% vs 3-4% for teh other mreits..also operation twist cant really be blamed since its been know for a while its coming... I think it is a mixup with AAR. if you look at a chart 1M shares (1/3 of its daily average volume) traded in a 2 minute period as the stock tanked.. that to me sigmals either a hedge fund dumped their state or someone made a mistake and sold it instead of AAR. and on a day like today there isnt enough buing interest to push it back up to where it should be.
just bought some HPQ..
yes its a poorly run ompany.. yes wall street hates it and its gotten murdered.
but earnings are estimated at 4.25 next year. assuming it misses by 15% thats still 3.60 a share or a pe of 6.. plus they have a 2% dividend..
I think my downside is fairly limited.
I have a core position that i bought around $11. on the way up I added doubled my position up to $20. now I use the second uy as a trading position. i sell after a spike upwards and buy some back at the inevitable break..
My last trade was a sell at $39.. i havent bought it back yet. I usually need a 10-15% correction and while Im close to pulling the trigger Ihavent done it yet..