The big buyers just focused on a small decrease in revenue and not the whole picture. If it goes down again today (11/26) I am a buyer. Their future looks too bright as opposed to Transocean and Noble.
An article from Barron's on Wednesday's online edition.....
Investors' Soapbox PM
| WEDNESDAY, NOVEMBER 20, 2013
Banks That May Cut Dividends
Sterne, Agee & Leach
After the close Tuesday, Valley National Bancorp announced a 32% cut in their dividend.
This reduced Valley National's (ticker: VLY) (rated at Neutral) 2014 payout ratio from 117% to 76%, still well above the 32% level for all banks over $10 billion in assets. Two other Northeast banks that we believe could be in the spotlight include New York Community Bancorp (NYCB) (rated at Underperform) and People's United Financial (PBCT) (rated at Neutral).
New York Community's 96% 2014 dividend-payout ratio is well above slightly larger Comprehensive Capital Analysis and Review (CCAR) bank peers (more than $50 billion in assets) of 23%. People's United's recent capital-return levels (aggressive buybacks plus 85% 2013 payout ratio) is unsustainable, in our view.
Valley National announced a 32% reduction in their dividend rate (16.25 cents to 11 cents per-share quarterly). This reduced the 2014 payout ratio from 117% to 76%, still well above the 32% ratio for all banks over $10 billion in assets. The change in dividend policy does not come as a big surprise, as management has more recently suggested that the dividend is a decision carefully revisited by the board each quarter and they would take action necessary to protect the quality of balance sheet. Core earnings power as measured by preprovision net revenue (PPNR) has been under pressure as mortgage-banking volumes have slowed and the core net interest margin (NIM) continues to decline. PPNR was 1.01% of average assets in the third quarter, down from 1.82% in the year-ago quarter and 1.55% in full year 2012.
New York Community is projected to pay out 96% of earnings (based on consensus estimates) in 2014. Unlike Valley National, New York Community management has been adamant over the last several years that they have no plan or need to reduce their dividend. While overall profitability and earnings momentum is stronger at New York Community compared to Valley National, we would point out that management has a deep desire to become a much larger institution. To accomplish this, the company has been very clear with Wall Street that they are constantly on the prowl for acquisitions, preferably larger acquisitions which can catapult them well through the Federal Reserve's $50 billion CCAR stress-test threshold. New York Community's current asset base at Sept. 30 was $46 billion. We would point out that the average 2014 dividend-payout ratio for Federal CCAR banks is 22%.
People's United is projected to pay out 74% of earnings (based on consensus estimates) in 2014. Among banks with more than $10 billion in assets, People's United has the third-highest payout ratio....In addition to a high dividend-payout ratio, the company has been actively returning capital through share repurchases. Total return of capital (buybacks plus dividends) is expected to be 242% in 2013, up from 167% in 2012. As a result of this aggressive capital-return plan (combined with organic growth and deals), tangible capital has declined from 12.0% at year-end 2011, to 8.5% in the most recent quarter. Looking ahead, we see total-capital-return ratios of 111% and 69%, in 2014 and 2015, respectively. Given the company's size ($32 billion in assets), we believe there could be downside risks to these estimates over the next 12 to 18 months.
-- Matthew Kelley
-- Matthew Breese
In 2 weeks time short interest in GLW doubled from 41,600,000 shares to 83,400,00 shares. According to Barron's makes it the largest change in short interest on the nyse. Which gives 5.79% of GLW's stock outstanding. Apple's decision to use GTAT make that much difference? I think the shorts are going to hit the fan.They deserve it.
SBUX has (or is it now had) the cash to take care of Kraft and the stock was up for the day in spite of that (to me simply amazing). But when Howard leaves for whatever reason...and it seems like Apple that SBUX is such a personality and culture driven company; how will that affect the stock? Admittedly; probably quite a few years away. Just wondering.
I think; no let me change that to I am sure Apple changing "glass suppliers" because of Corning's deal with Samsung. Apple may sell more in the U.S. but, Samsung is the world wide leader. You do the math.
Sentiment: Strong Buy
It could be worse. If EMC didnot have so much of VMW; just think how much down we would be now. If it gets down to 22.5-23 should be an oppurtunity to buy.
Eternal...that is exactly what my financial advisor always says word for word. Amazing! And all this time I have been paying the wrong guy.
To help broaden CAG's product line..I would suggest an acquistion of Annie's (BNNY). Might be taken on extra debt now...but it is still affordable for them. Even at a 30% premium price over yesterday's close, you are talking $65 a share and just over a billion. Iw would widen their product line, and with Cag's help Annie's could widen theirs also. Deflect some of the pain from GMO situation and doing it now borrow before rates change. I am not long in BNNY by the way. Just a thought.
As glad as I would be to see that; I don't think so in reality. If it just got back to its 52 week high (37.28) I would be extremely satisfied. If they made another acquisition; I would recommend Annie's (BNNY) 43 would be doable.
I am assuming that is $3.00..:). Gas price has to rise for it to get over 3. And if it gets over 3: I will be as they say on Duck Dynasty...happy,happy,happy.
In the long run, holding CAG for a couple of years will be better in the long run. You want a quick buck...go to Vegas. You want to invest; buy CAG. You can do withoit streaming movies (netflix) and you can do without mail orders from the internet (amazon) but you cannot live without food. Rememebr you gotta eat.
Wonder what will happen with SNH once the fed announces today.If taper is already figured in stock price or not. I would suppose it is. If not and it goes down..I am a buyer.