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To: Wallace Rivers who wrote (56734)1/22/2016 5:07:33 PM
From: LTBH
   of 75785
 
Believe you might find Costco membership much larger then you think:

"Costco employs about 174,000 full and part-time employees. [4] In 2015, Costco had 81 million members. [20]"

en.wikipedia.org

Have been a member of Costco from its early days (Price Club) and believe its loss to AmEx is easily 12K annual charges per member .... provided the member switches all charges to the new Visa/Costco card.

Luck
LTBH

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From: Paul Senior1/22/2016 5:11:50 PM
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Construction companies.

I am not doing well with this sector:

CBI: in@$45; now $34
SIEGY: in @$91; now $88
FLR: in @$61; now $43.

I've been in FLR since 2012. I've had red on my screen on FLR, almost from day 1, and I'm tired of seeing that. Company and numbers (metrics) still look ok to me. Going on four years of red though...there's either some impairment with the company or with my brain. At some point, I'll give up and make at least a partial sale and move funds elsewhere.

Meanwhile, I reentered TPC on the announcement of apparently (?) unexpected year-end results and poor(?) 2016 expectations.

TPC says: " ...The Company now expects to report revenue of approximately $5.0 billion for 2015)...Revenue for 2016 is preliminarily expected to be in the range of $5.1 billion to $5.6 billion, with diluted EPS of $1.90 to $2.20."

Company has been profitable 8 of past 10 years. In 2009 the avg p/e was 6.5x. Applying that multiple to $1.90/sh, I get a stock price about $12.35. Stock closed at $10.68, about when I bought today. I expect that if prospects for 2017 look good, the stock could gain back its frequently seen 10x multiplier, or maybe $19/sh. Of course, this primarily depends on management being right in their "preliminary expectation". But why should they be? They haven't been right about 2015 (apparently) or in couple of other years either. Still...I'll let myself in for a few shares.

finance.yahoo.com

finance.yahoo.com

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To: Paul Senior who wrote (56733)1/22/2016 5:16:23 PM
From: Keith J
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I have one AmEx, as does my wife. Once Costco switches, I will keep the card but it probably won't get used much (it's the Hilton one with no annual fee). My wife's card is the Starwood one. Jury is out currently on what happens once the Starwood/Marriott merger is completed (Marriott has Chase Visa). So another major account could be lost there.

KJ

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To: LTBH who wrote (56736)1/22/2016 5:24:17 PM
From: Wallace Rivers
   of 75785
 
Absolutely not debating that the Costco AMEX transaction amount dwarfs Fido. I would hazard a guess that the Fido spend per card is significantly more than the Costco spend/card. That's the point I was trying to make.

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From: LTBH1/22/2016 5:24:48 PM
   of 75785
 
RE Amex

This excerpt, from the Plumbers and Steamfitters Local 137 Pension Fund lawsuit against Amex, gives an estimate of Costco loss:

"The investors contend that the U.S. Costco co-branding contract was “highly material to AmEx’s business,” representing 8% of the company’s revenues in 2014; 20% of its outstanding loans and 10% of its cards issued worldwide."

consumerist.com

Luck
LTBH

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To: Jurgis Bekepuris who wrote (56709)1/22/2016 6:07:25 PM
From: Graham Osborn
   of 75785
 
I actually did too yesterday, just b/c Brent spiked and some of the microcap oils didn't budge. Sold on the spike this AM.. I try not to do that sort of thing but in this case just couldn't resist :)

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From: staring1/23/2016 10:33:21 AM
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Why These Stocks are so Cheap?

UNFI BOSS appear to me really cheap with great upside. To me they appear to have very low multiples and good growth prospects. Why no one is paying attention? Am I missing something?

Disclosure: I am long in both

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From: Elroy1/23/2016 9:22:56 PM
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Here's a high tech "value" stock that might be worth a look.

OIIM - O2 Micro

They are a fabless semiconductor maker, about $50-$60 million per year in sales, gross margins around 50%.

They are big in semiconductors that go into hardware like saws, tools, etc. Their sales have been struggling for the past few years. They are trying to get into backlighting for cell phones, perhaps, we'll see.

The main reason it is a "value" stock is they have $55 million cash (last quarter, probably down a bit in Q4 2015), no debt, and the market cap is about $32 million.

If business stabilizes or turns around, the stock could do well. If not, you can hope that management will wise up and sell the company at some point, they should be worth at least $55 million to a larger semiconductor company that can rationalize the business and keep the cash.

They buy back a bit of their own stock each quarter.

No idea whether sales will turn around, but it's a good one to watch, if this kind of thing turns around it's easier to get a 2x-4x bagger out of it. And if not, the cash provides some downside cushion.

==

Founded in April 1995, O2Micro develops and markets innovative power management components for the Computer, Consumer, Industrial, Automotive and Communications markets. Products include LED General Lighting, Backlighting, Battery Management and Power Management.

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To: Wallace Rivers who wrote (56735)1/24/2016 12:13:46 PM
From: Spekulatius
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Re Costco, VISA - the affiliate business was part of their model to increase the reach of the Amex card. This business does not seem to be competitive any more, so this is definitely a big negative for Amex . This loss may be priced in the stock already.

The problem may go further though, as it indicates lack of brand cache and competitiveness. Amex could charge higher prices for their services than Visa and MC and it appears to me that there is pushback from the marketplace, which will force Amex to reset their pricing and that can't be good for Amex margins and stock price.

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To: bruwin who wrote (56701)1/24/2016 2:24:15 PM
From: Graham Osborn
   of 75785
 
Well let's not forget that Graham was one of the great macro investors. That's why he spent so much time on the theory of market levels and equity/ bond allocation etc. Every account I've read of Graham implies he would have been out of the market at these levels. That's very different from Buffett's "hold forever" mentality which basically says he doesn't care about the market or Berkshire's valuation over the short/ intermediate term. Buffett was a long term holder whereas Graham believed in relatively short holding periods of 2-5 years. After considering Buffett's comment "I could do 50% a year in stocks easy" from many angles, I've concluded its baloney - maybe you could do that in microcaps in the 50s-60s when he got started, but we are in a very different macro environment currently. Not saying such returns are impossible, but the mechanism to achieve them will be very different right now.

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