***Official*** 2010 Stock Market Thread

[IHateMyJob2004]

I have held a large position in JNJ for a long time. Its one of my retirement stocks as I like the consistently rising dividends. Not sure how much Ill like them once Obummer decides to tax the shit out of them, I might switch some more into muni bonds.

I don't know why people are so hung up on what party is in control in regards to drug companies. Until there is campaign reform, both parties are owned by the eug lobbyists. It's that simple. Really.

NPR had a good story today. I forget which state, but it was a democrat that id something to cut spending on health care. now the attack as are out to have him ousted from office, paid for in part by rug companies.

EDIT: This is an example of having more than one tool in the toolbox. JNJ is worth more than it is trading for. Nothing that happens on the tax landscape can mysteriously make it overvalued.

 

[IHateMyJob2004]

We think alike. Ive got loads in Verizon as well, sold off my ATT and coverted it to VZ last year. VZ also pays a nice 6%ish percent dividend to boot.

They haven't cut the dividend yet? One hell of a debt load there to be throwing cash out the window.

Scary: A company that had alot of debt in a quickly evolving industry where the debt payments depend on the future revenue stream. The best part? The debt that will take years to pay off is dependent upon the capital expenditures that caused the debt not becoming obsolete.

 

[lothar]

We think alike. Ive got loads in Verizon as well, sold off my ATT and coverted it to VZ last year. VZ also pays a nice 6%ish percent dividend to boot.

How long can they continue to pay their dividend?
VZ's payout ratio is >220+% the last time I looked at it about 2 months ago.
They are bleeding money to pay a dividend to their shareholders instead of paying down their debt.

 

[eLiu]

How long can they continue to pay their dividend?
VZ's payout ratio is >220+% the last time I looked at it about 2 months ago.
They are bleeding money to pay a dividend to their shareholders instead of paying down their debt.

I was tempted into VZ earlier this year for the dividend (+ iphone next year), but noticed the same thing. Do you know/can you guess why they're paying out such a big dividend? Like do they fear the price hit that may come with reducing the dividend?

Also att/vz both seem kinda scary right now. It's expensive to upgrade their networks to support newer phones + more users demanding larger amts of bandwidth. ATT seems to be fighting a losing battle w/their terrible reputation for qos right now. Isn't that the #1 factor stopping people from joining the iphone club?

 

[AUMM]

so what's the latest on Rambus case?

 

[Demo24]

Nflx(netflix) is a stock going nuts at the moment. Been on a rather steep increase and fell off pretty nicely today as well. In puts on it as an experiment, but unsure where it's going to go.

I'm also enjoying csco's somewhat steady climb back up. Hopefully it will gain a touch more and then I'll close out of my positions.


Given that in the past I've lost a fair amount of money in the market, these days I'm trying some new strategies and far more willing to take profits when I have them rather than wait too long on hope they will increase more. Seems to be working ok for now

 

[JS80]

How long can they continue to pay their dividend?
VZ's payout ratio is >220+% the last time I looked at it about 2 months ago.
They are bleeding money to pay a dividend to their shareholders instead of paying down their debt.

Try reading their cash flow statement.

 

[SandEagle]

huge gains on BSDM today.

 

[ahurtt]

How long can they continue to pay their dividend?
VZ's payout ratio is >220+% the last time I looked at it about 2 months ago.
They are bleeding money to pay a dividend to their shareholders instead of paying down their debt.

Where are you looking? If you think 220% is high then don't dare look here:

http://finance.yahoo.com/q/ks?s=VZ+Key+Statistics WTF??? 725%???

Look here instead:

http://www.dailyfinance.com/financials/verizon-communications-inc/vz/nys/key-ratios
A more modest 96% which is still a tad high but not unheard of for a "retirement" utility stock.

I guess your opinion regarding the safety of VZ's dividend payout could vary widely depending on where you look...I think Yahoo is calculating something wrong...
I'd say read the financial statements and calculate it yourself. That way you know exactly how the figure was arrived at. Where did you originally get your information from?

 

[ahurtt]

Try reading their cash flow statement.

Could you enlighten us as to what you find when you examine VZ's cashflow? I take your previous post to mean that maybe you see something there that explains the abnormally high payout ratio. If my understanding of how payout ratio is calculated it uses NET profit so if there were a high amount of say...capital expenditure or something (like upgrading old infrastructure or something)...or paying down a large amount of debt, something like that...it could potentially at least temporarily affect a companies NET profits which would greatly skew the payout ratio figure upward. Is this more or less correct? Is there something in the cashflow statement to this effect? I'm not great with the meanings of the individual line items on the statements such as what are the various components of each line item that go into calculating the figures on each line item.

 

[FelixDeCat]

lvs will hit $30 this year when their macau casino opens.

(caps) GOAL!!!!

 

[JS80]

Could you enlighten us as to what you find when you examine VZ's cashflow? I take your previous post to mean that maybe you see something there that explains the abnormally high payout ratio. If my understanding of how payout ratio is calculated it uses NET profit so if there were a high amount of say...capital expenditure or something (like upgrading old infrastructure or something)...or paying down a large amount of debt, something like that...it could potentially at least temporarily affect a companies NET profits which would greatly skew the payout ratio figure upward. Is this more or less correct? Is there something in the cashflow statement to this effect? I'm not great with the meanings of the individual line items on the statements such as what are the various components of each line item that go into calculating the figures on each line item.

Add back non-cash charges such as depreciation and other adjustments to your net income. Then your coverage ratio all of a sudden becomes magical. Not only that they are cash flow positive even after paying down debt ($7.3b ttm) and paying the dividend. AND they are spending $16b in capex.

I don't see any hocus pocus, just people who can't read a financial statement. Now if they were raising debt and paying div I'd be concerned.

 

[lothar]

Where are you looking? If you think 220% is high then don't dare look here:

http://finance.yahoo.com/q/ks?s=VZ+Key+Statistics WTF??? 725%???

Look here instead:

http://www.dailyfinance.com/financials/verizon-communications-inc/vz/nys/key-ratios
A more modest 96% which is still a tad high but not unheard of for a "retirement" utility stock.

I guess your opinion regarding the safety of VZ's dividend payout could vary widely depending on where you look...I think Yahoo is calculating something wrong...
I'd say read the financial statements and calculate it yourself. That way you know exactly how the figure was arrived at. Where did you originally get your information from?

Like I said before in my post, I was looking at 2 month old data.
They just released updated earnings sometime this month(or was it last month?) and I'm not interested in going back to evaluate.
I didn't see anything special the first time I looked that would warrant me taking a second look. Granted, VZ was better than T(IMHO) when I compared both, but that's not saying much.

If all I really wanted a dividend stock that bad, I'd go with either MO, PM, along with many others out there over utility stocks.

My info shows the same info Yahoo Finance does. That's where I got my 220% number from 2 months ago. AOL Finance? Never used them before...Not sure how credible they are. As you suggested, only by reading through dozens of pages of documents does one figure out which is correct.
For some people, it may be worth it to do so. For others, I don't want to waste time when I move on to something else.

 

[ahurtt]

Not only that they are cash flow positive even after paying down debt ($7.3b ttm) and paying the dividend. AND they are spending $16b in capex.

This was kind of what I was alluding to in my post before when I said:

"so if there were a high amount of say...capital expenditure or something (like upgrading old infrastructure or something)...or paying down a large amount of debt, something like that..."

But I am admittedly somewhat novice at reading corporate income statements, balance sheets, and cash flow statements so I didn't want to say the wrong thing but what you say here confirms what I thought I was seeing. These things can definitely up the payout ratio because they eat away at the bottom line (NET profit which is used in calculating the payout ratio) but in my opinion these are "good" expenditures by VZ...paying down debt, reinvesting in the corporation to improve infrastructure...stuff like that can only lead to more future gains in my opinion.

However, I notice if you look at the longer term annual total current and long term liabilities on the balance sheet, the numbers are still trending upward despite any recent paydown of debt. Maybe by the end of 2010 they will turn that around.

 

[ahurtt]

Like I said before in my post, I was looking at 2 month old data.

Nice.

 

[manlymatt83]

What's everyone think of ORB and NG? I own shares of each, and just watched ORB climb pretty heavily this past month.

 

[rcpratt]

Looks like we're headed back below 10,000.

Also, I swear to god, the market swings up every two weeks right before my 401k contribution gets deposited, and then tanks right after.

 

[wpd7]

Those who were complaining about VHC, now's the time to get rid of your positions. =)

Too bad I didn't pick any up on the downside a few months after I sold- would have been an easy $2/share at this point.

 

[snoopdoug1]

Those who were complaining about VHC, now's the time to get rid of your positions. =)

Too bad I didn't pick any up on the downside a few months after I sold- would have been an easy $2/share at this point.

bummer - i didn't either! What happened today? I see no news?

 

[manlymatt83]

oy

 

[InverseOfNeo]

bummer - i didn't either! What happened today? I see no news?

Another big rise today. I am in the same boat as you guys are. I think I'm in at ~$7/share. I might wait (i.e. hope) it hits $8.50 or a bit more then I'll sell.

 

[snoopdoug1]

Another big rise today. I am in the same boat as you guys are. I think I'm in at ~$7/share. I might wait (i.e. hope) it hits $8.50 or a bit more then I'll sell.

Very nice! I'm back in the green now - avg price was 6.50. The question is when to sell now

 

[thepd7]

I'm buying some BP and JPM today, market's being a bitch right now but I feel good about it as a 3-6 month play.

 

[FelixDeCat]

Is it too early for 2011 predictions?

Google will buy Ebay. They have been getting rather cozy and I think it would be a good marriage of search and goods for sale.

Dont know what price though.....yet.

 

[InverseOfNeo]

Is it too early for 2011 predictions?

Google will buy Ebay. They have been getting rather cozy and I think it would be a good marriage of search and goods for sale.

Dont know what price though.....yet.

Interesting yet makes sense as that would get rid of competition from PayPal.