Tag Archives: debt

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Estée Lauder – after –75% still not pretty + dividend in danger

A common misconception is that lower stock prices are akin to cheaper shares. Without much explanation, it is logical that this can only apply when the underlying business has at least been stable. Otherwise it is possible that a stock even becomes more expensive! While this is not the case at Estée Lauder, despite a 75% drop from its all-time high, the stock is still looking ugly valuation-wise. A decent downside risk remains. On top, the likelihood for a dividend cut or even entire suspension is significant.

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Investing in oligopolies isn’t always a winning strategy

Everyone knows that market concentration leads to less competition and in turn to more powerful entities within this group. Such oligopolies by definition should allow the respective companies to achieving strong results and high margins due to pricing power, but also where applicable economies of scale. In reality, however, not every sector or company offers automatically a good stock investment, even when factually operating in an oligopoly.

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Checkmate – more kings to have on the radar for dividend cuts

My longer time readers know that dividend cuts have been one of my favorite topics. It is of high importance for me to ring the bell in order to help investors get more cautious with their investments. There are no risk-free stocks. The same applies to proclaimed “bond-proxy” dividend stocks, no matter which useless title they hold in connection with their dividend series. Today, I’m presenting two more kings I have on my radar for a cut.

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Back to 2012 after the blocked acquisition – is Capri Holdings a buy?

Last year in August, struggling Capri Holdings, known for its brands Michael Kors, Versace and Jimmy Choo, received a bid from competitor Tapestry. Capri’s stock surged by 50%. However, the Federal Trade Commission (FTC) wants to block this deal in fear of market concentration. As the deal still hasn’t closed and court hearings are ongoing, the stock lost now the complete bid premium. It fell even back again to 2012-levels. Is the stock a buy now?

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The untold risks of average returns

This headline might sound confusing at first sight, but behind it is a topic worth thinking about. As one understands what’s behind “average returns”, a portfolio check-up could be appropriate, especially if one is overweight in stocks with past above average performances paired with high valuations. A few thoughts on risk-adjusted investing.

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Uncle Sam as tenant? Two stocks with government exposure – Part I

While it is not directly investing in the government per se as you won’t have any direct ownership in it (luckily), I’ve found two stocks that are operating in the name of it. I am not talking about defense companies where governments are the sole customers (individuals don’t buy tanks). There are two high-yielding REITs with several government agencies as their tenants. Are they worth a look? Part one.

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Buying companies after dividend cuts + new research report

What sounds crazy at first sight, indeed is rather an interesting strategy to think about. Sounds crazy, as almost everyone is talking about higher dividends? Let me make the case for dividend cuts! My next stock idea from my upcoming research report fits exactly into this scheme.

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“Fallen Angels” – why you should be cautious + new research report

No matter whether experienced or not, almost every investor is on the hunt for undervalued stocks to make money. What could be less welcome than a stock which has fallen in price and become cheaper? The problem is, “cheap” is not automatically “cheap”. In fact, buying cheap can become a costly mistake. I see a strict urgency to clean up with this dangerous myth that a stock only has to fall enough to become attractive.

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Why I don’t care about the Lindy effect

There are many rules of thumb and well-intentioned advice for younger investors. One such “rule” says that it is better to buy stocks of older and proven companies. While I do not disagree with this on an isolated basis, I am missing the second part, namely that every business has a certain life expectancy. There comes inevitably a time for every company to either step into the background or to disappear altogether. History is full of examples.

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“Everything-resistent” iconic consumer stocks are tanking – but why?

In times of economic or political stress it is always good to have defensive, iconic consumer stocks in the portfolio – at least this “common wisdom” applied in the past. However, during the current market decline which in technical terms was not even a correction (the peak to trough drop was less than 10%), the overall sentiment already showed first signs of a panic. Not only that, the highly praised “defensive” stocks actually lost disproportionately. How come? And was it foreseeable?

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