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Allen Cooke  

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  • Brazilian Telecom Oi S.A.: A Good Value After The Recent Fall [View article]
    We hope the real can stabilize. It seems that it has a little recently
    Mar 4, 2015. 12:39 PM | Likes Like |Link to Comment
  • Brazilian Telecom Oi S.A.: A Good Value After The Recent Fall [View article]
    This is my 1st article on Oi so probably Cornelius's (above) article he seemed to have a clear message to stay clear! I don't know about the board.
    Mar 4, 2015. 12:38 PM | Likes Like |Link to Comment
  • Brazilian Telecom Oi S.A.: A Good Value After The Recent Fall [View article]
    Thanks I will read it. It did seem that investors considered it a bad deal
    Mar 4, 2015. 12:36 PM | Likes Like |Link to Comment
  • Brazilian Telecom Oi S.A.: A Good Value After The Recent Fall [View article]
    We will need to see the reorg plan for Rio, I got the sense that over 50 cents was achievable. If they got zero it would not be a catastrophe we did not add one of the recent tower sales of 1.2 b R$ into our estimate so we have a little room for errors. The company estimates its Africatel ownership about about 5B R$, We used 7X 2013 earnings. If it is not sold they will collect the dividends, which I believe are around 300-500m R$/ year. The EBITDA is mainly being propelled by interconnection costs reduction. and a return is closer to the historical average of 30%
    Mar 4, 2015. 12:35 PM | Likes Like |Link to Comment
  • Brazilian Telecom Oi S.A.: A Good Value After The Recent Fall [View article]
    the debt is up to 136 billion USD now ( as of 3rd Q 2014), 20b increase in the last 9 months, EBITDA should be heading lower, so PBR may have credit risk
    Mar 3, 2015. 06:50 PM | Likes Like |Link to Comment
  • Brazilian Telecom Oi S.A.: A Good Value After The Recent Fall [View article]
    The div is suspended and may remain that way for a few years
    Mar 3, 2015. 04:46 PM | 1 Like Like |Link to Comment
  • Brazilian Telecom Oi S.A.: A Good Value After The Recent Fall [View article]
    we are assuming 60%
    Mar 3, 2015. 04:46 PM | Likes Like |Link to Comment
  • Brazilian Telecom Oi S.A.: A Good Value After The Recent Fall [View article]
    Hi cmuzzio, please see the 1st table for our calculation of the net debt post the various asset sales. We calculate this to be about 19.5 billion R$ or about 2.9 X 2014 EBITDA and 2.4 X 2015 EBITDA
    Mar 3, 2015. 03:26 PM | Likes Like |Link to Comment
  • Why I'm Bearish On Coke [View article]
    Thought you made some good points. The earnings were not a beat by any measure and for anyone paying attention they were quite alarming. Operating income before any special items in the 2013 and 2014 4th Q were down 9.93%. This company can transition but the margins in most categories are lower than the historical KO margins so the future looks challenging. If you assign an optimistic 10X forward EBITDA or alternatively 12 or 13 X operating income or 17-18 X earnings you get a share price of 23-26/ share. The trajectory of the operating income of the company looks quite bad and KO is warning of a "transitional year" which means look out for poor results. KO is a company with a primary product in continuous decline and an entire worldwide company structured around the sale of that product. The biggest blow could come in the form of an exit by Warren B. He is not happy with the recent stock plans for management, which were characterized as greedy.
    Feb 11, 2015. 07:00 PM | Likes Like |Link to Comment
  • Genworth Financial: Making Sense Of The LTC Troubles [View article]
    Looking at the LTC I think that there is one main point : the increase in claims for assisted living. Currently the insurance enjoys a lower claims severity rate than actually the people who qualify for nursing home care. This is due to the stigma and realities of going into a nursing home. Most families treat this as a difficult decision leaving the person at home for as long as possible, Currently GNW has a claims rate that is similar to the national average of people over 65 who are in a home: 4.3% or about 50k of the 1.2 area mm people who have policies.

    In order to activate a GNW policy you need an impairment in 2 or more ADLs. Closer to 20% , of people over 65, or so actually have 2 or more impairments in ADLs or activities of daily living (there are 10 or so, cooking cleaning using the shower etc). However many of the GNW insureds will never activate the policy due to the fact that they and their family do not want to send them to a home (until it is too hard to care for them or they cannot continue on their own and do not have an alternative. Many have end of life type of illnesses. leading to higher mortality rates).
    The problem for GNW is on the newer blocks : Choice 1 through PC flex 1, the policy holders can access assisted living in the home and may have lifetime benefits. About 22% of these policy holders have lifetime benefits, or about 300k people. These policies have a max daily benefit ranging from 160 to 213. So it is possible that GNW could experience a higher claims rate due to the fact that it is much easier to make a choice regarding assisted living in the home versus going to a nursing home. Insureds are also possibly more likely to make the claim at an earlier age, resulting in a higher severity or cost in booking the claim. Based on a max daily policy limit of about $180, each claim can add costs of about 60k a year or 300k for 5 years. If the activated claims grow to 5% (from 4.3%)of the insureds the additional cash costs would grow to 510mm year, taking the LTC portfolio to a (cash)loss of 200mm annually. If the activated claims increase to 6% the insureds additional cash costs rise to over 1b annually.
    So I think that this is statistically huge for an insurance pool i am not sure that this is not possible. Also this would be treated in a much different manner due to actuarial accounting. Possibly a much higher booked amount (for the life of the claim not the annual cash costs) but reduced by re-insurance and returns on investments as well as the continuation of rate raises.
    On the last conference call there was a reference to a rise in the severity of the assisted living claims, so younger healthier insureds activating their policies. It is likely that the claims experience for contracts with assisted living clauses will trend higher than the traditional policies with nursing home only provisions....but by how much? It is probably too early to tell but the numbers for the reserves can get big fast. I would protect the position a little with short term puts until we get past the announcement.
    Thanks for putting up the article
    Aug 26, 2014. 01:30 AM | 3 Likes Like |Link to Comment
  • Safeway: Numerous Challenges Suggest Avoidance Is The Best Strategy [View article]
    just to wrap up this thread the company is bought out 150% higher than the price at the time of this article as of March 2014..time to move on! whats the next one ?
    Mar 19, 2014. 12:29 PM | Likes Like |Link to Comment
  • Time To Get Out Of Yahoo [View article]
    Ali Baba is worth about $25 + per share, Yahoo Japan is trading at aroung $10 per share and the Yahoo we know is worth about $15/ share. So at this time the shares are worth between $50 and $60 depending on the value of Ali Baba
    Dec 29, 2013. 05:42 PM | 4 Likes Like |Link to Comment
  • Despite Prudent Acquisitions, Yahoo A Sell [View article]
    As of last Q, the 3 month and 6 month year over year comparisons on operating income were positive? Give the new CEO about another 6-12 months and I think that we probably will see some meaningful improvements. Meanwhile it seems that Ali is worth $25-35 per share, Yahoo Japan is about $11 ( it is publicly traded in Japan [sym: yahoy, US OTC]) and Yahoo is worth about $10-15, So you have about 40-50 for the share.
    Oct 3, 2013. 11:51 AM | 2 Likes Like |Link to Comment
  • Safeway Inc.: Time To Check-Out Some Bonds? [View article]
    Donald, this is one of the most thorough articles I have seen on SA, probably the most. I would add that there could be additional risk from a leveraged buy out such as what happened with Dell. The senior notes and debentures which I believe are all equal but unsecured could find themselves subordinated to a oversized secured loan. This could explain why investors are possibly pairing the bonds with the CDS and the higher trading levels of Safeway CDS. Although not the most popular stock, pretty low default possibility with 5 times interest coverage from EBITDA. In the Dell situation the bonds dropped 10-30 %. another dimension of risk for the risk adverse investors
    Sep 28, 2013. 12:14 AM | Likes Like |Link to Comment
  • Yahoo's Turnaround Not Progressing As Planned [View article]
    You should read the conference call transcript this will give you some insight into why the stock popped 10% the next day. Mainly the increase in year over year page views that will be monetized later in the year and the growth in mobile apps. The talk for the Ali IPO is around 75-100 billion. This adds as much as $24 / share pre tax and the company has around $4/share in cash. so essentially you get Yahoo Japan (Yahoy) and Yahoo for free
    Jul 23, 2013. 01:53 PM | 4 Likes Like |Link to Comment