Margin is a double edged sword. Your gains are magnified when the value of the related assets rise. Losses, however, are magnified when they decline. Continue reading “Margin is a Double Edged Sword”
For the last several months I have become increasingly concerned that stock valuations are too high for many publicly listed companies on North American stock exchanges. In fact, the last time I made equity investments of any significance, valuations were much, much more favorable.
I admit it has been increasingly frustrating to watch stock prices repeatedly set new highs while I sit on the sidelines. Whenever I find myself thinking “This time it is different”, however, I remind myself of Warren Buffett’s following pearl of wisdom:
“The stock market is a no-called-strike game. You don’t have to swing at everything. You can wait for your pitch.” Continue reading “Stock Valuations are Too High. I Would Exercise Caution.”
- This Canadian National Railway stock analysis is based on Q4 and FY2016 results and outlook for 2017 reported January 24, 2017.
- Revenue dropped but net income, operating income, and diluted EPS increased.
- Record Free Cash Flow (FCF) of $2.520B was reported which permitted the repurchase C$2B of shares vs. C$1.75B in 2015.
- The annual dividend has been increased 10% to C$1.65. The C$0.4125/share dividend will be paid on March 31, 2017.
- Management has forecast mid-single-digit EPS growth in 2017 from the adjusted diluted EPS of C$4.59 recorded in 2016.
- This 3M stock analysis is based on Q4 and FY 2016 results and outlook for fiscal 2017 released January 24, 2017.
- 3M reported strong result in FY2016 thus enabling it to return $6.431B to shareholders via share repurchases or dividends.
- 3M has been taking advantage of favorable interest rates and has increased LTD from $4.3B in FY2013 to over $11B as at end of Q3 2016.
- 2017 projections include EPS range of $8.45 to $8.80 (a 4% – 8% increase) and FCF conversion range of 95% to 105%.
- I would be prepared to acquire additional 3M shares below $164.
- This McDonald’s stock analysis is based on Q4 and FY 2016 results and outlook for fiscal 2017 released January 23, 2017.
- McDonald’s FY2016 results reflect a drop in revenue but a corresponding larger drop in expenses.
- It has been repurchasing its share at a torrid pace using LTD under attractive terms.
- I am prepared to acquire additional shares under $117.
In this post I outline how you can increase your net worth and cashflow with 10 equity investing rules. My wife and I followed them and were able to take early retirement. Continue reading “Increase Your Net Worth and Cashflow With 10 Equity Investing Rules”
- This Union Pacific stock analysis is based on Q4 and FY 2016 results and the outlook for fiscal 2017 released January 19, 2017.
- Union Pacific, North America’s largest railroad, reported a substantial full-year decline in volumes vs. FY2015 but declines moderated in Q4 FY2016.
- Union Pacific’s operating ratio increased to 63.5 percent but UNP is committed to its G55 + 0 initiatives which it initiated in FY2015.
- Dividend and share repurchases amounted to roughly $5B or 118% of net income in FY2016.
- Since 2007, Union Pacific has repurchased just over 29% of outstanding shares.
- I view Union Pacific as being a bit too expensive at the moment and will patiently wait for it to retrace to the low $90s.
We currently own shares in only one railroad, the TSX listed shares of Canadian National Railway (NYSE: CNI) in the FFJ Portfolio and no other shares within the Transportation sector. I would like to beef up our exposure to this sector and after a quick review of certain financial metrics for various North American Rail Freight Transport companies, decided to analyze Union Pacific Railroad (NYSE: UNP).
I have been monitoring UNP with the hope of a pullback to a more reasonable valuation level so I can add it to our investment portfolio. Today’s earnings release and the subsequent jump in price has not helped my cause. I am cautiously optimistic, however, of a correction in UNP’s valuation at some stage in 2017. Continue reading “Union Pacific Stock Analysis – I Continue to Patiently Wait for a Pullback”