According to Bloomberg.com, “Molycorp, Inc. produces and sells rare earths and rare metal materials in the United States and internationally.”
The Study of Failure
“Mistakes are there for us to learn by (Russell, Richard. Dow Theory Letters. January 16, 1976. page 1.).”
Posted in Chart of the Day, MCP, The Study of Failure
In this piece, Dow is a leading advocate for frequent and full disclosure for greater clarity to all investors. This was a concept that was relatively unheard of at the time.
"It is in a high degree important for all interests that this market should be made as fair for the outsider as possible. Nothing will promote fairness so much as reasonable frequency in the publication of the profits which the company decides belong to stockholders. It is to the interest of every investor, every speculator and every broker that this should be done. It may possibly lessen the business of some houses to be obtained from insiders, but their loss will be more than made good by the breadth and permanency of a market in which outsiders have a fair chance (Dow, Charles H. Wall Street Journal. Review and Outlook. March 7, 1900)."
Who was Charles H. Dow?
“Charles Henry Dow was an American journalist who co-founded Dow Jones & Company with Edward Jones and Charles Bergstresser. Dow also founded The Wall Street Journal, which has become one of the most respected financial publications in the world.”
Posted in Dow's Value Theory
According to Yahoo!Finance, “Westell Technologies (WSTL), Inc., through its subsidiary, Westell, Inc., designs and distributes telecommunications products to telephone companies in the United States. The company operates through three segments: In-Building Wireless (IBW), Intelligent Site Management and Services (ISMS), and Communications Network Solutions (CNS).”
The Study of Failure
“The great destroyer of stock market analysts is their own pride of opinion. Pride has ruined more so-called market experts than has any other single character defect. The public, in its innocence, all too frequently mistakes the analyst’s pride for ‘intelligent confidence’ or 'steadfastness.’ So the public’s losses are often linked to the analyst’s defective prophecies (Russell, Richard. Dow Theory Letters. March 28, 1975. page 1.).”
Posted in Chart of the Day, The Study of Failure, WSTL
In our posting from November 8, 2018, we outlined the expected overvalued, fair valued, and undervalued ranges from 2019 to 2029. This posting will graphically represent the period from 1998 to 2018 with the overvalued and undervalued ranges and contrast those ranges with the price of the stock.
Posted in 10-year Targets, Altimeter, BDX
According to Yahoo!Finance, “DryShips Inc. (DRYS) owns and operates ocean going cargo vessels worldwide. It operates through four segments: Drybulk Carrier, Tanker, Gas Carrier, and Offshore Support. The Drybulk Carrier segment offers drybulk commodities transportation services for the steel, electric utility, construction, and agri-food industries.”
The Study of Failure
“I have found that I learn a great deal from both my own mistakes and from the mistakes that other men make. I like to learn why and how we make mistakes and hopefully to avoid those mistakes in the future (Russell, Richard. Dow Theory Letters. March 19, 1975. page 1.).”
Posted in Chart of the Day, DRYS, The Study of Failure
Below are the valuation targets for Becton, Dickinson and Co. (BDX) for the next 10 years. Continue reading
According to Yahoo!Finance, “Globus Maritime Limited, an integrated dry bulk shipping company, provides marine transportation services worldwide. The company owns, operates, and manages a fleet of dry bulk vessels that transport iron ore, coal, grain, steel products, cement, alumina, and other dry bulk cargoes.”
The Study of Failure
“If you make three trading mistakes and lose say 15% or 20% on each, you have lost half your capital (Russell, Richard. Dow Theory Letters. November 8, 1974. page 3.).”
Posted in Chart of the Day, GLBS, The Study of Failure
On November 6, 2018, MarketWatch.com published an article titled “This is what happened the last time Warren Buffett’s Berkshire Hathaway bought back stock.” In the article, the author, Tomi Kilgore says, “Perhaps what is of value to investors, Berkshire Hathaway disclosed in its 10-Q quarterly filing with the Securities and Exchange Commission that it repurchased about $928 million worth of its Class A and Class B shares during the quarter, something it hasn’t done since December 2012.”
In the past, it has been indicated that Berkshire Hathaway, “…would repurchase Class A and Class B shares at no more than a 10 percent premium over the current book value of the shares ("Berkshire Hathaway to repurchase stock." UPI NewsTrack, 26 Sept. 2011. Infotrac Newsstand,. Accessed 7 Nov. 2018.).”
Why wait until after Berkshire announces a buyback plan to find out when the stock is at or below a “10 percent premium?” Our work on the topic has consistently pointed to when Berkshire was undervalued as noted in our May 6, 2012 article titled “Should Berkshire Hathaway Be Trading at 1995 Prices?” which outlined the fact that Berkshire Hathaway was severely underpriced.
In addition, Berkshire Hathaway has consistently performed within the parameters of overvalued and undervalued that we expected since that article in May 2012. Based on the data that we generated in May of 2012, we are posting the undervalued and overvalued ranges that would have been expected from 1998 to 2018.
1998 to 2009
Below is the charting of the undervalued and overvalued ranges from June 1, 1998 to March 5, 2009.
Much of the data shows a relative range that Berkshire Hathaway generally trades in. However, at certain times, Berkshire Hathaway’s stock price has run to extremes of overvalued and undervalued. This is made more clear in the next chart, a continuation of the above from December 3, 2007 to November 6, 2018.
2007 to 2018
Below is the charting of the undervalued and overvalued ranges from December 3, 2007 to November 6, 2018 with a reference to our May 6, 2012 posting with the May 7, 2012 closing price of Berkshire Hathaway.
Our October 11, 2018 posting, well before the announced buyback plan, of Berkshire Hathaway’s price targets (2019 to 2030) easily demonstrates why Berkshire would be in a mood to buy back shares at the current levels.
Posted in 10-year Targets, Altimeter, BRK-A
Yahoo!Finance describes Sequential Brands Group (SQBG) as, “…owns, promotes, markets, and licenses a portfolio of consumer brands in the United States and internationally. It offers products in the apparel, footwear, eyewear, fashion accessories, and home goods categories under the Jessica Simpson, AND1, Avia, GAIAM, Joe's Jeans, Ellen Tracy, Emeril Lagasse, William Rast, Heelys, Revo, Caribbean Joe, DVS, The Franklin Mint, Linens N Things, SPRI, Nevados, and FUL brand names; and food, wine, magazines, books, and other print and digital content categories under the Martha Stewart brand name.”
The Study of Failure
“…don’t ever forget that when you make a mistake in a bear market you do not have the underlying primary trend to bail you out. When you make a mistake in a primary bull market, however, you are more often than not bailed out by the passage of time (Russell, Richard. Dow Theory Letters. August 8, 1973. page 4.)”
Posted in Chart of the Day, SQBG, The Study of Failure
Below are the valuation targets for Aqua America (WTR) for the next 10 years. Continue reading
According to Yahoo!Finance, “VIVUS, Inc. (VVUS), a biopharmaceutical company, develops and commercializes novel therapeutic products to address unmet medical needs in human health in the United States and the European Union. The company offers Qsymia for the treatment of obesity as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adult patients with an initial body mass index of 30 or greater, or obese patients, or 27 or greater, or overweight patients in the presence of at least one weight-related comorbidity, such as hypertension, type 2 diabetes mellitus or high cholesterol; and STENDRA, an oral phosphodiesterase type 5 inhibitor for the treatment of erectile dysfunction.”
The Study of Failure
“The stock market indicators are seldom wrong, it’s the people who interpret them who make the mistakes (Russell, Richard. Dow Theory Letters. September 8, 1972. page 1.).”
Posted in Chart of the Day, The Study of Failure, VVUS
Below are the valuation targets for International Business Machines (IBM) for the next 10 years. Continue reading
Below are the valuation targets for Archer Daniels Midland (ADM) for the next 10 years. Continue reading
According to Yahoo!Finance, “Inpixon (INPX), through its subsidiaries, provides big data analytics and location based products and related services for the cyber-security and Internet of things markets worldwide. The company operates in two segments, Indoor Positioning Analytics and Infrastructure.”
The Study of Failure
“On the first night of that unfortunate play [Henry James's] Guy Domville, produced by George Alexander, it was soon evident from the attitude of the gallery that the play was not going to be a success, but the seal of failure was set on it when Sir George uttered the line, ‘I am the last of the Domvilles,’ Scarcely were the words out of his mouth than a voice came from the gallery, ‘Well at any rate, that’s a comfort to know.’ (Clifton Fadiman and André Bernard, general editors. ALEXANDER, Sir George (1858-1919), British Actor. Bartlett's Book of Anecdotes. Boston :Little, Brown, 2000. Print. page 9.)”
Posted in Chart of the Day, The Study of Failure
Top Five Watch List Performance Review
In our ongoing review of the NLO Dividend Watch List, we have taken the top five stocks on our list from November 3, 2017 and have checked the performance one year later. The top five companies on that list can be seen in the table below.
| Symbol | Name | 2015 Price | 2016 Price | % change |
| JWN | Nordstrom | 38.50 | 66.49 | 72.7% |
| ADM | Archer Daniels Midland | 39.78 | 48.00 | 20.7% |
| CTL | CenturyTel | 16.37 | 20.97 | 28.1% |
| NS | NuStar Energy L.P. | 32.00 | 23.31 | -27.2% |
| SJM | JM Smucker | 102.22 | 105.69 | 3.4% |
| Average | 19.5% | |||
| DJI | Dow Jones Industrial | 23,539.19 | 25,270.83 | 7.4% |
| SPX | S&P 500 | 2,587.84 | 2,723.06 | 5.2% |
Prior Year Performance Review
The best performing stock was Nordstrom (JWN) which gained 72.7%. A year ago, Nordstrom failed to go private after failing to secure funding. Our team thought this would be a prudent time to take a finer look at this major retailer. Below is an except from our watch list.
Despite such draw back, we are curious if this could be an opportunity for value investors to buy in. Our team are not proposing to go long at this level but one should be ready to accumulate at the right price point. The stock yield 3.8% but payout 70% of its earning which is relatively high and leave company with small margin of safety. Perhaps halting a dividend or reducing it could provide a better entry point.
U.S. Dividend Watch List: November 2, 2018
The volatility in the market continued and S&P 500 gained some ground this week and rebounded 1.5%. Here is a list of companies that are on our watch list for the week. Continue reading
Posted in Dividend Achiever Watch List, Dividend Achievers, Dividend Watch List
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