Honeywell should increase Dividend! $HON Will Management Send the Signal?

Honeywell (NYSE:HON) produced some very nice earnings. Not a flashy stock with a lot if noise it treated as an old school industrial. However looking at its markets of transportation and aeronautics it really is a high-tech business with large moats. not everyone can just start installing parts onto an aircraft carrying hundreds of passengers.

The proof or validation for the earning will be an increase in dividend. When you are firing on all cylinders as Honeywell is shareholders need to be rewarded. Current yield is just under 2%. Free cash flow for the past two years has not been stellar. But cash on hand has been rising.

If management and the board are shareholder conscious they will increase the dividend and play to the buy and hold investors. so far no signals from management. Why is that?

George Gutowski writes from a caveat emptor perspective.

Muddy Waters Tears a Strip off $AMT. What about brokerages with a buy recommendation.

Muddy Waters has declared the emperor wears no clothes at American Tower Corp (NYSE:AMT) They have a few interesting points which I leave the readers to do their own due diligence on. Muddy Waters traditionally has a modus operandi of making it look very bad.

Management should be responding shortly. Documents have been sent to the SEC which confirm Muddy Waters reasoning. What about the investment firms that have signed off on AMT and producing glowing reports.

Fitch Ratings upgraded American Tower REIT’s credit ratings by a notch, pointing to what they felt were the company’s strong free cash flow and margins as well as its low business risk model.

The firm bumped AMT’s issuer-default rating to triple-B, which is two steps into investment territory, from triple-B-minus. The outlook we are told is stable is stable. Muddy Waters disagrees with a few points.

On May 21 Macquarie raised the stock to outperform from neutral.

On May 17 Barclay’s started coverage on the stock with an overweight.

In the meantime if you follow any regulatory financial releases from the company the numbers were not looking so good. At least to my eyes.

Going to be a lawyers delight.

George Gutowski writes from a caveat emptor perspective.

The correct way to analyze Yahoo $YHOO

Yahoo (Nasdaq:YHOO) shares have done well for the past year mainly because of faith in the new CEO Marissa Mayer. But revenues have fallen and some investors are worrying. Tech stocks are not used to rebuilds and restructure and perhaps this is a good time to think about a process old line industrial stocks have followed for years.

Firstly restructures do not happen over night. It takes a long time to hire the correct staff get them focused and start producing commercial results.

Secondly a lot of existing revenue sources are declining and are or will be abandoned shortly. Temporarily this will cause short-term dips.

Thirdly the real catalysts for driving shareholder wealth will come from my products and new applications. Watch this space like a hawk. This is what will determine Yahoo’s success. Getting into a fist fight with Google or Facebook only results in a war of attrition with declining profit margins. Much like reading a history of World War One. Much bloodshed little progress. World War Two you had tanks, aircraft and new thinking on both sides.

Lastly watch the acquisitions space. Yahoo knows they have to buy and buy quickly.

So a classic financial analysis of quarterly earnings will profit little. So for those of you who like to analyze the crap out of everything don’t bother. The winning cards have not yet been dealt.

George Gutowski writes from a caveat emptor perspective.

JP Morgan Tricks and Sleight of Hand. Need Proof in Dividend $JPM

JP Morgan (NYSE:JPM) came up with a beat the street for latest quarterly earnings. When you think about it Jamie Dimon after all the controversy at the AGM about his role as Chairman and CEO could not come up with less than expected. But buddy you cheatin a bit. As a bank you warn us that loan growth is soft. Then we all hear that mortgage refi and the housing market is not as strong as we want it to be. Then you make the numbers by cutting back on your loan loss reserves. If you had not cut back on loan loss you would have had a big miss. The four-year trend looks like the slope of a double black diamond skill hill. Dangerous.

So the operations are not carrying themselves as well as they should. Investors are starting to get tired of the magic trick. We all know banks will lose money somewhere, somehow and for sure. So why cut back and manufacture pretty profits for today. The profits are like cut fresh flowers. They eventually wilt.

The real proof is in the dividend. In God we trust all others including Jamie Dimon pay cash. When they pop the dividend that’s when you start to believe. In the meantime from the folks that brought you the London Whale and then made earnings by dropping loan loss provisions it’s a real caveat emptor moment. No need to rush in.

George Gutowski writes from a caveat emptor perspective.

Ultimate Hedge Position. Short Mcdonald’s $MCD Long Diabetes. Open to suggestions-Diabetes Contango.

Business Week has an interested cover of the reality of hedge funds. Long overdue.

Consider the ultimate hedge position. Play the Diabetes Contango. Short McDonald’s (NYSE:MCD) who with extra fries has done a lot to promote diabetes. Go long something with a Diabetes solution. Which raises the question which stock will be the financial standard-bearer in the fight against diabetes. Currently an epidemic in western countries with some 20% of general population affected. Drugs, health care provider, diabetes supply manufacturer. This is perhaps the next golden grail.  This is just the strategic big bet that Jack Welch and the old General Electric or GE (NYSE:GE) were famous for.

Who will make it this time?

George Gutowski writes from a caveat emptor perspective. Lots of home work to do after this post.

Blackberry Busted Play or Classic Contrarian Tool $BBRY #smartphone $AAPL

Blackberry (Nasdaq:BBRY) is the markets favourite whipping boy. Everyone knows they have lost their touch. Everyone knows they are not the smart players in the smart phone market. Everyone knows to be hyper negative. Short position is about 37% of float.  That’s hugely bullish. all large short positions must be ultimately covered.

Cash position is about 53% of market cap. When was the last time that a stock value of 53% cash disintegrated. Margins are still positive and revenues are growing. They do not need to beat Apple. They just need to prove steadily increasing revenues and profits and investors will discover it. Currently no debt as well.

This is like an option on technology. Not everyone needs to be a world-beating monolith. You just need to prove you can create shareholder wealth long-term. However at todays annual meeting do not expect any major announcements. They’ll play out some disgruntled investors and look down the road.

With this cash position watch for some acquisitions. Blackberry needs to change the air inside a lot of journalistic heads and get them focused on another narrative. Once the I-bankers start to smell the acquisition fees watch the buy recommendations come out.

George Gutowski writes from a caveat emptor perspective.

Hush My Children. Volatility has gone away. $VIX $VXX Maniacal Laughter Follows

Hush my children volatility has gone away. It was so unwelcome and made investors so unhappy. You know everyone likes to be long and happy. Blue skies as far as we can see. Never mind about any of the following issues.

  1. Tapering off of QE and rising interest rates negatively impacting personal and corporate circumstances.
  2. Rising price of Oil which sucks money out of the economy faster than a tax.
  3. Fragile recovery with uncertain employment growth.
  4. Certain knowledge that stocks cannot continue to go up forever.
  5. Huge federal deficit distorting real economic conditions.
  6. Fewer and fewer CEO’s ready to guide earnings upwards.
  7. Lack of personal savings jeopardizing many a seniors retirement.
  8. China bubble may blow because of China Debt bubble.
  9. Europe is not stable financially. But you all knew that.
  10. Obama-care delays creating uncertain financial burdens on individuals and small businesses.
  11. Chaotic middle east. Potential allies difficult to assess.

That’s before you drill down and listen to a particular story about any one of thousands of stocks.

Hush my children. Volatility has gone away. If you hear maniacal laughter pay no heed. They’re only disturbed and must no be paid attention to.

George Gutowski writes from a caveat emptor perspective. Todays best advise is to keep your powder dry and value liquidity. Investing is a long-term process.