In this crazy market there are moments to cherish. The recent collapse has generated memorable quotes from conversations with brokers and analysts. Here are my top 10:
- “No one owns this stock” (Me: “it is 100% owned every day”) Him: “you know what I mean” (Me: “No I don’t”)
- “The company has to take a $4bn write-off, which would be very positive for returns”
- “Why would you think that a State Owned Company will not increase tariffs by 20%?”
- “If you forget the sovereign and macro concerns, it is very cheap” (tied with “”We leave that to the strategists” and “On an absolute basis, the stock is cheap” )
- “Stock overhang should not matter because it gives opportunity to buy cheaper”
- “Seven percent yield is very attractive” (Me: “But sovereign is at 6.5%”) Him: “Why would sovereign matter?”
- “Earnings downgrades are not relevant, although consensus will have to go down 20%”
- “Semi-State Owned Enterprises have less risk because they will be allowed to earn medium profits”
- “I don’t use P/E for valuation, I don’t believe their accounting methods or find them relevant”
- “I don’t look at EV, I’m recommending an equity, not debt”
Of course, these are added to the classics “everything is discounted” and “my estimates are very conservative” etc…
And, as always, never forget the Top Three Sentences to Identify a Great Short when you read a broker report:
- Fundamentals Haven’t Changed
- It’s A Good Company
- Dividend Yield Is Supportive
From meetings with companies, here are my Top 10:
- “It’s not a profit warning, it’s a revision of estimates” (tied with “”this is an opportunity for longer term investors”)
- “Management ownership of stock is low because if we owned a lot of stock it could compromise our long term perspective”
- “This acquisition has not destroyed value. Depends what you define as value creation”
- “Paying the dividend in shares proves our commitment to maintaining shareholder remuneration in difficult times”.
- “A convertible bond is not dilutive because shares will go up more in the long term”
- “Of course we have kept our targets, we are just rebasing them”
- “Our plan has not changed, it has just been postponed”
- “Leverage doesn’t impact fundamentals”
- “In the long term we will be proven right”
- “You cannot judge the valuation of the company on earnings and balance sheet”
- Deservedly… My all time favorite: “We are committed to having the highest dividend yield of our sector“
And from Buyside, the mother of all… “The market is wrong”, “It’s only a correction”, “catalysts abound” or “why is X stock down/up?” … culminating in “My friend has told me that this is going up“.
Daniel Lacalle, June 12, 2012
Brought to mind an epic earnings call with Klockner (KCO GY), Q2 2011, with the stock falling 25%:
-CS analyst: “Would you actually consider personally buying more stock here”?
-KCO Chairman: “When I would be me, I would buy shares”.
In addition, the landlord can be forced to keep each of the equipment
and services regarding the way to obtain gas, electric, heating, water and sanitation in good repair.
If you’re a property owner, you can’t deduct your property owner’s insurance premiums.
Hope it may help you and you should be able to avoid any
type of future problems.