Investment

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6. Oct 14, 2006 5:42 AM

» SteveT - Big Investor Trims Stake in Amazon

.
By NAUREEN S. MALIK

A LONG-TIME INVESTOR has been steadily reducing its stake in Amazon.com, even as the online retail giant enters its seasonally strong fourth-quarter.

Over the past three quarters, Trust Company of the West, or TCW, has slashed its stake in Amazon to 24.3 million shares, or 5.8%, from an 11% stake at the end of last year, according to a Securities and Exchange Commission filing Tuesday.

TCW, based in Los Angeles Calif., manages more than $53 billion in assets on behalf of institutions, endowments, foundations and high net worth individuals, according to StreetSight.net.

The firm held nearly 31.3 million Amazon shares at the end of the first calendar quarter (March 31) and 26.97 million shares at the end of the second quarter (June 30).

Amazon has been buying back stock, but StreetSight.net calculates the first and second quarter stakes at 7.5% and 6.4%, respectively.

This year, the stock fell from a two-year high of $50 last December to a four-year low of $25.76 on Aug. 11. Shares closed Friday at $33.32.

TCW declined to comment. Amazon did not return a call seeking comment by deadline.

Certainly the selling has slowed down as Amazon shares continued to slip and TCW still owns a large amount of Amazon shares.

However, Ben Silverman, director of research at InsiderScore.com, says, "When you have big money investors like TCW moving out of a stock or decreasing its exposure to the stock, it's certainly something to take notice of."

While firms like TCW will actively buy and sell shares, he adds, "this is the first time they have sold the stock for three consecutive quarters since 2001."

In late 2001, Amazon "was struggling for profitability, the bubble had burst and the valuation was totally out of whack," says Silverman. Now there is more concern about competitors eating away the Internet retailer's presence, such as with "big-box retailers expanding their online presence," he adds.

TCW reported it had a stake in Amazon of less than 1% of the online retailer's total shares from early 1999 through much of 2002. It crossed the 5% ownership threshold in the first quarter of 2003 and regularly built its stake up since then.

The bulk of these purchases took place as Amazon shares rallied from 2002 to 2004. The stock bottomed out at around $6 in late 2001. As such, Jonathan Moreland, director of research at InsiderInsights.com, says TCW has "done extremely well and it looks as though they are taking home their marble and plan on playing elsewhere."

"They can definitely declare victory and go home at this point given their past transactions," he adds.

Overall, though, Joshua Hong, director of research at OwnershipAnalyzer.com, says the institutional picture looks "neutral," with selling by shareholders such as TCW offset by others' purchases.

For instance, Legg Mason Value Trust has "increased its ownership stake for eight consecutive quarters," notes InsiderScore.com's Silverman.

The $18.7 billion Legg Mason fund is run by Bill Miller, who is known for beating the Standard & Poor's 500 stock index for the past 15 straight calendar years.

Legg Mason is Amazon's second largest shareholder, with an 18% stake (75.9 million shares) at the end of June. Amazon's founder, Jeffrey Bezos, holds a 24.2% stake. According to StreetSight.net, Amazon is also Legg Mason's second largest holding, valued at $2.9 billion, after Sprint Nextel.

Meanwhile, sales by Amazon executives and directors have also slowed down along with the stock's depreciation. So far this year they have sold 337,000 shares for $11.98 million, compared to 1.057 million sold in 2005 for $45 million, Thomson Financial data show.

So far in the fourth quarter, two executives have sold 27,848 shares for $883,719. Thomas J. Szkutak sold 26,000 of those shares for $824,600. The stock declined an average of 13.6% following his previous seven sales, according to Thomson Financial.

Last October, insiders sold 75,500 shares for $1.93 million, bring the quarter's total sales to $14 million on 321,000 shares. In the past five years, insiders sold an average of $34.6 million in shares during the quarter, according to Thomson Financial data.

Ivan Feinseth, managing director of Matrix USA, says Amazon stock "definitely rallies in the fourth quarter of each year" as more consumers shop online for the holiday season. While he expects a solid shopping season, "we think [Amazon] is trading at fair value."

Editor's Note: The data tables did not arrive in time to be included with today's story.

E-mail comments to editors@barrons.com

URL for this article:
http://online.barrons.com/article/SB1160...
.

-- posted by SteveT

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7. Nov 4, 2006 10:03 AM

» Normxxx - More Wal-Mart Price Cuts

Wal-Mart cuts more prices in time for the holidays

[ Normxxx Here:

Retail Harbinger for XMAS; or just another dead canary?

]

By Carolyn Pritchard, MarketWatch | 4 November 2006

SAN FRANCISCO (MarketWatch)- Wal-Mart Stores Inc., which just turned in softer-than-expected same-store sales growth for October and forecast flat results for November, on Friday said it was cutting prices on nearly a hundred electronics products, including high-definition TVs, digital cameras and cell phones.

It's the second price cut by the world's largest retailer (WMT : 47.53) ahead of the key holiday shopping season; Bentonville, Ark.-based Wal-Mart last month lowered prices on more than 100 toys and games.

The price cuts, including a Panasonic 42" HD plasma TV for $1,294 instead of $1,794 and a Dora The Explorer Talking Kitchen for $65 vs. $89.84, will be in effect until Dec. 31.

Last week, Wal-Mart said sales at stores open at least a year edged 0.5% higher last month, with food and consumables doing better than other merchandise.

[ Normxxx Here:

These former are largely loss-leaders, intended merely to lure consumers into the stores. Wal-Mart is NOT looking for sales gains here!

]

Analysts polled by Thomson First Call had been looking for a 1.5% rise, on average. See full story.

But the company said the lower toy prices had generated "significant lift in unit volume."

At its analyst meeting two weeks ago, Chief Executive Lee Scott apologized for any misconception that the retailer was "comfortable" with sluggish sales in recent months. He also said he believed that aggressive price-cutting and promotions in December, coupled with lower gas prices, will lead to strong holiday sales.

"I would suspect that as gas prices continue to level off and as we implement aggressive strategy ... in the holiday season that we will see strong sales," Scott predicted. "This is our expectation. It is not our expectation to receive 1% [same-store sales]." See full story.

Shares of Wal-Mart closed Friday at $47.53, down 76 cents.

-- posted by Normxxx

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8. Nov 6, 2006 9:14 AM

» Normxxx - What, me worry?

What, me worry?

By Mark Hulbert, MarketWatch | 6 November 2006

ANNANDALE, Va. (MarketWatch)- I would have thought that Wal-Mart Stores Inc.'s announcements over the last few days of weaker-than-expected sales growth would have sent shivers down the spine of every stock market bull.
That just goes to show how little I know.

The reason I had thought Wal-Mart's recent announcements would have been cause for deep concern: The U.S. economy is very heavily dependent on consumer spending. Indeed, it was consumers' optimism that was primarily responsible for helping the economy emerge from its last recession several years ago.
Ever since, analysts have been hyper-vigilant in focusing on consumer behavior, looking for any early warning sign that consumers were pulling back.

Wal-Mart's outlook over this past weekend and on Monday would seem to have constituted a lot more than just an early warning signal. In contrast to an earlier forecast that same-store sales growth in October would be in the 2% to 4% range, the company said last Saturday that the growth would in fact come in around 0.5%. That's even below the lowered forecast that Wal-Mart (WMT) had circulated as recently as the prior week.

If Wal-Mart's same-store sales growth in October turns out to be just 0.5%, it would be the lowest growth rate the retailer has seen in more than five years.
Furthermore, Wal-Mart was already facing big challenges even prior to its latest announcements, as fellow columnist Peter Brimelow noted in mid-October. Read Brimelow column.

My causes for concern notwithstanding, however, the investment newsletter industry has reacted to Wal-Mart's recent announcements with a collective yawn. Prior to this last weekend, Wal-Mart was one of the newsletter industry's most recommended stocks, tied for 13th place in a ranking of newsletter popularity. No fewer than nine newsletters were recommending it for purchase. And, it turns out, none of these nine has reduced its rating of the retailing giant in the wake of its recent announcements, and only one of them- at least as of Tuesday night- had even bothered to make more than a passing reference to the company's weaker-than-expected growth.

This one newsletter that did discuss Wal-Mart's recent woes was Sound Advice, which is edited by Gary Cardiff and Steve Horwitz. They draw an analogy between Wal-Mart's current problems and those McDonald's Corp. (MCD) faced several years ago. To reverse its slipping revenue at that earlier time, McDonald's "new domestic openings drastically were reduced. U.S. operations concentrated on improving service and products, and internationally MCD continued to expand." Each of these moves is being echoed today by Wal-Mart.
How has McDonald's done in the wake of those moves several years ago? "The results have been spectacular. We recall that whereas before MCD got its act together, Wall Street had concluded that MCD's day had passed. As Mark Twain observed from Europe after he had reads his own obituary in American newspapers, 'Rumors of my demise have been greatly exaggerated."

The Sound Advice editors think that Wal-Mart can look forward to a similar resurgence in coming years. They therefore argue that its updated sales-growth rates represent "an opportunity to buy more" Wal-Mart shares.
How much weight should you put on the Sound Advice analysis? The newsletter is one of the minority that has beaten the market over the longer term, beating the Dow Jones Wilshire 5000 Index over the last one-, five- and ten-year periods.

-- posted by Normxxx

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9. Feb 10, 2007 4:32 AM

» SteveT - Everybody's Store

BARRON'S COVER

By ANDREW BARY

"MEMBERSHIP HAS ITS PRIVILEGES." That slogan belongs to American Express, but it might better apply to Costco Wholesale, the leading warehouse-club operator in the U.S., whose determination to deliver value and innovative products to its 23 million members has made it one of the country's top retailers.

Costco has succeeded by flouting industry norms. It charges customers a base yearly fee -- now $50 -- to shop in its sprawling stores, which offer quality goods at low mark-ups. Consequently, its margins are among the slimmest in retailing. The privileges also extend to employees, who are paid well and enjoy generous health-care benefits.

This formula has generated fierce loyalty among both shoppers and staff, while rewarding long-term investors. Costco shares (ticker: COST), which traded Friday at 56, are up from a split-adjusted price of $1.67 when the company went public in 1985. True, they no longer are dirt-cheap, but in view of the company's superior management and opportunities for growth, neither are they rich.

Small businesses are big customers at Costco, but the company also has managed to make discount shopping fashionable for affluent Americans by offering fine wines, books and big-screen televisions at low prices, and staples like paper towels and razor blades in bulk.

By offering one-time specials like discounted Prada bags or Callaway golf clubs at individual outlets, Costco has created what it calls a "treasure-hunt" atmosphere in its stores. BMWs and Mercedes often crowd Costco parking lots on weekends.

COSTCO IS ONE OF A HANDFUL OF RETAILERS that has flourished despite Wal-Mart Stores' (WMT) onslaught; Wal-Mart's more downscale Sam's Club chain runs second to Costco. With its strong labor relations, low employee turnover and liberal benefits, Costco has been called an "anti-Wal-Mart." Its approach has paid dividends, because Costco, based in Issaquah, Wash., hasn't encountered the same community resistance as Wal-Mart when it has sought to open new stores.

"Retailing isn't rocket science. Costco has figured out the big, simple things and executed with total fanaticism," says Charles Munger, a Costco director for the past 10 years. The outspoken Munger, 82, is better known as Warren Buffett's long-time partner at Berkshire Hathaway (BRKA), where he serves as vice chairman.

Crucial to the chain's success is CEO Jim Sinegal, who co-founded Costco in 1983 with Jeff Brotman, the company's chairman. "Jim would be on any intelligent list of the top 10 retailers of the past century," Munger says.

Sinegal, 70, also is one of the biggest bargains among big-company CEOs: In an era of seven- and eight-figure pay packages for CEOs, Sinegal earned a salary of $350,000 in Costco's latest fiscal year, which ended in August. He garnered other compensation of about $100,000.

What's more, Sinegal got no bonus last year, after the company determined that it failed to measure properly the appropriate date for certain option grants from 1996 to 2002, although no evidence of fraud or falsification of records was found. "Jim wouldn't let the board give him a bonus. His view was that the option glitch happened on his watch," Munger says. "How many people behave like that? No wonder everyone loves him."

Unlike Buffett, who draws a salary of just $100,000 as CEO of Berkshire, Sinegal isn't a billionaire. He owns Costco stock worth about $135 million and has options on 1.2 million shares.

Sinegal's compensation and demeanor offer a welcome contrast to former Home Depot chief executive officer Robert Nardelli, who alienated employees with his autocratic style and whose gargantuan exit package of $210 million didn't sit well with shareholders. Costco and Home Depot were two of retailing's biggest success stories in the 1990s, but Home Depot has since lost its way while Costco's growth has continued unabated.

None of this has been lost on the investment community. At 56, Costco trades for 22 times fiscal 2007 projected earnings of $2.58 a share. It has one of the highest price/earnings ratios among major retailers. Target (TGT) shares, at 62, trade for 17 times estimated 2007 earnings, while Wal-Mart, at 48, commands 15 times projected 2007 profits.

While some retailing analysts deem Costco shares expensive, the company seems to qualify under one of Buffett's investment dictums. Buffett has said he'd rather buy a good business at fair price than a fair business at a good price. Berkshire owned 5 million Costco shares at the end of September.

THIS IS A GENUINE GROWTH STORY. Earnings per share have grown at a 12% annualized rate in the past five years. Neil Currie, a retailing analyst at UBS Securities, believes the company is capable of generating 13% growth in earnings per share in the next few years, and an even higher rate if it gets more aggressive in repurchasing shares. The bullish Currie carries a 12-month price target of $66. With large annual buybacks, Costco could earn more than $4 a share in fiscal 2010, Currie estimates. That could support a stock price of $80.

The company plans to open 36 to 40 new stores in the current fiscal year, and about 35 annually in the following years. The store base totaled 474 on Dec. 31, including 371 in the U.S. Costco says that domestic and international markets ultimately can support more than 1,000 stores. Outside the U.S. and Canada, Mexico, the U.K. and Japan are seen as its most promising markets.

Costco's merchandise sales in its most recent fiscal year rose 14% to $59 billion, while membership fees generated another $1.2 billion of revenue. This year, sales are expected to rise more than 10%, reflecting lower prices for gasoline. Sales at stores open at least year, a key gauge of retailing success, were up a healthy 8% in fiscal 2006. January results, announced last week, fell short of expectations, chiefly due to a change in the calendar.

Could it be a candidate for a leveraged buyout? Costco does possess some of the key characteristics private-equity players seek. It has a strong balance sheet, predictable cash flow and a durable franchise. Its market value is a hefty $26 billion, but LBOs of that size are doable these days. Witness Blackstone Group's winning $39 billion bid for Equity Office Properties Trust (EOP), announced last week (see Private Equity's Big Gamble1).

EOP has $17 billion of debt. Among Costco's attributes is $2 billion of net cash, as well as ownership of 78% of its stores. The stores could be monetized through sale/leasebacks that might generate several billion dollars in proceeds.

Costco bought back $1.5 billion of stock in its latest fiscal year and $400 million in the quarter ended Nov. 30. But it has resisted a large debt-financed buyback like the one under way at Home Depot, and to date it hasn't sought to raise funds through the sale of its real estate. The company takes pride in its impressive financial condition. "Have we gotten to the point in America that balance-sheet strength is a negative?" Munger asks.

Currie argues that Costco could keep LBO operators at bay by launching a more aggressive buyback program and taking on a moderate level of debt. "The best way for Costco to protect its independence is to have a high multiple on its stock," the analyst says, adding that an augmented buyback would help achieve that goal. He believes Costco comfortably can repurchase $2 billion or more of stock annually. The dividend yield on the stock is a low 0.9%.

ITS COOPERATIVE-LIKE OPERATION MAKES the retailer's business model unusual. In its latest fiscal year, Costco generated pretax income of $1.75 billion, nearly 70% of which came from membership fees. Another $125 million was kicked in by the interest income on the company's cash. Costco earned just $400 million from its stores, for a retailing operating margin of less than 1%. The low margin is intentional, and reflects the company's commitment to low prices.

As a matter of corporate policy, Costco refuses to mark up any product by more than 15% above its cost. When the company signed a new contract in 2005 with a supplier for Brooks Brothers-style men's cotton, button-down shirts, and got a significant price reduction for a massive two-year order, it immediately cut the price of the shirts to $12.99 from $17.99, notes Richard Galanti, Costco's chief financial officer. Other retailers might have phased in the reduction and captured added profits, but that's not the Costco way. The shirts now cost $14.99 because they are made with better-quality cotton.

One attraction in the eyes of a potential buyer would be the opportunity to lift margins. Costco leads Sam's Club in most financial measurements, including total sales, sales per store, sales per square foot of retail space and sales per employee. But Sam's Clubs' operating profit margin of 3.5% tops Costco's 2.8%.

IF COSTCO WERE TO RAISE ITS MARGINS to Sam's level, it would translate into an additional 65 cents a share of net income -- a large amount relative to the current-year consensus estimate of $2.60 a share. Sinegal has talked in the past about lifting Costco's margins to 4%, but little progress has been made.

This has led to some criticism on Wall Street. An analyst report in December, after Costco reported its fiscal first-quarter profits, was entitled "Still no Margin." Galanti says management has no interest in going private. "The public model has worked for us. We have no plans to change," he says.

Many Costco shareholders are also happy with the current situation. "Costco refuses to be undersold, and thinks so long term that the company will not even remotely degrade the value it gives customers, even if it would fuel a healthy increase in margins and earnings and very few customers would notice," says Ken Charles Feinberg, co-manager of the Davis New York Venture Fund (NYVTX) and Selected American Shares (SLADX), both run by Davis Selected Advisors. "That's how a great management builds a great business franchise that's built to last."

The Davis funds are Costco's largest shareholder, with a 12% stake.

Feinberg says that Costco's effective valuation is lower than its stated price/earnings ratio because of the company's conservative approach to depreciation. He recently calculated that Costco trades for about 16 times his projection of calendar "owner earnings." This profit measure adds to operating earnings depreciation expense in excess of what is needed to maintain the existing store base. Feinberg believes Costco is a "compelling bargain" for long-term investors.

SINEGAL, WHO BRINGS AN OWNER'S PASSION to Costco, doesn't talk much to Wall Street and wasn't available to speak with Barron's. Even at 70, he maintains a grueling schedule. He aims to visit each Costco store twice a year, and is about 70% successful in that goal, Galanti says. This means he's on the road 40 to 45 weeks a year. Costco executives jokingly refer to Sinegal's weekly travels as a "death march" because he usually begins each day at 7 a.m. and finishes at 10 p.m.

Dressed in sneakers, khaki pants and Costco's now $14.99 button-down shirts, Sinegal asks store managers what's selling, what's not and how Costco prices compare with the competition. He has no set plans to retire, although he has talked casually about holding the job for another five years. Because he hasn't set a retirement date, there is no heir apparent. But Costco has a strong group of managers who share Sinegal's passion and vision.

Unlike most CEOs, Sinegal has no severance or golden parachute in his contract, which runs less than a page. He insists on one-year contracts, believing the Costco board should have the opportunity to evaluate him annually to determine if he's still up to the job. Sinegal's view is that the restrained terms of his contract send an important message to employees.

In the view of Berkshire's Munger, one of Costco's great strengths is that its two founders, Sinegal and Brotman, are still active. Brotman, 64, focuses on real estate. "There is no better site acquisitor in the retailing industry," Munger says. "I'd like to see Jeff get more credit. He deserves it."

Costco has chosen to focus on more affluent coastal markets; California alone is home to 30% of its stores. Finding sites for new outlets in densely populated areas is one of Brotman's specialties.

The company features products that offer its members large cost savings over what they would pay at traditional retailers. The chain carries just 10% of the items in a typical supermarket, which might stock 40,000 products.

The formula works. Costco sold 1.5 million TVs last year, and has successfully built what it calls "ancillary" businesses like pharmacy and eyeglasses, filling 26 million prescriptions in 2006. Hungry Costco members bought 63 million hot-dog and soda combinations last year at in-store snack bars -- priced at only $1.50, and with free soda refills. The dogs are even kosher.

An innovative Seattle Costco added a car wash last year that proved popular. A wash that includes rim cleaning, waxing and undercoating costs just $7.99 -- below what an independent car wash might charge. More car washes could be in store.

Costco's customer-focused strategy is apparent in its 87% membership-renewal rate.

The retailer allows returns on nearly all items at any time, with no questions asked; computers are the lone exception. It doesn't even need to see receipts. This liberal policy has proven costly in the past year, because the company is seeing returns of an unusually large number of big-screen TVs. Analysts suspect that many members are taking advantage of the sharp drop in TV prices to return models bought in the past 12 months so they can buy new ones at lower cost. Costco said it is evaluating its TV-returns policy, but emphasizes that no change will be retroactive and that it still plans to maintain the industry's most generous returns policy on electronics.

MANY SMALL BUSINESSES, SUCH AS RESTAURANTS, convenience stores and caterers, find Costco attractive because the stores can be a cheaper alternative to wholesale distributors.

Then again, customers need to purchase industrial-sized packages, which can lead to waste. Companies like General Mills (GIS) and Nabisco supply Costco but don't offer the more convenient-sized packages available in supermarkets and discounters. If you want Cheerios, you have to buy a 37-ounce box at Costco, not the standard 15-ounce container. In a Seinfeld episode from 1996, Kramer returned from a trip outside Manhattan with a trunk filled with goods from Costco, prompting Jerry to ask when he planned to eat all 48 Eggo Waffles in the package.

Getting these oversized items out of the store can be a trying experience. There are large crowds on weekends, and long lines at checkout counters. Clothes are piled high on tables, and it can take a lot of looking to find the right size. Ever thrifty, the company tries to cut its summer air-conditioning bills by maintaining warmer temperatures in its stores than other retailers.

Workers get a relatively good deal at Costco -- a point of emphasis for the company, which contends it's also a matter of good business. Despite fewer stores, Costco's sales are about 50% above those of Sam's Clubs and sales per employee are about $500,000 a year, versus $340,000 at the Wal-Mart unit, UBS's Currie calculates.

Sinegal was asked in a recent Bloomberg TV interview about the company's health-care benefits. Costco provides health insurance to its 93,000 domestic employees and pays 90% of the cost, which runs about $6,000 annually per employee. "We're 100% committed to maintaining this program," Sinegal said. "It works for us, and our people count on it. We think they're entitled to that security."

Costco has one of the lowest turnover rates in retailing. Among employees who have been with the company for at least a year, just 6% leave annually. That may be because store employees such as cashiers can earn more than $40,000 a year after only four years on the job.

The combination of Costco's loyal employee and membership base has translated into the industry's lowest shoplifting rate -- just 0.2% annually. One deterrent is that employees check receipts before customers leave the premises.

Costco shares aren't a bargain at current levels, but patient investors could be rewarded, because the company is an industry leader with top-notch management, a loyal customer base and solid growth prospects in the U.S. and abroad. In Street-speak, Costco may be "under-earning," meaning its profit margins are lower than they need to be. Management is loath to tinker with a successful formula, but margins probably have only one way to go -- up. In time, the shares are likely to follow.

E-mail comments to editors@barrons.com

URL for this article:
http://online.barrons.com/article/SB1171...
.

-- posted by SteveT

http://en.wikipedia.org/wiki/Eric_Shinse...

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10. Apr 1, 2007 7:53 PM

» smile_1 - Honeywell - Shinseki up for a board spot - smile gives a big YES

So I'm reading along voting out the old dead wood on my Honeywell stock proxy online and I run across a picture of an Asian guy dressed in a suit up for a board seat, not that this is unusual, I look over at the name and it's Erik K Shinseki...
.
I smile to myself and say what the f*$% is a general doing on a board of directors, and it all comes together in an instant - Honeywell gets some/maybe a lot of its business from defense contracts, so this is not a stretch to see x high ranking military up for a board seat, also Shinseki as a general would still have a lot of contacts in the active force - which translates to 2 pluses in favor of this board seat from my perspective. Also he should have a good vision of what the Army may need going forward from Honeywell, so I'd say it is a good fit not knowing anything more, ... but I do know something more...

Shinseki was the general who was retired/"dismissed", due to his estimate of 200-300k boots on the ground in Iraq to keep the peace after the Shock and Awe phase was done, which was at odds with the non-thinking of Rumsfeld & Wolfowitz. Shinseki was one of the few Generals that got it right calling for more boots on the ground. How much different would Iraq have looked if we went in there loaded for bear and prepared to keep the peace... we will never know.

What does this last part tell me about Shinseki and what kind of board member he would make? It tells ol' smile happy here we have a guy that is perceptive, and is willing to stand up for what he believes even if it is unpopular, and even if his opinion leads to a career ending move for him, if the issue is of great importance to him.

Not to mention Stryker Combat teams (see below) and vehicles if one is going into combat would be the vehicles of choice (heavily armored) and the teams are mobile and lethal in their execution of missions.

So ol' smile says an enthusiastic yes vote for Eric Shinseki (ret. Genl) for Honeywell Board seat.

_________

During his tenure, Shinseki initiated an innovative but controversial plan to make the Army more strategically deployable and mobile in urban terrain by creating Stryker Interim-Force Brigade Combat Teams. His long-term initiative was called Objective Force and the main long-term weapons program he pushed was the Future Combat Systems.

Shinseki is famous for his remarks to the U.S. Senate Armed Services committee before the war in Iraq in which he said "something in the order of several hundred thousand soldiers" would probably be required for post-war Iraq. Rumsfeld and Deputy Secretary of Defense Paul Wolfowitz publicly disagreed with his estimate.[1]

When the insurgency took hold in post-war Iraq, Shinseki's comments and their public rejection by the civilian leadership were often cited by those who felt the Bush administration deployed too few troops to Iraq.

-- posted by smile_1

http://biz.yahoo.com/rb/070410/alcoa_res...

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11. Apr 10, 2007 2:43 PM

» smile_1 - Alcoa starts the earnings season off beating earnings est.;

median earnings for AA were expected to be 0.77/shr

NEW YORK (Reuters) - Alcoa Inc. (NYSE:AA - News), the world's largest aluminum company, said on Tuesday first-quarter profit rose, driven by higher metal prices and sales in the aerospace, building and construction and industrial product markets.

Net earnings were $662 million, or 75 cents per diluted share, compared with $608 million, or 69 cents per share in the same quarter last year, the Pittsburgh-based company said.

Income from continuing operations was 77 cents per share.

Excluding restructuring costs, the company said it earned 79 cents per share, beating analysts' average estimate of 77 cents per share, according to Reuters Estimates.

Revenue for the quarter rose to $7.9 billion from $7.1 billion, Alcoa said.

-- posted by smile_1

http://biz.yahoo.com/ap/070517/ibm_outlo...

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12. May 18, 2007 8:55 AM

» smile_1 - IBM Eyes Big Profit Bump by 2010

IBM Eyes Big Profit Bump by 2010
Thursday May 17, 9:52 pm ET
By Brian Bergstein, AP Technology Writer

Even With Revenue Growth Sluggish, IBM Foresees Big Profit Jump by 2010

Even with revenue chugging along only moderately, IBM Corp. expects to find enough cost cuts, acquisitions and stock-buyback opportunities that annual earnings per share could nearly double by 2010, the company's finance chief told analysts Thursday.

Addressing a daylong briefing at IBM's research labs in Yorktown Heights, N.Y., Chief Financial Officer Mark Loughridge laid out what he called a "road map" for earnings per share to rise from $6.11 last year to as much as $11 in 2010.

Although Loughridge acknowledged that many factors could affect the accuracy of the estimate, even the ballpark forecast was striking because the technology company generally is conservative about its guidance to Wall Street.

"I think the road map ... gives us a lot of confidence in our business model," he said.

Of the roughly $5 increase in earnings per share that IBM says is possible by 2010, 75 cents comes from the assumption that IBM's recent growth rates will continue. IBM sees another $1 coming from wide-ranging efforts already underway to cut costs and boost profit margins; $1.10 from more than $40 billion worth of stock buybacks; $1.20 from acquisitions and other future growth initiatives; and 90 cents from retirement-related savings. IBM is freezing accruals in its pension plan after this year.

IBM already has been on a stock-buyback tear, spending $27 billion on that purpose from 2003 through 2006. Last month IBM's board authorized the company to spend $16.4 billion more on repurchases and take on debt to achieve that.

That move and a recent rise in IBM's dividend have helped the company's shares hit five-year highs recently.

Even so, IBM still is scrambling to find meaningful growth and fend off lower-cost competition in its key tech-services business. One answer, Chairman and Chief Executive Sam Palmisano contended earlier in Thursday's presentation, is that IBM is in a better position than rivals to take advantage of fast growth in India, China, Russia, Brazil and other developing countries.

Analyst Bob Djurdjevic of Annex Research said IBM's $11-per-share goal seems "pretty realistic," given that the company expects to rely even more on its software division in coming years. "That's where the big profit margins are," he said. But he'd rather see the company pour more money into future business prospects and less on buying its own stock so aggressively.

IBM shares fell 10 cents to $105.77 in afternoon trading.

________________

From Cramer:

http://secure2.thestreet.com/cap/login/r...

It's IBM's Turn to Soar

By Jim Cramer

About this article:
IBM . Yeah, I know. Who cares. You think of it like you think of Unisys or maybe CSC or EDS. Boring yet unpredictable. Always issuing press releases about important "breakthroughs" that mean nothing. Conscious that it has become some sort of inconsequential utility. Think again. After vegetating for what seems like a decade, management has awoken and decided it must pick up the pace. At yesterday's meeting it talked about the possibility of growing mid-teens -- maybe 16%! As Laura Conigliaro at Goldman notes, even if it does 13% to 14%, that's still 10% to 12% above targeted growth. And the darned stock sells at 15 times earnings. Meanwhile, its buyback soaks up 10% to 15% of the volume each day and it wants to accelerate that. A nice dividend boost punctuates the newfound shareholder friendliness. People are looking for new tech...

-- posted by smile_1

http://www.marketwatch.com/news/story/in...

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13. Jun 4, 2007 8:28 PM

» smile_1 - Strategy changes spark Wal-Mart gains

huge 15 Billion dollar buy back - wow

all i can say is 'bout d$%n (darn) time wmt management figured it out. Everytime I go to wmt I darn near have to take a shuttle to the store after I park, always crowded and the stock has sucked wind. Let's see if we can get some momo going on this pig.

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PnF target 70 on a 3x1

http://stockcharts.com/webcgi/Pnf.asp?S=...

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Valuation targets using growth multiple in the 1.65 to 1.75 range = 68 to 72 converges with PnF

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upper range convergence on using DCF (need to check DCF again) and a 2 multiple = 82 to 83 range

-- posted by smile_1