Pitney Bowes (PBI-N)

Does the rumour that IBM is looking to acquire this company, make any sense? That makes no sense at all. IBM is really trying to battle out in the cloud computing space. Think of this company as being an outlier that is just getting old branded. Debt to cash flow ratio is humongous.

12.3%. Well known secular decliner. Sales declines are starting to accelerate. It is cheap, but the problem is that they have debt. They make their money on postage.

May have bottomed but he is concerned about the dividend which seems a little high. 3 consecutive years of earnings declining. 81% payout ratio. Serious headwinds as an industry.

Has a great yield of 12%, for exactly the wrong reason, i.e. the price has been dropping. There is no catalyst here. This is postage and postage meters and more and more people are not using the mail. Right now they are covering their dividend but he doesn’t feel this will last for long.

Nice dividend. Payout ratio is low. When you look at their suite of products, this is a dying business. This stock is cheap for a reason. Products are all centered around snail mail. 11% yield is a real red flag. Doesn’t know if they will survive.