There’s been quite a bit going on in the companies that I follow both personally and for the Irregulars, so I want to check in on a few of these today — I’ll be taking at least a quick look at Sandstorm Metals and Sandstorm Gold, Invensense, Xerox, and maybe some other stuff will leak in as well… and I’ve gotten a lot of questions about Patrick Cox’s continuing heavy ad barrage for Applied DNA (APDN), so I’ll share some thoughts on that at the end of today’s note.
Next week, there may be some abbreviated notes for the Irregulars or a short Friday File coming, but I’ll be traveling at the end of the week and the following week will be all about the Irregulars — I’ll be holding off on most teaser analysis and will be dedicated instead to reporting for you from the Value Investing Congress in Las Vegas on May 6 and 7, so I’ll save most of my blather for that.
First of all, I should let you know that today I followed up on a recent Idea of the Month piece and bought a (very small) intiial position in Xerox (XRX), a company I sold a couple years ago but that I think is starting to plateau operationally now and may be in a good position to grow into a long-term compounding machine (they’ve more recently been doing a lot of buybacks and some major dividend increases, and they can afford them).
So this goes into my personal portfolio, and I still think it’s reasonable anywhere under nine dollars (I paid about $8.40)… though it’s not a “beat and raise” growth darling by any means, and management is still working hard at cost cutting and margin improvement in both their services division and in the imaging business, so it may require patience. We’re below book value here, with good dividends and aggressive growth in both dividends and stock buybacks, so I think the stock probably has a floor here around $7.50 to $8 a share unless the market completely tanks or something exogenous happens to the company (scandal, lawsuit, much worse than expected performance, etc.). The stock is cheap based on almost any metric, they have a lot of debt but the debt is cheap and they’ve got ample cash flow to cover it, and ...