Well the bars a lot lower at the current price. They dont have to hit 20, just have to maintain 15
Well i can grant you that such technology if it ever actually gets deployed would do great damage to the coal businesses but would far from unleash free energy. 60% of electric costs are tied to distribution
yes american express does hold more potential risk, in the last recession axp dropped from 56 all the way down to 12, before it became clear that their losses were not going to be catastrophic. Mastercards loss was more muted in the 50% range.
Imagine that most of our cities have monopoly electricity providers and its not in their financial interest
Liabilities are $15 billion too and cant be ignored. If we could just ignore liabities, JPM would be worth $2.5 trillion
how do you think sears can get there? That's a market cap of $19.2 billion. Clearly it can't get anywhere near there in a liquidation, so you're betting on quite the turn around, to the tune of sears earning near $1.5 billion a year after interest expense and taxes. And as kmart's are quickly being closed, this would have to largely be done on the back of sears, whose total revenue is $15 billion and falling. And in the meantime they continue to rack up large losses that have to be serviced with very expensive debt, if it can be raised at all.
Well mostly what i stated above. Mastercard for example is primarily a payments network it issues cards and gets a fee upon their use, while their partners hold loans/issue rewards. As the losn provider and reward issuer, american express has a much different looking income statement than mastercard. For mastercard, total operating expenses come in at $1 billion a quarter. American express spends $2 billion just on rewards and member services each quarter and as the loan owner they have to provision for losses, etc. I supposed what i meant is that the businesses are so different, it doesnt make sense to compare them on a basis such as profit margins.
american express retains their loans, that's most of it. What goes along with that is a very aggressive member rewards program which alone was about $7 billion last year, with other card member services adding about $800 million. Its really a very different business than mastercard and visa.
yeah pretty incredible. Just a $2 margin on the next 2 years gives roughly $6 billion in pretax present value, about today's total valuation.
well actually he has said the roadmap was a part of the reason for buying IBM. In the case of AXP, its almost pure capital gain so no way he sells axp. IBM however is a loss. That said, in my mind the 4th quarter was not the disaster that the third quarter was. He may have sold some after the third quarter report, but if not then I don't think he'd sell here.
Yeah perofrmance still pretty solid lately, my guess is a combination of his stocks outperforming as well as witht the recent volatility, value of hedges have gone up. Of course if that continues, it will be more expensive to continue hedging.
Except every quarer gets worse. Even last quarter with largely stabilized same store sales on an ebitda basis still lost about $35 million more than the year before. Diseconomies of scale as locations get closed and despite what eddie says, upon store closures very very little of the sales get retained. Online is an incredbly small portion of the business and despite the tailwinds in the segment and all the store closures it managed only a 9% increase last quarter
Yeah I think he sold after that third quarter report, although it takes a long time to liquidate a position that large. I wouldnt call it a 20 billion dollar mistake though. Its fairly unlikely that if the IBM purchase wasnt made that berkshire would have bought back any more stock. Probably would have mostly sat in cash or short term bonds
this is all true. Still there's no doubt its cheap. $900 million market cap with well over $300 million in cash, little debt and npv of $400 million which should grow substantially through 2016. I dont have a position here yet but strongly considering one.
Well certainly the 21 cent electricity contract is much higher than the 15 cent overall average, but yes its a problem as it would be roughly equal to the tier 2 2018 rate of 21.6c/kwh and perhaps a 20cent average rate. Still, im not sure if its a significant enough difference to poison PPAs.
thats installation cost, total cost is forecast to be $2.50, but that may be a bit conservative. I think there's still a market if you have a 19 cent tier but it certainly isn't quite as attractive.
the ITC does go to the homeowner but the loan requires a balloon payment of 30%(equal to the credit) in June the year after installation, so thats when it should be booked. I'm not sure of the exact sales price for mypower. I think the last presentation put in a range of $4.35-5.60 per watt. I definitely think mypower is very significant.
Mypower is a game changer. Sell at $5/watt, install at somewhere below $2.90 and quickly pocket a balloon payment equal to the tax credit of $1.50 a watt. Solarcity will be profitable sooner than many realize.
Yes the step down in ITC will hurt. Regardless, just over the next 2 years, solarcity will install nearly 3 GW at a npv of $4.75/w with average costs somewhere below $2.75/w. That's over $6 billion of present value just in the next 2 years. After that maybe you'll get close to the company's forecast of $1/watt which is still very good considering they'll be doing 2+gw per year. Not bad for a company valued under $5 billion.