Blog Archives

IAC/InterActiveCorp

9/28/2015

IAC is a leading media and Internet company focused on the areas of search, applications, online dating, media and eCommerce. Ranked by Fortune magazine's annual standing of the world's most admired companies in the Internet Services & Retailing sector for many years, IAC's family of websites is one of the largest in the world, with over two billion monthly visits reaching users in more than 200 countries.

IAC Headquarters

IAC/InterActiveCorp operates as a media and Internet company in the United States and internationally. It operates through four segments: The Match Group, Search & Applications, Media, and eCommerce. The Match Group segment provides subscription-based and ad-supported online personals services through its Websites and applications. This segment also operates The Princeton Review that offers college and graduate school admissions test preparation and college readiness services; Tutor.com, which offers various live, one-on-one, and on-demand tutoring services; and Daily Burn, a health and fitness property that provides streaming fitness and workout videos in various platforms. The Search & Applications segment operates various Websites to offer search services, and content and other services comprising Ask.com, About.com, CityGrid, Dictionary.com, Investopedia, PriceRunner, and Ask.fm; and develops, markets, and distributes various downloadable applications, which provide users the ability to access search services. The Media segment offers Vimeo, a video sharing platform that provides video creators tools to share, distribute, and monetize content online, as well as offers viewers a clutter-free environment to watch content in various Internet-enabled devices; and The Daily Beast, a Website dedicated to news, commentary, culture, and entertainment. This segment also provides Electus, an integrated multimedia entertainment studio to produce video content for distribution, as well as operates Electus Digital, which consists of various Websites and properties. The eCommerce segment offers HomeAdvisor, an online marketplace for matching consumers with home services professionals; and operates Shoebuy, an Internet retailer of footwear and related apparel and accessories. The company, formerly known as InterActiveCorp, was founded in 1986 and is headquartered in New York, New York.
(Summary) (Company) (Chart)

27 September 2015
Price $66.90
1yr Target $85.60
Analysts 15
Dividend $1.36
Payout Ratio 39.30%
1yr Cap Gain 27.95%
Yield 2.03%
1yr Tot Return 29.98%

EPS (ttm) $3.46
EPS next yr $4.13
EPS next 5yr 19.85%
1yr Potential $81.98
P/E 19.34
PEG 0.97
Beta 0.74
Market Cap $5.55 Bil
Revenues $3.16 Bil
Earnings $306.40 Mil
Profit Margin 9.68%

1yr EarnGR 42.24%
3yr EarnGR 35.83%
5yr EarnGR ---
1yr DivGR 31.25%
3yr DivGR 72.84%
5yr DivGR ---
Quick Ratio 1.90
Current Ratio 1.90
Debt/Equity 0.59
ROA 11.70%
ROE 25.60%

Company History

IAC was incorporated in 1986 under the name Silver King Broadcasting Company, as a subsidiary of the Home Shopping Network. In 1992, Silver King was spun off to Home Shopping Network shareholders as a separately traded public company. In August 1995, Barry Diller bought a controlling stake in Silver King Communications, taking control of the television company as Chairman and CEO. A year later, Silver King Communications and Home Shopping Network merged and acquired a third company, Savoy Pictures Entertainment. The three companies were combined to create HSN, Inc.

HSN, Inc. acquired several assets in the late-1990s. In May 1997, the company acquired a controlling stake in Ticketmaster Group; in February 1998, it acquired the majority of the TV assets from Universal Studios (including USA Networks, Sci-Fi Channel, and Universal Television's domestic production and distribution arms). The company's name was changed to USA Networks, Inc. at this point, after the Universal deal was approved. Continuing its acquisition strategy, the company acquired Match.com in May 1999 and the Hotel Reservation Network in June 1999.

In the early 2000s, USA Networks began divesting itself of its traditional television broadcasting and production units. In May 2001, Univision Communications acquired USA Broadcasting - a division of USA Networks including 13 fully owned stations. The following year, 2002, Vivendi bought the rest of USA Networks' broadcast entertainment businesses, including the USA Network and Sci-Fi Channel. This led to the creation of a new entity called Vivendi Universal Entertainment (Barry Diller became the CEO of the newly created company). In the midst of this transition, USA Networks continued to build up its online portfolio. In July of 2001, the company entered the online travel business with its acquisition of Expedia, followed the next year by an acquisition of Interval International.

Search and Applications

Personals

Media

Local

Other Sites

Following the shift in focus to online assets, the company changed its name to USA Interactive in May 2002; InterActiveCorp in June 2003; and finally to IAC/InterActiveCorp in July 2004.

In August 2003, IAC acquired the online mortgage comparison site LendingTree, and in September, the company added discount travel website HotWire to its growing list of acquisitions. In October, Transat A.T. Inc. entered into an agreement to sell its French subsidiary Anyway.com to IAC, for an enterprise value of €53 million (approximately CAD$81.6 million, $62.7 million USD).

In 2004 and 2005, IAC continued its growth through acquisition, adding assets including TripAdvisor, ServiceMagic, and AskJeeves.com. It also launched Gifts.com during this period. In August 2005, the company bundled together its travel-related sites, including Expedia, and spun them off as a new publicly traded company on the NASDAQ. Additional acquisitions in 2006 included Shoebuy.com and CollegeHumor.com.

In May 2008, IAC and Ask.com acquired Lexico, the owner of Dictionary.com, Thesaurus.com, and Reference.com. In August 2008, IAC spun off several of its businesses, including: Tree.com, the Home Shopping Network, Ticketmaster, and Interval Leisure Group. 2009 saw the acquisition of Urbanspoon.com and PeopleMedia, and the launch of production company Notional.

In July 2009, IAC partnered with Ben Silverman to create Electus, a company focused on multimedia production and online distribution.

In 2010, IAC acquired dating site Singlesnet and fitness site DailyBurn. Later that year, Barry Diller stepped down as CEO of IAC. In February 2011, IAC acquired the free-to-contact dating site, OK Stupid, for $50 million. In April 2011, IAC extended its deal with Google, originally worth $3.5 billion, to hand over all search advertising on Ask.com and other IAC search products through March 31, 2016.

On February 14, 2012, Barry Diller introduced Aereo, an Internet television service. In March 2012 Aereo started streaming all of the broadcast networks to smartphones, tablets and televisions with Internet capability. On June 25, 2014, in a 6-3 Opinion, the U.S. Supreme Court ruled against Aereo. The Court found that Aereo infringed upon the rights of copyright holders.

On August 26, 2012, IAC acquired About.com from the New York Times.

In January 2013, IAC acquired online tutoring firm Tutor.com. On August 3, 2013, IAC sold Newsweek to the International Business Times on undisclosed terms. In November 2013, IAC acquired Investopedia and PriceRunner from ValueClick.

On December 22, 2013, IAC fired their Director of Corporate Communications, Justine Sacco after an AIDS joke she posted to Twitter went viral, being re-tweeted and scorned around the world. The incident became a byword for the need for people to be cautious about what they post on social media.

On August 14, 2014, IAC acquired Ask.fm. In January 2015 IAC sold Urbanspoon to Zomato for $52 million. On July 14,2015, the dating service PlentyofFish was purchased for $575 million in cash to become a part of The Match Group.

My Perspective

This company can be a little difficult to understand simply because of its history and the many twists and turns its taken over the years. But there's no doubt that although you may have never heard of this company, you surely have used many of their sites. And that's the real secret here. These sites are everywhere and the company is constantly buying, selling and reshaping the organization over time.

What I like most about this company are the fundamentals listed above. They're very nice and comforting for an investor like myself. And if this company was easier to understand, an investment in it would be a no-brainer, especially since it has pulled back so far with the rest of the market.

So here's what I'm going to do in the near future. I'm going to start a small position and see how the company grows over time. If it performs as I expect, I'll be adding more shares quickly to capture that expected 30% expected return on investment over the next year. And with an expected earnings per share growth rate of almost 20% over the next five years, this could end up occupying a slot in my portfolio for a very long time.

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Thor and Winnebago

9/24/2015

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As the Baby Boomers continue to transition into their retirement years, many of them are starting to hit the road and do all those things they didn't have time to do during their working years. For many that means buying a recreational vehicle (RV) and hitting the road. And that's pumping up the top line of the RV manufacturers. Today I'd like to look at two of those companies, Thor and Winnebago Industries, and see just how well their fundamentals stack up, and then try to determine if either one of them could possibly be a potential candidate for accumulation.

As a consumer, a dividend investor, and a future retiree one day, I'm also interested in the possibility of traveling around the country seeing the nation while trading and investing in comfort. Who says you can't have fun while you're working?

Thor Industries, Inc. designs, manufactures, and sells a range of recreational vehicles, and related parts and accessories in the United States and Canada. It operates through two segments, Towable Recreational Vehicles and Motorized Recreational Vehicles. The company offers travel trailers under the trade names of Airstream International, Classic Limited, Sport, Flying Cloud, Land Yacht, and Eddie Bauer; Interstate and Autobahn Class B motorhomes; conventional travel trailers and fifth wheels under the trade names of Cruiser, Rushmore, Zinger, Elevation, ReZerve, Sunset Trail, Montana, Springdale, Hornet, Sprinter, Outback, Laredo, Alpine, Bullet, Fuzion, Raptor, Passport, Cougar, Coleman, Kodiak, Aspen Trail, Voltage, Landmark, Bighorn, Sundance, Elk Ridge, Trail Runner, Cyclone, Prowler, Wilderness, Sportsmen, Vision, Spree, MXT, Durango, SportTrek, and Sonic; and luxury fifth wheels under the name of Redwood. It also manufactures and sells gasoline and diesel Class A and Class C motorhomes under the Four Winds, Hurricane, Windsport, Chateau, Daybreak, Challenger, Tuscany, Outlaw, Palazzo, Axis, Vegas, and A.C.E. trade names; lightweight travel trailers, fifth wheels, and specialty products under the Camplite, Quicksilver, Bearcat, and Axxess trade names; and equestrian recreational vehicle products with living quarters under the Trail Hand, Trail Express, Stratus, and Stratus Express trade names. It markets its recreational vehicles through independent dealers. Thor Industries, Inc. was founded in 1980 and is based in Elkhart, Indiana.
(Summary) (Company) (Chart)

22 September 2015
Price $51.32
1yr Target $70.00
Analysts 7
Dividend $1.08
Payout Ratio 28.87%
1yr Cap Gain 36.39%
Yield 2.10%
1yr Tot Return 38.49%

EPS (ttm) $3.74
EPS next yr $4.46
EPS next 5yr 20.00%
1yr Potential $89.20
P/E 13.72
PEG 0.69
Beta 1.20
Market Cap $2.69 Bil
Revenues $3.99 Bil
Earnings $199.80 Mil
Profit Margin 4.98%

1yr EarnGR 16.31%
3yr EarnGR 20.16%
5yr EarnGR 60.96%
1yr DivGR 21.95%
3yr DivGR 25.70%
5yr DivGR 28.99%
Quick Ratio 1.60
Current Ratio 2.20
Debt/Equity 0.00
ROA 13.50%
ROE 19.40%

Winnebago Industries, Inc. manufactures and sells recreation vehicles primarily for use in leisure travel and outdoor recreation activities. The company manufactures motor homes, which are self-propelled mobile dwellings that provide living accommodations and include kitchen, dining, sleeping, and bath areas, as well as a lounge. It also offers travel trailers and fifth wheel trailers; original equipment manufacturing parts, including extruded aluminum and other component products for other manufacturers; and commercial transit buses to public and private transportation agencies for use in community based transit programs, para transit applications, hospitality shuttles, car rental shuttles, airport shuttles, and other various applications under the trade names of Metro. In addition, the company provides commercial vehicles, which are motorhome shells for law enforcement command centers, and mobile medical and dental clinics, as well as offers commercial vehicles as bare shells to third-party upfitters. The company sells its products primarily under the Winnebago, Itasca, and Winnebago Touring Coach brand names through independent dealers in the United States and Canada. Winnebago Industries, Inc. was founded in 1958 and is headquartered in Forest City, Iowa.
(Summary) (Company) (Chart)

22 September 2015
Price $19.49
1yr Target $26.20
Analysts 5
Dividend $0.36
Payout Ratio 22.92%
1yr Cap Gain 34.42%
Yield 1.84%
1yr Tot Return 36.26%

EPS (ttm) $1.57
EPS next yr $1.82
EPS next 5yr 15.80%
1yr Potential $28.75
P/E 12.41
PEG 0.79
Beta 2.28
Market Cap $524.87 Mil
Revenues $971.40 Mil
Earnings $42.40 Mil
Profit Margin 4.32%

1yr EarnGR 45.13%
3yr EarnGR 58.00%
5yr EarnGR ---
1yr DivGR 0.00%
3yr DivGR ---
5yr DivGR ---
Quick Ratio 1.70
Current Ratio 3.40
Debt/Equity 0.00
ROA 12.10%
ROE 21.20%

My Perspective

Looking at the fundamental numbers above it's apparent to me that Thor Industries is the company to invest in because there are just too many holes in Winnebago Industries earnings and dividend growth rates. And these numbers are rather important to me. Thor Industries earnings and dividend growth rates are outstanding and the estimated one year total return of almost 40% is tough to ignore.

But a close look at the available fundamentals for Winnebago Industries reveals a company that is probably also a great company to add to my portfolio. And I would consider adding it to my accounts if I had tons of money, but I only have limited funds so my candidate for accumulation is Thor. And I intend to begin accumulating shares as soon as funds become available.

Finally, I think this category of investing (RVs) has a extended move higher for many years to come. I also believe that because the Baby Boom Generation has just started to retire these last few years and this wave of retirees will continue to increase through 2025. And that generation is both large and wealthy.

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Determining Share Value

9/23/2015

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Trying to determine the true worth of a company’s stock is the holy grail of stock investing for any investor. If a stock’s true worth could be determined, then it would be a simple exercise to compare that worth to the current asking price and then simply buy or short the stock. Life would be easy and Investing would be simple and obvious. And financial freedom and security would be within the grasp of every investor.

Many investors attempt to determine a stock’s worth by simply viewing it as a multiple of a company’s earnings. This is the basis used for calculating the P/E ratio for any company’s stock. But once calculated, what determines the appropriate ratio? Many investors compare individual company’s P/E ration to the P/E ratio of a market average, like the DJIA or the S&P500. If the company’s P/E is larger than the market’s P/E, then the price of the individual stock is overpriced. But this is too simple and really doesn’t take into account the differences in individual companies.

A review of several different company’s P/E ratio will quickly show that the ratios of different companies differ greatly. That’s because investors value different companies differently. Companies that grow earnings at a faster pace are often considered more valuable and hence, are priced higher. The result is a higher P/E ratio. Companies that grow earnings at a slower pace, on the other hand, are often priced lower resulting in a lower P/E ratio.

Since earnings growth rates often vary slightly from year to year for most companies, I tend to look at a company’s expected growth rate over the next five years. While that’s only an estimate, it’s a smoothed or averaged expectation of upcoming earnings increases. I then use that earnings growth rate as my expectation of where the P/E ratio of any given company will gravitate toward over time. I then calculate a company’s value as a relationship between a company’s earnings growth rate and it’s stock price.

So in the process of trying to determine a company’s true worth, I tend to multiply a company’s five year earnings growth rate by a company’s next year estimated earnings per share to determine the value of the company one year into the future. From this it’s simply a comparison of next year’s expected price divided by the current price to determine the percentage increase over the next year. If that increase meets my minimum requirement, then that company becomes a possible candidate for accumulation.

The next thing I do is check to see if the company has a rising dividend. If not, then it’s discarded. If it does, I check to see just how many years its been increasing, and obviously the longer the better. I also check to make sure that the payout ratio is less than 100% because any company paying out more than that can not possibly continue to pay a dividend for long.

I also sort my list of candidates for companies that have a quick ratio greater than one and a current ratio greater than one. If either of these are below one the chances of the company paying a dividend for very long are slim since the company’s assets are less than its liabilities.

The last couple of checks involve looking at the debt to equity level to ensure that there’s more equity than debt, for obvious reasons. And ensuring that there are expected positive earnings in the next year and the next five years. Once I sort through all those requirements, I generally have a nice list of companies that I expect will have a higher price next year as well as a growing dividend.

My final comparison is between the one year expected price, as calculated above, with the one year target price as calculated by a number of analysts. If they’re similar, I have a lot of confidence in both my calculation and the analysts’ conclusions. If they’re not, I investigate further to try to determine which number is correct.

I’m sure others have dozens of different ways of estimating the value of a company’s stock but this is how I do it. I realize that a lot of the numbers I use are calculated guesses and assumptions, but when you’re dealing with the future no one has the facts. Only assumptions.

In the end, I’m just looking for the best possible investment I can find. That’s why I calculate these numbers over and over and over again. They’re estimates and they can change over time, as all estimates will do. And then I compare them to each other in order to buy the shares of the best company I can find.

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Owens Corning

9/20/2015

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Owens Corning's creation of the first fiberglass reinforced plastic car body was the company's most famous product because it was used by General Motors in the production of the first Corvette in 1953. But the company is much more. Owens Corning is the world's largest manufacturer of insulation, roofing and fiberglass composites which is used extensively by the home builders and home remodelers. The company was formed in 1935 as a partnership between two major American glassworks, Corning Glass Works and Owens-Illinois. Three years later, on 1 November 1938, Owens Corning was spun off as a separate standalone entity.

The company's use of asbestos as a fireproofing agent led to major medical liabilities and the company was forced to file for Chapter 11 bankruptcy in 2000. A subsequent reorganization and recapitalization allowed the company to emerge from Chapter 11 in October 2006.

Today Owens Corning's products and systems save energy and improve personal comfort in both commercial and residential buildings. Through its glass reinforcements business, the company makes thousands of products lighter, stronger and more durable for the construction industry. Owens Corning had sales of $5.3 billion in 2014 and currently employs approximately 15,000 people in 26 countries. Additionally, Owens Corning has been a Fortune 500 company for 61 consecutive years.

Owens Corning produces and sells glass fiber reinforcements and other materials for composite systems; and residential and commercial building materials worldwide. It operates in three segments: Composites, Insulation, and Roofing. The Composites segment manufactures, fabricates, and sells glass reinforcements in the form of fiber; and manufactures and sells glass fiber products in the form of fabrics, mat, veil, and other specialized products. Its products are used in pipe, roofing shingles, sporting goods, consumer electronics, telecommunications cables, boats, aircraft, defense, automotive, industrial containers, and wind-energy applications in the power and energy, housing, water distribution, industrial, transportation, consumer, and aerospace/military markets. The Insulation segment manufactures and sells fiberglass insulation into residential, commercial, industrial, and other markets for thermal and acoustical applications; and manufactures and sells glass fiber pipe insulation, flexible duct media, bonded and granulated mineral wool insulation, and foam insulation used in above- and below-grade construction applications. It sells its products primarily to the insulation installers, home centers, lumberyards, retailers, and distributors. The Roofing segment manufactures and sells residential roofing shingles and oxidized asphalt materials used in residential and commercial construction, and specialty applications. This segment sells its products through home centers, lumberyards, retailers, distributors, and contractors, as well as to roofing contractors and distributors for built-up roofing asphalt systems and to manufacturers various other industries, including automotive, chemical, rubber, and construction. The company was founded in 1938 and is headquartered in Toledo, Ohio.
(Summary) (Company) (Chart)

20 September 2015

Price $46.24
1yr Target $48.34
Analysts 16
Dividend $0.68
Payout Ratio 41.46%
1yr Cap Gain 4.54%
Yield 1.47%
1yr Tot Return 6.01%

EPS (ttm) $1.64
EPS next yr $2.90
EPS next 5yr 28.10%
Est Price next yr $81.49
P/E 28.20
PEG 1.00
Beta 1.86
Market Cap $5.44 Bil
Revenues $5.26 Bil
Earnings $194.00 Mil
Profit Margin 3.68%

1yr EarnGR 11.69%
3yr EarnGR -4.99%
5yr EarnGR 30.74%
1yr DivGR 6.25%
3yr DivGR ---
5yr DivGR ---
Quick Ratio 1.30
Current Ratio 2.10
Debt/Equity 0.59
ROA 2.50%
ROE 5.20%

The Company's History

Owens Corning was formed in Toledo, Ohio, in 1935. During its first year it developed Navy Board, a lightweight, nonflammable insulation with a finished wall surface. This was its main product throughout the World War II years. In 1944 the company produced and began selling the first fiberglass reinforced plastic boat hull.

After the war, as car factories were converted from army material back to auto production, the company worked with automakers to produce the first fiberglass reinforced plastic car body. In 1953, General Motors used this type of body in the production of the Chevrolet Corvette.

In 1954, the company invented a process to make centrifugally spun fiberglass wool, which quickly became the standard for producing fiberglass insulation. In 1957 the company launched the "Comfort Conditioned Home" program to promote sales of residential insulation.

In 1977, it acquired a shingle and asphalt company and started the manufacture of fiberglass reinforced roofing shingles, the current industry standard.

In 1980, it licensed United Artists' Pink Panther cartoon character as its mascot for the insulation, and trademarked its product's pink color in 1987.

In 2000 the company was forced to file for Chapter 11 bankruptcy because of civil liabilities in three 1995-1999 lawsuits. The lawsuits concerned the use of asbestos in its Kaylo product, a high-temperature calcium silicate pipe insulation, manufactured by Owens Corning from 1952 to 1972. After a successful reorganization and recapitalization, the company emerged from Chapter 11 on October 31, 2006.

In 2007, the company expanded when it acquired Saint-Gobain's building reinforcements and composite fabrics business. Finally in 2011 it developed a process to make formaldehyde free insulation with 50 percent recycled content.

My Perspective

Buying shares of Owens Corning is buying into the idea that the economy is improving going forward, and that both the housing markets and the remodeling markets will improve. In fact, I believe that will be the exact case moving forward. With earnings for Owens Corning estimated to improve better than 20% next year, over 35% the next year, and over 28% on average for the next five years, I think this company's stock price is about to move higher than estimates. And actually quite a bit higher. In fact I believe that the 16 analysts' estimated target of $48.34 is way too low. Even with a P/E ratio of only twenty next year, the estimated stock price would rise to near $58 per share. With a P/E ratio remaining near its estimated earnings growth rate, the price would be nearer to $81 per share. But even at $58, that's a twenty five percent increase over the current price.

Most investors would shy away from any stock with a P/E ratio near 28 but with a PEG ratio of only 1, a P/E of this size is not totally unreasonable. In fact it just reinforces the fact that the company is growing at a very fast rate. And that's the kind of company I'm generally interested in.

While Owens Corning doesn't meet all the parameters I usually look for in a company, it does have enough of them to peak my interest. Like many of my other investments, I intend to start a small position in this security over the next few days or weeks. I then will allow that position to grow naturally through dividend reinvestments and eventually through the sale of derivatives.

I expect this to be a great stock to hold for at least five years. And perhaps longer.

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The Tiffany Network

9/16/2015

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While CBS started out in 1927 as a group of independent radio broadcasters, it quickly expanded into the universe of mass media. And in the years since it's gone through several organizational incarnations but throughout those years the corporation has continued its focus on producing great entertainment. Since 2005 Viacom has been selling off the majority of the company to allow it to stand on its own.

Today CBS has operations in the following segments:

Entertainment: This segment is composed of the CBS Television Network, the CBS Television Studios, the CBS Global Distribution Group (composed of CBS Studios International and CBS Television Distribution), CBS Interactive, and CBS Films
Cable Networks: This segment is composed of Showtime Networks (Showtime, The Movie Channel, and Flix), the CBS Sports Network (the Company’s cable network focused on college athletics and other sports), and the Smithsonian Networks (a venture between Showtime Networks and Smithsonian Institution) which operates the Smithsonian Channel, a basic cable program service.
Publishing: This segment is composed of Simon & Schuster, which publishes and distributes consumer books under imprints such as Simon & Schuster, Pocket Books, Scribner and Atria Books.
Local Broadcasting: This segment is composed of its 30 owned CBS Television Stations and the 117 owned and operated CBS Radio stations in 26 US markets.

CBS Corporation is a worldwide mass media company operating through four segments: Entertainment, Cable Networks, Publishing, and Local Broadcasting. The Entertainment segment distributes a schedule of news and public affairs broadcasts, and sports and entertainment programming; produces, acquires, and distributes programming, including series, specials, news, and public affairs; operates online content networks for information and entertainment; and produces, acquires, and distributes theatrical motion pictures. The Cable Networks segment offers subscription program services, such as original series, theatrical feature films, documentaries, boxing and other sports-related programming, and special events; and owns and operates multiplexed channels. This segment also owns and manages Smithsonian Networks, which operates a channel featuring cultural, historical, scientific, and educational programs; and operates a CBS Sports Network, a 24-hour cable program service that provides college sports and related content. The Publishing segment publishes and distributes adult and children's consumer books in printed, digital, and audio formats; develops special imprints and publishes titles based on the products; and delivers content and promotes its products on its own Websites and general Internet sites, as well as those linked to individual titles. The Local Broadcasting segment owns 30 broadcast television stations; owns and operates 117 radio stations in 26 U.S. markets and related online properties; and operates local Websites in various U.S. markets, which combine the company's television and radio local media brands online to offer the latest news, traffic, weather, and sports information, as well as local discounts, directories, and reviews for local community. CBS Corporation was founded in 1986 and is headquartered in New York, New York. CBS Corporation operates as a subsidiary of National Amusements, Inc.
(Summary) (Company) (Chart)

13 September 2015
Price $43.93
1yr Target $63.00
Analysts 1
Dividend $0.60
Payout Ratio 17.91%
1yr Cap Gain 43.40%
Yield 1.36%
1yr Tot Return 44.76%

Market Cap $21.41 Bil
1yr EarnGR 75.08%
3yr EarnGR 39.54%
5yr EarnGR 74.04%
1yr DivGR 12.50%
3yr DivGR 15.38%
5yr DivGR 21.97%
Revenues $13.77 Bil
Earnings $1.20 Bil
Profit Margin 8.71%

Beta 1.91
EPS (ttm) $2.35
EPS next yr $4.13
EPS next 5yr 14.43%
P/E 18.69
PEG 1.30
Debt/Equity 1.36
ROA 11.70%
ROE 41.40%
ROI 12.60%

The Company operates businesses which span the media and entertainment industries, including the CBS Television Network, cable networks, content production and distribution, television and radio stations, Internet-based businesses, and consumer publishing. The Company’s principal strategy is to create and acquire premium content that is widely accepted by audiences, and to generate both advertising and non‑advertising revenues from the distribution of this content on multiple media platforms and to various geographic locations. The Company is increasing its investment in both Company-owned and acquired premium content to enhance its opportunities for revenue growth, which include exhibiting its content on digital and other platforms through licensing and subscription services; expanding the distribution of its content internationally; and securing compensation from multichannel video programming distributors (“MVPDs”), including cable, direct broadcast satellite (“DBS”), telephone company, and other distributors, for authorizing the MVPDs’ carriage of the Company’s owned television stations (also known as “retransmission fees”) and cable networks, and securing compensation from television stations affiliated with the CBS Television Network (“station affiliation fees” also known as “reverse compensation”). The Company also seeks to grow its advertising revenues by monetizing all content viewership as industry measurements evolve to reflect viewers’ changing habits.

My Perspective

It's no secret that I like the entertainment and media companies because I believe that this area will garner a larger and larger portion of the consumer budget in the years ahead. I believe that consumers are after content regardless of the venue or location where that content will be delivered and consumed. That said, I'm interested in any company that's producing content.

Since ABC has been swallowed up by Disney and NBC has been swallowed up by Comcast, CBS's breakaway from Viacom opens up an opportunity to own one of the original big three television networks. Throw in the cable networks, the local broadcasting affiliates, and the publishing arm and this could be a great investment in a great entertainment company.

Looking at the fundamentals above, it's hard to place any faith in the one year target grade because its based on only 1 analyst's projection, but it's a large number with a huge one year return on investment. The yield is also a little lower than I would like but it's growing at a fast pace. And the dividend payout ratio is low and could obviously be increased multiple times in the future.

All in all I like this company's future prospects as the fundamental begin to ease from such a torrid pace to a more normal expected rate near 15%. I'll also be watching the debt levels to make sure that debt subsides as the company continues to stand up on its own more and more. I just think there's too many great content stories going on here not to take advantage of owning shares in this company.

My intent is to open up a small position in CBS in the next couple of weeks and then let that position grow naturally over time through dividend reinvestment. I think this is a solid investment that will grow over time and benefit my portfolio greatly.

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The Gladstone Companies

9/14/2015

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The Gladstone Companies are leaders in private equity, debt financing and real estate ownership. They are a family of public and private investment funds with approximately $1.7 billion invested. The funds invest in small and medium-sized companies and provide businesses the capital to fund growth, acquisitions and recapitalizations. As a group of public companies with a consistent base of capital, Gladstone is a patient, long-term investor and value added partner.

Gladstone Capital Corporation is a business development company specializing in debt investments in senior loans, second lien loans, senior subordinated loans, junior subordinated loans, and mezzanine loans and equity investments in the form of common stock, preferred stock, limited liability company interests, or warrants. The fund also makes private equity investments in acquisitions, buyouts and recapitalizations, and refinancing existing debts. It targets small and medium-sized companies in United States. The fund seeks to invest between $5 million and $30 million in companies that have between $20 million and $500 million in sales. It prefers to acquire minority stakes and seeks to exit its investments through strategic acquisitions by other industry participants or financial buyers, initial public offerings of common stock, or other capital market transactions.

Gladstone Investment Corporation is a business development company specializing in buyouts; recapitalizations; refinancing existing debt; senior debt securities such as senior loans, senior term loans, lines of credit, and senior notes; senior subordinated debt securities such as senior subordinated loans and senior subordinated notes; junior subordinated debt securities such as subordinated notes and mezzanine loans; limited liability company interests, and warrants or options. The fund does not invest in start-ups. It seeks to invest in small and mid-sized companies based in the United States. The fund prefers to make debt investments between $5 million and $30 million and equity investments between $10 million and $40 million in companies. The firm seeks to invest in companies with sales between $20 million and $100 million. It seeks minority equity ownership and prefers to hold a board seat in its portfolio companies. The fund typically holds its investments for seven years and exits via sale or recapitalization, initial public offering, or sale to third party.

Gladstone Commercial Corporation operates as a real estate investment trust (REIT) in the United States. It engages in investing in and owning net leased industrial and commercial real properties, and making long-term industrial and commercial mortgage loans. The company leases its real estate properties to small businesses, as well as to large public companies. As of December 31, 2009, it owned 64 properties, and held 1 mortgage loan. The company qualifies as a REIT under the Internal Revenue Code of 1986. As a REIT, it would not be subject to federal tax to the extent that it distributes at least 90% of its taxable income to its shareholders. The company was founded in 2003 and is based in McLean, Virginia.

Gladstone Land Corporation, an externally-managed agricultural real estate investment trust, owns and leases farmland to corporate and independent farmers in the United States. The company’s farms allow its tenants to grow row crops, such as lettuce and tomatoes; and berries comprising strawberries and raspberries. As of December 31, 2014, it owned 33 farms, including 15 in California, 9 in Florida, 4 in Michigan, 4 in Oregon, and 1 in Arizona covering 8,370 acres. The company also leases a parcel on its farm near Oxnard, California to an oil company. Gladstone Land Corporation was founded in 1997 and is based in McLean, Virginia.

My Perspective

I'm an investor in all four of these funds. I've found this company to be a very conservative company that provides a nice source of income with some equity growth. Dividends from each of these companies are paid monthly. I have each of these on a dividend reinvestment plan with the intent to continue that plan for an indefinite period of time. Eventually I will discontinue the reinvestment portion of these investments and live on the monthly income.

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The Andersons

9/10/2015

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The Andersons is generally thought to be a Farm Products Company but it has grown into so much more than that since its beginnings in the 1940s. It's a company that started out as a single grain elevator but it has turned into a diverse conglomerate made up of five different groups - Grains, Plant Nutrients, Ethanol, Rails and Retail.

The Grains Group includes the following:

1. Operations. The company owns grain terminals in eight states including Ohio, Michigan, Indiana, Illinois, Nebraska, Iowa, Tennessee and Texas with grain storage capacity of more than 140 million bushels at more than 45 grain storage facilities. Their grain facilities accept corn, soybean and wheat commodities.
2. AgVantage Crop Insurance. When crop prices become volatile due to unpredictable weather patterns, the company helps manage farmer's risk with crop insurance.
3. Freedom Pricing Tools. The company provides a full line of solutions, designed to help farmers manage their risk through pricing diversification.
4. Farm2Market. With their Farm2Market program, the company can pick up grain from the farm or it can be delivered to many of the large number of Andersons or non-Andersons locations and the company will handle all the details. This allows farmers to spend less time running their grain to market and more time running their farm business.
5. Grain Market Commentary. Grain market commentary videos are created exclusively by the experts at The Andersons to provide daily morning and closing market comments, as well as crop progress and USDA report video commentary.
6. Products The company provides their customers with high quality Dried Distiller Graing and Solubles and feed. Their DDG merchants will work with each of their customers on feed needs, quality requirements, freight needs and more. When customers need feed the company will find a solution that best fits the customer's feed requirements whether they need need DDGs, Hominy, Corn Screenings, Corn Gluten Pellets, Wheat Midds, Oats or Barley.

The Plant Nutrients Group includes the following:

1. Wholesale. The company's wholesale facilities formulate, store, and distribute approximately two million tons of dry and liquid agricultural nutrients through their extensive dealer network.
2. Professional Turf and Horticulture. The company's experience offering specialty nutrients and formulations to the professional turf and horticulture markets, combined with next generation technologies, make them an industry leader.
3. Mineral Processing. The company's pelletized products, manufactured from high quality, natural sources, are leading the way in the limestone and gypsum business in both the agriculture and turf markets nationwide.
4. Southern Region. Their Southern Region is a leading producer, dealer, and applicator of liquid fertilizer and crop protection products in the southeastern United States. They are also a major producer and marketer of dust abatement and water treatment products.
5. Contract Manufacturing. The company's facilities provide manufacturing services to some of the largest branded marketing and chemical companies in the world. These services range from bagging to custom formulation development. Research and development, regulatory, and marketing teams also assist in moving projects from concept to market.
6. Laboratory Animal Bedding. The company's corncob based products are sold into the laboratory animal bedding market as part of a complete bedding, nesting and enrichment product offering. Product and packaging services are also provided, including irradiation and sterility testing, and autoclavable and bulk bags.
7. Industrial Corncob Products. The company's corncob based products are sold into industrial markets for use as blast cleaners, polishers, absorbents and carriers. These products are also sold into oil and gas industry for solidification, stabilization and remediation purposes.
8. Industrial Products. The company's facilities manufacture, package, distribute, and inventory a broad range of dry and liquid industrial products. They products, including nitrogen reagents, deicers, and anti-icers are distributed in bulk and packaged containers.
9. Farm Centers. The company's Farm Centers offer an extensive selection of products and services that are vital for successful crop production. Their agricutural advisors’ expertise, combined with modern technology, provides growers with solutions for maximizing crop production and income.

The Ethanol Group includes the following:

1. Operations. The company operates four ethanol plants in Indiana, Michigan, Ohio and Iowa that are collectively capable of producing 330 million gallons of ethanol.
2. Products. The company's plants produce ethanol that can be shipped by rail or truck to customers along with E-85 that is automatically blended to ensure consistency and quality. They also produce Corn Oil for industrial, feed, biodiesel and renewable diesel applications. The plants in Michigan and Ohio have a supply agreement with a major liquified CO² and dry ice provider that turns the CO² into liquid CO² for beverages as well as dry ice for food (frozen food, catering, etc.) and cleaning (ice blasting) applications.
3. Services. The company's investment in ethanol is an extension to their core competencies in grain operations, corn originations and commodity processing. In addition, the company also provides services that include ethanol marketing and risk management.

The Rail Group includes the following:

1. Railcar Leasing. The Andersons Rail Group has a fleet of more than 22,000 various railcars and locomotives that they lease, manage and sell. With their extensive rail market knowledge, railcar repair and railcar component capabilities, they provide smart solutions to meet the demands of business.
2. Railcar Repair. The company has multiple locations across the US that can provide repair, maintenance and renovation solutions to meet the needs of the fleet. They also provide a range of services with a complete parts inventory from AAR-approved suppliers. Their railcar repair workforce has the capability to perform different types of railcar conversions and railcar modifications including converting large cube covered hoppers to smaller cube sand cars as well as perform extended service life and JIC repairs.
3. Fabrication. The company has a strong industry reputation with more than 50 years of experience in steel fabrication, sandblasting and painting services. The Fabrication Shop specializes in railcar component manufacturing as well as custom design and fabrication of mild steel, aluminum and stainless steel items.

The Retail Group includes the following:

1. General Stores. The company's four large stores located in Maumee, Toledo and Columbus, Ohio have an assortment of products from home décor (bedding, bath and kitchen wares) to furniture, mattresses and window fashions. The stores also have an assortment of lawn and garden items, as well as pet food and supplies, automotive supplies, casual/work clothing and a unique specialty food offering.
2. Market. The Andersons Market in Sylvania, Ohio transforms the every day food shopping experience into one that is more exciting.
3. Mower Center. The Andersons is one of northwest Ohio's leaders for outdoor power equipment sales and service. Through their John Deere, Stihl Elite, Toro Master and Honda Power Choice partnerships, the company is able to fulfill the constantly changing needs of residential, commercial lawn and grounds care providers.

The Andersons, Inc. engages in the grain, ethanol, plant nutrient, railcar leasing, turf and cob products, and consumer retailing businesses in the United States and internationally. It operates through six segments: Grain, Ethanol, Rail, Plant Nutrient, Turf & Specialty, and Retail. The Grain segment operates grain elevators; and stores grains, as well as provides marketing, risk management, and corn origination services to its customers. The Ethanol segment purchases and sells ethanol; and offers facility operations, risk management, and ethanol and corn oil marketing services to the ethanol plants. The Rail segment leases, sells, and repairs various types of railcars, locomotives, and barges; provides fleet management services to private railcar owners; and invests in short-line railroad, as well as offers metal fabrication services. The Plant Nutrient segment manufactures, distributes, and retails agricultural and related plant nutrients, and pelleted lime and gypsum products; and crop nutrients, crop protection chemicals, and seed products, as well as provides application and agronomic services to commercial and family farmers. This segment also offers warehousing, packaging, and manufacturing services to nutrient producers and other distributors; and manufactures and distributes various industrial products, including nitrogen reagents for air pollution control systems. The Turf & Specialty segment produces granular fertilizer and control products for the turf and ornamental markets; and private label fertilizer and control products, and various corncob-based products. The Retail segment operates The Andersons retail stores; The Andersons Market, a specialty food store; a distribution center; and a lawn and garden equipment sales and service facility. The Andersons, Inc. was founded in 1947 and is headquartered in Maumee, Ohio.
(Summary) (Company) (Daily Chart)

9 September 2015
Price $34.63
1yr Target $45.50
Analysts 6
Dividend $0.56
Payout Ratio 20.66%
1yr Cap Gain 31.38%
Yield 1.61%
1yr Tot Return 32.99%

Market Cap $969.64 Mil
1yr EarnGR 20.75%
3yr EarnGR 4.19%
5yr EarnGR 22.71%
1yr DivGR 9.30%
3yr DivGR 13.52%
5yr DivGR 15.36%
Revenues $4.38 Bil
Earnings $77.60 Mil
Profit Margin 1.75%

Beta 1.34
EPS (ttm) $2.71
EPS next yr $3.15
EPS next 5yr 12.00%
P/E 12.78
PEG 1.06
Debt/Equity 0.73
ROA 3.50%
ROE 9.80%
ROI 1.40%

The Company History

1940s

Harold and Margaret Anderson found The Andersons Truck Terminal in Maumee, Ohio.
ATT is established as an operating partnership with Harold and Margaret and their six children.
Grain terminal with nine truck bays is built for rapid turnaround and better service to farmers.
Rail transfer to ship loading is established on the Maumee River.

1950s

Additional grain storage is added, known nationally as “The Big Pour.”
The Andersons Warehouse Market is opened as the first retail store.
Fertilizer blending begins, initially utilizing a cement mixer.
Ear corn and cob milling facilities are added.
St. Lawrence Seaway is opened.

1960s

The first deep-water grain loading facility on the U.S. side of the Great Lakes is opened by The Andersons.
Champaign, Illinois opens as the first elevator in the U.S. capable of loading 100-car unit trains destined for the East Coast, the Gulf, and the fast-growing export market.
The largest steel tank grain storage installation in North America is conducted by The Andersons in Maumee, Ohio.
Lawn Products business begins.
John Anderson becomes Managing Partner.

1970s

Grain receipts almost triple and the river elevator is expanded.
Unit train fertilizer shipments arrive from western U.S. and Canada.
Unit train grain shipments head to Gulf ports.
Grain elevator and cob mill built in Delphi, Indiana.

1980s

Liquid fertilizer facilities open on the Maumee River.
Toledo and Columbus retail stores open.
Dick Anderson becomes Managing Partner.
The Andersons Management Corporation forms.
Two "outside" directors are added to the Board of Directors.
Grain elevators and fertilizer facilities open in Indiana and Michigan.

1990s

The Andersons is incorporated and is first listed on the NASDAQ on February 20, 1996.
Railcar repair shop is built in Maumee and the Company enters the rail leasing business.
Mike Anderson becomes CEO.
Grain and liquid storage facilities are acquired in Clymers, Walton, Logansport, Seymour, North Manchester and Waterloo, Indiana.
Sales reach $1 billion.
The majority of the board is comprised of independent directors.

2000s

The Andersons enters the ethanol business, overseeing the construction and operation of three ethanol plants.
Railcar fleet is significantly expanded and additional railcar repair shops are added.
Earned ISO certifications for all liquid plant nutrient facilities.
Professional turf products are expanded.
Additional shares are issued in the form of a 2-for-1 stock split and follow-on offering.
The Andersons invests in Lansing Trade Group, an independently owned ag-merchandising company that trades wheat, corn, feed ingredients and other grains/oilseeds.

2010s

The Andersons Denison LLC acquires an ethanol plant in Denison, Iowa.
Twelve grain and agronomy facilities are purchased in Iowa and Tennessee.
Opened newly constructed state-of-the-art 27,000 square foot railcar paint facility in Maumee, Ohio.
The Andersons and Lansing Trade Group, LLC acquire Thompsons Limited, a grain and food-grade bean handler with eleven facilities in southern Ontario and one facility in Minnesota.
Additional shares are issued in the form of a 3-for-2 stock split.
Specialty products offering expanded with purchase of New Eezy Gro, Inc.
Six grain and four agronomy facilities located throughout north central Michigan are purchased.

My Perspective

This great company operates in almost every aspect of food production at the farm level without actually growing the food. But don't let that fool you. This company competes in almost every area that farm products travel in the process between the farm and the dinner table. Those processes can (and do!) often create more value that the farm crops themselves.

As I look at all the fundamentals listed above I like every one of them except possibly the dividend yield and the profit margin. Each of these could be a little higher and I really wouldn't mind, but that's a small price to pay for such a great company that's currently on sale.

If you review the company's chart it may concern you a little if you don't think about it for a while. The stock has fallen the last couple of months but an investor has to remember that the entire market has fallen this year. In addition, commodity prices have fallen too affecting the price of this stock. These two things have created an opportunity for smart investors. Today I can buy this great company for a very cheap price because it's being penalized by stock and commodity markets in reverse. And this has nothing to do with the fundamentals of the company itself.

I plan to take advantage of this situation and open a position in this company in the next few days. As always, I'll open a small position and then add to that position over the next few months as I see the stock price develop. There's a lot of great things occurring with this company, including hiring a new CEO (brought in from Cargill). I expect these to bring new insight and new ideas into the company and result in further expansion of the food business.

I also expect this to increase the value of my shares as I continue on my life long quest for financial freedom and security.

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