Below are the valuation targets for Lincoln National Corp. (LNC) for the next 10 years. Continue reading
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Author Archives: nlo-admin
Chart of the Day: Luby’s Inc.
According to Yahoo!Finance, “Luby's, Inc. operates as a multi-brand restaurant company in the United States. The company operates through three segments: Company-Owned Restaurants, Franchise Operations, and Culinary Contract Services.”
The Study of Failure
"The initial step in learning from our mistakes is recognizing that our present knowledge is inadequate (Perkinson, Henry J. “LEARNING FROM OUR MISTAKES.” ETC: A Review of General Semantics, vol. 36, no. 1, 1979, pp. 37–57. JSTOR, JSTOR, www.jstor.org/stable/42575890.)."
Posted in Chart of the Day, LUB, The Study of Failure
Unum Corp. 10-Year Targets
Below are the valuation targets for Unum (UNM) for the next 10 years.
IBM: An Act of Desperation?
On April 18, 2012, we said of IBM:
“In this case, the dividend has been rising much faster than the stock price, among the many reasons that Buffett might be interested in a technology stock near an all-time high. Now, just imagine what the stock will look like after falling to a 52-week low.”
On July 23, 2015, we said:
“We think that a value investor would have fun pouring over the data to determine the actual value of IBM. Gould’s Speed Resistance Lines [SRL] indicate that the conservative downside target for IBM is $130. However, we think a process of accumulation at the current price, and below, is a prudent long-term strategy.”
On May 4, 2018, we said:
“For the time being, IBM is reasonably priced for a retest of the 2012 peak in the Altimeter. The stock price would be approximately $362. Keep in mind that the stock still has the prospect of retesting the prior low at $120. The 2008 low of $80 is a consideration but not expected at this time.”
Below we have outlined the commentary dates and the relative price of IBM.
Our interpretation of the data is that IBM is at a critical stage given their recent investment in Red Hat (RHT). There are some who are asking whether or not IBM has overpaid for RHT. To put an end to the discussion, we show a comparison between RHT and IBM since the March 2009 low.
The concept of cloud computing and its role wasn’t new to IBM in 2015. Yet, at a comparable share price, in early 2016 (red arrows), IBM could have bought RHT at $70 instead of the current bid at $190.
The $190 takeout offer exceeds the early 2016 price by +171% and was +62% above the closing price of RHT on October 26, 2018. This deal doesn’t pass the smell test.
We will close with the following observations and price targets: Continue reading
Posted in IBM
Ablemarle Corp. 10-Year Targets
Below are the valuation targets for Ablemarle Corp. (ALB) for the next 10 years. Continue reading
Chart of the Day: Och-Ziff Capital Management Group
According to Yahoo!Finance, “…Och-Ziff Capital Management Group LLC is a publicly owned hedge fund sponsor. The firm provides investment advisory services for its clients. It primarily caters to institutional investors which include pension funds, fund-of-funds, foundations and endowments, corporations and other institutions, private banks and family offices. The firm invests in equity and alternative markets across the world. It employs quantitative and qualitative analysis to make its investments.”
The Study of Failure
"This is a typical mistake that U. S. companies make: they begin courting, and marry the first one who asks without checking them out or without picking the partner, the country, or the market that best suits their needs (Fjetland, Michael. “Strategic Mistakes in International Transactions.” Journal of International Marketing, vol. 4, no. 2, 1996, pp. 75–86. JSTOR, JSTOR, www.jstor.org/stable/25048647.)."
Posted in Chart of the Day, OZM, The Study of Failure
Transaction Alert
The NLO team executed the following transaction(s): Continue reading
Chart of the Day: Five Star Senior Living
According to Yahoo!Finance, Five Star Senior Living Inc. (FVE) “…operates and manages senior living communities in the United States.”
The Study of Failure
"The scientific method is essentially a monument to the utility of error (Schulz, Kathryn. “Making Good Mistakes.” RSA Journal, vol. 156, no. 5543, 2010, pp. 16–17. JSTOR, JSTOR, www.jstor.org/stable/41380031)."
Posted in Chart of the Day, FVE, The Study of Failure
Real Estate: Nationwide Declines from 1910 to 1936
In a CNBC interview that took place on July 1, 2005, Ben Bernanke said:
“We’ve never had a decline in house prices on a nationwide basis.”
This claim is coming from a scholar who specialized in the Great Depression. The Great Depression was an era of nationwide house price declines as represented in the red box below.
Reviewing the work of Roy Wenzlick, we can see that house price declines were not the only measurable metric that real estate suffered on a nationwide basis. Throughout the U.S., in more than 70 large cities we see that rents decreased, number of new dwellings decreased, office vacancies increased, farm land values decreased and real estate transfers decreased. Below data and charts based on the work of Roy Wenzlick demonstrating nationwide trends in real estate. Continue reading
Chart of the Day: Christopher & Banks
According to Yahoo!Finance, Christopher & Banks (CBK), “…through its subsidiaries, operates as a specialty retailer of private-brand women's apparel and accessories in the United States.”
The Study of Failure
"Mistake 1: Not Understanding the Decision Context. It is necessary to understand the decision context to make good value trade-offs. This means that you should know what the decision is, what it is intended to accomplish, and what types of alternatives are available (Keeney, Ralph L. “Common Mistakes in Making Value Trade-Offs.” Operations Research, vol. 50, no. 6, 2002, pp. 935–945. JSTOR, JSTOR, www.jstor.org/stable/3088614.)."
Posted in CBK, Chart of the Day, The Study of Failure
Standex International 10-Year Targets
Below are the valuation targets for Standex International Corp. (SXI) for the next 10 years. Continue reading
Chart of the Day: Globalstar Inc.
Yahoo!Finance describes Globalstar Inc. as, “…Globalstar, Inc. provides mobile satellite voice and data services worldwide. The company offers duplex two-way voice and data products, including mobile voice and data satellite communications services and equipment for remote business continuity, recreational, emergency response, and other applications; fixed voice and data satellite communications services and equipment in rural villages, ships, industrial and commercial sites, and residential sites; and satellite data modem services comprising asynchronous and packet data services.”
The Study of Failure
"That which is not worth doing is not worth doing well (Roger Lowenstein. Buffett: The Making of an American Capitalist. Random House. 1995. page 286)."
Posted in Chart of the Day, GSAT, The Study of Failure
Gold Stock Indicator: October 2018
On April 14, 2011, in our very first attempt at understanding Edson Gould’s Speed Resistance Lines, when the Philadelphia Gold and Silver Stock Index (XAU) was within 6 trading days of the top, we said the following:
“Based on the most recent high of 228.95 the downside target for the XAU index is 76.32. We recommend that whenever the XAU index falls at or below the speed resistance line drawn on the chart, between now and just before 2028, as part of the secular rising trend in interest rates/inflation, we would expect that the stocks in the index are underpriced. Confirmation of fair values should be determined for possible speculative positions at these times.”
The chart below reflects the April 14, 2011 level and the projected downside target and is contrasted with the actual low attained, so far.
The most obvious failure is the fact that the XAU Index declined to 38.84 instead of the 76.32 level, by early 2016. Additionally, we did not arrive at a timeframe that was useful to traders or investors in gold and silver stocks.
Below, we’re going to use the same methodology of projecting price targets for both the price of gold and the XAU Index. However, in this review, we’ll be focused on what the upside targets are from the current levels.
Let it be known that the downside target for gold is $1,049.40 and for the XAU Index is 38.84, until proven otherwise. We believe a reasonable market participant should be willing to accept that both levels will retest the prior low before moving higher. Continue reading
Cass Information Systems 10-Year Targets
Below are the valuation targets for Cass Information Systems (CASS) for the next 10 years. Continue reading
Caterpillar Inc. 10-Year Targets
Below are the valuation targets for Caterpillar Inc. (CAT) for the next 10 years. Continue reading