Aeropostale Management: are you trustworthy?

I am a moron.  I put all of my money into ARO stock at about $21; am down about 40%… very poor performance… and I’m embarrassed.

But that isn’t what worries me most… because in this game, being down comes with the territory.

After repeated calls to upper management to discuss the possibility of initiating a dividend ,  I have yet to receive a call back.

I specifically called:  Tom Johnson, Michael Cunningham, and Marc Miller, 3 of ARO’s top level executives; and left voice mails to each, detailing  that I had most of my assets in their stock.  That was several months ago.

I have also left repeated messages, and several e-mails, for their investor relations director, Ken Ohashi.  I have yet to hear back from him.

Today I called two of ARO’s top level design executives to discuss the ARO logo and design prospects: Todd Blumenthal and and Beverly House.  We will see if I hear back form either.  I am very doubtful.

In the past, I have a had large stock positions in Coach, Inc.  Large being relative… cause I’m small potatoes.

Even so, the Coach management got right back to me… whenever I called.  They were very friendly and obviously care about their shareholders.

The Aeropostale management seems to be the opposite.  Very opaque… almost as if hey are hiding something.

This makes me very uncomfortable.  After all, most of my money is in their stock.  And if they are hiding something big, I am in a bad way.

I have a real problem here because I want to hold my position, but management is making it hard.  Simply by being non transparent.

I realize that I’m not Carl Icahn.  Even so, I feel that management has a responsibility to be receptive to shareholder  queries.  We are, after all, paying these people huge money.

A large part of my problem is of my own doing… for not being diversified.

Even so, I am not happy with their management team… it’s my bed, and I’ll have to sleep in it.

Trustworthy, transparent management teams carry an intrinsic value that is very hard to calculate.

But in my world, trust is everything.

 

 

 

 

 

 

Full disclosure: This blog and website are for informational, educational, and discussion purposes only. I am not a registered advisor, broker, dealer, or otherwise holding myself out to be a financial expert. In writing this Blog, I am only stating my opinion, which may change over time, as does the market and the conditions which affect it. I do not intend to cause harm of any kind by writing this Blog and do not guarantee the absolute accuracy of the contents within it. By writing this Blog, I do not offer advice of any kind as it relates to a potential course of action by readers involving the sale or purchase of stocks or any other security. I encourage you to consult with your financial advisor or other experts before making such decisions. Therefore, you, the reader, hereby agree not to hold JB’s Financial Blog, or any of its writers, liable for any action which you may choose to take or fail to take based strictly upon information contained within this Blog. I am in no way responsible for the comments which other readers may make, nor the content of websites found via outbound or inbound links to this site, as I have no control over the contents thereof. I look forward to your input and feedback. Peace. JB © 2010, JB’s Financial Blog. All rights reserved. Unauthorized use of JB’s Financial Blog’s material may violate multiple legal rights of JB’s Financial Blog. All of JB’s Financial Blog’s material and information provided herein is fully protected under the United States Copyright Laws, 17 U.S.C. §§ 101 et seq., and unauthorized copying of, or quoting from, our materials without express written permission is strictly prohibited. JB

Dupont is not a buy…

Dupont is no buy.

15% avg. ROIC is close, but I still need better.

The chemical sector, in general, comes up short.

If you can find 20% ROIC or better in the group, please let me know. I’m all ears.

Dupont is close to being excellent, but not close enough.

Sell.

Full disclosure: This blog and website are for informational, educational, and discussion purposes only. I am not a registered advisor, broker, dealer, or otherwise holding myself out to be a financial expert. In writing this Blog, I am only stating my opinion, which may change over time, as does the market and the conditions which affect it. I do not intend to cause harm of any kind by writing this Blog and do not guarantee the absolute accuracy of the contents within it. By writing this Blog, I do not offer advice of any kind as it relates to a potential course of action by readers involving the sale or purchase of stocks or any other security. I encourage you to consult with your financial advisor or other experts before making such decisions. Therefore, you, the reader, hereby agree not to hold JB’s Financial Blog, or any of its writers, liable for any action which you may choose to take or fail to take based strictly upon information contained within this Blog. I am in no way responsible for the comments which other readers may make, nor the content of websites found via outbound or inbound links to this site, as I have no control over the contents thereof. I look forward to your input and feedback. Peace. JB © 2010, JB’s Financial Blog. All rights reserved. Unauthorized use of JB’s Financial Blog’s material may violate multiple legal rights of JB’s Financial Blog. All of JB’s Financial Blog’s material and information provided herein is fully protected under the United States Copyright Laws, 17 U.S.C. §§ 101 et seq., and unauthorized copying of, or quoting from, our materials without express written permission is strictly prohibited. JB

Goldman is not so great…

Yes, GS, is a storied franchise.  But it is NOT a great company by any means.

4% avg. ROIC for the last 5 years????

Common now.  I can do better in my sleep.

Just because everybody likes a name doesn’t make it right.

Peace.  JB

Full disclosure: This blog and website are for informational, educational, and discussion purposes only. I am not a registered advisor, broker, dealer, or otherwise holding myself out to be a financial expert. In writing this Blog, I am only stating my opinion, which may change over time, as does the market and the conditions which affect it. I do not intend to cause harm of any kind by writing this Blog and do not guarantee the absolute accuracy of the contents within it. By writing this Blog, I do not offer advice of any kind as it relates to a potential course of action by readers involving the sale or purchase of stocks or any other security. I encourage you to consult with your financial advisor or other experts before making such decisions. Therefore, you, the reader, hereby agree not to hold JB’s Financial Blog, or any of its writers, liable for any action which you may choose to take or fail to take based strictly upon information contained within this Blog. I am in no way responsible for the comments which other readers may make, nor the content of websites found via outbound or inbound links to this site, as I have no control over the contents thereof. I look forward to your input and feedback. Peace. JB © 2010, JB’s Financial Blog. All rights reserved. Unauthorized use of JB’s Financial Blog’s material may violate multiple legal rights of JB’s Financial Blog. All of JB’s Financial Blog’s material and information provided herein is fully protected under the United States Copyright Laws, 17 U.S.C. §§ 101 et seq., and unauthorized copying of, or quoting from, our materials without express written permission is strictly prohibited. JB

Buy Con Agra? Nope.

Con Agra Foods is another example of a purely average company.

The ROIC avg is just 9%.  Again.. there is simply no reason to go here.  Especially when I can go to Campbell Soup and get 27% ROIC on average.

Over time, 9% stinks.

Con Agra Foods is a no go in my book.

Peace.  JB

Full disclosure: This blog and website are for informational, educational, and discussion purposes only. I am not a registered advisor, broker, dealer, or otherwise holding myself out to be a financial expert. In writing this Blog, I am only stating my opinion, which may change over time, as does the market and the conditions which affect it. I do not intend to cause harm of any kind by writing this Blog and do not guarantee the absolute accuracy of the contents within it. By writing this Blog, I do not offer advice of any kind as it relates to a potential course of action by readers involving the sale or purchase of stocks or any other security. I encourage you to consult with your financial advisor or other experts before making such decisions. Therefore, you, the reader, hereby agree not to hold JB’s Financial Blog, or any of its writers, liable for any action which you may choose to take or fail to take based strictly upon information contained within this Blog. I am in no way responsible for the comments which other readers may make, nor the content of websites found via outbound or inbound links to this site, as I have no control over the contents thereof. I look forward to your input and feedback. Peace. JB © 2010, JB’s Financial Blog. All rights reserved. Unauthorized use of JB’s Financial Blog’s material may violate multiple legal rights of JB’s Financial Blog. All of JB’s Financial Blog’s material and information provided herein is fully protected under the United States Copyright Laws, 17 U.S.C. §§ 101 et seq., and unauthorized copying of, or quoting from, our materials without express written permission is strictly prohibited. JB

Marriott Hotels is a sell…

Marriot Hotels is just not a very good company folks.

The avg. ROIC in MAR is 9%.  There is no way that 9% makes it worth my while and risk to own such average merchandise.

Plus, at 40x earnings, it is prohibitively expensive.

Hotels are average to poor businesses; and abuse their capital supply.

Marriott is no exception.

Sell.

Full disclosure: This blog and website are for informational, educational, and discussion purposes only. I am not a registered advisor, broker, dealer, or otherwise holding myself out to be a financial expert. In writing this Blog, I am only stating my opinion, which may change over time, as does the market and the conditions which affect it. I do not intend to cause harm of any kind by writing this Blog and do not guarantee the absolute accuracy of the contents within it. By writing this Blog, I do not offer advice of any kind as it relates to a potential course of action by readers involving the sale or purchase of stocks or any other security. I encourage you to consult with your financial advisor or other experts before making such decisions. Therefore, you, the reader, hereby agree not to hold JB’s Financial Blog, or any of its writers, liable for any action which you may choose to take or fail to take based strictly upon information contained within this Blog. I am in no way responsible for the comments which other readers may make, nor the content of websites found via outbound or inbound links to this site, as I have no control over the contents thereof. I look forward to your input and feedback. Peace. JB © 2010, JB’s Financial Blog. All rights reserved. Unauthorized use of JB’s Financial Blog’s material may violate multiple legal rights of JB’s Financial Blog. All of JB’s Financial Blog’s material and information provided herein is fully protected under the United States Copyright Laws, 17 U.S.C. §§ 101 et seq., and unauthorized copying of, or quoting from, our materials without express written permission is strictly prohibited. JB

Buy Kraft? Not so fast…

Dear readers:

Kraft foods is a name that is synonymous with middle America.  Processed, unhealthy, middle of the road food for the masses.  Hey… there is absolutely nothing wrong with that.

But KFT stock is much like its products.  Average quality, at best.

Consider: KFT’s average ROIC for the last 5 years is a meager 7.2%.   Why would I ever take the risk of owning such an average company when I could simply buy an index and get about the same returns(8-10%)??

That is as serious question that  needs to be addressed when purchasing average goods.  Is it worth the risk?  I would have to say no.

I need excellent ROIC from my holdings to justify the risk of owning them.  Pretty simple, right?

If I want average, an index will do just fine, thank you very much.

KFT is the very definition of average.  I’ll take a pass on KFT; hold  the MAC and CHEESE. YUK!!! :)

Peace.  JB

Full disclosure: This blog and website are for informational, educational, and discussion purposes only. I am not a registered advisor, broker, dealer, or otherwise holding myself out to be a financial expert. In writing this Blog, I am only stating my opinion, which may change over time, as does the market and the conditions which affect it. I do not intend to cause harm of any kind by writing this Blog and do not guarantee the absolute accuracy of the contents within it. By writing this Blog, I do not offer advice of any kind as it relates to a potential course of action by readers involving the sale or purchase of stocks or any other security. I encourage you to consult with your financial advisor or other experts before making such decisions. Therefore, you, the reader, hereby agree not to hold JB’s Financial Blog, or any of its writers, liable for any action which you may choose to take or fail to take based strictly upon information contained within this Blog. I am in no way responsible for the comments which other readers may make, nor the content of websites found via outbound or inbound links to this site, as I have no control over the contents thereof. I look forward to your input and feedback. Peace. JB © 2010, JB’s Financial Blog. All rights reserved. Unauthorized use of JB’s Financial Blog’s material may violate multiple legal rights of JB’s Financial Blog. All of JB’s Financial Blog’s material and information provided herein is fully protected under the United States Copyright Laws, 17 U.S.C. §§ 101 et seq., and unauthorized copying of, or quoting from, our materials without express written permission is strictly prohibited. JB

Nothing special about Intel…

Dear readers:

In the technology world, Intel is a popular name.  But, just because it’s the dominate name in processing does not mean the stock is a buy.

Let’s take a look at the critical average ROIC number.  What we find is that INTL averages 14% ROIC.  That is not bad, but I can do much better on my capital.  RIMM, for instance, offers about 30% ROIC.  In other words, it is literally twice as good a company.

In IBM, I get 24% ROIC… again a much better company than Intel.  MSFT has averaged a whopping 39% ROIC for 5 years running.  MSFT is a name I happen to like a lot, actually.

Playing the tech names is hard enough. I need the absolute best quality … else I have little chance of maximizing my profits over time.

Isn’t that the goal after all??

Peace.  JB

Full disclosure: This blog and website are for informational, educational, and discussion purposes only. I am not a registered advisor, broker, dealer, or otherwise holding myself out to be a financial expert. In writing this Blog, I am only stating my opinion, which may change over time, as does the market and the conditions which affect it. I do not intend to cause harm of any kind by writing this Blog and do not guarantee the absolute accuracy of the contents within it. By writing this Blog, I do not offer advice of any kind as it relates to a potential course of action by readers involving the sale or purchase of stocks or any other security. I encourage you to consult with your financial advisor or other experts before making such decisions. Therefore, you, the reader, hereby agree not to hold JB’s Financial Blog, or any of its writers, liable for any action which you may choose to take or fail to take based strictly upon information contained within this Blog. I am in no way responsible for the comments which other readers may make, nor the content of websites found via outbound or inbound links to this site, as I have no control over the contents thereof. I look forward to your input and feedback. Peace. JB © 2010, JB’s Financial Blog. All rights reserved. Unauthorized use of JB’s Financial Blog’s material may violate multiple legal rights of JB’s Financial Blog. All of JB’s Financial Blog’s material and information provided herein is fully protected under the United States Copyright Laws, 17 U.S.C. §§ 101 et seq., and unauthorized copying of, or quoting from, our materials without express written permission is strictly prohibited. JB

Is Fortune Brands a buy?

Dear readers:

As you might know, Fortune Brands recently announced that is splitting its company into 3 different businesses.  That might be a good idea, because FO is not a very good company right now.

Why do I say this?  There is one simple reason: FO’s ROIC  average for the last 5 years is a paltry 6%.   That will not get the job done.  Remember: I need 20+ % ROIC on average to be even remotely interested in purchasing a stock.

Why would I put my precious capital to work at 6%??

I would not.  There are infinitely better options for my capital that will yield me 20%+.  For example:  PM, CL, ARO, HANS, AVP, XOM, COH. KO.    You get the idea.

The break up  of FO may or may not increase that disgusting ROIC.

Let somebody else be the guinea pig.

Peace.  JB

Full disclosure: This blog and website are for informational, educational, and discussion purposes only. I am not a registered advisor, broker, dealer, or otherwise holding myself out to be a financial expert. In writing this Blog, I am only stating my opinion, which may change over time, as does the market and the conditions which affect it. I do not intend to cause harm of any kind by writing this Blog and do not guarantee the absolute accuracy of the contents within it. By writing this Blog, I do not offer advice of any kind as it relates to a potential course of action by readers involving the sale or purchase of stocks or any other security. I encourage you to consult with your financial advisor or other experts before making such decisions. Therefore, you, the reader, hereby agree not to hold JB’s Financial Blog, or any of its writers, liable for any action which you may choose to take or fail to take based strictly upon information contained within this Blog. I am in no way responsible for the comments which other readers may make, nor the content of websites found via outbound or inbound links to this site, as I have no control over the contents thereof. I look forward to your input and feedback. Peace. JB © 2010, JB’s Financial Blog. All rights reserved. Unauthorized use of JB’s Financial Blog’s material may violate multiple legal rights of JB’s Financial Blog. All of JB’s Financial Blog’s material and information provided herein is fully protected under the United States Copyright Laws, 17 U.S.C. §§ 101 et seq., and unauthorized copying of, or quoting from, our materials without express written permission is strictly prohibited. JB

Why Transocean is a poor investment choice…

Dear readers:

If you open the newspapers lately, you will inevitably find stories about the perils of offshore drilling.  No doubt, these stories formulate most investors views on the validity of drilling investments.  That’s because most people are sheep.  BAHHH.

Rather than look at the news, I want to know the facts.  Is RIG a great business?  Is it worth of my investment dollars… long term?

ROIC tells me everything I need to know.

Let’s take a look at the ROIC numbers for RIG:

Over the last 5 years, RIG has averaged just 12% ROIC.  That is not good enough people.  I need at least 20% ROIC, if not more.

In a world littered with poor and average companies, like RIG, I need to find better companies.  ” Seek excellent companies”, as Buffett says.

RIG just doesn’t qualify.

Peace.  JB

Full disclosure: This blog and website are for informational, educational, and discussion purposes only. I am not a registered advisor, broker, dealer, or otherwise holding myself out to be a financial expert. In writing this Blog, I am only stating my opinion, which may change over time, as does the market and the conditions which affect it. I do not intend to cause harm of any kind by writing this Blog and do not guarantee the absolute accuracy of the contents within it. By writing this Blog, I do not offer advice of any kind as it relates to a potential course of action by readers involving the sale or purchase of stocks or any other security. I encourage you to consult with your financial advisor or other experts before making such decisions. Therefore, you, the reader, hereby agree not to hold JB’s Financial Blog, or any of its writers, liable for any action which you may choose to take or fail to take based strictly upon information contained within this Blog. I am in no way responsible for the comments which other readers may make, nor the content of websites found via outbound or inbound links to this site, as I have no control over the contents thereof. I look forward to your input and feedback. Peace. JB © 2010, JB’s Financial Blog. All rights reserved. Unauthorized use of JB’s Financial Blog’s material may violate multiple legal rights of JB’s Financial Blog. All of JB’s Financial Blog’s material and information provided herein is fully protected under the United States Copyright Laws, 17 U.S.C. §§ 101 et seq., and unauthorized copying of, or quoting from, our materials without express written permission is strictly prohibited. JB

Why grocery stores make poor investments…

Dear readers:

Investing is all about making the most out of our available capital.

With that in mind, the companies we buy must have the highest possible ROIC  if we are to maximize our returns.  Again…it”s just common sense.

In the long term, there is no substitute for purely excellent companies with high ROIC.  I know from my experience owning Coach, a company that averages 42% ROIC.

That said, let’s take a look at average ROIC from some top grocery names:

1) Whole Foods: 8%

2) Kroger: 8%

3) Supervalu: -2.3%

4) Costco: 10%

As you can plainly see, grocery chains are just not very good companies.  They are simply not worth owning over the long term.  There are far, far better companies out there.

Peace.  JB

Full disclosure: This blog and website are for informational, educational, and discussion purposes only. I am not a registered advisor, broker, dealer, or otherwise holding myself out to be a financial expert. In writing this Blog, I am only stating my opinion, which may change over time, as does the market and the conditions which affect it. I do not intend to cause harm of any kind by writing this Blog and do not guarantee the absolute accuracy of the contents within it. By writing this Blog, I do not offer advice of any kind as it relates to a potential course of action by readers involving the sale or purchase of stocks or any other security. I encourage you to consult with your financial advisor or other experts before making such decisions. Therefore, you, the reader, hereby agree not to hold JB’s Financial Blog, or any of its writers, liable for any action which you may choose to take or fail to take based strictly upon information contained within this Blog. I am in no way responsible for the comments which other readers may make, nor the content of websites found via outbound or inbound links to this site, as I have no control over the contents thereof. I look forward to your input and feedback. Peace. JB © 2010, JB’s Financial Blog. All rights reserved. Unauthorized use of JB’s Financial Blog’s material may violate multiple legal rights of JB’s Financial Blog. All of JB’s Financial Blog’s material and information provided herein is fully protected under the United States Copyright Laws, 17 U.S.C. §§ 101 et seq., and unauthorized copying of, or quoting from, our materials without express written permission is strictly prohibited. JB


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