Latest Research

Ford Motor Company: At Least It’s Profitable, Unlike Tesla

By Saibus Research - 28th September 2012

Despite the fact that Ford Motor Company (F) suffered through a tough Q2 2012 performance in Q2 2012 due to the weakness in the European market, a slowdown in the Latin American market and increased marketing in Asia, it is still our preferred pick in the automotive industry. We like the fact that it undertook its restructuring earlier than its rivals and was able to decline a bailout from the Obama Administration. Despite the fact that it turned down welfare...

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Research In Motion: It’s BlackBerry 10 Or Bust!

By Saibus Research - 28th September 2012

Research in Motion’s (RIMM) stakeholders can celebrate the fact that the company’s Q2 FY2013 adjusted loss of $0.27 per share ($142M) was less than the $192M incurred in Q1 2013. Its GAAP loss was $235M ($0.45/share), which was less than the $518M ($0.99/share) in the prior quarter. The company benefited from the absence of $335M in Goodwill impairments during the quarter. If we were to exclude the $335M in goodwill from Q1 losses, the company’s reported loss would have increased...

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Shell’s Shale Oil Expansion

By Saibus Research - 27th September 2012

Royal Dutch Shell (RDS.A) is a large oil and gas producer in North America that has been making acquisitions that are sure to increase its yields in the future. Shell is looking to make an impact in shale oil production, an industry that has the potential to change our entire economy in the next five years. Shale oil refers to a rock that releases petroleum like liquids when heated up and are richer in crude, a process that will revolutionize...

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Nokia’s New Strategy: Rely On Apple’s License Revenue And Dispose Of Remaining Operations

By Saibus Research - 27th September 2012

We at Saibus Research love furious, intellectually-stimulating debate. That’s probably why we have set-up our own investment research firm. We love investment research because it is the most remunerative way for us to indulge this fancy of ours. We were pleased that our recent reports onMicrosoft Corporation (MSFT) and Apple Inc. (AAPL) generated such strong feedback that a Nokia Corporation (NOK) stockholder shared with us an article about how Nokia gets €8 in royalties per iPhone sold due to a patent dispute that was settled last year....

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General Growth Properties: We’re Glad GGP Rejected Ackman’s Demands

By Saibus Research - 27th September 2012

We entered into a long position in General Growth Properties (GGP) in 2009 when it was trading at ~$2/share and it was facing a technical bankruptcy due to its overleveraged position. Since then, the company was able to exchange $7B of its debt for fresh equity capital. While this diluted shareholders by over two-thirds due to the number of shares issued in the bankruptcy reorganization, at least it didn’t wipe out the shareholders. We were also pleased to see that...

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The Likeliness of Emergency Oil Reserve Tap from the President

By Saibus Research - 26th September 2012

Hours before accepting his Democratic nomination September 6th, President Barack Obama wasn’t exactly focused on how he’d be presenting his speech to the crowd gathered in Charlotte, North Carolina.  Instead, the President was busy meeting with industry experts in the oil industry, National Security Council officials, members of the Treasury, and members of the Department of Defense. They discussed the rise in oil prices this nation has experienced in the past year, with raised concerns directing from a rapid growth...

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CenturyLink Vs. Windstream: Comparison Of 7-9% Dividend Yields And Cloud Computing Operations

By Saibus Research - 26th September 2012

In our May 14th research report on CenturyLink (CTL), we couldn’t help but notice how CenturyLink and its rural telecom competitors have had numerous dealings with Verizon Communications (VZ). We have decided to explore this further by comparing how each rural telecom company’s deals with Verizon have worked out by comparing each firm in a series of head-to-head reports. We first compared FairPoint (FRP) against CenturyLink because FairPoint acquired Verizon’s Northern New England operations. Despite FRP surprising us with a higher broadband...

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Philip Morris’s Dividend Growth Is An Annual September Tradition

By Saibus Research - 26th September 2012

There are two traditions in America that a person can set their watch to during the month of September. The first tradition is the Back-To-School period, which we used to dread when we were kids. The second tradition isn’t as well known, but it is something that we have been looking forward to since 1999. This tradition is the annual dividend increase from the Philip Morris Companies and its two tobacco successors Philip Morris International (PM) and Altria Group (MO). We have...

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Apple’s iPhone 5 Is Already Outselling Nokia’s Lumia Windows Phones

By Saibus Research - 25th September 2012

All of Apple’s (AAPL) detractors let out a loud, collective cheer that was heard all the way around the world when the company reported sales results for its new iPhone 5 smartphone device that missed consensus expectations. While we did not publish an estimate for Apple’s iPhone 5 sales, we were content with the over five million iPhone 5 devices sold by Apple during the opening weekend from Friday September 21st to Sunday September 23rd. We believe that investors need to approach Apple...

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Research In Motion: iPhone 5 Goes On Sale While BlackBerry Network Goes Out Of Service

By Saibus Research - 25th September 2012

We still find ourselves amused that the name of the BlackBerry vendor is Research in Motion (RIMM). We think that somewhere around 2011, someone injected a large dose of curare in the company because a more appropriate name for the company would be “Research in Immobility”, or “Research in Regression” or “Research Immobilized” considering RIMM’s rapid revenue declines and swing from profitability to loss. We are amazed at the tumble the company has taken and we can’t believe that the company is seeing...

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Citigroup: Sandy Weill’s Jealous Because Jamie Dimon Succeeded Where He Failed

By Saibus Research - 24th September 2012

We used to admire Sanford I. Weill for his career in the financial services industry and for his role in creating Citigroup (C). We were most impressed with the fact that Citigroup was able to grow its EPS in 2001 and 2002 during the implosion of the dot-com bubble. We were impressed with the fact that Sandy Weill brought together leading financial services firms like Citibank (the world’s most recognized name in consumer banking), Smith Barney (a premier wealth manager),...

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Microsoft Blew It With Windows Mobile And Windows Phone

By Saibus Research - 24th September 2012

On September 5th, Nokia (NOK) announced its two newest Lumia smartphone devices that will be running on Microsoft’s (MSFT) Windows Phone 8 operating system at Nokia World 2012. We were disappointed in how Nokia handled the Lumia WP8 launch because in its rush to upstage Apple’s new iPhone 5, Nokia was unable to announce when it would be released or who would be carrying it. We were impressed with how Apple handled the launch of the iPhone 5 and we believe that...

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Investment Ideas of the Week 9-24-12

By Saibus Research - 24th September 2012

Top 5 ideas of the week:   CYS Investments (CYS) Despite the fact that CYS Investments (CYS) cut its dividend by 10% beginning with its Q3 dividend distribution, it is still providing a solid 12% dividend yield to income oriented investors. We are not surprised to see mREITs cutting per share dividend distributions to investors due to the narrowing spreads that the firms are realizing on the mortgage portfolios. READ MORE   Lee Enterprises (LEE) On September 10th, Lee Enterprises (LEE) announced...

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Exelon’s Counting On New Fracking Regulations To Boost Natural Gas Prices

By Saibus Research - 21st September 2012

We were especially pleased that the last two installments in our multi-part analysis on Exelon Corporation (EXC) have been recognized for the high level of quality and unique analysis and research we have performed as part of our iconoclastic thesis on Exelon. Exelon’s largest subsidiary is its Exelon Generation Company LLC wholesale power generation operations, and its fortunes are directly tied to natural gas prices. Natural gas prices dropped from an unsustainably high price of $10.79/MCF in July 2008 to $1.89/MCF in April 2012,...

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Sprint Is Enjoying Strong iPhone 5 Sales And Sees Potential Wireless Consolidation

By Saibus Research - 21st September 2012

On September 19th, Sprint Nextel (S) had presented at Goldman Sachs’ Communicopia Conference. While Sprint did not divulge iPhone 5 sales figures like AT&T (T), we would expect that Sprint sold about 800K iPhones so far based on the fact that Sprint’s Q2 iPhone sales were 40% of AT&T’s and AT&T announced that it sold 2 million iPhone 5 devices. Sprint shares a common bond with AT&T in that both companies are significantly trailing Verizon Wireless (VZ) with regards to...

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CYS: 12% Dividend Yield Even After 10% Dividend Cut

By Saibus Research - 21st September 2012

Despite the fact that CYS Investments (CYS) cut its dividend by 10% beginning with its Q3 dividend distribution, it is still providing a solid 12% dividend yield to income oriented investors. We are not surprised to see mREITs cutting per share dividend distributions to investors due to the narrowing spreads that the firms are realizing on the mortgage portfolios. CYS’s quarterly dividend reached its peak of $.60/share in 2011 and remained constant until Q2 2011, when it was reduced to...

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Nokia And Research In Motion Are Jockeying For Third Place Behind Android-iOS Duopoly

By Saibus Research - 20th September 2012

Nokia Corporation (NOK) held its annual Nokia World event on September 5 and 6 and at that event it introduced its new Lumia 920 and new Lumia 820 smartphone devices. Like the Lumia Devices introduced last November, these phones use Microsoft Corporation‘s (MSFT) Windows Phone operating system. This product announcement was widely anticipated by Nokia’s stakeholders in the wake of its poor financial performance in the first half of 2012. While Nokia World’s Lumia Launch may have been another flop by Stephen Elop, at least it is expecting...

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Microsoft’s Disappointing Dividend Boost Doesn’t Divert From Poor Capital Allocation

By Saibus Research - 20th September 2012

On September 18th, Microsoft (MSFT) announced that it would increase its quarterly per share dividend payout from $.20 to $.23. This represents a 2.96% yield based on the September 18th closing price of $31.20 and represents the ninth time in the last 10 years that Microsoft boosted its adjusted quarterly dividend. We were disappointed that the dividend only increased by 15% because Microsoft generated over $19.2B in free cash flows, even though it spent $10.1B for acquisitions. While we are...

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Intel: We Can See Why Berkshire Sold Its Intel Position

By Saibus Research - 19th September 2012

On August 24th, Berkshire Hathaway (BRK.B) released its Q2 2012 13F-HR report in which it showed that it liquidated its position in Intel Corporation (INTC). We believe that despite the fact that Berkshire’s CEO Warren Buffett protests his lack of understanding of technology stocks, we believe that Berkshire has more knowledge of the technology sector than people realize, including Buffett himself. After all, if Buffett was a total ignoramus about technology, Berkshire would not have sold off its position in Intel in Q2 2012 before...

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Lee Enterprises Needs To Sell More Newspapers

By Saibus Research - 19th September 2012

On September 10th, Lee Enterprises (LEE) announced that it had agreed to sell one of its community newspaper publishing companies. Lee entered into an agreement with San Diego real estate developer Doug “Papa Doug” Manchester to sell the Escondido, CA area North County Times to Papa Doug for $12M. Despite the fact that we were disappointed that Lee was only able to harvest $12M from the sale of the paper, we believe that it was a good idea for Lee to sell...

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There’s Nothing Limited About Limited Brands

By Saibus Research - 18th September 2012

We have held a long position in Limited Brands (LTD) and its predecessor Intimate Brands since 2000. We doubled our position in February 2002 when The Limited announced it was reacquiring the minority interest in Intimate Brands that it did not already own. We were originally attracted to Intimate Brands because it was the strongest performing division of The Limited because it contained Victoria’s Secret and Bath and Body Works and we were able to get direct exposure to that...

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Altria’s Dividend Growth An Annual American Tradition

By Saibus Research - 18th September 2012

There are two traditions in America that a person can set their watch to during the month of August. The first tradition is the Back-To-School period, which we used to dread when we were kids. The second tradition isn’t as well known, but it is something that we have been looking forward to since 1999. This tradition is the annual dividend increase from Altria Group (formerly known as Philip Morris Companies). We have written about the long and proud tradition of Altria...

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Our Evaluation Of CenturyLink’s Ability To Pay Its Dividend

By Saibus Research - 18th September 2012

In August, we published our report analyzing AT&T’s (T) ability to pay its dividends to shareholders. We are aware of how dividends are not an ordinary and necessary business expense, which explains why such payments are not tax-deductible for dividend-paying businesses. At the same time, dividend-paying companies have an implicit obligation to shareholders to pay dividends because such cash flows belong to the shareholders. If the company can’t invest said cash flows in projects that meet or exceed the cost of equity capital, and if the...

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Let’s Face It: Facebook Has Lost Its Mojo

By Saibus Research - 18th September 2012

When Facebook (FB) announced its IPO, we had considered investing in the company because of its rapid revenue and profitability growth. We were surprised to hear concerns about Facebook’s ability to monetize its growth, because although its revenue and profit per user were small, the company had over 845M monthly active users of Facebook. Even the Winklevii have public pages on Facebook despite Cam and Ty’s dispute with Facebook founder Mark Zuckerburg. Even Microsoft (MSFT) invested $240M in Facebook for a 1.6% stake in 2007. (Although considering Microsoft’s performance since...

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First Solar: At Least It Is Not Trina Solar

By Saibus Research - 17th September 2012

Despite the fact that we were impressed with First Solar’s (FSLR) Q2 2012 recovery with regards to revenues and profits, we’re still not fans of the solar companies. As sympathetic as we are to alternative energy sources, we noticed that these companies have been largely spilling red ink despite receiving billions of dollars in direct and indirect subsidies. We had expressed concern that the weakness in the solar industry was beginning to catch up to First Solar before its most recent quarter in which...

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