Pitney Bowes (PBI)

[jpr62902]

I was watching a video where this financial "pundit" was proclaiming that Pitney Bowes was not a good stock because mail will soon be "dead." What? While it is certainly a declining means of communication, it will never be "dead." We will always have to move stuff from one point to another and until we figure out the teleporting thing, mail (federal or private) will always be the way to do it.

Financially, PBI has:

1. a dividend payout ratio around 50%;
2. increasing cash flow;
3. increasing profit (2011 was 2x 2010), and;
4. increasing shareholder equity.

Am I missing something here?

 

[waybomb]

If all they do is support postage, they are dead meat. I'm sorry, but in ten years, usps will be no more.
What else does pbi market these days?

 

[jpr62902]

If all they do is support postage, they are dead meat. I'm sorry, but in ten years, usps will be no more.
What else does pbi market these days?

That's just it. They don't just do postage. Good article here: http://seekingalpha.com/article/499...ill-survive-and-offers-a-9-yield?source=yahoo

 

[waybomb]

Looks like I'll be doing some research Mr esquire! But first I'm going to check out volly in the am. Sounds like something e could take advantage of with some of our smaller dollar customers.

On the face of it, seems as if pbi saw the writing on the wall and reacted early enough to be ahead of the curve.

 

[jpr62902]

Looks like I'll be doing some research Mr esquire! But first I'm going to check out volly in the am. Sounds like something e could take advantage of with some of our smaller dollar customers.

On the face of it, seems as if pbi saw the writing on the wall and reacted early enough to be ahead of the curve.

I bought PBI when it was just over $19 and I'm more than happy it's trading at just over $17 (for now) since my shares are in a DRIP. The 52 week high is $26.36, so I'm thinking its heavy discount is based largely on the premise that they're too intertwined with the USPS, when they're actually not. Hence why I'm wondering if I'm missing something ... Lemme know watcha find out Fred, since I'm thinking of doubling down on it. It's hard to look away from a 9% dividend that's only a 50% payout of earnings, know what I mean?

What is "volly"?

 

[JEV]

I bought PBI when it was just over $19 and I'm more than happy it's trading at just over $17 (for now) since my shares are in a DRIP. The 52 week high is $26.36, so I'm thinking its heavy discount is based largely on the premise that they're too intertwined with the USPS, when they're actually not. Hence why I'm wondering if I'm missing something ... Lemme know watcha find out Fred, since I'm thinking of doubling down on it. It's hard to look away from a 9% dividend that's only a 50% payout of earnings, know what I mean?

What is "volly"?

Funny you should bring this up. Just read an article yesterday (don't remember where) talking about all the BOGO stocks out there right now. Good fundamentals, good dividends, but the prices are in the tank because of market volatility. It's a buyer's market if you do your due diligence properly and move quickly.

 

[jpr62902]

Funny you should bring this up. Just read an article yesterday (don't remember where) talking about all the BOGO stocks out there right now. Good fundamentals, good dividends, but the prices are in the tank because of market volatility. It's a buyer's market if you do your due diligence properly and move quickly.

Due diligence is right. There's also a shitload of overbought stuff out there. Lockheed, Altria and Reynolds American are on my watchlist, but are all trading near 52 week highs and 30+% over their lows in the last year.

But Johnson & Johnson's looking good right now.

 

[waybomb]

Here's what Volly is.
http://www.volly.com/



So I went and spent a little time scoping PBI out. Too many ifs for me. A few analysts wrote of funny stuff on the balance sheet. I have not looked at it yet, just reading blogs and articles. Maybe tonight. They do carry allot of debt at a time when companies are flush with cash. Back to work..........

 

[JEV]

Here's what Volly is.
http://www.volly.com/



So I went and spent a little time scoping PBI out. Too many ifs for me. A few analysts wrote of funny stuff on the balance sheet. I have not looked at it yet, just reading blogs and articles. Maybe tonight. They do carry allot of debt at a time when companies are flush with cash. Back to work..........

Same results here when I started research. 5 year trend is all down, so not one I would add to my potfolio right now. Cycles are spread wider than I like, all seemingly ending down further each down stroke. I'm looking for more dividend paying stocks with good track records, since I plan to retire soon.

 

[jpr62902]

Same results here when I started research. 5 year trend is all down, so not one I would add to my potfolio right now. Cycles are spread wider than I like, all seemingly ending down further each down stroke. I'm looking for more dividend paying stocks with good track records, since I plan to retire soon.

Are you just looking at price history, JEV? Not being critical, I'm just trying to figure out the love\hate relationship analysts have with PBI.

 

[jpr62902]

Here's what Volly is.
http://www.volly.com/



So I went and spent a little time scoping PBI out. Too many ifs for me. A few analysts wrote of funny stuff on the balance sheet. I have not looked at it yet, just reading blogs and articles. Maybe tonight. They do carry allot of debt at a time when companies are flush with cash. Back to work..........

Where are you getting this info, Fred? Again, I'm not trying to criticize, just trying to learn. When I look at their balance sheet, I see that PBI has a bunch of treasury stock. That tells me the company has enough cash to buy back its own stock. Companies don't do that when they're not doing well.

 

[waybomb]

Maybe I'm looking at it incorrectly, but I see d/e 1.3 or so.
I've also seen some analysts looking at pbi as a short term possibility, but I'm done with chasing that gold.
I skimmed over volly, but I have concerns with acceptance of something so encompassing.

One more thing, look at goodwill. Two point four billion. Seriously?

 

[waybomb]

Downgraded
http://www.reuters.com/article/2012...0424?feedType=RSS&feedName=marketsNews&rpc=43

(Reuters) - Pitney Bowes Inc : * Moodys downgrades Pitney Bowes sr. unsec. to baa1, short-term to p-2);
outlook stable


I replied to another member's pm when questioning me on some of my replies. I have made the big money by going with gut, not fundamentals.

When I have gone on fundamentals (everybody has their own), I have come out ahead, but not enough to retire on! And some have been stellar losses.

No matter what, I have learned that earnings really mean nothing to the stock market; volume computer trading is what drives the prices. I am slowly coming to realize that balance sheets mean way more than income statements to those computer algorithms.

I have also learned that sticking with a few companies and watching them very closely, you can ride the highs and lows. (Think ValueJet/AAI; TXT; TSN - big ups and big downs, but solid companies nonetheless)

PBI just gives me no good gut feel and that goodwill is a serious issue with a stodgy old company like PBI. They've way overpaid for something. But then again, if they can somehow make a comeback with some new tech, somebody will get rich, quickly.

JPR - what's your gut telling you?

ps - the downgrade really means nothing to the algorithms, in my estimation.

 

[jpr62902]

I look at the goodwill value in the context of the worth of the whole company. PBI's goodwill is a little over 25% of their total assets (see: http://finance.yahoo.com/q/bs?s=PBI+Balance+Sheet&annual).

I understand we all have different metrics and risk tolerances. I was just trying to others' opinions on this stock. With a 9% dividend that represents only a 50% payout of earnings, I think PBI is a good risk for now ...

As for earnings not having an impact on stock prices, check out what happened to RAI after their earnings report today. The price dropped 5% because (IMHO) folks misinterpreted what the earnings report really meant.

 

[waybomb]

What pbi should be doing it's taking impairment charges to bring the goodwill down to something reasonable, like 5% or less. If they did the right thing, in my mind anyway, income would be zero, until their balance sheet was adjusted to reality.
Then the stock might take off.
The dividend is funny money.
This is why the players in the market, the computers, will not drive this stock up. And if you want to make any earth shattering money on the market, you need to invest in an undervalued company. Hence, the balance sheet, not the income statement.
Play the computers and algorithms, not the market.
Just my thoughts on this game. Do not take any of this as investment advice; I am not a professional in the market.

 

[jpr62902]

What pbi should be doing it's taking impairment charges to bring the goodwill down to something reasonable, like 5% or less. If they did the right thing, in my mind anyway, income would be zero, until their balance sheet was adjusted to reality.
Then the stock might take off.
The dividend is funny money.
This is why the players in the market, the computers, will not drive this stock up. And if you want to make any earth shattering money on the market, you need to invest in an undervalued company. Hence, the balance sheet, not the income statement.
Play the computers and algorithms, not the market.
Just my thoughts on this game. Do not take any of this as investment advice; I am not a professional in the market.

And this appears to be where we differ, Fred. I'm not a trader, but instead have a 15 -- 20 year steady growth plan(via both appreciation and DRIP). I don't know enough about the technical stuff to make a killing with short term capital gains.

 

[waybomb]

I am not a trader either. I basically play one stock at a time. Have since 1996. Before that, I was in mutuals. I play the highs and lows of that one company. Those companies have been VJET/AAI, TSN, and TXT. I've made maybe 8 buys and 7 sells since '96. I hang on to them for months and months, sometimes years and years.

I do not believe that being in the market as I am shows I am a trader, but a fool by real stock players. I am a fool, but a happy camper for sure.

I believe analysts call all three of my stocks Alpha stocks. As the market moves either way, these usually move double. Or triple. Alas, AAI has been sucked up by Southwest, and TSN isn't going back to single digits, maybe ever. So all I am left with is TXT to play with.

I will also say I have "day traded" on a bunch of stocks, but only a few hundred shares at a time. Net/net, after taxes, I did ok. Maybe a 10% return, but nothing like playing my babies. Right now, I am all in on TXT at about 8 bucks. I am a fool. (I do have retirement accounts for that purpose, so stock money is funny money)

A stock like PBI moves half, and many times opposite.

Please look carefully at the balance sheet of PBI before you put money in it. I see BK on the horizon.

Paying big dividends, continually, dilutes the company. You can see it in PBIs Liabilities and in Goodwill. What good is big dividends if market cap drops by more than dividends? You do want to get your original investment back, right? And just fogedabot earnings. Earnings are already figured into the share price. You are buying the company, not the earnings.

But hey, many said VJet would go BK, TSN was going to go BK, and TXT was being running into the ground by Lew. So, maybe you have some insight on PBI that I don't.