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+--- Thread: Dilemma? (/showthread.php?tid=770)
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RE: Dilemma? - Roadmap2Retire - 12-08-2014
(12-08-2014, 11:07 AM)Be Here Now Wrote:(12-08-2014, 10:48 AM)Vincenzo Wrote: I saw a headline on Yahoo Finance that hedge funds are betting the rout in oil is coming to an end. I don't place much stock in what I read on Yahoo Finance, but I was wondering what your thoughts were.
Hedge funds are getting it wrong more often than right. Plus, they are not investors in the sense of Graham and Buffett, they are speculators. Ignore them, do your own due diligence, follow your plan, don't over-pay.
This! What 'Be Here Now' said. Stop paying attention to the talking heads on CNBC and the so called "analyst". Most of them did not see the housing crisis coming and fortunes and lives were lost.
Look for solid blue chip companies that can weather storms and if they attractively priced, buy them. Do your own due diligence before investing instead of listening to traders. Hope that helps.
R2R
RE: Dilemma? - Vincenzo - 12-08-2014
(12-08-2014, 01:26 PM)Roadmap2Retire Wrote:(12-08-2014, 11:07 AM)Be Here Now Wrote:(12-08-2014, 10:48 AM)Vincenzo Wrote: I saw a headline on Yahoo Finance that hedge funds are betting the rout in oil is coming to an end. I don't place much stock in what I read on Yahoo Finance, but I was wondering what your thoughts were.
Hedge funds are getting it wrong more often than right. Plus, they are not investors in the sense of Graham and Buffett, they are speculators. Ignore them, do your own due diligence, follow your plan, don't over-pay.
This! What 'Be Here Now' said. Stop paying attention to the talking heads on CNBC and the so called "analyst". Most of them did not see the housing crisis coming and fortunes and lives were lost.
Look for solid blue chip companies that can weather storms and if they attractively priced, buy them. Do your own due diligence before investing instead of listening to traders. Hope that helps.
R2R
Hm...
I'm not sure what gave people the impression that I'm only basing my buy decisions on Yahoo Finance headlines when I stated in my OP, "I don't place much stock in what I read on Yahoo Finance". That last bit about the headline was really just an aside to my main post in an attempt to get other peoples opinion about the OPEC situation and whether they agreed the worst is over.
HP has managed to grow revenues by 17.98% per year over the past 10 years. Over that same time period, they've managed to grow EPS by 33.25%. For the past five years, those numbers are 15.17% and 35%, respectively. This is according to Morningstar.
HP's profit margin is 19.05% and its operating margin is 28.45% according to Yahoo Finance.
HP's ROE is 15.19% and it's 10-year average ROE is 17.1% according to Morningstar.
HP's debt/equity is 1.64 and its current ratio is 2.52 according to Yahoo Finance.
HP has been paying uninterrupted dividends for >= 25 years. Their 10-year dividend growth rate is 70%/year according to nasdaq.com. If you disregard the huge spike in payout in 2013 (from $0.07 to $0.50) and only count the years 2008-2012, the 5-year dividend growth rate is 9.56%/year.
HP's 5-year average dividend yield is 1.5% according to Yahoo Finance. It now stands at around 4%.
HP's payout ratio stands at 38% according to Yahoo Finance and Morningstar.
HP's 52-year high is 118.95, and it's 52-year low is about where it sits now (62.76), according to Yahoo Finance.
HPs 10-year average P/E is 15.96, according to Morningstar. It now stands at 9.77.
Currently, the company has a four-star rating on Morningstar, for whatever that's worth.
My favorite Warren Buffett quote, "Be fearful when others are greedy, and greedy when others are fearful". In my opinion, others are being fearful now.
Would love to hear your thoughts based on these things. Thanks!
RE: Dilemma? - EricL - 12-08-2014
I do think HP looks interesting, but I would point out that their earnings will take a big hit should cap-ex from the E&P's get cut significantly. Their earnings estimates for 2015 have already been dropped from $7.52 to $6.31 and for 2016 they've dropped from $8.18 to $6.53 over the last 60 days and with cuts to drilling budgets already beginning to show up, they could be headed down further.
They have a great balance sheet though so I'd think the dividend is safe for the immediate future, especially considering management's seeming strong commitment to it.
RE: Dilemma? - Main Street Stock Investor - 12-08-2014
HP is a dividend achiever (a good thing), but E&P can be volatile, so I would wait until the stock settles down a little. The stock has dropped 46% in the last 5 months, and the technical indicators are still looking weak.
Eva Dimensions (Starmine rating of 85) has a buy rating on the stock. The analysts consensus is bullish, but analysts don't always get it right. If you still believe this is a stock you want to invest in, my suggestion is: Consider how many shares you want to own, and only buy a 1/3 position. Take that first 1/3 position monitoring MACD and stochastics. build a full position based on market conditions and technical indicators. Don't rush it. It may take a year to build a safe full position.
Thanks for posting. HP has been on my radar for some time, but I couldn't pull the trigger. I may now consider adding this stock to my portfolio as I monitor the technicals and market conditions.
M$$I
RE: Dilemma? - Dividend Watcher - 12-08-2014
(12-08-2014, 02:52 PM)Vincenzo Wrote: HP's debt/equity is 1.64 and its current ratio is 2.52 according to Yahoo Finance.
HP has been paying uninterrupted dividends for >= 25 years. Their 10-year dividend growth rate is 70%/year according to nasdaq.com. If you disregard the huge spike in payout in 2013 (from $0.07 to $0.50) and only count the years 2008-2012, the 5-year dividend growth rate is 9.56%/year.
HP's 5-year average dividend yield is 1.5% according to Yahoo Finance. It now stands at around 4%.
HP's payout ratio stands at 38% according to Yahoo Finance and Morningstar.
HPs 10-year average P/E is 15.96, according to Morningstar. It now stands at 9.77.
Would love to hear your thoughts based on these things. Thanks!
The above stats hold some sway with me. To which I add:
- LT Debt = 40M, current portion of LT Debt is 40M. Wow, long term debt gone in a year. (From the 9/30 Q4 Balance Sheet)
- Cash & equivalents on hand = $309M. A/P and accrued liabilities total $464M. They could almost pay that off if they shutdown all their rigs today.
- Interest coverage ratio is greater than 10x.
From all the reading I've done, management has been fairly conservative. The big dividend increases were a little surprising to me but I'm thinking management took into account what could happen. Even with news of declining demand, they boosted the dividend another 10%. Why not 7% or 8% to be conservative; especially after those two big jumps in the last few years? Still would put them in their normal range.
They've survived the Great Recession, the 90's slump and all the other wild swings of the last 40 years.
They developed the Flex-Rig with standardized components. This alone I imagine benefits them in training and manpower flexibility.
Are you willing to hold should earnings be cut in half? What about a dividend freeze if things get really bad? At 4+% yield and reinvested, I can be very patient.
I'd recommend M$$I's suggestion -- buy in pieces. I'm waiting for a further drop since I'm about 2/3 of the way there.