Thursday, July 29, 2010

Northrop Grumman Liquidity Convenience

Northrop Grumman (NOC) presents debt net of cash as a percentage of capital. They currently make the claim that the debt percentage is down significantly. What they fail to point out is that they have substantial pre-payments and progress payments which are pseudo-debt. Clearly without these prepays they would be heavily indebted. The debt net of cash is not fully representative of the firms liquidity and capital.

Disclosure: No position in any stocks mentioned in this post.

Wednesday, July 28, 2010

Comcast No Discussion Earnings Release

Comcast (CMCSA) reported improved results but had to digest NBC Universal costs. The press release is disappointing as it does not discuss the business in any detail. There are lots of macro numbers. No qualitative discussion was presented. Management does not want to address the issues and is hiding behind the accounting presentation. Stock is near it’s 52 week high. What’s the big secret.

Disclosure: No position in any stocks mentioned in this post.

Tuesday, July 27, 2010

L-3 Curious Balance Sheet

L-3 (LLL) has a curious balance sheet. They announced an additional stock buy back program to goose up the EPS. They have refinanced some long term debt at reduced rates and extended maturities. They have $1 Billion of long term debt which is now current. They have about $1 Billion in cash. They make no mention of short term borrowings or lines of credit. They rely on pre-payments in excess of costs billed to provide working capital. This can slide the wrong way. Investors have no clear picture. Debt costs have already negatively impacted guidance.

Disclosure: No position in any stocks mentioned in this post.

Monday, July 26, 2010

BP New Whipping Boy

BP (BP) is changing the CEO optics. Tony Hayward with his Anglo Saxon weekend yacht racing propensity may become the sacrificial lamb. Congress did not like him. He did not like congress.

A native from Mississippi is coming out of the bullpen. The PR types think he will be able to stick handle the crisis better. Maybe who really knows for sure. Robert Dudley is on deck.

How about this for strategic planning? The US government starts to meddle so much in BP operations that BP spins off the US entity and dividends it out to unsuspecting shareholders. The US government still has the whipping boy it wants. Shareholders divest from a problematic asset.

The US is still dependent on foreign oil.

Disclosure: No position in any stocks mentioned in this post.