It looks as if the future of electricity marketing will take the form of retail. One wonders if this is a viable industry and if energy-based cryptocurrencies will one day become a value investment.
The marriage of cryptocurrency and energy might create a fascinating new class of investments. Only time will tell if these tokens will have any real value.
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The cash flow might explain some of the problems at CenturyLink, the company is taking in just enough cash to pay the bills and finance a large salary for executives. It might also disprove a popular notion of Warren Buffett’s to invest businesses that are so simple to operate somebody’s idiot nephew can run them.
The reason Buffett might be wrong is that once in the executive suite, the idiot nephew is in a good position to loot the company. He might order a new corporate jet instead of updating the equipment, or sell off potentially profitable assets in order to raise the dividend and the price of the stock in his compensation package.
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The Union Pacific has a pretty bright future because it owns four rail lines that connect the Great Plains to the West Coast.
They include the original transcontinental rail line from Omaha, Nebraska to Oakland, California and the Southern Pacific line from Los Angeles to Houston. Shorter routes include the line from Salt Lake City to Los Angeles, and the Oregon shortcut from Pocatello, Idaho, to Portland, Oregon, and Seattle. Other key routes include a line from El Paso to Chicago, the line from Houston to Chicago, and the line from Denver to Salt Lake City.
These tracks put the Union Pacific in a great position to cash in on all the raw materials shipped from the West and Midwest to Pacific and Gulf Coast Ports. It is also in a good position to haul all the consumer goods shipped from China to U.S. ports.
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Those who doubt that American stocks might be in a potentially catastrophic bubble need to take a look at the Kansas City Southern (NYSE: KSU). The railroad makes little money, yet its stock is dangerously overpriced.
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The potential of this are absolutely staggering. Just a few of the things Uncle Warren can do with all that cash include:
Buy America’s second largest grocer; Kroger (NYSE: KR), outright and still have $75.56 billion left in the bank. That’s amazing because Kroger reported revenues of $118.05 billion on 31 July 2017. Kroger had an enterprise value of $32.74 billion on November 10, 2017.
This exposes the Canadian Pacific’s greatest problem: its resources are simply too limited. The railway barely seems to make enough money to cover the cost of operations, let alone expand or modernize.
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Sports fans know that even the greatest winning streaks end sooner or later. The same can be said of stocks,
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Amazon (NASDAQ: AMZN) – The Everything Store is basically a logistics company and Hyperloop is a next generation logistics solution. Hyperloop One CEO Rob Lloyd has even described his company’s technology as “Amazon Prime on steroids.” Hyperloop would make Amazon more profitable by greatly reducing transportation costs while speeding up delivery times. A fulfillment center in Ohio would be able to provide same day delivery for merchandise ordered in Chicago or New York by utilizing Hyperloop.
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A leaderless Uber with its value destroyed will be a natural acquisition target.
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Between February 2016 and February 2017, Rite Aid’s revenues increased by $2.11 billion. The revenues rose from $30.74 billion in 2016 to $32.85 billion in 2017. There’s a lot of cash flowing through Rite Aid that might make somebody a lot of money if he can figure out how to capture it.
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