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Olstein Capital Management CEO Bob Olstein on the impact of Obama’s decision to reject the Keystone Pipeline on energy investments, plus the outlook...
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Breathless up cracked standing here with Bob Goldstein we should get to him right now because he owns Apache he owns ExxonMobil and Bob of course with the old Steve funds and look when you hear this does this make you shy away from energy or not at all now we're we're a long term players we don't get involved in any individual project or -- We think -- is an excellent run company apaches and excellently run up but we're still underweight new wells in the fund from what.
We we just don't see the bid the price to value you know it it -- at what price to value guys in.
We bought Exxon and Apache when new way down and you know we still like them because -- -- greatly managed companies but.
We think oil is stuck in a in abandoned we think you know like the the eighty to a 11090 to a 110 is where it is and we a lot of that in the pricing.
We should also -- markets right now I mean if we show that the Dow Jones industrials only for an -- moving lower we've added on that.
Since the news about 93 points for the -- isn't shaking the markets certainly.
You have said in the past that investors are overreacting to European negative European news overreacting to bad news here in the US.
Yeah we we're very optimistic that we can.
We can see you know high single digit returns now that's not what we got back in the ninety's -- -- mid two thousands but -- -- one -- 2% interest rate market.
Did the best a -- is the best game in town we're finding so many companies as a value guy will get in -- -- 10% free cash flow yields.
We think that that there's great balance sheets out there.
Everybody's out of the market because of 2008 that's a domino right -- -- of course -- -- -- at the top the next couple.
It's but it's gotta jump in other 15% before you start getting Republican Bob says another 15% before the slower money and so where's your money let's start with your first name.
Sealed area -- -- -- mean.
Who doesn't play -- rap especially -- the holiday season but you like sealed there.
As you know -- we're vulture investors we need price price price to buy something here's a company cheap cheap cheap that cheap cheap cheap we look at the price relative to cash flow.
Here's a company that's would food safety bubble wrapping it -- -- They just recently made an acquisition diversity which is in sanitation.
That goes into clean and food places -- Admittedly some of the great value investors sold the stock at 2728.
Dollars a stock -- -- down to eighteen dollars.
But again price price price here's a company.
That's only earning a dollar forty to a dollar sixty right now but basically a lot of that's been hidden by excess amortization relating to the acquisition.
You get the bears out there the analysts who are in the moment -- Listen don't buy the stock for a year or two we think they can do to radio free cash flow on a year -- -- effort to but right now the next year's going to be rough.
We look out two years we don't know -- -- time we lead the timing to the great analysts of the world who -- next thirty days what's -- -- up tech and again.
Will wait for proud value we think the stock is worth at least when he -- -- waving its throwing off the two point 9% dividend yield.
Dividend yield and it and it free cash flow yield when you take it apart is hardly hard to believe 14%.
Now the next pick I have to tell you guys Bob was way ahead of Warren Buffett on this one and that is -- you bought it so much cheaper than it is now.
Yes we did.
We're listening to these fantasy stories out there how arm is gonna knock Intel -- -- are holding a look at.
Where we are very concerned about whether and how much more on that affect.
You see companies spending fifty billion dollars a year I literary research report this morning live.
And Liz and basically here's a pricing and account -- -- 250 this year to sixty next year as sell a stock what I'm cutting it to neutral.
Here's a company with a 10%.
Free cash flow yield sixteen billion dollars in cash sitting on the balance sheet.
Probably the best management out there and corporate America and people are advising stay away from the stock can buy stock at -- a sixty times earnings and do you love.
That it got downgraded yesterday by a couple of companies out there again these analysts we love -- the negativity because everybody's in the now today.
I'm writing this story about fundamental vs technical now analyst there's no more fundamental -- left in this.
-- and I don't know why any viewers with listened to analysts at the moment because you've heard it right here first on Fox Business on Wednesday from the CEO the great management that -- A -- is talking about Paul Otellini who told us first on Fox Business here's how his numbers are going to look that come out after the bell tomorrow.
And you know something periods as.
Much better records exporters around this sets up a quarter breakfast type plus plus odd definitive presumably.
And pointed of our numbers would be thirteen seven.
That would be a record -- -- -- on -- -- -- -- reported after the do that anyway you look at.
Up from 4040 something life here.
-- -- ten billion here.
Ten billion a year do you do you remember Rain Man in the picture -- many kept on going EJ -- -- -- that.
Well they said that Intel was never going to get into the yet.
The Smartphones so they announced a major entry into the Smart -- market at the CES show last week.
And that makes it well lower only moderately -- -- when that's gonna be moderately in near the good to be majoring in there this is that outstanding company.
At 10% free cash flow yield.
With taken of advantage.
We have to name she likes now wait till you hear what he is really worried about in fact one name know to like guarantee 99% of -- He says might be falling off a cliff since a stay tuned for that for --
