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No. of Recommendations: 5
Market hates them, mail business shrinking and all that. But they do make money. Target EPS
from valueline is .95 in 2019 and 1.10 in 2020. VL's 3-5 year price target is between
8.00 and 13.00.

On the business side, they purchased a company called Newgistics in 2017 which
looks to be a bet on e-commerce. I don't know the ins and outs of that industry but
there will likely be more packages (and less US mail) sent each year from here on out
for quite some time.


PBI's business is shrinking and has been for years. It's a creature of the 20th century, when a lot of business was transacted on paper via the US mail. There is some legacy business there but it's shrinking today. At the Fire House most bills and even medical information arrives electronically now.

The volume of packages shipped is growing overall, but it's not clear that PBI has some special advantage in this space vs. other players.

Also, I do note that management cut the dividend to increase share buybacks...sensible as a
response to the drop in price. (But do to the drop in price it now yields over 6%)


Yahoo Finance reports the dividend payout ratio is 78%. That's alarmingly high. Dividend is going to get cut; just a question of when.

One thing I'm lukewarm on is their increasing business loan division. I agree with the statement
that lots of small businesses have a hard time getting loans but there seems to be a good
degree of risk there and I wonder if PBI has an advantage or is just crawling into a mine field.
I also have a hard time separating the additional debt fo fund that with the debt from ops.


Agreed this is a troubling move. It was like they were out of other ideas to try so hey let's go into finance what could possibly go wrong? Several successful businesses have been killed by this move. Do they have some insight here that I'm missing? What advantage does PBI have here vs. a traditional bank?

Anyone else have thoughts here? Unless they swing to losses or have funding risk it seems hard to
fail buying at an estimated 2020 PE of 3.


One other thing that jumped out at me in the five minutes I spent on this is that 20% of the float is short. That's a lot of short interest. You might make some money here on short squeezes if you were so inclined. It's risky and I probably won't do that myself.

Otherwise this seems like a business that's destined to go to zero eventually, just a question of when that happens.

Regards,

- HCF
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