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Afam Edozie  

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  • Velti: A High-Growth, Low-Priced Winner? [View article]
    Chances of Velti going bankrupt are slim, if you exclude the factoring purchase (which is a one off at $15 million) burn was $7 million. They have 30 million cash PLUS 35 million facility. 9 quarters before they run out of cash.

    I think they plan to take on new risks, with acquisitions.
    Feb 15, 2013. 05:22 PM | Likes Like |Link to Comment
  • Velti: A High-Growth, Low-Priced Winner? [View article]
    The CEO has made mistakes, as have many manager I have worked with or invested in. I have also made many management blunders. I don't believe he is inept. Though he in experienced at running a large public company.

    If I were his chairperson or dominant investor I would give him the time to get better at it. Steve Jobs was inexperienced and Sculley was experienced, with hind sight who was the better CEO.

    Yes he has been arrogant from time to time (again look at Steve Jobs).

    Overreactions by investors without a long term view and the understanding of good managers and how they develop create opportunities for those who with a long term view.

    Alex has been running this business for ten years, he has presided over a relatively successful global expansion, one pivot of the business model and the start up of the firm. Hardly inept.
    Feb 15, 2013. 03:20 PM | 1 Like Like |Link to Comment
  • Velti: A High-Growth, Low-Priced Winner? [View article]
    The plan is to sell off some of the high DSO emerging market businesses. However the cash won't come for another 3 years. So yes it gets rid of the receivables but no cash in the short run.
    Feb 15, 2013. 03:13 PM | Likes Like |Link to Comment
  • 3D Systems: For Experienced Speculators And Momentum Players Only [View article]
    Sold a third at 60, a third at 70 and a third around 63. All out. Risk is higher than the potential reward.
    Feb 7, 2013. 03:50 PM | Likes Like |Link to Comment
  • Zagg Inc. - Strong Value Pick [View article]
    1. Warren Buffet prefers companies with a competitive advantage. Zagg has none.
    2. Zagg growth has been decelerating in the last 3 quarters both in percentage terms and in absolute numbers. 104%, 59%, 30% ($39m, $28m, $23m, $14m) (latest quarter last)
    3. Inventories and receivables rose this quarter
    4. 40% of revenues is in two customers (one of who may be under financial pressure of their own.)
    5. Though it is being accumulated, distribution is also still strong
    6. I value Zagg between $10 and £12 (based on 17% top line growth, stable margins). Though those margins have been declining since peaking in 2010 and given its lack of moat could decline further.)
    I would not be tempted unless there was a bigger margin of safety, for a firm of this quality with deteriorating growth, 30% discount minimum, 40% ideal. I would be tempted at $6.50 to $7.0
    Feb 6, 2013. 10:09 AM | Likes Like |Link to Comment
  • Is It Too Late To Ride The Stock Rally? [View article]
    I hear emotions talking, regret, fear of losing out more. No one knows when the market will turn, maybe tomorrow, maybe next month. But it will turn and adding money now is high risk. This is not a buy point. If you do have an itch for action throw a maiden in the volcano, maybe 25% of equity ahead of a pullback. Odds are against you.
    Jan 28, 2013. 12:55 PM | 7 Likes Like |Link to Comment
  • Is It Too Late To Ride The Stock Rally? [View article]
    Its human nature. We are all looking for our decisions to be affirmed by others. Even if they had gotten in earlier, they would not have gone against the crowd and sold on the way up, so they would still be holding as the market falls at some point in the future. Making money in the markets is tough, not because it is hard, but because we are not wired for it. We are wired to lose.
    Jan 28, 2013. 12:48 PM | 5 Likes Like |Link to Comment
  • Is It Too Late To Ride The Stock Rally? [View article]
    A sure sign of big players saying the market is too high for them. You will find that its been one of a few topping signals for more than 1.5 years. More like 150 years.
    Jan 28, 2013. 12:44 PM | 1 Like Like |Link to Comment
  • Coach Results - The Good, The Bad, And The Ugly [View article]
    Never possible to tell the future, it hasn't happened yet.

    At this price Coach is fair value, with potential for upside if it can sort out the issues that are apparent from this quarter. If it can't then its still fair value.

    I don't expect the price to do anything before next quarters results (though you never can tell, we could always have a storming bull market.)

    If they are able to sort themselves out you should see $75 within 12 months. If not then price should languish around where it is now (maybe a 45 to 55 range.)

    I am not a buyer at today's price, I prefer a margin of safety, but I'm not a seller either (I am long COH), I believe (no proof though) that it will sort out its US business before the end of the year (though there is no evidence either way). I think your decision should be based on opportunity cost. Could you get better for your $51.
    Jan 24, 2013. 11:52 AM | Likes Like |Link to Comment
  • 3D Systems: For Experienced Speculators And Momentum Players Only [View article]
    Sold another third (of what I had left) at 70 today.

    I don't know how high it will go, but the motto is not to be greedy and to sell overvalued stocks when they become extended from their support (particularly if they go parabolic.)

    Odds are that they come back to earth.

    I will sell more if it gets to 80.
    Jan 22, 2013. 04:49 PM | Likes Like |Link to Comment
  • Apple's Falling Share Price And The Market's Implicit Growth Implications [View article]
    Good article. I agree (sort of) with the price band - my band was $450 to $700, based on DCF - growth 2% to 8% which I believe incorporates 95% of likely outcomes. Though I suspect 3% to 6.5% would incorporate more than 80% probability.

    Those critical of a wide price range don't get that the range will be as wide as dictated by the probability distribution of the key variables. Otherwise you will fool yourself with precision that does not exist.

    Sorry to hear you will no longer be writing for SA.
    Jan 22, 2013. 09:11 AM | 1 Like Like |Link to Comment
  • Coach Vs. Kors: Who Will Win The Handbag Wars? [View article]
    I had made the assumption that it was a combination of new customers (Kors popularity has been on the increase) and store ramp up. But I have not done a detail analysis of their same store sales, to know for sure where they come from. I decided at an earlier stage not to buy because it was expensive for me.
    Jan 21, 2013. 05:50 AM | 1 Like Like |Link to Comment
  • 3D Systems: For Experienced Speculators And Momentum Players Only [View article]
    13% is a great return for a less risky investment. To get the 13% DDD has to grow revenue 22% per annum over the next five years AND grow free cash flow 43% per annum (i.e. improve margins.) Though this is possible, very few companies achieve it, so there is a high risk that they won't. In addition historically, much of their growth has come from acquisitions, this is not a bad thing, but it also adds to the risk in two ways, firstly sustainability and secondly share dilution (DDD has paid for acquisitions by issuing new shares.)

    If all goes well, you get 13%, if things don't go so well you could easily lose. I can get 13% from several companies with a strong and durable competitive advantage, that are paying dividends, have management teams that have proven they can deliver consistent performance over decades, that are in markets where the product will change very little over the next fifty years and have much less volatility (though in theory volatility doesn't matter, in reality - particularly if you invest with leverage - it does).

    I would need at least 18% to be a long term owner of 3D. And I would not be surprised if many players would demand over 20%. So when the current uptrend ends, I would not be surprised if this is the price it comes down to in order to attract non momentum buyers. Look at the price charts of other high growth companies.

    Don't get me wrong, I own 3D and like it, but I bought it at a much lower price and I sold a third of my position at 60. I know at this price I am holding nuclear fuel, it can deliver great benefits, certainly more so than coal, but if it also has the potential to blow up in my face, and it will do much more damage than if a lump of coal were to catch fire.
    Jan 21, 2013. 05:40 AM | Likes Like |Link to Comment
  • Where Boeing Went Wrong With Its 787 Dreamliner [View article]
    Given the fact that Lithium Ion batteries have been catching fire, exploding and giving people burns on their legs and cheeks, in cellphones and laptops ever since they came out, should this issue not have been anticipated by both Boeing, its supplier and the air safety regulator? Would fail safe systems not have been built into the design.
    Jan 18, 2013. 03:06 AM | 3 Likes Like |Link to Comment
  • Coach Vs. Kors: Who Will Win The Handbag Wars? [View article]
    Interesting, how they deal with problems like this says a lot about the customer culture. That it happened twice is a red flag.When I get a chance I will ask at the Dept store what their customer complaint levels are vs. Coach, and also the company policy. At this level bags should be guaranteed for at least 12 months.
    Jan 18, 2013. 02:49 AM | 1 Like Like |Link to Comment
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265 Comments
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