Message Font: Serif | Sans-Serif
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 15637  
Subject: Re: FKA:ACN Date: 6/29/2013 6:09 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 10
I bought some more IBM on their little dip, in-the-money calls.
I think it will do well in the next 4 years.
They have forecast $20 EPS by 2015, and I think they'll manage it by 2016 to allow for a flubbed year.
I think 13-14x isn't unreasonable, so a target of $280 isn't nuts and $260 seems eminently likely,
so that's my target range around the time the January 2017 calls expire.
I'm buying Jan 2015s and pencilling a few bucks more for the cost to roll to 2017 if needed.

One thing about these price dips though: given the massive ongoing share
buybacks, the more the price stays low for now the more likely it is they
will hit the $20 EPS in 2015 as forecast. A given repurchase retires
more shares, leaving fewer shares among which to divide the earnings.
So I guess I want low prices for a good long while, then a zoom!
Very contrarian.
The lower the market's expectations for growth, the lower the price.
The lower the price (for now), the higher the earnings growth will (later) due to cheap buybacks.
So low expectations will lead directly to better results, and vice versa.

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.