No that actually considers full tax, as they are declaring now on their income statements. Of course, they do have substantial dtas so for the time being the majority of income tax expense that they report is really just a reduction in dtas.
they really are in good shape. I've got to say I'm surprised with the valuation but maybe thats because I thought it was cheap when I bought it at 33. But it trades at maybe 8x normalized earnings not even considering the large amount of deferred tax assets. 4th quarter not off to a bad start with bnsf motor vehicle shipments up 10% qtd and UNP up 3%
Definitely shows its not being liquidated. Thing is reit is not that great a business. Most earn 8% at best on their equity and thats with low cost debt. Sears has high cost debt and doesnt have the tax benefits of an reit although it probably wont matter much with all the deferred tax assets theyll have if they ever regain profitability. Issuing new leases definitely seems less than satisfactory for a company with funding needs such as sears.
I dont really think they are, just trying to evaluate potential downside. Bankruptcy is the only thing that could cause this investment to ultimately lose money.
Yes there has been some lowering of the discount rate but the bulk of the reason why stocks are priced the way they are is that earnings have continued to be strong. Hussman has been saying that will change as governments are running lower deficits but hes made that claim for a long time now as deficits have come down but so far it hasnt happened. If it happens, he will brag about his call. If it doesn't, I expect it wont be mentioned again
if you dont see bankruptcy consider the preferred. 9% yield and price appreciation above $4 at the current price. The big risk to that play as to the common is bankruptcy. I think there is a possibility for a middle ground, that HK's operations may be profitable enough to avoid bankruptcy but not enough to be generating significant profit. This is the situation where the preferred has the biggest advantage over common stock. If there is a bankruptcy, neither are likely to get any recovery imo.
if fair value is 130, doesnt it kind of suck to have a rights offering that dilutes it by nearly 25%, unless of course you participated in it?
convertible preferred worth considering too. 8.8% yield (about 9.3% when paid in stock). Conversion isn't till 6.16 but at the current price essentially you have upside starting at $4
Earnings were pretty decent at 97 cents ex-special items. Preferred stock will be redeemed at end of year which will add a littleover 5 cents to quarterly eps. Earnings will be even greater wihout $200 million restructuring charge and $400 million loss in europe that is likely less than permanent. Even with todays conditions though you have a company that trades not much over 7 times earnings on a full tax basis. Gm has plenty of deferred tax assets so the valuation is even lower. Id consider buying here and the warrants are a decent way to get a little leverage.
I really dont get the claim. For companies that return their cash to shareholders via dividends thats fine but buybacks are considered financial engineering. Ibm got caught by the winds of change not buybacks
Todays gains may be erased but things will be fine.
Dont own any vz but like aig here. I see it as a decent way to get stock like returns with risks that are not too significantly more than the risk of the bonds that make up their investment income and the large discount to book value helps also. Yes there will be large catastrophe losses from time to time but unlikely to derail the overall thesis.
It certainly could be. I dont think the stock is that cheap based on recent results. 11x nongaap but earnings will decline further according to ginni. I believe ibm was a mistake but no stock has 100% visibility and warren buffett has no more information than anybody else. Overall berkshire is doing the right things and becoming an operating company (2/3 operating now). This is a much more advantageous structure as not only do you have greater management and capital control but you avoid the 14% tax on dividends and possible 35% capital gains tax if you'd ever choose to sell.
well shares just got diluted nearly 25% due to the rights offering with the debt also carrying an 8% coupon. Secondly theres substantial losses occurring between now and whatever time the assets could be liquidated and there doesnt really seem to be much of an indication that eddie is in fact trying to liquidate.
interesting article, but the entire premise is that if you took the down payment and invested in instead at an assumed real return of 7.5% (far too high imo) that it would more than make up for the savings of owning a house with a 4% mortgage that would be expected to appreciate about 1.2% in real terms. The author also assumes that the renter would contribute annual principal payments into the stock market.
I found it a little interesting that it was reason enough for doug kass to reestablish his short. We'll see how that works out.