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***Official*** 2012 Stock Market Thread

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Intel17 said:
AMD is on a crazy, crazy tear. It closed at $8.25...jesus...
Click to expand...

Dryships too. up 9% today.
dont want to sound like i'm complaining but WTF?

Also,
at 150% stock. have 50% left in my margin.
itching to add Sirius radio.
YES/NO?


edit:
what happened to AMD 8days ago that started it's +20% run? 😱
 
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KB said:
$2.65 / qtr
$10.60 / year

Thats quite a dividend; however it is still only 1.7%, but there is still a lot of room for it to grow.
Click to expand...

AAPL gets the award for 2012's best destroyer of shareholder money, thus far.

Why buyback stock at $600 when you wouldn't at $200, $300, $400 or $500? If there is that much employee dilution, I don't want to be in the name. If management is that stupid, I don't want to be in the name.

Oh well today gave me a good excuse to finally ditch.

All gone...
 
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The-Noid said:
AAPL gets the award for 2012's best destroyer of shareholder money, thus far.

Why buyback stock at $600 when you wouldn't at $200, $300, $400 or $500? If there is that much employee dilution, I don't want to be in the name. If management is that stupid, I don't want to be in the name.

Oh well today gave me a good excuse to finally ditch.

All gone...
Click to expand...
I don't have a position and don't foresee opening one again soon.

But isn't the announced buyback tiny? I agree with you that this is a ploy to offset ESO dilution. Guess it's good timing for you to book a healthy gain.
 
manly said:
I don't have a position and don't foresee opening one again soon.

But isn't the announced buyback tiny? I agree with you that this is a ploy to offset ESO dilution. Guess it's good timing for you to book a healthy gain.
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~$15 to $20B in buyback over three years.

The dividend is just a way to mask the fact there is going to be huge dilution in the form of stock option exercise. 932MM shares * (2.65 * 4) = $9.879B annualized in dividends over three years that is $29.637B in dividends. They have announced $45B in returns to shareholders that is $15 to $16B in shareholder buybacks.

Seems like a lot of dilution for options or just really poor capital management to buy shares here.

This is also probably a rationalization for me. I wanted an excuse to get out. This just fits well.
 
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I read a logical reason on Slashdot. When they offer the dividend, the stock price will take a hit, the buyback would be used to offset the drop. Though both will take a bite out of their cash fund.
 
JTsyo said:
I read a logical reason on Slashdot. When they offer the dividend, the stock price will take a hit, the buyback would be used to offset the drop. Though both will take a bite out of their cash fund.
Click to expand...

In the world of finance 101 this makes sense.

Dividends and buybacks are an equivalence. If one knows the dividend is coming they buy into the ex-dividend to get the dividend, which comes off the share price. In the form of a buyback the company does the buying for you.

Long term studies show that it makes no difference if you buy back stock or pay a dividend to return capital to your shareholders. Having said that recent studies continue to show that companies continually buy back shares at their high points, as the company itself becomes the marginal buyer.
 
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3 million new iPads sold over the weekend, that's nuts. That's not even taking into account people who decided to jump on the newly discounted $400 iPad 2. The 4S did 4 million in its first weekend, and we all know how that turned out. Just under $605 right now in after hours.
 
The-Noid said:
AAPL gets the award for 2012's best destroyer of shareholder money, thus far.

Why buyback stock at $600 when you wouldn't at $200, $300, $400 or $500? If there is that much employee dilution, I don't want to be in the name. If management is that stupid, I don't want to be in the name.

Oh well today gave me a good excuse to finally ditch.

All gone...
Click to expand...

The-Noid said:
In the world of finance 101 this makes sense.

Dividends and buybacks are an equivalence. If one knows the dividend is coming they buy into the ex-dividend to get the dividend, which comes off the share price. In the form of a buyback the company does the buying for you.

Long term studies show that it makes no difference if you buy back stock or pay a dividend to return capital to your shareholders. Having said that recent studies continue to show that companies continually buy back shares at their high points, as the company itself becomes the marginal buyer.
Click to expand...

This is what many people don't understand about share buybacks.
There hasn't been any proof that companies that initiate buybacks do so when their stock is actually cheap or time the market correctly. RIMM is a perfect example here. They initiated a buyback June 2010 to buy their overvalued stock...Look were the stock is now. Another example here is SHLD doing massive buyback programs at $135/share.

Other companies do buybacks to hide massive compensation plans. Instead of issuing new shares, these companies will do a buyback and hand those shares out from the exercise.
A perfect example of that is this:
Between June 2002 and June 2005, Microsoft(MSFT) cheered itself for spending $18 billion to buy back 674 million shares. But at the end of the three years, there were just as many shares outstanding as the beginning. Why? Because the company issued 666 million new shares during the same period. In other words, it was repurchasing shares with one hand and doling them out with the other.
Who did they dole out those new shares to? Corporate execs stock options? Employees stock options? Restricted stock units to who? It certainly was not the shareholders.

Let's look at most buy-backs: Management waters the stock, just like in the 1920"s by granting huge stock options to themselves.

Then, they have to do a buy-back to keep the EPS from sinking. The net result is a transfer of what should have been dividends to the common shareholders into the pockets of management at capital gains rates.

How in the world does that create any value for the shareholders?
I'll give my MBA back if you can explain that to me.
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http://seekingalpha.com/article/211969-why-i-don-t-like-stock-buybacks#comment-1084837
 
Most of the time, companies buy back shares jsut to offset the dilution caused by compensation that the executives and management get. I see Lothar got into this

Apple has been a massive shareholder diluter. In 5 years they went from 853 million shares to 929 million.

Apple buying back stock is a big yawn.
 
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apac said:
Ah 🙁 bummer. You win some, you lose some.

If you like high dividend stocks check out PDLI. 9.5% dividend yield and (in my totally unprofessional opinion) feels like a solid stock. I looked at it for a month before buying in.
Click to expand...

Why do you feel that PDLI is a solid stock?
Not looking to berate you or anything, just fishing for information I may not already know about.
 
Lothar,

true ... very true. The occasional slow growth gem is hidden out there that is buying back stock.

PDLI ... I was looking at that a while back. I think it is a Seth Klarman holding .... warning ... Seth Klarman buys buckets of cigeratte butts. Cigerette butt refers to a stock that may be on it's last puff.
 
lothar said:
Why do you feel that PDLI is a solid stock?
Not looking to berate you or anything, just fishing for information I may not already know about.
Click to expand...

PDLI is not a simple case because it holds valuable patents that expire by 2014. Unless something dramatically changes the company will liquidate in 2016. However, in the mean time it is generating a lot of revenue that goes straight to the shareholders, which explains the high dividend. The gamble is that the total dividend return + final shareholder payout (or share price you sell at) will be greater than the price per share you paid. The stock is hovering at what people are estimate the net payout to be - as that estimate increases, so does the stock price. (edited this because my math was previous math was wrong)

Then there is additional risk/reward in litigation and drug approval. There are a couple new drugs that seem likely to be approved in 2012/2013 that will increase revenue. There are also a couple open lawsuits that may also be lucrative. More revenue = more payout to shareholders.

So, when I say a solid stock, I mean that (for the right price) I'm hoping to see a decent ROI when all is said and done. There is a huge upside with the litigation, but admittedly, a significant risk as well. My portfolio is about 15% PDLI.
 
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hmm Amazon is up 9% from when I bought in. Considering bailing out now and getting back in later. Still think they'll break 200, don't want to miss that though.
 
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