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Andreas Constantinou

 
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  • A Convergence Of Amazon And Staples [View article]
    Who is the 2nd largest internet retailer then? It's not like I agree that Staples is, it's just that your comment didn't seem to add much.

    The way I see it, a company that is valued at hundreds of times in market cap to Staples making a third of its net profits is absurd. Growth or not, I agree with the author. Amazon is overvalued.

    Not sure what Staples can do to overcome it's issues though. I think focusing on office supplies exclusively might have something to do with it. With the rise of technology and the increasing ease of computer filing systems, shouldn't office supplies become gradually less needed? Maybe diversify a bit in a category that is related to office supplies somehow but does have future.
    Mar 17, 2014. 05:35 PM | 1 Like Like |Link to Comment
  • The Paradox Of Target's Recent Share Price Gain [View article]
    The big deal is that the comparison has been between GAAP estimates and non-GAAP results. This caused a large gap to appear between analyst and reported EPS figures, tricking the public into believing that Target did much more awesome than it was expected.

    Interesting what you say that many companies do this. Perhaps one who would find a similar situation could place a buy before an earnings call then sell it afterwards for a nice swing-trade profit.

    By the way, the Canada situation from what I gathered appears to be just a remodeling of some old retail chain stores that they purchased. They haven't converted those stores into the full Target "experience".
    Mar 13, 2014. 01:39 PM | Likes Like |Link to Comment
  • The Paradox Of Target's Recent Share Price Gain [View article]
    Hi Paul. Thanks for your comment. I just came back from reading your article. You are right, Target's management seems content with just showing a decent EPS, and the buyback programs were obviously a failure.

    There are more failures too like the inability to increase the bottom line over the years (flat profits like you say). That's not to say that Target has saturated the retail market - Walmart has also had fairly stale profits, but Walmart is much larger than Target in terms of revenues. Maybe Walmart being saturated can be argued for. But not Target. There is room for improvement. Besides, like you show in your article, Target's sales have been rising, but the net profits have not.
    Management is inadequate, that's for sure.

    My view on Target being undervalued is based on it's market capitalization alone. I compared it to Costco in another article, and I got a lot of reaction on that the two are not comparable. I still stand by my comparison. Yes, their business models are different, but the way I see it is that they both share the same customers (a grocery shopper will either shop at one or the other). Them being competitors make them comparable in my book.
    Target has a market cap of 38 billion and Costco has a market cap of 50 billion. Yet Target is much larger in assets (number of stores). I also think that Costco is overvalued, by the way.

    I also understand that the public values a company based on it's growth trend and future earnings, and Costco is much better looking.

    But I think it's really illogical for the two to have such a large gap in market cap. The way I see it, Target should have a market cap at least equal to Costco's. At the current shares outstanding, that's at a price of around $75-$80 (if Costco doesn't fall, which that's what seems to be happening, especially after Costco's bad recent results).
    Mar 13, 2014. 01:33 PM | Likes Like |Link to Comment
  • CarPlay Has The Potential To Bring Long-Term Value To Apple [View article]
    I stated that I assumed it was the iOS platform but you say it is based on Blackberry's OS. Thank you for the info. I will look into it.
    Mar 7, 2014. 05:12 AM | Likes Like |Link to Comment
  • Take-Two Is Poised To Rise 50% [View article]
    I am skeptical. Looking at their income statements from the previous few years, it seems that Take Two has an issue with their post gross-profit expenses. Big expense numbers before gross profit, which I will assume is the cost of paying the developers make those games, is understandable. But why the inefficiency past gross profit? It's not even research and development costs, which should be more for a company of this nature. It's all the other expenses. They are dis analogous to earnings. Net profits have been negative or too low.

    Sure, it will make impressive net profit this fiscal year because of amazing GTA sales. This might even drive the stock price up significantly upon announcement.

    However, I am thinking that investors wouldn't want to rely on one hot cake every few years to see actual net profits. They will milk GTA V dry - with PC sales especially since people want to use mods and this kind of stuff (not sure about PS4/Xbox One sales as not that many of those consoles have been sold yet) - but eventually they will run back into the same problems. The way I see it, there should be a fundamental restructure in the company's administrative part.

    The development part is fine apparently, and it is making great games. They are subsidiaries anyway with their own structures. Maybe, though, they spend too much on some of them? Obviously Rockstar is off the hook.
    Mar 7, 2014. 02:47 AM | 1 Like Like |Link to Comment
  • Signs Point To A Costco Negative Surprise [View article]
    Appreciate it!
    Mar 7, 2014. 02:05 AM | Likes Like |Link to Comment
  • Signs Point To A Costco Negative Surprise [View article]
    Thanks for that comment. It's OK about the criticism, it actually opened my eyes on the company for the long term. The stock's price is being very resilient to a 15% net profit fall. That's saying something.
    Mar 7, 2014. 02:03 AM | Likes Like |Link to Comment
  • CarPlay Has The Potential To Bring Long-Term Value To Apple [View article]
    Well worded. Smartphones and their convenience philosophy are fast evolving into much more aspects of our lives. Just like they evolved into functional internet browsing and multiple application machines from mere mobile phones (which already had aforementioned features, though dysfunctional and not focused upon). Nowadays you have a computer on your hand.

    The evolution of "smart" is inevitable and capturing/dominating the different markets early is important for the survival of Apple's and Google's images. Which, let's face it, it's basically going to be a battle between those two in the end.
    Mar 7, 2014. 01:06 AM | Likes Like |Link to Comment
  • CarPlay Has The Potential To Bring Long-Term Value To Apple [View article]
    Thanks for the feedback. The first point I will submit a correction to. I apologize for the factual misinformation.

    As for the second point, Apple Maps has been around since the original iPhone. Granted that it has been backed up by Google Maps at the time.
    Mar 7, 2014. 12:45 AM | Likes Like |Link to Comment
  • CarPlay Has The Potential To Bring Long-Term Value To Apple [View article]
    Good point. If Apple plays it smart it could subsidize both CarPlay and iPhone on a car purchase. I don't think new car buyers who have been users of other systems will mind given a free or cheaper iPhone. This will possibly convert them to the iOS, and long term too since they will want to use their car's features for years to come.

    Of course, Google and Microsoft can make similar offers. Would be interesting to see how things turn out.
    Mar 7, 2014. 12:32 AM | Likes Like |Link to Comment
  • CarPlay Has The Potential To Bring Long-Term Value To Apple [View article]
    Thank you for the feedback. I will a submit a correction to that issue.
    Mar 7, 2014. 12:18 AM | Likes Like |Link to Comment
  • Signs Point To A Costco Negative Surprise [View article]
    Hi TGC004. I found your comment interesting so I tried to look at the Annual report to check the issue. I couldn't find an exact note so I did the simple calculations myself of the Inventory turnover for the year (which is supposed to show how many times an inventory is sold and replaced over a year), and Creditor turnover (which supposedly shows how many times per year the company pays it's average accounts payable). And it was the same. This confirmed by hunch when I went to check your claim, which said that it somehow doesn't make logical sense for a company to get paid (sell it's inventory) faster than it pays it's suppliers.

    Being able to pay your suppliers as soon as you sell your stuff is, to my understanding, the maximum performance (which means that CostCo is awesome at that area, don't get me wrong).

    I am getting pretty confused here. Wouldn't getting paid by consumers faster than having to pay suppliers eventually lead in empty store shelves?

    What exactly did you mean? Can you please point me at the part of the annual report that you were talking about so I can study it?
    Mar 5, 2014. 07:18 AM | Likes Like |Link to Comment
  • Signs Point To A Costco Negative Surprise [View article]
    These data are from Costco's 2013 Annual report;
    Membership fees received: 2,29 billion USD
    Revenues from sales: 102,87 billion USD

    Net profit: 2,04 billion USD


    It's easy to imagine that Costco makes it's profits from membership fees looking at it like that, given that what's left after all expenses are paid, is approximately the amount of membership fees received. Right?

    Here's another way to look at it. Take these scenarios into consideration:
    - If membership fees were abolished, with everything else remaining the same, then the bottom line would be a net loss of $250 million.
    - If revenues from sales dropped 5% (to $92.59 billion), with everything else remaining the same (people paying their membership fees etc), then the bottom line would be a net loss of $8 billion.

    Do you still think that as long as people continued paying membership fees, Costco would be fine even if all the stores ware buried by snow nationwide?
    Mar 4, 2014. 12:48 PM | Likes Like |Link to Comment
  • Signs Point To A Costco Negative Surprise [View article]
    I have pulled out a polar vortex area map, and compared it with Costco's store location map. I have counted approximately 75-80 Costco warehouses within the vortex's area (and those include Canada locations). Costco has 498 total worldwide warehouses right now (including US and Canada). That's not an insignificant ratio.
    Mar 4, 2014. 12:21 PM | Likes Like |Link to Comment
  • Signs Point To A Costco Negative Surprise [View article]
    I admit I haven't considered the warehouse locations compared to the polar vortex areas. I assumed that they were spread evenly throughout the country. Thanks for bringing it to my attention. Looking at a map of the locations right now, it seems that the polar vortex hasn't hit as many as I first thought. Although it did hit a substantial part of them.

    Thanks for the other insights as well.

    My point is that in spite of who shops at Costco (small restauranteurs who buy in bulk which makes sense, or more educated/wealthy people who understand savings better), if they were hit by the vortex, they would have shopped less during those periods. Which would affect Costco's profits. And that's not what estimates are showing which, to my view, don't seem to take that situation into account.
    Mar 3, 2014. 08:50 PM | Likes Like |Link to Comment
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