Motorola

[Zeno]

Lastest earnings: First Quarter Earnings etc (http://news.morningstar.com/news/PR/M04/D20/1082491272258.html)

The stock is taking off today, past $19 right now. How does the balance sheet look to all the experts here?

By the way this tidbit of spew from the balance sheet is interesting:

Company-obligated mandatorily redeemable
preferred securities of subsidiary
trust holding solely company-guaranteed debentures.

Some form of debt? I need a translation.

-Zeno

[Mark Heide]

Zeno,

If I held this stock I would sell first thing in the morning. It's overvalued with a P/E of 43. Here's a quick analysis from Quicken:

http://www.quicken.com/investments/seceval/?p=MOT&cmetric=intrinsic

Good Luck

Mark

[hedged]

this is a common tax trick that companies use. They set up a trust and sell the trust subordinated bonds. Then the trust sells preferred stock to investors, which essentially receive a passthrough of the bond interest paid by the company.

the reason to do this is that the company wants to issue preferred stock (in this case mandatorily convertible into common stock at a future date), but dividends that they pay are not tax deductible. Using this structure they can deduct the dividend expense for tax purposes.