The Alchemy of a Stock Market Wizard

Energy Transfer Equity, L.P. (ETE) Capitalization Rate

2011-12-22T17:32:00.000-08:00

(in millions except PPS)

Price - $39.34
Shares Outstanding - 222.97
Market Capitalization - $8,769.78
Debt & Preferreds - $12,063.24
Cash & Equivalents - $170.87
Enterprise Value - $20,662.15
Normalized 2011 EBIT - $1,352.79
Pre-Tax Cap Rate - 6.55%

Notes: Normalization based on cap spending prior to 2008. ETE deal for Southern Union Co. (SUG) recently approved by shareholders, a $9.4 billion acquisition to include debt.

Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

iGATE Corporation (IGTE) Capitalization Rate

2011-12-22T16:12:00.000-08:00

(in millions except PPS)

Price - $15.86
Shares Outstanding - 56.61
Market Capitalization - $897.81
Debt & Preferreds - $1,167.10
Cash & Equivalents - $432.41
Enterprise Value - $1,632.50
2011 EBIT Runrate - $90.28
Pre-Tax Cap Rate - 5.53%

Note: 1st came across company in Fortune Dec. 2011 issue and in my Dec screen.

Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Bally Technologies, Inc. (BYI) Capitalization Rate

2011-12-22T14:19:00.000-08:00

(in millions except PPS)

Price - $38.14
Shares Outstanding - 43.34
Market Capitalization - $1,653.14
Interest Bearing Debt - $506.66
Cash & Equivalents - $61.94
Enterprise Value - $2,097.87
2011 EBIT - $232.07
Pre-Tax Cap Rate - 11.06%
Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

JB Hunt Transport Services Inc. (JBHT) Capitalization Rate

2011-12-21T23:19:00.000-08:00

(in millions except PPS)

Price - $44.91
Shares Outstanding - 116.73
Market Capitalization - $5,242.37
Debt - $768.03
Cash & Equivalents - $7.75
Enterprise Value - $6,002.65
normalized 2011 EBIT - $223.11
Pre-Tax Cap Rate - 3.72%

Note: After pouring over this one, risk/reward favors the house. May reach new high 1Q/2Q 2012 ensued by a large sell off. Expectations in Mr. Market's sentiment won't be met.

Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Tempur Pedic International Inc. (TPX) Capitalization Rate

2011-12-21T21:21:00.000-08:00

(in millions except PPS)

Price - $51.71
Shares Outstanding - 65.93
Market Capitalization - $3,409.29
Debt - $508.50
Cash & Equivalents - $103.01
Enterprise Value - $3,814.77
2011 EBIT Runrate - $348.29
Pre-Tax Cap Rate - 9.13%
Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Medco Health Solutions Inc. (MHS) Capitalization Rate

2011-12-20T21:07:00.000-08:00

(in millions except PPS)

Price - $55.56
Shares Outstanding - 387.06
Market Capitalization - $21,505.02
Debt - $5,038.60
Cash & Equivalents - $166.80
Enterprise Value - $26,376.82
2011 EBIT Runrate - $2,725.73
Pre-Tax Cap Rate - 10.33%
Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Express Scripts Inc. (ESRX) Capitalization Rate

2011-12-20T20:12:00.000-08:00

(in millions except PPS)

Price - $44.54
Shares Outstanding - 486.51
Market Capitalization - $21,669.07
Debt - $3,989.20
Cash & Equivalents - $1,062.60
Enterprise Value - $24,595.67
2011 EBIT Runrate - $2,638.80
Pre-Tax Cap Rate - 10.73%
Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

CEC Entertainment (CEC) Capitalization Rate

2011-12-20T19:44:00.000-08:00

(in millions except PPS)

Price - $34.67
Shares Outstanding - 18.86
Market Capitalization - $653.75
Debt - $366.56
Cash & Equivalents - $18.88
Enterprise Value - $1,001.44
2011 EBIT Runrate - $116.15
Pre-Tax Cap Rate - 11.60%
Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Sunoco Inc. (SUN) Capitalization Rate

2011-12-20T19:23:00.000-08:00

(in millions except PPS)

Price - $39.49
Shares Outstanding - 106.76
market capitalization - $4,215.85
interest bearing debt - $3,524.00
Cash & Equivalents - $1,656
Enterprise Value - $6,083.85
2011 EBIT runrate - $517.33
Pre-tax Cap Rate - 8.50%
Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Valassis Communications Inc. (VCI) Capitalization Rate

2011-12-20T13:42:00.000-08:00

(in millions except PPS)

Price - $19.11
Shares Outstanding - 44.75
market capitalization - $855.26
interest bearing debt - $606.31
Cash & Equivalents - $91.03
Enterprise Value - $1,370.54
2011 EBIT - $267.59
Pre-tax Cap Rate - 19.52%
Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Jack in the Box Inc. (JACK) Capitalization Rate

2011-12-19T17:38:00.000-08:00

(in millions except PPS)

Price - $20.35
Shares Outstanding - 43.97
market capitalization - $894.81
interest bearing debt - $468.50
Cash & Equivalents - $11.42
Enterprise Value - $1,351.89
2011 EBIT - $124.69
Pre-tax Cap Rate - 9.22%
Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Gentiva Health Services, Inc. (GTIV) Capitalization Rate

2011-12-19T16:55:00.000-08:00

(in millions except PPS)

Price - $6.57
Shares Outstanding - 30.79
market capitalization - $202.32
interest bearing debt - $1,008.13
Cash & Equivalents - $221.09
Enterprise Value - $989.35
2011 EBIT runrate - $154.14
Pre-tax Cap Rate - 15.58%
Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Strayer Education Inc. (STRA) Capitalization Rate

2011-12-19T12:44:00.000-08:00

(in millions except PPS)

Price - $91.86
Shares Outstanding - 12.00
market capitalization - $1,102.77
interest bearing debt - $0
Cash & Equivalents - $76.49
Enterprise Value - $1,026.28
2011 EBIT runrate - $187.64
Pre-tax Cap Rate - 18.28%
Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

International Shipholding Corporation (ISH) Capitalization Rate

2011-12-19T11:14:00.000-08:00

(in millions except PPS)

Price - $19.40
Shares Outstanding - 7.23
market capitalization - $140.23
Long-term debt - $306.10
Cash & Equivalents - $35.52
Enterprise Value - $410.81
normalized 2011 EBIT - $29.35
Pre-tax Cap Rate - 7.15%
Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Shadows of the Banking Industry

2011-12-18T11:26:00.001-08:00

There's About To Be A Huge Surge In Foreclosures http://www.businessinsider.com/a-new-wave-of-foreclosures-is-coming-2011-12

Windstream Corporation (WIN) Capitalization Rate

2011-12-17T21:23:00.000-08:00

(in millions except PPS)

Price - $11.58
Shares Outstanding - 515.82
market capitalization - $5,973.14
Long-term debt - $7,373.70
Cash & Equivalents - $34.30
Enterprise Value - $13,312.54
2011 EBIT runrate - $1,340.53
Pre-tax Cap Rate - 10.07%
Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Genco Shipping & Trading Limited (GNK) Capitalization Rate

2011-12-17T20:54:00.000-08:00

(in millions except PPS)

Price - $6.93
Shares Outstanding - 35.97
market capitalization - $249.24
Long-term debt - $1,755.16
Cash & Equivalents - $291.79
Enterprise Value - $1,712.62
2011 EBIT runrate - $123.00
Pre-tax Cap Rate - 7.18%
Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Good Industry Trade Website

2011-12-17T11:50:00.000-08:00

Great website covering news on companies in the Teleco, Next Generation Networks, Broadband, and other critical service provider Industry.
http://www.fiercetelecom.com/

Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

What Makes International Paper Better?

2011-12-16T17:19:00.000-08:00

In my last price analysis, International Paper sported a pretax capitalization rate of roughly 13%. What you may not be aware of is that I was intending to do an analysis on Temple-Inland Inc. The merger agreement announced back in September 2011 by International Paper which was the result of a hostile tender offer for Temple-Inland was a bit pricey for the corrugated packaging and building products company which International Paper is paying $32.00 a share. Despite the high price for Temple-Inland, this makes International Paper a strategic acquirer who may benefit very well in the long run with this acquisition by adding to the bottom-line and consolidating the industry. International Paper may have not be a bad idea even though it may have not appeared on any of my screens.

Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

International Paper Company (IP) Capitalization Rate

2011-12-15T20:22:00.000-08:00

Price - $27.53
Shares Outstanding - 437,070,722
market capitalization - $12,032.56
Long-term debt - $8,445.00
Cash & Equivalents - $2,722.00
Enterprise Value - $17,755.56
2011 EBIT runrate - $2,399.67
Pre-tax Cap Rate - 13.52%
Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. The commentaries are for informational and educational purposes only. Rather, these commentaries are presented solely for the purpose of illustrating my investment approach. These commentaries contain my views and opinions at the time such commentaries were written and are subject to change thereafter. Under no circumstances should a person act upon the securities mentioned without first consulting an investment adviser as to the suitability of such investments for his specific situation. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Cracker Barrel Old Country Store, Inc.(CBRL) Capitalization Rate

2011-12-14T19:39:00.000-08:00

Price - $49.30
Shares Outstanding - 22.95
market capitalization - $1,131.41
Long-term debt - $550.24
Cash & Equivalents - $49.77
Enterprise Value - $1,631.88
expected 2012 EBIT - $159.81
Pre-tax Cap Rate - 9.79%
Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.

Knoll Inc.(KNL) Capitalization Rate

2011-12-09T17:38:00.000-08:00

(in millions except PPS)
Price - $14.76
Shares Outstanding - 47.75
market capitalization - $704.75
Long-term debt - $217.00
Cash & Equivalents - $10.74
Enterprise Value - $911.02
TTM EBIT - $102.75
Pre-tax Cap Rate - 11.28%

Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.

CPI Corp.(CPY) Capitalization Rate

2011-12-09T17:04:00.000-08:00

(in millions except PPS)
Price - $4.93
Shares Outstanding - 7.04
market capitalization - $34.70
Long-term debt - $70.7
Cash & Equivalents - $2.64
Enterprise Value - $102.76
TTM EBIT - $11.07

Pre-tax Cap Rate - 10.78%
Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.

Koppers Holdings Inc.(KOP) Capitalization Rate

2011-12-09T16:35:00.000-08:00

(in millions except PPS)
Price - $34.45
Shares Outstanding - 20.60
market capitalization - $709.78
Long-term debt - $301.6
Cash & Equivalents - $59.2
Enterprise Value - $952.18
TTM EBIT - $106.8
Pre-tax Cap Rate - 11.22%

Industrial Services of America Inc.(IDSA) Capitalization Rate

2011-12-08T20:20:00.000-08:00

(in millions except PPS)
Price - $5.74
Shares Outstanding - 6.94
market capitalization - $39.84
Long-term debt - $46.60
Cash & Equivalents - $3.04
Enterprise Value - $83.40
TTM EBIT - $5.29

Pre-tax Cap Rate - 6.34%
Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.