Showing posts from August, 2020

IB Net Payout Yields Model

Nikola: Too Many Promises For Now

Nikola has a long list of promises to meet in order to reach substantial out year revenue targets. The stock currently has a $15 billion market cap due to 425 million fully diluted shares outstanding. The company remains a 2024 revenue story. Investors need to realize Nikola has 200% upside, but the stock has 90% downside risk over the next few years. As with most IPOs and newly public companies, the initial earnings report is very volatile. The  Q2 earnings report  for  Nikola  ( NKLA ) was no different from the general market despite the unique method of going public via a SPAC. Whether or not to invest in the stock is more related to whether the zero emissions commercial transportation system company can meet staled promises. My  investment thesis  remains negative on the stock, considering the huge jump in the public float and the massive valuation for a company that hasn't delivered on revenues yet. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. P

Exxon Mobil: Dividend Should Be At Risk

Exxon Mobil continues to boost net debt levels in order to pay massive dividends. The energy giant continues to cut investing in the future in order to pay an 8.3% yield while watching the stock collapse. The stock isn't investable until the company cuts the dividend at least 50% similar to BP. After another quarter of massive amounts of cash exiting the balance sheet in favor of debt,  Exxon Mobil  ( XOM ) investors should want the energy giant to consider cutting the dividend. The biggest issue is that the company can't afford to correctly invest in the future with the massive dividend overhang. My  negative investment thesis  continues to project the stock having less value due to $15 billion in annual payouts causing irrational asset sales and volatile capital spending decisions that hurt investors. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please read the disclaimer page for more details.