Conspiracy-theory me believes there must have been time travel involved in the creation of this work as the figure almost exactly resembles a selfie I took recently when contemplating the AI bubble and looking at NVDA’s stock price (and the other usual suspects).
Anyway, what’s the face expression of someone experiencing ROMO (or someone thinking about opportunity cost)? I imagine someone bathing in the yellowish golden sunlight reflected off the the pile of gold bars and coins glimmering on the dinner table after taking them out of the wall safe or so?
Specific ROMO/opportunity cost head shots or museum recommendations welcome.
I trim my position in NCSM (yes, that NCSM) today and it goes up 11% afterwards. They didn’t even have the decency to wait until the next trading day before making me rage!
Not quite sure why the price recently went lower. Maybe too peppery for the market at the moment?
Maybe the price drop is related to them recently buying coffee company JDE Peet’s.
A quick look at the balance sheet shows that there is basically no company; Dr. Peppers is other companies that they bought. 81% of their assets are “goodwill”.
So it is kind of a second hand stock; the first owner already enjoyed it, probably a lot.
If I put on my sleeve protectors and put their books on my standing desk I see that discounting the goodwill the company would have to pay me to buy their shares, negative value.
Aren’t they all, though? Or is KO or PEP significantly different in this respect? Sorry for asking the dumb questions as I have not looked into this at all, but an image – often labeled as “the illusion of choice” – I recently saw (again) on Twitter came to mind, as all of these companies just kept acquiring brands (ok, some brands they built themselves, but most they did not). And brands is all what these companies are about? For the beverage part of their business they sell water with sugar and some flavors … no?
Maybe I’m holding it wrong, but I fail to spot the alarming upcoming debt repayments due.
About $1.5B until the end of next year, and somewhat evenly spread out tranches longer term, nothing really really big coming up soon (or ever, according to the current maturity schedule).
Also – important for me – FCF easily covers the dividend and – bonus point (which I know someone here won’t agree with) – they raised and paid their dividend in 2023 when their FCF didn’t cover the dividend.
KO and PEP are both at 31% goodwill of total assets. Kind of high, but not that high as Dr. Peppers. Not sure about the rules but I think this has to be written off in some time frame and therefor will lower earnings.
But correct, the names have no tangible value, but they have value.
There is no need to write off goodwill, unless the value of the corresponding business went down. It usually stays on the balance sheet ad vitam eternam and decreases in percentage of asset with inflation and developpment of the business
Regularly on Sundays I circle through my stockpicking portfolio with FASTgraphs to update potential buy and sell positions. Some companies I just click through, others make me stop and contemplate.
Three I’ll comment on here:
Boring Bank of New York Mellon (BK) is one that I liked looking at today:
but after indeed some initial earnings growth their earnings peaked in 22 and have been falling ever since. Probably patents expiring and generic drugs chipping away at BMY’s earnings.
At least they still grow the dividend, but I wish one of their new drugs in the pipeline (or some acquisition) will turn things around for earnings (and stock price, subsequently).[2]
Ah, well.
Some companies in my portfolio remain puzzles to me. Like Global Payments (GPN).
While this wasn’t an income play (like almost all other companies in my stock picked portfolio), the thesis of their price catching up with their earnings remains contested, now for many years already.[3]
Oh, and I bought my initial tranche of Dr. Pepper. I expect to be buying more of this with the price going further down, but I believe it’ll work out long term, i.e. over the next week or so … [4]
1 First quarterly dividend after I bought it on Oct 27 2020: 31 cents (ex on Oct 28, no less! )
Latest quarterly dividend paid in August 2025: 53 cents. That’s +70% in five years! Almost the kind of income growth you would get with a regular job …
2 Always a risk with pharmaceuticals and biotech, but sometimes it works out just fine. I was in a similar situation with ABBV and it just took a couple of years until the stock price recovered.
In the mean time the dividends kept rolling in – which after all is the main thing I am looking for.
3 The market must know something that I don’t. I’ll hang on to it as it’s a speculative position with less than a 2% positon of my stock picked portfolio and quite some upside if price catches up to earnings again.
4 Just kidding (on the time horizon). I expect this is a buy-and-hold position unless it gets ridiculously overvalued for some reason.
Just checked the last cash flow statement of Dr. Pepper. Don’t like it. FCF payout ratio is over 100%, that is a no-go for me.
I keep on with my method: checking out U.S. Dividend 100 stocks, searching for the highest dividend yield that fulfills my cash flow requirements and is not in a sector I cannot buy any longer ant that is it. Easy peasy and fully mechanic.
Here a list of that index sorted by dividend yield: Finviz
I admit, when writing my post – which was really mostly about everything else in that post than my KDP buy – I was tempted to omit mentioning my KDP buy as I feared I’d trigger you … … but in the end that’s what makes a market!
I’m guessing you looked at the 10-K/Q?
FASTgraphs claims the FCF[$] covers dividends easily:
Curious to learn how you arrive at a different conclusion?
$ FASTgraphs gets (most of) their data from FactSet, which in turn I am certain of devours company financial statements with a small army of analysts.
FactSet Research Systems (FDS) is in fact a company I’d love to own, but they’re almost always expensive – they benefit from being in an oligopoly for providers of financial data.
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