Investing - dennis mccain

Sunoco LP

10/27/2015

Today's article is a quick overview of Sunoco LP. I wanted to get this out because I started accumulating shares in this company today. I wanted this information in one location so I could review it in the days and weeks to come. This company has an extremely complicated organizational structure but it's worth the time to try and understand the roll ETE, ETP, SUN, SXL, and WMB each play in the overall organization.

Below you'll find a summary organizational structure to provide you with a starting point.

Sunoco LP engages in the wholesale distribution and retail sale of motor fuels primarily in Texas, New Mexico, Oklahoma, Louisiana, Kansas, Maryland, Virginia, Tennessee, Georgia, and Hawaii. It operates through two segments, Wholesale and Retail. It serves convenience stores and consignment locations, contracted independent convenience store operators, and other commercial customers. The company also distributes other petroleum products, such as propane and lubricating oils; and leases or subleases real estate properties used in the retail distribution of motor fuels. As of December 31, 2014, it operated 155 convenience stores and fuel outlets offering merchandise, food service, motor fuel, and other services in 5 states. Sunoco GP LLC serves as the general partner of the company. The company was formerly known as Susser Petroleum Partners LP and changed its name to Sunoco LP in October 2014. Sunoco LP is based in Houston, Texas.
(Summary) (Company) (Chart)

26 October 2015
Price $34.16
1yr Target $49.58
Analysts 12
Dividend $2.77
Payout Ratio 119.39%

1yr Cap Gain 45.14%
Yield 8.10%
1yr Tot Return 53.24%

EPS (ttm) $2.32
EPS next yr $2.33
EPS next 5yr 25.80%
1yr Potential $60.11
P/E 14.72
PEG 0.57
Beta ---
Market Cap $1.79 Bil
Revenues $10.52 Bil
Earnings $89.00 Mil
Profit Margin 0.84%

1yr EarnGR 10.65%
3yr EarnGR ---
5yr EarnGR ---
1yr DivGR ---
3yr DivGR ---
5yr DivGR ---
Quick Ratio 0.90
Current Ratio 1.50
Debt/Equity 1.46
ROA 3.80%
ROE 8.20%

Greenbrier and Trinity

10/20/2015

The Greenbrier Companies and Trinity Industries compete with each other in the railroad freight car business so I thought it would be constructive to compare their fundamentals to see how each company stacks up against the other. These two companies are not perfect matches because each company has additional lines of business that are different from each other, but I think there's enough similarity in their products and services that the comparison of the two companies would be useful in analyzing their values.

The Greenbrier Cos design, manufacture, and market railroad freight car equipment in North America and Europe. Its Manufacturing Segment offers double-stack intermodal railcars; tank cars; auto-max railcar, multi-max auto rack, and flat cars for automotive transportation; conventional railcars, such as boxcars, covered hopper cars, center partition cars, bulkhead flat cars, and solid waste service flat cars; and pressurized tank cars, non-pressurized tank cars, gondolas and coil cars, coal cars, sliding wall cars, and automobile transporter cars; and marine vessels, including conventional deck barges, double-hull tank barges, railcar/deck barges, barges for aggregates, and other heavy industrial products and dump barges. The company’s Wheels, Repair & Parts segment provides wheel services, including reconditioning of wheels and axles, new axle machining and finishing, and axle downsizing; heavy railcar repair and refurbishment, as well as routine railcar maintenance; and repair, refurbishment, and retrofitting of railcars for third parties. This segment also reconditions and manufactures railcar cushioning units, couplers, yokes, side frames, bolsters, and various other parts, as well as produces roofs, doors, and associated parts for boxcars. Its Leasing & Services segment offers operating leases and ‘by the mile’ leases for a fleet of approximately 8,600 railcars; and management services, including railcar maintenance management, accounting services, fleet management, administration, and railcar remarketing. This segment owns or provides management services to a fleet of approximately 246,000 railroads, shippers, carriers, institutional investors and other leasing and transportation companies. The company’s customers include railroads, leasing companies, financial institutions, shippers, carriers, and transportation companies. The Greenbrier Companies was founded in 1974 and is headquartered in Lake Oswego, Oregon.
(Summary) (Company) (Chart)

19 October 2015
Price $36.26
1yr Target $52.67
Analysts 9
Dividend $0.60
Payout Ratio 11.21%

1yr Cap Gain 45.25%
Yield 1.65%
1yr Tot Return 46.90%

EPS (ttm) $5.35
EPS next yr $6.22
EPS next 5yr 12.33%
1yr Potential $76.69
P/E 6.78
PEG 0.55
Beta 2.62
Market Cap $1.07 Bil
Revenues $2.46 Bil
Earnings $173.30 Mil
Profit Margin 7.03%

1yr EarnGR ---
3yr EarnGR 140.76%
5yr EarnGR ---
1yr DivGR 0.00%
3yr DivGR ---
5yr DivGR ---
Quick Ratio ---
Current Ratio ---
Debt/Equity 0.65
ROA 10.70%
ROE 30.90%

Trinity Industries provides various products and services for the energy, transportation, chemical, and construction sectors in the United States and internationally. Its Rail Group segment offers railcars, including autorack, box, covered hopper, gondola, intermodal, tank, and open hopper cars; and couplers, axles, and other equipment, as well as railcar maintenance services. This segment serves railroads, leasing companies, and industrial shippers of various products. The company’s Railcar Leasing and Management Services Group segment leases tank and freight railcars to industrial shippers and railroads; provides management, maintenance, and administrative services; and manages railcar fleets on behalf of third parties. As of December 31, 2014, this segment had a fleet of 75,930 owned or leased railcars. Its Construction Products Group segment offers highway products, such as guardrail, crash cushions, and other protective barriers; and aggregates, including expanded shale and clay, crushed stone, sand and gravel, asphalt rock, and other products, as well as other steel products for infrastructure-related projects. This segment also provides hot-dip galvanizing services to fabricated steel materials manufacturers; and trench shields and shoring products for the construction industry, as well as construction equipment for the mining industry. The company’s Energy Equipment Group segment manufactures structural wind towers; utility steel structures for electricity transmission and distribution; ambient and cryogenic storage and distribution containers; and tank heads for pressure and non-pressure vessels. Its Inland Barge Group segment provides deck barges, and open or covered hopper barges to transport grain, coal, and aggregates; and tank barges to transport crude oil, chemicals, and petroleum products, as well as fiberglass reinforced lift covers for grain barges. The company was founded in 1933 and is headquartered in Dallas, Texas.
(Summary) (Company) (Chart)

19 October 2015
Price $26.45
1yr Target $34.22
Analysts 9
Dividend $0.44
Payout Ratio %

1yr Cap Gain 29.37%
Yield 1.66%
1yr Tot Return 31.03%

EPS (ttm) $4.23
EPS next yr $3.97
EPS next 5yr 10.00%
1yr Potential $39.70
P/E 6.25
PEG 0.63
Beta 2.07
Market Cap $4.09 Bil
Revenues $6.53 Bil
Earnings $658.10 Mil
Profit Margin 10.07%

1yr EarnGR 76.05%
3yr EarnGR 67.35%
5yr EarnGR ---
1yr DivGR 38.88%
3yr DivGR 28.59%
5yr DivGR 18.57%
Quick Ratio ---
Current Ratio ---
Debt/Equity 1.01
ROA 7.60%
ROE 21.30%

Ford and GM

10/18/2015

The American Automobile Industry has come a long way since the Federal Government had to bail out both General Motors and Chrysler. Chrysler is now a foreign based company and GM and Ford are the only two American Automobile Manufacturers remaining (I know Tesla is now making cars but they'll have to make more than one model and a few thousand cars before they're in the league of the other car manufacturers).

Today I just wanted to look at the fundamentals of these two automobile companies and see how they compare with each other. For me the numbers are where the rubber meets the road so this is where I start all of my analysis. It's only after reviewing the numbers that I can start to understand the company and what to expect from investing in their stock.

Ford Motor Co manufactures and distributes automobiles worldwide and operates through two sectors, Automotive and Financial Services. The Automotive sector develops, manufactures, distributes, and services vehicles, parts, and accessories. It offers vehicles primarily under the Ford and Lincoln brand names. This sector markets and sells its products through distributors, dealers and thru dealerships to fleet customers. The Financial Services sector offers its products to and through automotive dealers. It provides financing products, including retail installment sale contracts for new and used vehicles and direct financing leases for new vehicles to retail customers, government entities, daily rental car companies, and fleet customers. This sector offers loans to dealers to finance vehicle inventory, working capital and improvement of dealership facilities, and other dealer vehicle programs. The company was founded in 1903 and is based in Dearborn, Michigan.
(Summary) (Company) (Chart)

18 October 2015
Price $15.28
1yr Target $17.75
Analysts 16
Dividend $0.60
Payout Ratio 64.51%

1yr Cap Gain 16.16%
Yield 3.92%
1yr Tot Return 20.08%

EPS (ttm) $0.93
EPS next yr $1.93
EPS next 5yr 22.17%
1yr Potential $42.78
P/E 16.43
PEG 0.74
Beta 1.29
Market Cap $60.63 Bil
Revenues $141.95 Bil
Earnings $3.70 Bil
Profit Margin 2.60%

1yr EarnGR -54.81%
3yr EarnGR -45.17%
5yr EarnGR -1.44%
1yr DivGR 23.52%
3yr DivGR 1.62%
5yr DivGR ---
Quick Ratio ---
Current Ratio ---
Debt/Equity 4.69
ROA 1.70%
ROE 14.50%

General Motors Co designs, builds, and sells cars, crossovers, trucks, and automobile parts worldwide. It operates through GM North America, GM Europe, GM International Operations, GM South America, and GM Financial segments. The company markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Opel, Holden, and Vauxhall brand names, as well as under the Alpheon, Baojun, Jiefang, and Wuling brand names. It also sells cars and trucks to dealers for consumer retail sales, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. In addition, the company offers connected safety, security and mobility solutions, and information technology services. The company, through its subsidiary, General Motors Financial Company, Inc., provides automotive financing services. General Motors Company was founded in 1897 and is based in Detroit, Michigan.
(Summary) (Company) (Chart)

18 October 2015
Price $33.15
1yr Target $39.93
Analysts 15
Dividend $1.44
Payout Ratio 53.13%

1yr Cap Gain 20.45%
Yield 4.34%
1yr Tot Return 24.79%

EPS (ttm) $2.71
EPS next yr $5.10
EPS next 5yr 23.20%
1yr Potential $118.32
P/E 12.23
PEG 0.53
Beta 1.64
Market Cap $52.51 Bil
Revenues $152.76 Bil
Earnings $4.55 Bil
Profit Margin 2.97%

1yr EarnGR -51.19%
3yr EarnGR -28.61%
5yr EarnGR ---
1yr DivGR ---
3yr DivGR ---
5yr DivGR ---
Quick Ratio 1.00
Current Ratio 1.20
Debt/Equity 1.52
ROA 2.50%
ROE 12.40%

My Perspective

I'm slightly biased in looking at these two companies because I'm a shareholder of Ford Motor Company, but the numbers above make for some interesting comparisons. There's no reason to point out specific differences or how these companies compete globally against some tough competition, because anyone who has gotten this far into this article has already seen the numbers above. My general impression is that the investing community values Ford more than General Motors. That may cause General Motors to be the better investment for new funds. But those funds are also competing against investments in other, less competitive industries.

Obviously the above numbers wouldn't make me sell my shares of Ford because in so many ways its a great investment. What they do is convince me that General Motors is also a great investment and maybe I should be investing in General Motors too.

I expect to open a small position in GM as soon as the price falls closer to the lower Bollinger Band (click on the chart link above). As the shares stand today they're a little extended and look to fall a few dollars soon to a more acceptable level. These shares, once accumulated, will complement my shares in Ford. My intent is to let the dividends reinvest in additional shares of the company. I also intend to sell options once I attain at least one hundred shares of the company. Fortunately that didn't take very long for my shares in Ford. Hopefully it won't take very long for these shares that I'll soon be accumulating in General Motors.

Ryman Hospitality Properties

10/16/2015

Ryman Hospitality Properties and Country Music seem to go hand in hand with each other and anyone interested in Country Music eventually ends up at the Grand Ole Opry and the Gaylord Opryland Hotel. Add in the original Ryman Auditorium, WSM radio and the three additional convention and hotel properties, and you have a destination point for a lot of business activity.

Ryman Hospitality Properties, Inc. owns and operates hotels in the United States. Its Hospitality segment operates a network of meetings-focused resorts, including the Gaylord Opryland Resort and Convention Center in Nashville, Tennessee; the Gaylord Opryland Resort and Convention Center in Kissimmee, Florida; the Gaylord Texan Resort and Convention Center in Grapevine, Texas; and the Gaylord National Resort and Convention Center in Prince George's County, Maryland. As of February 15, 2013, this segment's network of resorts had 7,797 rooms. It also owns and operates the Inn hotel with approximately 303 rooms at Opryland. The company's Opry and Attractions segment owns and operates Nashville-based tourist attractions, including the Grand Ole Opry, a live country music show; the Ryman Auditorium, a venue with approximately 2,300 seats for concerts and musical productions; the General Jackson Showboat, a 300-foot, four-deck paddle wheel showboat on the Cumberland river; the Gaylord Springs Golf Links, a clubhouse, which provides meeting space for approximately 500 guests; and the Wildhorse Saloon, a country music performance venue. This segment also operates WSM-AM, a radio broadcasting station. Ryman Hospitality Properties, Inc. qualifies as a real estate investment trust for federal income tax purposes. The company generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Ryman Hospitality Properties, Inc. was founded in 1955 and is headquartered in Nashville, Tennessee.
(Summary) (Company) (Chart)

14 October 2015
Price $53.21
1yr Target $61.71
Analysts 7
Dividend $2.80
Payout Ratio 119.14%

1yr Cap Gain 15.97%
Yield 5.26%
1yr Tot Return 21.23%

EPS (ttm) $2.35
EPS next yr $3.11
EPS next 5yr 19.94%
1yr Potential $62.01
P/E 22.64
PEG 1.14
Beta 1.29
Market Cap $2.73 Bil
Revenues $1.06 Bil
Earnings $123.30 Mil
Profit Margin 11.60%

1yr EarnGR 19.88%
3yr EarnGR 119.63%
5yr EarnGR ---
1yr DivGR 18.18%
3yr DivGR ---
5yr DivGR ---
Quick Ratio ---
Current Ratio ---
Debt/Equity 3.91
ROA 5.00%
ROE 28.30%

Gaylord Opryland Resort

Gaylord Opryland is one of the leading convention destinations in the United States based upon number of rooms, exhibit space and conventions held. Designed with lavish gardens and expansive atrium areas, the resort is situated on approximately 172 acres. Gaylord Opryland is the largest non-gaming hotel in the continental United States. The resort has a number of themed restaurants, retail outlets and a full-service spa. It also serves as a destination resort for vacationers due to its proximity to the Grand Ole Opry, the General Jackson Showboat, Gaylord Springs Golf Links (Gaylord’s 18-hole championship golf course) and other attractions in the Nashville area. Gaylord Opryland has 2,882 signature guest rooms and approximately 640,000 square feet of meeting and exhibit space.

Gaylord Texas Resort

Gaylord Texan is situated on approximately 85 acres and is located approximately five miles from the Dallas/Fort Worth International Airport. Of the 85 acres, we own 75 acres and lease approximately 10 acres pursuant to a ground lease. The hotel features a lavish and expansive atrium, 1,511 signature guest rooms and approximately 400,000 square feet of meeting and exhibit space. The property also includes a number of themed restaurants, retail outlets and a full-service spa. Guests also have access to the adjacent Cowboys Golf Club. In 2006, we opened the Glass Cactus entertainment complex, an approximately 39,000 square-foot venue with a performance stage, dance floor and two-story outdoor deck, on land we own adjacent to the hotel. In 2011, we opened the Paradise Springs resort pool, a western-themed 10-acre resort pool and lazy river complex.

Gaylord National Resort

Gaylord National opened in April 2008 and is situated on approximately 42 acres of land located on the Potomac River in Prince George’s County, Maryland, eight miles south of Washington, D.C. The hotel has 1,996 signature guest rooms and approximately 470,000 square feet of meeting and exhibit space. The hotel complex includes an 18-story glass atrium, a 20,000-square-foot spa and fitness center and entertainment options such as restaurants, shops and a two-story rooftop nightclub.

Gaylord Palms Resort

Gaylord Palms has 1,406 signature guest rooms and approximately 400,000 square feet of meeting and exhibit space. The resort is situated on a 65-acre site in Kissimmee, Florida, which we have leased pursuant to a 75-year ground lease with a 24-year renewal option. The resort is approximately a five-minute drive from the main gate of the Walt Disney World® Resort complex. Gaylord Palms has a number of themed restaurants, retail outlets and a full-service spa, with 20,000 square feet of dedicated space. In 2012, a new resort pool and a two-story sports bar complex opened at Gaylord Palms. Hotel guests also have golf privileges at the world class Falcon’s Fire Golf Club, located a half-mile from the property.

My Perspective

I generally like REITs because they seem to throw off a lot of cash to their shareholders and I like that a lot. These properties are first class properties and they generate a lot of convention business because of both their facilities and their specific locations. I expect this company to continue to deliver excellent returns as long as Country Music remains popular.

I also expect that Ryman will be able to expand to other locations that would attract visitors and conventioneers throughout the United States. Sales and earnings growth along with a nice fat growing dividend is always a plus, but a company so synonymous with Country Music and the country lifestyle will surely be a destination spot for a large portion of the population of this country and for many around the world.

I'm My Best Advisor

10/14/2015

I spend a lot of time writing articles for this website, but I spend even more time re-reading and thinking about these articles. That's because some of the best ideas that I can find on investing are usually located within the confines of this website. I'm not sure what other writers do, but I actually transact the ideas laid out in these articles. And so far I've given myself some great ideas.

This week dividends were deposited in my accounts and I thought it might be a good idea to put those funds to work earning more dividends. So I went to the Best Ideas portion of this site and re-read about those Best Ideas. As a result, I added to my positions in Apple Inc and Time Warner Inc. In a few weeks I'll know if these were good investments but whether they're successful or not, I'll have a way of looking back at my research and see where the trade went good or bad. It's this reassessment and reevaluation that makes my personal investing strategy work over time. I'm able to learn from my mistakes and benefit from my successes. It's really the beauty of having a website like this.

If you're a struggling investor trying to perfect your investment philosophy like all the rest of us....

Welcome.

And I hope you'll come back again often.

Time Warner Inc

10/13/2015

With all the talk about how the Millennials are Cord Cutting, you'd think they weren't interested in watching TV at all. But nothing could be further from the truth. They just want to watch what they want and they're trying to find a cheaper way to do that. But in the end, they're after the same thing every one's interested in. That's great entertainment. And Time Warner Inc is the company that's creating and producing the great entertainment that everyone wants.

Time Warner Inc. operates as a media and entertainment company in the United States and internationally. It operates through three segments: Turner, Home Box Office, and Warner Bros. The Turner segment owns and operates a portfolio of cable television networks and related properties that offer entertainment, sports, kids, and news programming on television and digital platforms for consumers. It operates approximately 165 channels in 200 countries. The Turner networks and related properties include TNT, TBS, Adult Swim, truTV, Turner Classic Movies, Turner Sports, Cartoon Network, Boomerang, CNN, and HLN. This segment also manages and operates various digital media properties primarily consisting of bleacherreport.com, cartoonnetwork.com, CNN Go, CNN.com, CNNMoney.com, NBA.com, NBA Digital, and NCAA.com; and licenses original programming to subscription-video-on-demand (SVOD) services, and its brands and characters for consumer products. This segment serves cable system operators, satellite service distributors, telephone companies, and other distributors. The Home Box Office segment provides premium pay and basic tier television services comprising HBO and Cinemax; and sells its original programming through DVDs, Blu-ray discs, and electronic sell-through, as well as licenses home entertainment and content to international television networks and SVOD services. As of December 31, 2014, this segment had approximately 46 million subscribers worldwide. The Warner Bros. segment produces, distributes, and licenses television programming and feature films; distributes digital and physical home entertainment products; and produces and distributes videogames, as well as licenses consumer products and brands. Time Warner Inc. is headquartered in New York, New York.
(Summary) (Company) (Chart)

10 October 2015
Price $73.09
1yr Target $92.37
Analysts 30
Dividend $1.40
Payout Ratio 33.25%

1yr Cap Gain 26.37%
Yield 1.91%
1yr Tot Return 28.28%

EPS (ttm) $4.21
EPS next yr $5.70
EPS next 5yr 17.73%
1yr Potential $101.06
P/E 17.36
PEG 0.98
Beta 1.42
Market Cap $59.61 Bil
Revenues $28.24 Bil
Earnings $3.58 Bil
Profit Margin 12.67%

1yr EarnGR 10.71%
3yr EarnGR 16.81%
5yr EarnGR 15.95%
1yr DivGR 13.63%
3yr DivGR 11.45%
5yr DivGR 19.63%
Quick Ratio 1.30
Current Ratio 1.50
Debt/Equity 0.99
ROA 5.70%
ROE 14.80%

The Three Operating Divisions of Time Warner

Home Box Office

HBO offers the subscription video-on-demand products HBO On Demand and Cinemax On Demand, as well as HBO GO and MAX GO, HD feeds and multiplex channels. On April 7, HBO NOW, the network’s standalone premium streaming service, began providing instant access to the company's programming. Internationally, HBO branded television networks, along with the subscription video-on-demand products HBO On Demand and HBO GO, bring HBO services to over 60 countries. HBO and Cinemax programming is sold into over 150 countries worldwide.

HBO's original productions continue to provide some of the most innovative and critically acclaimed programming on television. Following a stellar awards year in 2014, HBO opened 2015 with a Golden Globe Award for Best Performance By a Supporting Actor in a Miniseries or Motion Picture Made for TV (Matt Bomer – The Normal Heart) and two Academy Awards for Best Documentary Feature (Citizenfour) and Best Documentary Short (Crisis Hotline: Veterans Press 1). HBO also earned three George Foster Peabody Awards for Last Week Tonight with John Oliver and the documentaries Mr. Dynamite: The Rise of James Brown and The Newburgh Sting, while CINEMAX earned a George Foster Peabody Awards for The Knick.

Among HBO’s top programming awards for 2014 are 19 Primetime Emmy Awards, the most of any network for the 13th year in a row, with True Detective leading HBO programming with five awards, while Game of Thrones received four awards and The Normal Heart received two awards. HBO also received two Golden Globe Awards, tied for the most of any television network in 2014 for Behind the Candelabra – Best Mini-Series or Motion Picture Made for Television and Best Performance by an Actor in a Mini-Series or Motion Picture Made for Television (Michael Douglas); three George Foster Peabody Awards for the documentaries Life According to Sam, Mea Maxima Culpa: Silence in the House of God and Six by Sondheim; two News & Documentary Emmy Awards including The Crash Reel in the Outstanding Informational Programming – Long-form category; and three Sports Emmy Awards including Outstanding Sports News Anthology for Real Sports with Bryant Gumbel.

Among HBO favorite series are Emmy®, Golden Globe and Peabody-winning Game of Thrones, The Leftovers and True Detective; hit comedies: Girls, Looking, Silicon Valley, Doll & Em and Emmy® winner Veep; Real Time with Bill Maher, Last Week Tonight with John Oliver and the news magazine show VICE; and Emmy® winner Real Sports with Bryant Gumbel. Project Greenlight, the documentary series chronicling the search for a first-time director and exploring the filmmaking process, will also return to HBO this year for a new season.

HBO Films and HBO Miniseries' slate of dramas for 2015 will include Bessie, Nightingale, and the HBO Miniseries/BBC adaptation of J.K. Rowling’s global bestseller The Casual Vacancy. Featured HBO Documentary Films for 2015 include: Oscar winner®Citizenfour, The Jinx: The Life And Deaths Of Robert Durst, Going Clear: Scientology And The Prison Of Belief, Kurt Cobain: Montage Of Heck, and the documentary Sinatra: All Or Nothing At All. Strike Back returns to Cinemax for its fourth and final season and The Knick will return to Cinemax a ten-episode second season.

On the technology side, HBO continues to build on the latest innovations and content distribution platforms, with the launch of HBO NOW, HBO’s new stand-alone premium streaming service that provides instant access to every episode of every season of the best of HBO’s award-winning original programming, more of the biggest and latest Hollywood hit movies, original HBO Films, groundbreaking documentaries, sports and comedy and music specials.

HBO also continues to bring its programming libraries online though its brand extensions HBO GO and MAX GO, which are also available on iPad®, iPhone®, iPod touch®, Kindle Fire, select Android™ devices and platforms such as Apple TV®, Google Chromecast, Xbox 360®, Samsung® Smart TVs, Roku® and PlayStation®3.

Turner Broadcasting System

Turner owns and operates some of the leading cable television networks and related properties in the world, including CNN, HLN, TNT, TBS, Cartoon Network, Turner Classic Movies, Adult Swim, truTV and Turner Sports. In addition to its cable networks, Turner manages digital sports, including bleacherreport.com, NBA.com, NCAA.com, and PGA.com.

TBS is the #1 entertainment network on basic cable in primetime delivery of adults 18-49. Television’s “very funny” network features hit series The Big Bang Theory, basic cable’s #1 comedy with adults 18-49, and is home to the Emmy®-nominated late-night hit CONAN, starring Conan O’Brien.

TNT is basic cable’s #1 network in primetime delivery of total viewers. The powerhouse lineup includes three of basic cable’s top original series: The Last Ship, Major Crimes and Rizzoli & Isles and popular original dramas Legend, Murder in the First and Perception.

Adult Swim continues to claim the #1 spot in total day delivery of adults 18-24, 18-34 and 18-49 and men 18-24 and 18-34. The late-night lineup includes #1 ranked original animated series Mr. Picklesand Squidbillies and Emmy®-award-winning original series Robot Chicken and Children’s Hospital. Adult Swim programming claims more top telecasts than any other basic cable network with 22 of the top 50 telecasts among adults 18-34 and 14 of the top 50 with men 18-34.

Cartoon Network’s offering of #1 rated original animation series includes Adventure Time, Teen Titans GO!, Steven Universe, The Amazing World of Gumball and Uncle Grandpa. Cartoon Network is television’s #1 destination for young audiences in early prime and claims 49 of basic cable’s top 50 telecasts for young boys.

truTV’s audience of young men and young adults continues to grow with the success of original high-stakes and action-packed ‘actuality’ programming. truTV's line-up features original seriesFriends of the People, The Carbornaro Effect and the #1 rated series Impractical Jokers.

CNN, the original 24-hour news network, delivers the most comprehensive, nonpartisan and breaking news and analysis to global audiences across all platforms, as well as special programming, documentaries and original series. Signature programs include Anderson Cooper 360, Erin Burnett: Outfront, Somebody’s Gotta Do It, This Is Life with Lisa Ling and the Emmy® Award winning Anthony Bourdain: Parts Unknown.

HLN, the “news and views” network, brings viewers breaking news and in-depth coverage all day, every day. HLN original series include Morning Express with Robin Meade, Nancy Grace and Dr. Drew On Call.

Warner Brothers Entertainment

In 2014, Warner Bros. Pictures grossed $4.73 billion in global box office ($1.56 billion domestic, $3.17 international), marking the sixth time the Studio has crossed the $4 billion in worldwide box office. The year was also the second time the Studio surpassed the $3 billion mark internationally, and the 14th consecutive year that both the domestic and international divisions crossed the billion-dollar mark—milestone no other studio has achieved. For the 14th consecutive year, Warner Bros. Home Entertainment was, once again, the industry’s leader, with 17 percent market share, and was number one in the overall sell-through and electronic sell-through categories. Warner Bros. Television Groups’ WBTV, Warner Horizon Television, Telepictures Productions and Warner Bros. Animation continued to produce television’s most popular and successful series for the broadcast, cable, pay and digital marketplaces, producing more than 60 series in the 2014-15 season. WBTVG and Warner Bros. Home Entertainment continued to be category leaders, working across all platforms and outlets, and remain trendsetters in the digital realm with video-on-demand, branded channels, original content, apps, anti-piracy technology and broadband and wireless destinations.

Warner Bros. Pictures Group produces and globally distributes a wide-ranging slate of some 18-24 films each year, employing a business paradigm that mitigates risk while maximizing productivity and capital. Warner Bros. Pictures either fully finances or co-finances the films it produces and maintains worldwide distribution rights. It also monetizes its distribution and marketing operations by distributing films that are totally financed and produced by others. The Warner Bros. Television Group oversees and grows the entire portfolio of Warner Bros.’ television businesses, including worldwide production, traditional and digital distribution, and broadcasting.

In the traditional TV arena, WBTVG produces primetime, first-run, cable and animated series, with more than 60 series on the air during the 2014-15 television season. WBTVG is the only studio to have at least one series on each of the five broadcast networks. In fact, Warner Bros. has at least three series on every network, and Warner Bros. is the only studio to have at least one new series on each of the five broadcast networks.

The cornerstone of WBTVG is Warner Bros. Television, one of the industry’s leading suppliers of network programming, as well as a major producer for cable. WBTV’s returning programs for 2014-15 are 2 Broke Girls, The 100, Arrow, The Big Bang Theory, The Following, Hart of Dixie, The Leftovers, Major Crimes, Mom, The Mentalist, The Middle, Mike & Molly, Nikita, The Originals, Person of Interest, Shameless, Supernatural, Two and a Half Men, Undateable, The Vampire Diaries, Childrens Hospital andNewsreaders. New series include, The Flash, Forever, Gotham, iZombie, Mysteries of Laura, One Big Happy, and Stalker.

WBTVG also includes:

- Warner Horizon Television, producer of scripted cable programs such as, Ground Floor, Longmire, The Lottery, Pretty Little Liars, Rizzoli & Isles and Sullivan & Son, as well reality series for network and cable such as The Bachelor, The Bachelorette, and The Voice,among others;

- Telepictures Productions, with first-run syndicated programming such as The Ellen DeGeneres Show, Extra, Judge Mathis, The People’s Court, The Real, TMZ, TMZ Hollywood Sports and TMZ Live;

- Warner Bros. Animation, producers of Be Cool Scooby-Doo!, Mike Tyson Mysteries and Wabbit;

- Blue Ribbon Content, a digital shortform series production unit.

The rapidly evolving marketplace for digital distribution is one of Warner Bros. Entertainment's greatest strategic opportunities. As the ways consumers access, purchase and enjoy Warner Bros.' content continue to change, Warner Bros. Home Entertainment, which includes the home video, online, wireless, video games and digital distribution businesses, is focused on protecting and maximizing the value of the studio's content while fully harnessing the benefits of emerging technologies.

Warner Bros. Entertainment's success at the box office and on TV contributed to its number one share in the domestic home video business for the 14th consecutive year. Warner Home Video commands the largest distribution infrastructure in the global video marketplace and is the number one company domestically in total physical sell-through video (DVD and Blu-ray combined), theatrical catalog, TV on DVD, non-theatrical family and animation, Blu-ray and VOD. WHV has been the number one studio in DVD sales for 18 consecutive years and in Blu-ray since its inception, and is the industry's leading studio in these sales internationally. WBHE is a change-leader in the home entertainment arena and a driving force behind the access technology UltraViolet, designed to reinvigorate consumer ownership of both packaged media and digital content.

DC Entertainment, founded in September 2009, is charged with strategically and deeply integrating the DC Comics business, brand and characters into Warner Bros. Entertainment and all its respective content and distribution businesses. DC Comics' characters appear in nearly 1,000 comic-book titles published and distributed globally each year as well as in live-action and animated series, direct-to-video releases, collectors' books, online entertainment, numerous licensing and marketing arrangements, graphic novels and feature films. Feature films based on DC properties include 2012's billion-dollar global blockbuster The Dark Knight Rises and 2013’s hit Man of Steel. In October 2014, the Studio announced from 2016 through 2020, its Warner Bros. Pictures and New Line Cinema will release a slate of at least 10 DC movies—as well as stand-alone Batman and Superman films—starting with Zack Snyder’s Batman V Superman: Dawn of Justice in March 2016.

My Perspective

I'm already a shareholder of Time Warner Inc so my strategy is pretty straight forward. I own it and I continue to buy additional shares on any pullbacks in the price of the stock. As always, I also use dividend reinvestment and options sales to increase the number of shares that I own. I'm also up front about my desire to own stock in just about any successful entertainment company because I believe more and more of the average household budget will be spent on entertainment in the future.

As any investor can see, this company is one of the great entertainment creators, developers, and producers. It fits well into the type of companies I like to own and the fundamentals are extremely compelling. I intend to own these (and more!) shares for as long as people want to be entertained. And that's going to be a long time!

Four Airlines Flying High

10/10/2015

Alaska Airlines, Delta Airlines, Southwest Airlines and Virgin Airlines are all flying high these days as a result of an improving economy, lower fuel prices, an increasing number of of people choosing to travel by air, and the airlines ability to manage the availability of airline seats. And this should only improve as each of these increase.

Alaska Air Group provides passengers and cargo air transportation services primarily in the United States. The company operates through Alaska Mainline and Alaska Regional segments. It serves approximately 100 cities in Alaska, the Lower 48, Hawaii, Canada, and Mexico. As of December 31, 2014, the company’s fleet consisted of 137 Boeing 737 jet aircraft; and 51 Bombardier Q400 turboprop aircraft. The company was founded in 1932 and is based in Seattle, Washington.
(Summary) (Company) (Chart)

10 October 2015
Price $75.92
1yr Target $88.14
Analysts 14
Dividend $0.88
Payout Ratio 16.00%

1yr Cap Gain 16.09%
Yield 1.15%
1yr Tot Return 17.24%

EPS (ttm) $5.50
EPS next yr $6.89
EPS next 5yr 18.02%
1yr Potential $124.15
P/E 13.77
PEG 0.76
Beta 0.82
Market Cap $9.65 Bil
Revenues $5.48 Bil
Earnings $729.00 Mil
Profit Margin 13.30%

1yr EarnGR 23.46%
3yr EarnGR 38.15%
5yr EarnGR 80.60%
1yr DivGR 43.33%
3yr DivGR ---
5yr DivGR ---
Quick Ratio 0.80
Current Ratio 0.90
Debt/Equity 0.34
ROA 11.50%
ROE 33.40%

Delta Air Lines provides scheduled air transportation for passengers and cargo worldwide. The company operates in two segments, Airline and Refinery. Its route network comprises various gateway airports in Amsterdam, Detroit, Los Angeles, Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City, Seattle, and Tokyo-Narita. The company sells its tickets through various distribution channels, including mobile and telephone reservations, delta.com, traditional brick and mortar, and online travel agencies. It also provides maintenance and repair services for third parties, as well as offers staffing services, professional security and training services, and aviation solutions; vacation packages; and aircraft charters, and aircraft management and programs. The company operates approximately 900 aircrafts. Delta Air Lines, Inc. was founded in 1924 and is headquartered in Atlanta, Georgia.
(Summary) (Company) (Chart)

10 October 2015
Price $47.21
1yr Target $60.40
Analysts 15
Dividend $0.54
Payout Ratio 23.58%

1yr Cap Gain 27.93%
Yield 1.14%
1yr Tot Return 29.07%

EPS (ttm) $2.29
EPS next yr $5.59
EPS next 5yr 20.59%
1yr Potential $115.09
P/E 20.07
PEG 0.97
Beta 0.79
Market Cap $36.56 Bil
Revenues $40.92 Bil
Earnings $1.88 Bil
Profit Margin 4.59%

1yr EarnGR -93.58%
3yr EarnGR -8.18%
5yr EarnGR ---
1yr DivGR 175.00%
3yr DivGR ---
5yr DivGR ---
Quick Ratio 0.60
Current Ratio 0.70
Debt/Equity 0.97
ROA 3.50%
ROE 18.90%

Southwest Airlines operates passenger airlines that provide scheduled air transportation services in the United States and near-international markets. As of December 31, 2014, it operated 665 Boeing 737 aircraft; and had 12 Boeing 717 aircraft. The company served 93 destinations in 40 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as 5 near-international countries, including Mexico, Jamaica, The Bahamas, Aruba, and the Dominican Republic. It also sells frequent flyer points and related services to business partners participating in the Rapid Rewards frequent flyer program, including car rental agencies, hotels, restaurants, and retail locations. The company was founded in 1967 and is headquartered in Dallas, Texas.
(Summary) (Company) (Chart)

10 October 2015
Price $39.94
1yr Target $50.71
Analysts 14
Dividend $0.30
Payout Ratio 12.93%

1yr Cap Gain 26.96%
Yield 0.75%
1yr Tot Return 27.71%

EPS (ttm) $2.32
EPS next yr $3.81
EPS next 5yr 26.84%
1yr Potential $102.26
P/E 16.71
PEG 0.62
Beta 0.65
Market Cap $25.56 Bil
Revenues $18.95 Bil
Earnings $1.58 Bil
Profit Margin 4.59%

1yr EarnGR 56.19%
3yr EarnGR 91.21%
5yr EarnGR 66.02%
1yr DivGR 144.44%
3yr DivGR 120.62%
5yr DivGR 61.53%
Quick Ratio 0.60
Current Ratio 0.70
Debt/Equity 0.40
ROA 7.60%
ROE 22.40%

Virgin America provides scheduled air travel services. As of December 31, 2014, it provided services to 21 airports in the United States and Mexico with a fleet of approximately 53 Airbus single-aisle aircraft, including of 10 Airbus A319s and 43 Airbus A320s. The company was formerly known as Best Air Holdings, Inc., and changed its name to Virgin America Inc. in November 2005. Virgin America Inc. was incorporated in 2004 and is headquartered in Burlingame, California.
(Summary) (Company) (Chart)

10 October 2015
Price $33.91
1yr Target $39.73
Analysts 10
Dividend $1.39
Payout Ratio 48.94%

1yr Cap Gain 17.16%
Yield 4.09%
1yr Tot Return 21.25%

EPS (ttm) $2.84
EPS next yr $4.56
EPS next 5yr 24.62%
1yr Potential $112.26
P/E 11.69
PEG 0.47
Beta ---
Market Cap $1.44 Bil
Revenues $1.51 Bil
Earnings $124.10 Mil
Profit Margin 8.21%

1yr EarnGR ---
3yr EarnGR ---
5yr EarnGR ---
1yr DivGR ---
3yr DivGR ---
5yr DivGR ---
Quick Ratio 1.30
Current Ratio 1.30
Debt/Equity 0.26
ROA 11.90%
ROE 42.30%

My Perspective

The airline industry hasn't had a very good history of taking care of its shareholders but that may finally be changing. I think the airlines may have finally figured out how to operate as a business with a long term strategic view for survival. The only major airline here (Delta) has survived battles with other major airlines, many of which are no longer in existence. The other three have operated in, and been very successful, in niche areas, but as they grow they'll start to come into conflict with the major airlines.

I'm of the belief that the airlines may be on the verge of a major move higher along with the economies of the world. And these four airlines are the four that I'd be interested in because they each have a nice one year estimated total return on investment. Based on the data above I'd be most interested in Alaska Air and Southwest Airlines.

As a result, I'll probably open a small position in one of these two airlines in the near future and see how the position progresses.

ArcBest Corporation

10/7/2015

A small moving company that started over 90 years ago as OK Transfer has grown and evolved into one of the country's premier trucking companies. Today that company is named ArcBest Corporation and it is a multibillion dollar freight transportation and logistics company with five subsidiaries that solve complex transportation and logistics challenges: ABF Freight, ABF Logistics, Panther Premium Logistics, FleetNet America and ArcBest Technologies.

ArcBest Corporation provides freight transportation services and integrated logistics solutions worldwide. The company's Freight Transportation segment transports general commodities, such as food, textiles, apparel, furniture, appliances, chemicals, petroleum products, rubber, plastics, metal and metal products, wood, glass, automotive parts, machinery, and miscellaneous manufactured products through less than container load services. This segment also offers motor carrier services in Canada and Puerto Rico through arrangements with other trucking companies. Its Premium Logistics & Expedited Freight Services segment provides expedited freight transportation services to commercial and government customers; premium logistics services, such as deployment of specialized equipment to meet line haul requirements; and domestic and international freight transportation with air, ocean, and ground service. The company's Transportation Management segment offers third-party transportation brokerage and management services by sourcing various capacity solutions, including dry van over the road and intermodal, flatbed, temperature-controlled, and specialized equipment. This segment also provides full container load and expedited less than container load ocean transportation services; and transportation and warehouse management services. Its Emergency & Preventative Maintenance segment offers roadside assistance and maintenance management services for commercial vehicles through third-party service providers. The company's Household Goods Moving Services segment provides third-party transportation, warehousing, and delivery services to consumer, corporate, and military household goods moving markets. As of December 31, 2014, it operated approximately 4,100 tractors and 19,900 trailers. The company was formerly known as Arkansas Best Corporation and changed its name to ArcBest Corporation in May 2014. The company was founded in 1923 and is headquartered in Fort Smith, Arkansas.
(Summary) (Company) (Chart)

7 October 2015
Price $26.53
1yr Target $39.22
Analysts 9
Dividend $0.24
Payout Ratio 11.88%
1yr Cap Gain 49.52%
Yield 0.90%
1yr Tot Return 50.42%

EPS (ttm) $2.02
EPS next yr $2.82
EPS next 5yr 19.20%
1yr Potential $54.14
P/E 13.16
PEG 0.69
Beta 1.74
Market Cap $689.74 Mil
Revenues $2.69 Bil
Earnings $53.00 Mil
Profit Margin 1.97%

1yr EarnGR 186.44%
3yr EarnGR 93.12%
5yr EarnGR ---
1yr DivGR 33.33%
3yr DivGR ---
5yr DivGR ---
Quick Ratio 1.50
Current Ratio 1.50
Debt/Equity 0.28
ROA 4.60%
ROE 9.40%

The Subsidiaries

The Company's HIstory

In 1923 the company was founded as a local freight hauler, the company operated in and around Fort Smith, Arkansas, as OK Transfer. In 1935 OK Transfer acquired Arkansas Motor Freight (AMF) and assumed its name and became an interstate carrier with the purchase of Motor Express. In the 1940s Operated as a regional carrier in Arkansas, Missouri and Louisiana. In 1951 Robert A. Young Jr. purchased AMF and made other key acquisitions. In 1956 AMF acquired Best Motor Freight and became Arkansas Best Freight System Inc. the next year – later renamed ABF. In 1966 Arkansas Best Corporation is formed. System expansion continued with the purchase of Healzer Cartage Company, Delta Motor Line and others. In 1972 Arkansas Best Corporation becomes a public company listed on the New York Stock Exchange. In 1978 With the purchase of Navajo Freight Lines, ABF becomes one of 12 transcontinental motor carriers. In 1980 The Motor Carrier Act of 1980 is introduced, and the trucking industry is deregulated. In 1988 Arkansas Best Corporation endures a hostile takeover attempt. A leveraged buyout is executed and Arkansas Best becomes a private company. In 1992 Arkansas Best Corporation once again becomes a public company, now traded on the Nasdaq Stock Exchange. In 1994 Arkansas Best expands its global capabilities through its own non-vessel operating common carrier (NVOCC) operation. In 1995 Worldway acquisition, which includes the purchase of FleetNet America. In 2006 Robert A. Young III retires as CEO after a 42-year career. He remains as Chairman of the Arkansas Best Corporation Board. In 2010 Judy R. McReynolds is named President and CEO of Arkansas Best Corporation. In 2011 Arkansas Best completes the purchase of Albert Moving. In 2012 Arkansas Best purchases Panther Expedited. In 2013 Arkansas Best expands its portfolio of transportation solutions with the formation of ABF Logistics. And finally, in 2014 Arkansas Best is renamed ArcBest Corporation.

My Perspective

I like this company primarily because of its fundamentals and the fact that it has pulled back from the high 40s earlier in 2015. This company has a high growth rate, a low payout rate, has more assets than liabilities, and can easily cover its debts. It's also expanding its footprint in Fort Smith, AR, and bringing almost 1000 jobs to the community. I expect this company to grow for another 90 years and I intend to be one of the company's shareholders and benefit from that growth.

I expect that with an estimated five year growth rate of almost twenty percent, the analysts have suggested price targets that are simply too low. I believe this company's stock could easily double in the next 18 months and the same could possibly be said for the dividend.

I expect to start a position in this company in the next few weeks and then grow that position through dividends and the sale of options. I also expect to be able to easily trade in and out of this stock as well and to sell some very lucrative options because of the stock's high beta (1.74).

If managed properly, this stock could be a lot of fun.

Gilead Sciences

10/2/2015

Gilead Sciences is an American biotechnology company that discovers, develops and commercializes therapeutics. For many years since the company was founded, the company concentrated primarily on antiviral drugs to treat patients infected with HIV, hepatitis B, hepatitis C, or influenza. In 2006, Gilead acquired two companies that were developing drugs to treat patients with pulmonary diseases. The company has fourteen commercially available products. Headquartered and founded in Foster City, California, Gilead has operations in North America, Europe and Australia.

Gilead Sciences, Inc. discovers, develops, and commercializes medicines in areas of unmet medical need in North America, South America, Europe, and the Asia-Pacific. The company’s products include Stribild, Complera/Eviplera, Atripla, Truvada, Viread, Emtriva, Tybost, and Vitekta for the treatment of human immunodeficiency virus (HIV) infection in adults; and Harvoni, Sovaldi, Viread, and Hepsera products for the treatment of liver disease. It also offers Zydelig, a PI3K delta inhibitor, in combination with rituximab, for the treatment of certain blood cancers; Letairis, an endothelin receptor antagonist for the treatment of pulmonary arterial hypertension; Ranexa, a tablet used for the treatment of chronic angina; Lexiscan/Rapiscan injection for use as a pharmacologic stress agent in radionuclide myocardial perfusion imaging; Cayston, an inhaled antibiotic for the treatment of respiratory systems in cystic fibrosis patients; and Tamiflu, an oral antiviral capsule for the treatment and prevention of influenza A and B. In addition, the company provides other products, such as AmBisome, an antifungal agent to treat serious invasive fungal infections; and Macugen, an anti-angiogenic oligonucleotide to treat neovascular age-related macular degeneration. Further, it has product candidates in various stages of development for the treatment of HIV/AIDS and liver diseases, such as hepatitis B virus and hepatitis C virus; inflammation/oncology; serious cardiovascular; and respiratory conditions. The company markets its products through its commercial teams and/or in conjunction with third-party distributors and corporate partners. Gilead Sciences, Inc. has collaborations with Bristol-Myers Squibb Company, Janssen R&D Ireland, and Japan Tobacco Inc. to develop and commercialize various products. The company was founded in 1987 and is headquartered in Foster City, California.
(Summary) (Company) (Chart)

27 September 2015
Price $98.27
1yr Target $125.06
Analysts 16
Dividend $1.72
Payout Ratio 18.04%
1yr Cap Gain 27.26%
Yield 1.75%
1yr Tot Return 29.01%

EPS (ttm) $9.53
EPS next yr $11.60
EPS next 5yr 16.73%
1yr Potential $194.06
P/E 10.30
PEG 0.62
Beta 0.85
Market Cap $144.10 Bil
Revenues $29.19 Bil
Earnings $15.04 Bil
Profit Margin 51.52%

1yr EarnGR 306.07%
3yr EarnGR 59.97%
5yr EarnGR 39.12%
1yr DivGR ---
3yr DivGR ---
5yr DivGR ---
Quick Ratio 1.80
Current Ratio 2.00
Debt/Equity 0.75
ROA 42.70%
ROE 96.30%

The Company's History

Gilead debuted on the NASDAQ in January 1992. Its IPO raised $86.25 million in proceeds.

In June 1996, Gilead launched Vistide (cidofovir injection) for the treatment of cytomegalovirus (CMV) retinitis in patients with AIDS. The company cooperated with Pharmacia & Upjohn to market the product outside the United States.

In March 1999, Gilead acquired NeXstar Pharmaceuticals of Boulder, Colorado following two years of negotiations with the company. At the time, NeXstar's annual sales of $130 million was three times Gilead's sales. NeXstar's two revenue-generating drugs were AmBisome, an injectable fungal treatment, and DaunoXome, an oncology drug taken by HIV patients. Also in 1999, Roche announced first approval of Tamiflu (oseltamivir) for the treatment of influenza. Tamiflu was originally discovered by Gilead and licensed to Roche for late-phase development and marketing. Viread (tenofovir) achieved first approval in 2001 for the treatment of HIV.

In January 2003, Gilead completed its acquisition of Triangle Pharmaceuticals. The company also announced its first full year of profitability. Later that year Hepsera (adefovir) was approved for the treatment of chronic hepatitis B, and Emtriva (emtricitabine) for the treatment of HIV.

In 2004, Gilead launched Truvada, a fixed-dose combination of tenofovir and emtricitabine.

In November 2005, George W. Bush urged Congress to pass $7.1 billion in emergency funding to prepare for the possible bird flu pandemic, of which $1 billion is solely dedicated to the purchase, and distribution of Tamiflu.

In July 2006, the U.S. Food and Drug Administration (FDA) approved Atripla, a once a day single tablet regimen for HIV, combining Sustiva (efavirenz), a Bristol-Myers Squibb product, and Truvada (emtricitabine and tenofovir disoproxil fumarate), a Gilead product.

Gilead purchased Raylo Chemicals, Inc. in November 2006 for a price of $133.3 million. Raylo Chemical, based in Edmonton, Alberta, was a wholly owned subsidiary of Degussa AG, a German company. Raylo Chemical was a custom manufacturer of active pharmaceutical ingredients and advanced intermediates for the pharmaceutical and biopharmaceutical industries.

In 2006, Gilead completed two acquisitions that allowed the company to branch out from its historical antiviral franchise into the cardiovascular and respiratory therapeutic arenas.

Myogen, based in Boulder, Colorado, was completing Phase 3 studies of ambrisentan—now marketed as "Letairis"—an orally available endothelin receptor antagonist. The U.S. FDA subsequently approved ambrisentan for the treatment of pulmonary arterial hypertension in June 2007.

Under an agreement with GlaxoSmithKline, Myogen marketed Flolan (epoprostenol sodium) in the United States for the treatment of primary pulmonary hypertension. Additionally, Myogen was developing (in Phase 3 studies) darusentan, also an endothelin receptor antagonist, for the potential treatment of resistant hypertension.

The other acquisition was Corus Pharma. Corus's lead product candidate, aztreonam lysine for inhalation, is an antibiotic with activity against gram-negative bacteria including Pseudomonas aeruginosa, which can cause lung infections in patients with cystic fibrosis. The product is in Phase 3 studies. Gilead also obtained an inhalation formulation of two antibiotics for treatment of respiratory infections.

Gilead expanded its move into respiratory therapeutics in 2007 by entering into a licensing agreement with Parion for an epithelial sodium channel inhibitor for the treatment of pulmonary diseases, including cystic fibrosis, chronic obstructive pulmonary disease and bronchiectasis.

In 2009, Gilead acquired CV Therapeutics for about $1.4B. This acquisition brought Ranexa and Lexiscan as commercial products. In 2009 the company received the award for one of the Fastest Growing Companies by Fortune. In the same year they were also named as one America's Top Companies to work for by Forbes.

On July 16, 2012, The Food and Drug Administration approved the first drug shown to reduce the risk of HIV infection manufactured by Gilead Sciences. The pill Truvada as a preventive measure (PrEP) for people who are at high risk of getting HIV through sexual activity.

Citing a market capitalization of US$113 billion and stock appreciation of 100%, and describing their 2011 purchase of Pharmasset for $11 billion as “one of the best pharma acquisitions ever”, Gilead Sciences was reported as the number 4 ranked drug company of 2013 by Forbes Magazine. The strong performance of Gilead in 2013 has also been linked to the FDA approval, and strong sales performance, of their “potentially revolutionary” Hepatitis-C drug Sovaldi. with US 4Q’13 sales estimated by Deutsche Bank at $53M.

My Perspective

This company was included in my list of best ideas this past week and it's been on my radar for months. And I don't really know why I haven't had a position in this company. But I rectified that situation this past week. I think this is probably one of the few great biotechnology companies out there, and those few are really pharmaceutical companies. The idea that they are niche research companies dabbling in the new world of biotechnology is just fantasy. These companies are now "Big Pharma" and to not see them as that is just foolishness.

I intend to build on the position that I've started in a rather ambitious way. Recent comments by politicians stating that medicines are over priced and need to be reduced has pushed the drug companies lower and the biotechnology companies even lower. I see this as a rare opportunity to take advantage of these low prices and stock up on these securities. And that's exactly what I'm doing.

I expect that these securities may pull back even further as the politicians begin to gang up on these companies and blame them for the failure of The Affordable Care Act to control drug costs. That said, these companies and their products are going to be critical to the future health of the United States and their future discoveries will enhance the health of the entire world.

Based upon my expectations of future revenues, earnings and the company's recent announcement to begin distributing a quarterly dividend, I expect to be a shareholder in Gilead Sciences for many years to come.

Author

I am an Individual Investor with specific interest in long term growth and then enhancing my returns with income from dividends and derivatives. I don't recommend stocks to anyone (it's a good way to lose friends) and no one reading this should misinterpret my blog as a recommendation for any type of investment. I am writing this solely for myself and my kids.

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