This company has spent over $3 BILLION in stock buybacks over the past several years and share count has not gone down accordingly. How can share count go down when the company has 12mn stock options outstanding??? This company awarded employees (read Lew Frankfort - property taxes are high in sagaponack) 3mn shares in FY2013 as they (read lew and his cronies) exercised options on 2.6mn shares in fy 2013. fy2012 was even better with the banditos (COH mgmt team) awarded themselves 2.2mn shares just as they exercised nearly 6mn shares (COH only has averaged 300mn shares over the past few years).
This management team has rewarded themselves oh so handsomely and this egomaniac CEO gets on with Maria Bartiromo and she is too stupid to ask the tough questions. Shareholders will never come out ahead when they mindlessly trust people like COH management who award themselves 1% of the company every year in stock options. These stock option strike prices aren't raised every year to adjust for WACC.
Furthermore, these service based RSU's and performance based RSU's continue to expand and we know who benefits from these right LOU ????? These crooks have awarded themselves 3.5mn RSU's over the past two years. so this is in addition to a salary, stock options, and a helicopter for all i know ?!?! LOU - WHEN IS ENOUGH ENOUGH ALL READY? Stealing 2% a year of the company every year isn't enough ????
There are real cracks in the COH dynasty. For one, they have aggressively expanded store count yet earnings are keeping pace. And the company can't be loving the weak Japanese Yen.
Sentiment: Strong Sell
pay shareholders a $12 one time dividend. the stock would go up 50-60%. NINTENDO could also monetize its Kyoto and Redmond real estate through cheap borrowing costs in Japan.
wow. if it costs that much money to develop 25k acres, DOLE is seriously undervalued with its acreage and infrastructure.
throw in the fact that HUM has $8-9 billion in net cash on the balance sheet, and we are talking about a $120 stock ($20 billion market cap). woo hoo. HUM could throw off over $2b in earnings in 2014 on top of $1.5 billion in 2013. by the end of 2014 HUM could have $13-14 billion in net cash (vs a current market cap of $12 billion). giddy up HUM. giddy up.
As a shareholder you have to wonder why DOLE can't use part of the sales proceeds to buy back its stock. It really comes down to the high cost of capital at DOLE. DOLE's interest expense has ranged in the high single digits over the past few years (some debt currently yields nearly 14%). I completely agree with the company's decision to pay down debt and cut the interest expense down to nothing. But you also have to wonder why a large multinational company like Cargill which can borrow money at 3-4% doesn't just buy DOLE (obviously with Murdock on board). Cargill could then keep the debt on DOLE and pocket the cash proceeds from itochu. DOLE's interest expense would drop by $100mn as a result of interest dropping from 8-9% to 3-4%and Cargill could receive the cash proceeds from itochu ($1.7b) which would more than cover a stock buyout at $13-14 say ($1.3b). I would like to think that if anyone was going to buy DOLE it would happen in the next 2 weeks and would have to have Murdock's blessing.
I wonder how much of the shares short are from capital structure arbitrage hedge funds who are shorting the stock as a hedge against DOLE debt. if they are hedged, they will need to cover their shorts when DOLE tenders for its bonds. DOLE said on the conference call that they will tender the evening the deal closes. ITOCHU wants to close the deal on April 1st which makes sense given that Japanese companies fiscal year end is 3/31/13. They will be starting the new fiscal year consolidating DOLE asia in full. It should be interesting to see DOLE's price action leading up to april 1st.
the two largest banana consumers in the world, china and india, look set to import bananas to meet their nation's needs. this should bode well for DOLE as central america banana exports have kept global supply demand largely in balance. assuming DOLE doesn't overpay for the farms, these investments in new banana farms could pay off quite nicely in years to come.
Listening to the investor call it was interesting to hear DOLE say they would be paying off all debt as opposed to their investor presentation last september where they suggested a debt level of approximately 250mn of debt post transaction. not sure where this extra paydown came from. as they mentioned their yen hedges made about 135mn over the past 2 quarters.
Listening to the call i also think DOLE is lowballing the price on its oahu land value. 10,000 an acre seems way way too low. just spend a little time on zillow and check out oahu propeerty prices. perhaps the land could be worth upwards of 300-400 million dollars.
just my two cents but this sell off seems absurd to me.
unbelievable trade. well done dole management! picked up some nice coin for shareholders!!! i owe you guys a beer! between the jpy hedge, the itochu money and the 20k acres they are going to sell, dole has dramatically improved the balance sheet
Kind of funny that BKS chose paying off cheap debt over buying back its cheap stock. Could this have something to do with Riggio's upcoming bid? It sure would be nice if we could hand him the bookstores unlevered.
BKS's retail stores and Liberty Media's funding subsidized the NOOK for the past few years and now now riggio is trying to pull the rug out. Something tells me LIberty Media isn't just going to sit idle here. Rather than take the whole company private (at a price north of $17) and putting liberty media's convertible preferred investment "in the money", riggio "the snake" is just cherry picking the best part of the company and taking the NOOK public in a backhanded way. This is insane. Riggio needs to be stopped.
BKS shareholders really need a large buyer of BKS stock here. with liberty owning 16% through the preferred (at a slightly higher conversion price) and tisch owning 8% there is an outstanding trade opportunity for a hedge fund to acquire 10-20% of BKS to offset riggio's 30% powerful stake. come on bill ackman. get in there! This stock should be well bid as there is an obvious trade for a white knight
luckily we have some big holders of BKS to challenge riggio when he tries to steal the retail biz. the retail biz is quite profitable with minimum capex requirements. it is the jewel of this company. hopefully a white knight can come in and challenge riggio's bid because there is so much value to this company. i hope that liberty media and tisch step up to challenge a low ball price from riggio.
And if this internet sales tax goes through (or the marketplace fairness act blah blah blah), companies like BKS and JCP have a lot to gain. It could make the retail stores worth $20 a share.
That's kind of what i'm thinking. I think the NOOK biz is worth more actually (BKS owns like 75% at 1.7b mkt cap), BKS really should spin off the NOOK soon as they guaranteed MSFT and Pearson a $1.7 billion market cap. With the stock market at all time highs (if you back out Citi, AIG, BAC, and GE) it seems like an insanely good time to do the spinoff. Could be why they moved the earnings date out a week.
BKS's retail stores have performed quite the past 2 quarters. hopefully this continues when they report. The NOOK seems less important to me than the retail store performance / the incoming monies from MSFT going forward. BKS will benefit massively too if the Internet sales tax gets pushed through Congress which seems quite likely. let's get a spinoff of the NOOK biz and continued improvement at the retail stores and we could have a 20-30% pop in BKS on the 28th.
Revenue Share. Beginning on the Launch Date and through the end of the Term, NewCo and Microsoft will [***] Net Revenue. [***]. The sharing described in this Section 7.1 is implemented in Section 7.2.
7.2 Advances; Revenue Share Service Fees.
7.2.1 Quarterly Payments. Microsoft will make advance payments to NewCo of up to $[***] as follows, subject to deferral as provided for in Sections 7.2.3 and 7.5 (each, an “Advance” ):
(a) $60,000,000 for the first Contract Year ( “Year 1” ), payable in equal quarterly installments at the beginning of each quarter of Year 1;
(b) $60,000,000 for the second Contract Year ( “Year 2” ), payable in equal quarterly installments at the beginning of each quarter of Year 2;
(c) $60,000,000 for the third Contract Year ( “Year 3” ), payable in equal quarterly installments at the beginning of each quarter of Year 3; and
This is from the SEC filing back in June.
So this Windows 8 app should now entitle BKS to receive $60 million a year for 3 years if i recall? This should hit the income statement and boost BKS margins. I think its just goofy that the Pearson and MSFT investments are sitting in the liability section of BKS's balance sheet. These are investments, not liabilities. BKS put them as liabilities b/c the investments have 5 year put options exercisable by MSFT and Pearson if BKS doesn't spin off the NOOK business. Obviously BKS is going to spin it off. If anything, BKS is extremely incentivized to spin off NOOK sooner than later as BKS locked in this 1.7 billion valuation with MSFT and Pearson. If the IPO price values BKS less than 1.7 billion, MSFT and Pearson have to be made whole through larger % interests. It wouldn't surprise me if BKS lays out the IPO of NOOK on the next earnings release as everyone expects them to report #$%$ numbers (I don't, as they suggested the retail stores are performing ok) and gives investors something to cheer about!
Sentiment: Strong Buy
has management made any mention recently of when they will live up to their end of the MSFT deal entitling them to start receiving the $85 million mentioned in the 10Q?
Sentiment: Strong Buy
Am i crazy or did DOLE just make some nice money on its JPY hedge? 450mn notional currency hedge which they've stated they will unwind if this deal goes through ??? seems like the recent weakness in the JPY is great for DOLE. just one more reason to get this deal done!
Sentiment: Strong Buy