TOP 100 TRANSPORTATION AND LOGISTICS SITES
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| GM Bondholders: No Good Answer Ockham Research submits: General Motors (GM) unveiled its new turnaround plan today after the company’s less aggressive viability plan was shot down by the Auto Task Force in February. Admittedly, this plan is much more realistic about what the company needs to do in order to become a viable entity. The most important feature of the plan is a debt restructuring that will offer $27 billion worth of bondholders 225 GM common shares for each $1,000 in principle exchanged. GM will need about 90% of its bondholders to accept this deal in order to avoid chapter 11 bankruptcy according to the statement. There is no question that this is a tall order, especially considering GM shares are trading right around $2 on Monday, meaning bondholders will not be made whole unless the company survives long enough for the share price to more than double. Furthermore, by converting to a common shareholder, you must believe that the new-look GM will be able to survive. As I am sure the bondholders realize, if GM does eventually go bankrupt it is much better to be a bondholder than a shareholder. At least as a holder of GM debt, in a worst case scenario, you will have a claim on some of GM’s not-insignificant assets. This is an extremely interesting proposition, as GM is telling their bondholders its really their decision: Chapter 11 bankruptcy or try out the new viability plan.Complete Story » seekingalpha.com |
Norfolk Southern - Why I'm Bullish Value Interrogator submits:Summary: Norfolk Southern (NYSE: NSC) is an attractive income play on the eventual U.S. economic recovery with an industry leading yield of 3.5% coupled with a competitive growth outlook, attractive valuation multiples, and a conservative balance sheet. However, I believe the share price is a little bit ahead of itself and I recommend investors initiate a half position in NSC if the stock corrects to $33, and accumulate a full position at $30.Complete Story » seekingalpha.com |
Ford Takes Advantage of Cash for Clunkers Ockham Research submits: Ford Motors (F), along with other major automakers, reported sales results from the month of July, and in Ford’s case it was the first increase since November 2007. The company delivered 165,279 vehicles last month compared to 161,530 a year ago. The much discussed “Cash for Clunkers” program offers car buyers a government subsidy for more fuel efficient cars. The program has been quite successful in luring buyers to the car lots, as the first billion dollars was used in just a few days. Apparently the program has incentivized potential buyers, but as the quote from Bloomberg suggests, that could slow future sales after the program ends.Clunkers’ EffectComplete Story » seekingalpha.com |
UPS: Economy Still Has a Long Way to Go A bit of mixed data Thursday morning has investors scratching their heads over the next move in the equity market.The index of leading indicators was up by 1% in September, marking its 6th consecutive gain. The largest contributor to the improvement was interest rates, which remain accommodative. Jobless claims, on the other hand, continue to reflect the extreme weakness in the economy. Claims jumped to 531K – a truly staggering number for an economy that is supposedly in the middle of a recovery. Continuing claims dropped by 98K which is a clear sign that the ratio of firings to hirings is becoming more favorable.Complete Story » seekingalpha.com |
Apple Overvalued? Here's What Else You Can Get for the Price In response to my Amazon post, there have been several comments about Apple (AAPL). This is yet another beloved company whose valuation has left the fundamentals behind. No stranger to momentum, Jim Cramer seems to think it's worth $300 a share. That's reason enough to be bearish on Apple.At the current quote, however, the company ONLY has a market value of $175 billion. For this purchase price, the prospective investor could own any of the following Apple-equivalents:Complete Story » seekingalpha.com |