TTM Technologies Will Benefit As Global Electronics Industry Recovers [View article]
I think this bottomed around $6.50. At $8.00 seems to now represent excellent value. Should be trading at 1 x sales or 2 x book ($12 to $14) within 3 to 4 months. Will go long today or tomorrow.
Sold half of my double position at 15 (half bought at 18 and half bought at 6), I still see the value closer to 30, but for some reason ADNC has always sold at a hefty discount.
These results were good (particularly given the loss of Apple) but revenue growth is decelerating
Beaten Down Logitech Has Significant Upside Potential [View article]
Trading at EV/EBITDA of 8.7, forward PE 40.
Given uncertainty around its future price is fair. I would wait for a turnaround. Time is the enemy when you own a bad business (market outlook: poor; competitive advantage weak, growth: weak; earnings quality: poor).
Apple $395: Time To Give Up And Abandon Ship? [View article]
All depends on your investment system. People who bought when it was 10% or 20% undervalued, were too early. Depending on quality, once a company is 30% to 50% undervalued it is normally a great bet. And downside volatility becomes minimal.
Trend following strategies like yours can also be a successful, though the issue remains that the beginning and ending of a trend are easy to spot only in hindsight, hence you tend to lose most on your entries and exits (false breakouts and retracements).
Overall value investors have done better than trend followers with much lower volatility. This is because trendies enter on highs (such as breakouts) and exit on lows (breakdowns). Value investors generally enter on lows (though on a percentage of investments those lows get lower) and exit on highs.
On a personal note, I combine a value approach with some technical analysis and I will be buying Apple (which in my mind is more than 30% undervalued) once the technicals confirm a bottom. There is no hurry, a bottom will take 3 to 7 weeks to form (and will most probably retest). Apple has been under distribution since February.
EZCorp, Inc.: Like All Value Investing, Hidden In Plain Sight [View article]
Good and comprehensive review.
I'm long EZPW, but value it more in the $30 to $33 bracket. I guess we differ on discount rates. I wouldn't accept 7%, more like 11%.
I tried to buy a bottom at $18.80, but got stopped out of much of my position and am now expecting a bottom closer to $16.00. Will try to add to my position if it gets there.
What do you see as a catalyst for the share price recovery.
What are your thoughts about the bear thesis - EZCorp's growth is mainly acquisition related and that there are likely impairments to the goodwill on the horizon and a decline in growth as fewer acquisition candidates are available (or they have to pay more to get them).
Apple $395: Time To Give Up And Abandon Ship? [View article]
Truth be told few people (if any) can tell for how long an undervalued security will stay undervalued.
My experience is that 80% of undervalued securities are revalued within 3 years and 95% within 6 years. However, there are some well known and well respected companies (e.g BRK) that can remain undervalued for over 10 years.
Whilst it is a fact that Apple is undervalued by any metric anyone can throw, it may well be back in favour before EOY (and it is certainly a bet worth taking) but it may not.
Apple $395: Time To Give Up And Abandon Ship? [View article]
Fortunately or unfortunately seeking alpha brings together a large number of market participants with vastly different investment/trading strategies.
There are so many different ways to play Apple depending on strategy, skill, portfolio size and time horizon. Many of them will result in profitable calls others will lose money.
Value investors: Apple in all probability is undervalued. Value investors are taking positions and will continue to buy as long as it remains undervalued (EV/EBTIDA is just 4). Regardless of whether it goes up or down after they buy.
GARP investors will stay clear since growth is likely to be subdued over the next few years.
Dividend investors should wait for a dividend increase or a clear dividend policy in which a percentage of its cash will be returned to shareholder in the form of buy backs or dividends. If the company decides to only keep enough cash required to support 25% RoE then their is plenty of cash available to distribute to shareholders.
Speculators will take positions on anticipation of an increased dividend, or some other insight they have as to what will happen in the near future and how the market will react to it.
Momentum traders/Trend followers will stay short until the trend has turned or until they have some signal that the current down trend is over. Personally I see many signs (rate of decline has slowed, accumulation has started).
Chart readers/tape worms will be watching to see what type of consolidation base is being built around the $400 mark, what price range will be stablised over the next couple of weeks and reach a conclusion as to whether the breakout will be on the upside or downside and either buy in anticipation or wait for the breakout (or breakdown).
Fact is for a stock that has run up from 100 to 700 in 3 years, a 30% to 50% retracement is quite normal and quite usual.
Velti: A High-Growth, Low-Priced Winner? [View article]
Today's news of a share issue is good news. Though it is unfortunate that management did not do this 3 months ago at a better price.
The going concern issue is now removed.
Theoretically (and a big theoretical here) shares should now be worth $1.66 (i.e. $1.70 closing for the existing shares plus $24 million of new money and 16.5 million new shares).
In practice on one side a $1.50 'value' has been established and on the other side confidence will have been increased.
The other good news is that needed management changes have made.
It will be interesting to see how it trades for the rest of the week. And of course to see its results mid May (though I'm holding my breath for mid August results).
Navigating The Labyrinth That Is Herbalife [View article]
They are vampires who feast on the capital of people who have either not enough skill or not done enough research to have sufficient conviction in what they buy.
Truth be told, even without short sellers and stock manipulators, these people will still likely lose as a result of panicking out of other market gyrations.
I say this as someone who has spent many years as this class of investor and even though I now know better, research better and buy with more conviction, I am still influenced by the changes in my brokerage statement and from time to time still end up having to put a maiden in the volcano.
3 Undervalued Tech Small Caps With Encouraging Sales Trends [View article]
I wouldn't compare MX to ARMH. MX sell a commodity, ARMH have a very strong competitive advantage. However at an adjusted PE of 6.9 (actual PE of 3.1) I do think MX is cheap and in the process of getting cheaper.
Apart from the stigma of just emerging from bankruptcy do you know any other reasons is should be so unloved.
It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors [View article]
Nice of you to have brought this up. Despite several thousand years of civilization, it remains a dog eat dog world and with the banking community fully entrenched in the FED and the Treasury, the dogs are silently in the house.
Rather than reenact a version of Glass Steagall where financial institutions are split into conservative deposit takers and less conservative risk takers. Banks and their regulators are jointly complicit in insisting that only by taking high levels of risk (aka London Whale) with depositors money can the industry provide an efficient service to the public.
One need only look at the incomes in the financial sector (the incentive to keep it alive) and the real value created (in terms of needs satisfied for those outside of the industry) to know that this is a lie. When the music stops, it will be a transfer of wealth from those who are financially ignorant (prey) to those who are financially savvy (predators).
iRobot: Good Prospects For The Price To Double [View article]
TTM Technologies Will Benefit As Global Electronics Industry Recovers [View article]
Audience Trading At Cash Value [View article]
These results were good (particularly given the loss of Apple) but revenue growth is decelerating
Q2 (Jun) 2012 $33m
Q3 (sep) 2012 $41m (+$21m) (+105%)
Q4 (dec) 2012 $39m (+$21m) (+117%)
Q1 (Mar) 2013 $47m (+$16m) (+52%)
Q2 (Jun) 2013 $44.5m (+12m) (+30%) (guidance)
Beaten Down Logitech Has Significant Upside Potential [View article]
Given uncertainty around its future price is fair. I would wait for a turnaround. Time is the enemy when you own a bad business (market outlook: poor; competitive advantage weak, growth: weak; earnings quality: poor).
Baidu: Disturbing Growth Slowdown [View article]
Q2 2012 - CNY +3,020 (124%),
Q3 2012 - CNY +2,836 (83%)
Q4 2012 - CNY +2,160 (52%)
Q1 2013 - CNY +1,705 (40%)
It is not just decelerating on a percentage basis, but also on a quantum basis.
Stone Fox has made a lot of good calls, but on this O'Neil trader is right.
Apple $395: Time To Give Up And Abandon Ship? [View article]
Trend following strategies like yours can also be a successful, though the issue remains that the beginning and ending of a trend are easy to spot only in hindsight, hence you tend to lose most on your entries and exits (false breakouts and retracements).
Overall value investors have done better than trend followers with much lower volatility. This is because trendies enter on highs (such as breakouts) and exit on lows (breakdowns). Value investors generally enter on lows (though on a percentage of investments those lows get lower) and exit on highs.
On a personal note, I combine a value approach with some technical analysis and I will be buying Apple (which in my mind is more than 30% undervalued) once the technicals confirm a bottom. There is no hurry, a bottom will take 3 to 7 weeks to form (and will most probably retest). Apple has been under distribution since February.
EZCorp, Inc.: Like All Value Investing, Hidden In Plain Sight [View article]
I'm long EZPW, but value it more in the $30 to $33 bracket. I guess we differ on discount rates. I wouldn't accept 7%, more like 11%.
I tried to buy a bottom at $18.80, but got stopped out of much of my position and am now expecting a bottom closer to $16.00. Will try to add to my position if it gets there.
What do you see as a catalyst for the share price recovery.
What are your thoughts about the bear thesis - EZCorp's growth is mainly acquisition related and that there are likely impairments to the goodwill on the horizon and a decline in growth as fewer acquisition candidates are available (or they have to pay more to get them).
Apple $395: Time To Give Up And Abandon Ship? [View article]
My experience is that 80% of undervalued securities are revalued within 3 years and 95% within 6 years. However, there are some well known and well respected companies (e.g BRK) that can remain undervalued for over 10 years.
Whilst it is a fact that Apple is undervalued by any metric anyone can throw, it may well be back in favour before EOY (and it is certainly a bet worth taking) but it may not.
Apple $395: Time To Give Up And Abandon Ship? [View article]
There are so many different ways to play Apple depending on strategy, skill, portfolio size and time horizon. Many of them will result in profitable calls others will lose money.
Value investors: Apple in all probability is undervalued. Value investors are taking positions and will continue to buy as long as it remains undervalued (EV/EBTIDA is just 4). Regardless of whether it goes up or down after they buy.
GARP investors will stay clear since growth is likely to be subdued over the next few years.
Dividend investors should wait for a dividend increase or a clear dividend policy in which a percentage of its cash will be returned to shareholder in the form of buy backs or dividends. If the company decides to only keep enough cash required to support 25% RoE then their is plenty of cash available to distribute to shareholders.
Speculators will take positions on anticipation of an increased dividend, or some other insight they have as to what will happen in the near future and how the market will react to it.
Momentum traders/Trend followers will stay short until the trend has turned or until they have some signal that the current down trend is over. Personally I see many signs (rate of decline has slowed, accumulation has started).
Chart readers/tape worms will be watching to see what type of consolidation base is being built around the $400 mark, what price range will be stablised over the next couple of weeks and reach a conclusion as to whether the breakout will be on the upside or downside and either buy in anticipation or wait for the breakout (or breakdown).
Fact is for a stock that has run up from 100 to 700 in 3 years, a 30% to 50% retracement is quite normal and quite usual.
Apple $395: Time To Give Up And Abandon Ship? [View article]
Even if its margins decline 35% it will be selling at a cheap price of 6.
I don't know how far down Apple will go, but I'm more than certain that it will go back up.to an EV/EBITDA above 7.
In the short run the market is a voting machine, in the long run a weighing machine.
Velti: A High-Growth, Low-Priced Winner? [View article]
The going concern issue is now removed.
Theoretically (and a big theoretical here) shares should now be worth $1.66 (i.e. $1.70 closing for the existing shares plus $24 million of new money and 16.5 million new shares).
In practice on one side a $1.50 'value' has been established and on the other side confidence will have been increased.
The other good news is that needed management changes have made.
It will be interesting to see how it trades for the rest of the week. And of course to see its results mid May (though I'm holding my breath for mid August results).
Navigating The Labyrinth That Is Herbalife [View article]
Truth be told, even without short sellers and stock manipulators, these people will still likely lose as a result of panicking out of other market gyrations.
I say this as someone who has spent many years as this class of investor and even though I now know better, research better and buy with more conviction, I am still influenced by the changes in my brokerage statement and from time to time still end up having to put a maiden in the volcano.
3 Undervalued Tech Small Caps With Encouraging Sales Trends [View article]
Apart from the stigma of just emerging from bankruptcy do you know any other reasons is should be so unloved.
5 Reasons To Buy 3D Systems After Sell Off [View article]
It Can Happen Here: The Confiscation Scheme Planned For U.S. And U.K. Depositors [View article]
Rather than reenact a version of Glass Steagall where financial institutions are split into conservative deposit takers and less conservative risk takers. Banks and their regulators are jointly complicit in insisting that only by taking high levels of risk (aka London Whale) with depositors money can the industry provide an efficient service to the public.
One need only look at the incomes in the financial sector (the incentive to keep it alive) and the real value created (in terms of needs satisfied for those outside of the industry) to know that this is a lie. When the music stops, it will be a transfer of wealth from those who are financially ignorant (prey) to those who are financially savvy (predators).