Monday, May 26, 2014

It's About Time

Happy Memorial Day!

I did get a chance this morning to read Barron's for the weekend.  One article that caught my eye was regarding Time Inc. (Time Inc.'s Prospects Make for Good Reading).   This could be a classic example from "You Want to Be a Stock Market Genius". Greenblatt devoted a large section of that book to spin-offs and how they have in total out-performed the market.  I am unable to pull their financial data in an automated format,  but Barron's says they are trading at 10x 2014 operating profit and will yield around 3.6%.  In addition, they are on the official MFI list (though I will note one needs to be careful, when a brand new stock is on the MFI list).  It reminds me a bit of when Liberty spun off STRZA.  That stock pretty much doubled in the first year. Stay tuned - I will be watching for Time, as it seems like a decent candidate for my dividend portfolio.

Barnes & Nobles Anyone?

Barron's also banged the table for BKS again.  Their point is that BKS is really two or three companies in one company, and if they ever split into components, it could really unlock the value.  It seems the Nook division is bleeding red ink like no tomorrow.  If you could kill that, then the retail and college bookstore are profitable and exceedingly cheap. The argument makes sense.  I am not really willing to wade into the stock right now, but will watch.

Chambers Sells $50M of CSCO

Gad, I hate it when CEOs say a ton of bullish things about a stock and then a week later you see them selling a boatload (Insider Selling: John T. Chambers Sells 2,050,000 Shares).  I mean, I understand there can be reasons to sell, but it feels so manipulative. I'd rather he sold after some bad news.

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