Subject: Re: OT good site
Right, but he totally missed that IEP sold a significant number of new shares while paying a high dividend. These cancel each other out. There were plenty of red flags. 5-year average earnings yield is -3.85%. 5-year average free cash flow is negative. Revenues are down from $19B in 2013 to $14B in 2022. I think "maybe buy a little for the dividend" was bad advice ("Should you invest? I don't know... Perhaps you take a small position in Icahn Enterprises to collect the 15% dividend yield." at time 16:00 in the podcast).
Looking at S&P1500 equal weight screens since 1991, the best CAGR was with both lower Total Shareholder Equity and lower Shares Outstanding compared to 9 years earlier. The worst CAGR was lower Equity and higher Shares. Increased Equity (1229 out of 1393) and increased Shares (998 out of 1229) was the most common.
Screen CAGR GSD MDD Sharpe Depth
EquityDownSharesDown2023 13.5 22 -65 0.63 103
SharesDown2023 12.3 20 -59 0.61 397
EquityDown2023 12.0 24 -69 0.53 166
EquityUpSharesDown2023 11.7 19 -58 0.59 294
SP1500EqualWeight 11.5 22 -60 0.54 1393
EquityUp2023 11.3 21 -59 0.54 1229
EquityUpSharesUp2023 11.0 22 -60 0.51 935
SharesUp2023 10.9 23 -61 0.51 998
EquityDownSharesUp2023 8.1 30 -75 0.34 63
From 19910524 To 20230310
https://gtr1.net/2013/?~SP1500...
https://gtr1.net/2013/?~Equity...
https://gtr1.net/2013/?~Equity...
https://gtr1.net/2013/?~Equity...
https://gtr1.net/2013/?~Equity...
https://gtr1.net/2013/?~Shares...
https://gtr1.net/2013/?~Equity...
https://gtr1.net/2013/?~Shares...
https://gtr1.net/2013/?~Equity...
"Though total shareholder yield might be something that does in fact work, it makes no economic sense. Buybacks don't increase the value of a stock... By seeking high numbers for the sum of divdends, buybacks, and [optionally] debt reduction, I suspect what the screen is really doing is finding firms that are generating more cash than they can profitably invest in growing the business. The only sensible things one can do in that situation is to pay out the surplus cash as dividends, pay down debt, or buy back shares. Since you're picking firms with "too much cash", it would not be a shocker that the screen beats a random selection of companies."
http://www.datahelper.com/mi/s...