I love your comment about stock buybacks - I don’t wan hem buying back stock unless it is at a price where I would buy it - and that’s when its cheap… lol
Chuck, Thanks for remembering David Fish. He has a very humble man and always trying to teach the novice investor. His approach was simple yet his work was great. And thank you for your relentless efforts to educate us as well.
David Fish was a professional friend and colleague and we often talked and exchanged ideas. he was gracious enough to allow us to include his CCC list on our FAST Graph tool and he often included them in his articles. I miss David and his passing was way too early. However, I also appreciate the good work that Justin law has been doing as the current curator thereby keeping David's legacy alive. Thanks for recognizing it Chuck
Chuck …. I get so disappointed when people make great points about their opinion but focus on just one point. Sometimes I don’t think they write a rough draft before comments , listen again and then see if they have all the points you make are covered. Thank you for all you do. You are one of my valuation
Verizon hands down. Operating earnings for LUMN have fallen from $3.39 in 2010 down to $1.67 and 2020 and are expected to continue dropping. More importantly, the dividend has fallen from $2.90 to $1 . I believe LUMN is a value trap, but I say that without conducting comprehensive research just based on what I see. Regards, Chuck
Hello, do you look at the stability of Margins? The operating Margin of PII has been in a downtrend over the past 5 years. Is that something to be concerned about?
given the receent acquisition activity and restructuring that Polaris has gone through I am not alarmed by the recent margin retraction, but I am aware. The real question to me is why have the margins been reduced and why would they be expected to improve going forward. This is where research and due diligence comes in. Here is MorningStar's view on the subject :"We expect that credit will remain available to wholesale and retail channels at current levels and management will continue to acquire like-minded companies (which we include in our model upon announcement). We see gross profit margin expansion of 260 basis points over the next decade from 2020 levels, to 27%, while net income margins grow to 8%. We think costs will stabilize and that the marketing ratio will stay around 7%-8% over our forecast (in line with the five-year historical average of 8.1%). Polaris has historically generated returns on invested capital well above our weighted average cost of capital assumption (9%) and should be able to restore adjusted ROICs including goodwill to around 40%." regards, Chuck
Very interesting company... This is being added to my watch list...loving the different type stocks... This will fit nicely in my portfolio... Great review
companies ask and pay for credit ratings. For whatever reason, Polaris has not done that. However, I have read analysts that have calculated and applied an effective credit rating based on current and historical debt metrics, solvvency ratios, Polaris is 2.84% average borrowing costs, etc. all confirming an A+ affective credit rating if the company were to apply for one. That does not mean they would get it, it is simply one analyst opinion but it was a consideration of mine before I presented the video. Regards, Chuck
as Mr. Valuation the effect of valuation on performance represents a major theme and Thesis of my work. Polaris was not overvalued in 2000 however, as you pointed out the market wAs. That same situation exists today. The market is overvalued and Polaris is not, so I would consider the comparison extremely relevant. Finally, as I often state measuring performance without simultaneously measuring valuation is a job half done. In essence, we agree, our only disagreement is whether or not the comparison is relevant - I think it is. Regards, Chuck
Hi Chuck, good video as always. Polaris is interesting, that's a company I didn't follow, so thank you for this. Hey, what do you think of the high yielding dividend ETFs (such as NUSI, JEPI, XYLD)? Perhaps it'll be a nice video for you to make with your thoughts on these ETFs that offer a high yield (using covered call option strategies etc..).
fundamentally AliBaba and many other Chinese stocks are very inexpensive. However, they currently face political risk that has many investors concerned. In other words, the company's appear to be very excellent businesses, the question is whether or not their government will allow them to continue to be so. Regards, Chuck
@@FASTgraphs I am fully invested in Alibaba maybe to much . But think they will but will be bumpy ride. Do you Chuck bought for yourself or consider. ? Love you video. Lots of knowledge. And thank you for Omega healthcare reit
Great investing idea! Went through the company, and all looks good, but what Zacks is showing me is that their quick ratio is below 1. One of my criteria for stock picking is Current Ratio & Quick Ratio to be over 1. What are your thoughts on that? Loved the review, seems like a great idea to start digging more into. Stoyan
Polaris does have a current ratio above 1. Regarding the quick ratio, it is consistent with historical norms for the company. Nevertheless, liquidity ratios are considerations that investors should look at. Regards, Chuck
Chuck, the 12.84% Dividend CAGR is excellent, though the DGR has slowed considerably on the 3 (2.25%) and 5 (3.2%) year perspectives. Do you think they'll accelerate this again? Or are are their best days (DGR wise) behind us?
Kieren Tinning: I do not expect the recent reduction in dividend growth to be a permanent trend. There are several reasons why companies Polaris included have slowed dividend growth in recent years. Covid 19 of course has been a major one. Furthermore, in Polaris's case the company made several acquisitions in 2018 which I believe had an impact on their decision to keep dividend increases modest. Finally,based on consensus estimates I do believe dividend increases will grow, but perhaps not as fast as they have historically. Regards, Chuck
Richard, one thing to consider is that 4% current dividend yields are typically accomplished at the expense of growth. I see Polaris more as a faster growing dividend growth stock. As a result, the 2% yield is typical of the faster growing dividend growth stocks which tends to generate a higher long-term total return. On the other hand, when I am looking for current income like you I favor 3% to 4% yield. Nevertheless, I recognize that I typically must give up capital appreciation potential in order to achieve that. Regards, Chuck
More recent data is obviously much much more relevant. The sizable dividend increases have come to a screeching halt (and this was way before COVID). The last 3 years have seen increases of a tiny 1.5%; and the 3 before was only 3% on average. The stats above, going back to 2001, are quite misleading, unless you dig down.
Hi Chuck, do you believe Polaris is affected more than the average company by inflation? It seems like the materials they use would reduce their margins, so I'd be interested in hearing your take on how they'd fare in an inflationary environment.
David: I do not see why you would think that, perhaps you could provide more detail. Polaris did recently raise prices and they are suggesting another price increase soon. in other words the company does seem to have good price elasticity which does affect their demand too much. I think the real strength in this company is that the demand for their core products is strong and should remain so. At least that is my humble opinion. Regards, Chuck
Good grief, I hate disagreeing with Chuck, but he's misusing the terms elasticity and inelasticity of demand and he's got this backwards. Polaris' products are highly discretionary. The demand curve for highly discretionary items is FAR more elastic (meaning price-sensitive) than for consumer non-discretionary (food, medicine, etc.). He's stated it exactly backwards -- high elasticity of demand means demand IS affected. It is products for which there is INelasticity of demand that sales do not fall when prices rise. I have no problem if Chuck wants to explain what evidence or rationale he relies upon in drawing his conclusion that _"demand for their core produces is stong and should remain so."_ Because the basic economics are in direct contradiction of that. We are in a period of *_pronounced_* stagflation. Real wages are FALLING at the bottom and middle of the socio-economic spectrum. That is an objective FACT. Rising prices and falling wages and discretionary income = fall in demand where there is ANY elasticity in the demand curve.
Your question was right on the money. Polaris guided down for next quarter. Why? Inflation beyond what they can pass through. _"Polaris (PII) guided down on its adjusted gross profit margins, citing an “escalating increase in input costs.” “Just in the third quarter alone, our input costs from logistics, ocean and truck rates, commodities, labor rates and plant inefficiencies increased over $100 million, or approximately 580 basis points, when compared to the prior year third quarter.”_
I love your comment about stock buybacks - I don’t wan hem buying back stock unless it is at a price where I would buy it - and that’s when its cheap… lol
Chuck - I bought Polaris last month - still down but this video motivates me! Thank you for covering this.
I've already got Polaris in my portfolio! I think I'll be adding more now!
Chuck, Thanks for remembering David Fish. He has a very humble man and always trying to teach the novice investor. His approach was simple yet his work was great. And thank you for your relentless efforts to educate us as well.
David Fish was a professional friend and colleague and we often talked and exchanged ideas. he was gracious enough to allow us to include his CCC list on our FAST Graph tool and he often included them in his articles. I miss David and his passing was way too early. However, I also appreciate the good work that Justin law has been doing as the current curator thereby keeping David's legacy alive. Thanks for recognizing it Chuck
Chuck …. I get so disappointed when people make great points about their opinion but focus on just one point. Sometimes I don’t think they write a rough draft before comments , listen again and then see if they have all the points you make are covered. Thank you for all you do. You are one of my valuation
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hi chuck , Vz vs lumn which one better for dividend investment ?
Verizon hands down. Operating earnings for LUMN have fallen from $3.39 in 2010 down to $1.67 and 2020 and are expected to continue dropping. More importantly, the dividend has fallen from $2.90 to $1 . I believe LUMN is a value trap, but I say that without conducting comprehensive research just based on what I see. Regards, Chuck
@@FASTgraphs thanks chuck . appreciate for your advice .
Looks like a good opportunity but might wait a while to see if I could get it a bit cheaper for larger MOS. Very well done video!
Big ups for pii
Never heard about that Company,thanks for the Inside Chuck
Great Tutorial!!
Hello, do you look at the stability of Margins? The operating Margin of PII has been in a downtrend over the past 5 years. Is that something to be concerned about?
given the receent acquisition activity and restructuring that Polaris has gone through I am not alarmed by the recent margin retraction, but I am aware. The real question to me is why have the margins been reduced and why would they be expected to improve going forward. This is where research and due diligence comes in. Here is MorningStar's view on the subject
:"We expect that credit will remain available to wholesale and retail channels at current levels and management will continue to acquire like-minded companies (which we include in our model upon announcement). We see gross profit margin expansion of 260 basis points over the next decade from 2020 levels, to 27%, while net income margins grow to 8%. We think costs will stabilize and that the marketing ratio will stay around 7%-8% over our forecast (in line with the five-year historical average of 8.1%). Polaris has historically generated returns on invested capital well above our weighted average cost of capital assumption (9%) and should be able to restore adjusted ROICs including goodwill to around 40%." regards, Chuck
Great vid ! Love this kind of content !
Thank you very much for this helpful information. I don´t knew the company but I will put in on my watch list. Best regards from germany
I thought it would be Amgen :D
Thanks Chuck!
Very interesting company... This is being added to my watch list...loving the different type stocks... This will fit nicely in my portfolio... Great review
Thank you for the video. I wonder why this company is not rated?
companies ask and pay for credit ratings. For whatever reason, Polaris has not done that. However, I have read analysts that have calculated and applied an effective credit rating based on current and historical debt metrics, solvvency ratios, Polaris is 2.84% average borrowing costs, etc. all confirming an A+ affective credit rating if the company were to apply for one. That does not mean they would get it, it is simply one analyst opinion but it was a consideration of mine before I presented the video. Regards, Chuck
Thank you!
I would not compare a stock with the S&P 500 in 2000 as the overall market was extremely expensive. I think that almost every stock would look good.
as Mr. Valuation the effect of valuation on performance represents a major theme and Thesis of my work. Polaris was not overvalued in 2000 however, as you pointed out the market wAs. That same situation exists today. The market is overvalued and Polaris is not, so I would consider the comparison extremely relevant. Finally, as I often state measuring performance without simultaneously measuring valuation is a job half done. In essence, we agree, our only disagreement is whether or not the comparison is relevant - I think it is. Regards, Chuck
Hi Chuck, good video as always. Polaris is interesting, that's a company I didn't follow, so thank you for this. Hey, what do you think of the high yielding dividend ETFs (such as NUSI, JEPI, XYLD)? Perhaps it'll be a nice video for you to make with your thoughts on these ETFs that offer a high yield (using covered call option strategies etc..).
Would absolutely love to hear his perspective
Love the channel. Can you please share your opinion about Alibaba and China mobile
fundamentally AliBaba and many other Chinese stocks are very inexpensive. However, they currently face political risk that has many investors concerned. In other words, the company's appear to be very excellent businesses, the question is whether or not their government will allow them to continue to be so. Regards, Chuck
@@FASTgraphs I am fully invested in Alibaba maybe to much . But think they will but will be bumpy ride. Do you Chuck bought for yourself or consider. ? Love you video. Lots of knowledge. And thank you for Omega healthcare reit
Great investing idea! Went through the company, and all looks good, but what Zacks is showing me is that their quick ratio is below 1. One of my criteria for stock picking is Current Ratio & Quick Ratio to be over 1. What are your thoughts on that?
Loved the review, seems like a great idea to start digging more into.
Stoyan
Polaris does have a current ratio above 1. Regarding the quick ratio, it is consistent with historical norms for the company. Nevertheless, liquidity ratios are considerations that investors should look at. Regards, Chuck
Great video as always! Thank you Chuck!! Could you please analize SMG?? Thanks again and regards from Argentina!
Can't do it. The only thing worse than a Polaris is a used Polaris
Chuck, the 12.84% Dividend CAGR is excellent, though the DGR has slowed considerably on the 3 (2.25%) and 5 (3.2%) year perspectives. Do you think they'll accelerate this again? Or are are their best days (DGR wise) behind us?
Kieren Tinning: I do not expect the recent reduction in dividend growth to be a permanent trend. There are several reasons why companies Polaris included have slowed dividend growth in recent years. Covid 19 of course has been a major one. Furthermore, in Polaris's case the company made several acquisitions in 2018 which I believe had an impact on their decision to keep dividend increases modest. Finally,based on consensus estimates I do believe dividend increases will grow, but perhaps not as fast as they have historically. Regards, Chuck
still. 2% is crazy low. I would like it to be at least 4% to start it off.
Richard, one thing to consider is that 4% current dividend yields are typically accomplished at the expense of growth. I see Polaris more as a faster growing dividend growth stock. As a result, the 2% yield is typical of the faster growing dividend growth stocks which tends to generate a higher long-term total return. On the other hand, when I am looking for current income like you I favor 3% to 4% yield. Nevertheless, I recognize that I typically must give up capital appreciation potential in order to achieve that. Regards, Chuck
More recent data is obviously much much more relevant. The sizable dividend increases have come to a screeching halt (and this was way before COVID). The last 3 years have seen increases of a tiny 1.5%; and the 3 before was only 3% on average. The stats above, going back to 2001, are quite misleading, unless you dig down.
Hi Chuck, do you believe Polaris is affected more than the average company by inflation? It seems like the materials they use would reduce their margins, so I'd be interested in hearing your take on how they'd fare in an inflationary environment.
David: I do not see why you would think that, perhaps you could provide more detail. Polaris did recently raise prices and they are suggesting another price increase soon. in other words the company does seem to have good price elasticity which does affect their demand too much. I think the real strength in this company is that the demand for their core products is strong and should remain so. At least that is my humble opinion. Regards, Chuck
Good grief, I hate disagreeing with Chuck, but he's misusing the terms elasticity and inelasticity of demand and he's got this backwards. Polaris' products are highly discretionary. The demand curve for highly discretionary items is FAR more elastic (meaning price-sensitive) than for consumer non-discretionary (food, medicine, etc.). He's stated it exactly backwards -- high elasticity of demand means demand IS affected. It is products for which there is INelasticity of demand that sales do not fall when prices rise. I have no problem if Chuck wants to explain what evidence or rationale he relies upon in drawing his conclusion that _"demand for their core produces is stong and should remain so."_ Because the basic economics are in direct contradiction of that. We are in a period of *_pronounced_* stagflation. Real wages are FALLING at the bottom and middle of the socio-economic spectrum. That is an objective FACT. Rising prices and falling wages and discretionary income = fall in demand where there is ANY elasticity in the demand curve.
Your question was right on the money. Polaris guided down for next quarter. Why? Inflation beyond what they can pass through. _"Polaris (PII) guided down on its adjusted gross profit margins, citing an “escalating increase in input costs.” “Just in the third quarter alone, our input costs from logistics, ocean and truck rates, commodities, labor rates and plant inefficiencies increased over $100 million, or approximately 580 basis points, when compared to the prior year third quarter.”_
The world is melting. Snow vehicles?
Thank you!