Last Sunday, Kinder Morgan (KMI) announced it was going to consolidate all of its holdings (KMP, KMR, EPB). As an owner of KMP, I decided to sell after a nice one-day pop of 17% and total gain of 31% (9% annualized, not including dividends). Originally I was going to buy KMI, but a little due diligence revealed some problems:
KMI: $42B market cap, $37B debt minus cash, $5B operating cash flow
KMP: $45B market cap, $22B debt minus cash, $4B operating cash flow
KMR: $13B market cap, (insufficient information)
EPB: $10B market cap, $5B debt minus cash, $1B operating cash flow
Combined KMI: $110B market cap, $64B debt minus cash, $10B operating cash flow
Those fundamentals are, in a word, terrible. (This guy agrees with me.) Comparables XOM, COP, EPD, and WMB each have better debt/equity and debt/operating cash flow ratios.
So instead, I took my proceeds and bought 2 other (presumably better) dividend stocks...Microsoft (MSFT), which I've previously covered here (and Ballmer's gone!); and a new holding...
Costco (COST)
Positives:
$7B cash vs. $5B debt.
Positive cash flows ($4B operating, $1B free).
Very safe 1.2% dividend yield.
Warren Buffett likes it.
Negatives:
Thin margins (2% profit, 3% operating).
Lukewarm revenue (7%) and earnings (3%) growth.
Monday, August 18, 2014
Sunday, August 10, 2014
Stock Of The Month: DDD
As previously recommended here, here, here, here,...and here. (and now here.)
3D Systems (DDD)
Positives:
Solid revenue growth (25%).
$570M cash vs. $19M debt.
Positive cash flows ($41M operating, $50M free).
Only 3D printing stock with positive margins (6% profit, 10% operating), ROA (3%), ROE (3%).
Negatives:
Absurd 114 P/E, though forward 43 P/E is slightly better.
Negative earnings growth (-77%).
Heavily shorted (33%).
Here's my current portfolio (growth, dividend, and speculative). As always, I believe in all of these stocks - until I sell them.
Apple (AAPL) 11.28%
Tesla Motors (TSLA) 10.72%
Baidu (BIDU) 7.04%
Google (GOOG/GOOGL) 6.75%
3D Systems (DDD) 5.14%
Under Armour (UA) 3.59%
Amazon (AMZN) 3.11%
Southern Copper (SCCO) 3.07%
Ace Limited (ACE) 2.82%
Qihoo 360 (QIHU) 2.76%
Stratasys (SSYS) 2.62%
Twitter (TWTR) 2.48%
Blackstone (BX) 2.48%
Intuitive Surgical (ISRG) 2.32%
Nike (NKE) 1.76%
American Software (AMSWA) 1.73%
Intel (INTC) 1.54%
Apache (APA) 1.45%
EMC (EMC) 1.37%
DuPont (DD) 1.32%
Wynn Resorts (WYNN) 1.31%
Kinder Morgan Energy Partners (KMP) 1.26%
McDonald's (MCD) 1.16%
Prospect Capital (PSEC) 1.13%
Las Vegas Sands (LVS) 1.07%
ConocoPhillips (COP) 1.06%
American Express (AXP) 1.03%
ExOne (XONE) 1.00%
Starbucks (SBUX) 0.97%
Canadian National Railway (CNI) 0.95%
Wells Fargo (WFC) 0.95%
Microsoft (MSFT) 0.93%
Computer Programs and Systems (CPSI) 0.92%
F5 Networks (FFIV) 0.90%
Cisco (CSCO) 0.88%
Ansys (ANSS) 0.88%
Hershey (HSY) 0.83%
BlackRock (BLK) 0.81%
Coca-Cola (KO) 0.77%
China Mobile (CHL) 0.76%
International Business Machines (IBM) 0.73%
Salesforce.com (CRM) 0.71%
SolarCity (SCTY) 0.69%
Groupon (GRPN) 0.64%
iRobot (IRBT) 0.61%
The Distressed (BEBE, GSOL, LZB, MSI, TMUS) 0.58%
Lululemon Athletica (LULU) 0.58%
Whole Foods Market (WFM) 0.45%
3D Systems (DDD)
Positives:
Solid revenue growth (25%).
$570M cash vs. $19M debt.
Positive cash flows ($41M operating, $50M free).
Only 3D printing stock with positive margins (6% profit, 10% operating), ROA (3%), ROE (3%).
Negatives:
Absurd 114 P/E, though forward 43 P/E is slightly better.
Negative earnings growth (-77%).
Heavily shorted (33%).
Here's my current portfolio (growth, dividend, and speculative). As always, I believe in all of these stocks - until I sell them.
Apple (AAPL) 11.28%
Tesla Motors (TSLA) 10.72%
Baidu (BIDU) 7.04%
Google (GOOG/GOOGL) 6.75%
3D Systems (DDD) 5.14%
Under Armour (UA) 3.59%
Amazon (AMZN) 3.11%
Southern Copper (SCCO) 3.07%
Ace Limited (ACE) 2.82%
Qihoo 360 (QIHU) 2.76%
Stratasys (SSYS) 2.62%
Twitter (TWTR) 2.48%
Blackstone (BX) 2.48%
Intuitive Surgical (ISRG) 2.32%
Nike (NKE) 1.76%
American Software (AMSWA) 1.73%
Intel (INTC) 1.54%
Apache (APA) 1.45%
EMC (EMC) 1.37%
DuPont (DD) 1.32%
Wynn Resorts (WYNN) 1.31%
Kinder Morgan Energy Partners (KMP) 1.26%
McDonald's (MCD) 1.16%
Prospect Capital (PSEC) 1.13%
Las Vegas Sands (LVS) 1.07%
ConocoPhillips (COP) 1.06%
American Express (AXP) 1.03%
ExOne (XONE) 1.00%
Starbucks (SBUX) 0.97%
Canadian National Railway (CNI) 0.95%
Wells Fargo (WFC) 0.95%
Microsoft (MSFT) 0.93%
Computer Programs and Systems (CPSI) 0.92%
F5 Networks (FFIV) 0.90%
Cisco (CSCO) 0.88%
Ansys (ANSS) 0.88%
Hershey (HSY) 0.83%
BlackRock (BLK) 0.81%
Coca-Cola (KO) 0.77%
China Mobile (CHL) 0.76%
International Business Machines (IBM) 0.73%
Salesforce.com (CRM) 0.71%
SolarCity (SCTY) 0.69%
Groupon (GRPN) 0.64%
iRobot (IRBT) 0.61%
The Distressed (BEBE, GSOL, LZB, MSI, TMUS) 0.58%
Lululemon Athletica (LULU) 0.58%
Whole Foods Market (WFM) 0.45%
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