Antonio Carradinha

Portfolio strategy, research analyst, growth at reasonable price
Antonio Carradinha
Portfolio strategy, research analyst, growth at reasonable price
Contributor since: 2013
Hi Raife,
In my opinion, negative surprises related to legacy issues will tend to be of little relevance. I think that in all likelihood LYG will return to pay dividends from now on.
On the share price I see a stabilization in the short term due to the expectation that the Government will sell its entire stake. But in the medium/long term I still think that the upside potential is huge.
Hi sam,
It is expected that Lloyds will announce a dividend payment for 2014 at the time of its annual report on 27 February.
Hi Rinascimento,
Thanks for reading and commenting my article.
My analysis is aimed to the evolution of the euro exchange rate against the dollar. Of course, the specific analysis of the euro is very important because the single currency is in crisis.
The euro is down for almost a year against the dollar, obviously not followed by the dollar. Everything is interconnect now, but we have to study currencies which have different evolution trends.
Although I am out of time to write lately (I'll be back soon) I want to respond to your comment.
One thing is certain: Fiat Chrysler needs a lot of money to develop the business to an high level. Thus, the sale of an independent brand is an excellent choice. In this case, Ferrari spin-off is far wiser than the sale of Alfa Romeo for example.
Ferrari is a brand loved and admired by almost all the world, and has no rival at the time. That's why, in my opinion, I accept that Maserati must have a different strategy although it has shown growth out of the ordinary.
Hi da'zman,
Thanks for commenting.
Novo Banco may still need additional provisions on restructured loans.
But it's possible that the €4.2B of provisions added to the existent ones in 1H14 may be a fair parcel of what is needed. Nobody can know that at this stage, but it's important not to forget that Novo Banco is the "good bank" without the toxic products and financial problems that stayed in BES ("bad bank").
Moreover, Novo Banco will soon be sold. One way to do this is through an IPO. It is a mere possibility, but in any case it is very likely that the Novo Banco may be listed in Lisbon. Unless it is purchased and integrated into a large bank.
As you have noticed, I made no assessment of Novo Banco. €3.5B-€4B is a mere assumption on the following provisional bases (not expressed in the article because there is not enough information):
1. Profits from 2015 onwards.
2. Progressive recovery of market share and profit growth (at a ~10% CAGR).
3. Terminal Value calculated on the 5th year representing about €2.6B-€3.2B (average NPV of around €1.8B).
4. Discount Rate: 10%
All that is a tentative food for thought.
Hi Russom,
The company hasn't yet informed the market about it, but in my opinion it should not pay dividends at this stage.
Hi Tales From The Future,
Thanks for the input.
It is obvious that before the confirmation of the merger, there were several scenarios for the firm. The Agnelli family seemed to be considering options for the future. When it became certain that the cost of shareholders against the merger would not reach €500M, the issue was finally clarified, and the initial plan won't seem to suffer any modification.
Even so, the launch of the Alfa C4 has a questionable competitiveness given its high cost in the American market. The plan for the Alfa Romeo brand seems to have some risks and may have to be reconsidered later though I still think it's a good bet. On the other hand, Lancia is actually on standby waiting perhaps a still unknown opportunity in the future. For now it's only indicated the continuation of the Ypsilon model.

Telefonica bid for GVT will probably be successful. Then Vivo will merge with GVT strengthening its position as market leader. Therefore, there is room for the other top Brazilian mobile phone carriers to respond, and OIBR move is in the right direction.
Buying TIM was the initial plan back in 2013. Let's see what is Oi's real financial capacity to buy 67% of TIM now. Probably, it will be in partnership with Claro (owned by America Movil).
Hi John,
Thanks for the kind words.
Oi is in no danger of seeing its shares dropping until they have an almost complete devaluation. I still think that the alliance even with a company like Portugal Telecom which is weaker now will represent a good step for the future. Both companies - merged or merely with a common shareholder basis - will have excellent know-how, innovation ability, marketing skills and will be well positioned throughout Brazil.
Naturally, the problems that have affected both companies and that have been mentioned in my articles and respective comments have led Oi to a less important role in the consolidation process of telecoms in Brazil.
Probably, there will be no capital increase in the near future because TIM is not a target for Oi anymore. So, it's possible that no major dilution will happen for now.
Hi Raife,
Thanks for your comment.
I agree with you completely. In my original article I have stated that "it is sensible to consider the hypothesis of a very large enhancement in case Lloyds begins, increasingly, to distribute significant dividends. In that event, the price could do much better within 5 to 7 years and go near 2007 highs."
Simply put, LYG has been an excellent investment, but it will probably be an even more valuable long-term play.

Thanks for the link, William!
There is a tentative date: December 31, 2014.
Hi NL2,
Thanks for the input and the kind words.
Given that summer is the low season for eggs, I was pleased with the fourth quarter results.
Still don't know when BKESY delist from OTC market will happen.
I meant "Good luck to you".
Hi invest2bfree,
In the OI/PT merger there were several mistakes, highly debatable decisions and everything is taking too long.
Surely you have your strategy. But in my opinion - although the share price could drop further - Oi may present a significant upside potential in the medium to long term. it has to be noted that they are trading at a P/B of 0.45 and a P/S of 0.38.
God luck to you.
Hi StandupWall,
This merger is in a state of confusion not only in Brazil but also in Portugal. However, I just don't agree with your opinion (is it reliable information?) that the merger isn't going to be approved by the Portuguese side. Let's see: PT has lost almost 40% of its value with Rioforte debt and this has absolutely nothing to do with the merger: it was a problem of PT that has been brought to the merger which is entirely different. And PT share prices have really plummeted after that situation, not before. So PT's minority shareholders have to blame PT not the merger. On the contrary, Oi's minority shareholders have been hit hard by all sorts of complications this merger has been showing.
Hi Lionel,
You're right, the merger is taking too long, but this is old news because some months ago I've told you that the closing of this deal would be in the end of the year. You say you cannot understand the final product: that's a fair statement as both companies are doing worse than before. They aren't yet merged, but for three years they have been developing an alliance that should have avoided a lot of the problems we're witnessing.
Hi Pete,
Thanks for the input.
Reading my articles about LYG it's clear that legacy issues were and still are a burden to the turnaround of the bank. Nevertheless, LYG's turnaround is in place and producing results year after year. I'm following this bank for many years and its share price has climbed to $4.93 currently from $1.33 in November 2011. There were many opportunities over the years to close positions (including near an intermediate top at $5.76 in January 2014) for those that are not long-term investors. Many investors would have lost robust profits if they had followed your highly debatable advice of staying away.
Dear Leo,
Thanks for reading and commenting my article. I’m glad you are here again because now I can tell you I’m sorry to have failed to comment your excellent article on Oi SA.
I think what you mean by the first part of your comment is this (from PT site):
“When PT and Oi announced a combination of their businesses in 2 October 2013 one of the steps was:
Subscription by PT of convertible debentures (convertible into AG Tel and LF Tel shares) and exchangeable debentures convertible into the PN OI shares held by AG Tel and LF Tel, both to be issued by AG Tel and LF Tel, followed by the subscription by AG Tel and LF Tel of convertible debentures (convertible into Tpart shares) to be issued by Tpart providing funds equivalent to the outstanding net debt of such entities, amounting to R$ 4.5 billion (Euro 1.5 billion).”
Here we see the problem. Following other steps prior to the final merger of PT into CorpCo that are non-transparent, only a professional analyst of high level like you could write what you have written and could be heard as you were. I only have stated what I have thought was possible for me in my own style.
I have never refused to comment problematic aspects, but on this subject I have reached my limit with regard to aspects of deontology. I'm not an auditor, I'm just an investment writer. I do my best. Surely, you can do it better than me and I'm glad.
About your two questions:
1. Analyzing the document linked above, I don't think this transaction has added to the intangible assets. But any help on that would be welcome.
2. The answer to your second question is yes. On the consolidation process there are additional intangible assets that were considered for the consolidated statement of financial position. Likewise, there are more liabilities that are the result of the merger. As can be seen easily, the balance sheet is now larger and intangible assets are much bigger due to different though debatable definitions. As Oi puts it, goodwill (included in intangibles) is related to several elements, which can not be reliably quantified individually and isolated from each other, including skilled workforce, technological capabilities and established market reputation.
I’m looking forward to receiving your input as soon as possible.
Hi C&$PER,
Thanks for commenting.
GVT and TIM Brazil is an old story, but Telefonica has the leading role.
1. Telefonica still is the largest shareholder of Telecom Italia and is in control of the company together with other major shareholders.
2. Telefonica has a big problem in the Brazilian market: it cannot own Vivo and, indirectly, have also an integrant stake on TIM.
3. So, Telefonica wished to sell TIM dividing the company among itself, America Movil (Claro) and Oi/PT.
4. TI's management seems to have other intentions and probably would like a merger between TIM and Vivendi's Brazilian subsidiary, GVT.
5. But what I think TI really wants is to solve its huge financial problems with Vivendi buying a large stake in TI, and taking the place of Telefonica.
6. I think Telefonica has a stronger position if it wants to buy GVT, strengthening its leading market position in Brazil and solving TIM's problem. Telefonica can offer its TI stake as part of a proposal to buy GVT.
Hi Matthew,
Thanks for your input.
I agree with you. Mistake after mistake we're witnessing a situation where two companies are in a much worse shape than before the merger - whether we see them together or separated.
I'm a Portuguese citizen and I couldn't expect to see something similar to what happened with PT investing almost 1 billion euros in an "impossible" operation with Grupo Espirito Santo, that seemed already on a quick path to bankruptcy.
Hi Steve,
This is a good question.
Intangible assets don't have physical value, but can be very valuable for a company. Usually, these assets don't appear on balance sheets unless they have been acquired. Oi has decided that it was the case with the merger with Portugal Telecom and the potential controversy lies on the valuation of different intangible assets.
You may see on this link (page 110) - this translation is still subject to the auditors review - all the items included in the R$19.5B intangible assets.
I'm available to discuss the matter further if you need some assistance.
Hi abdullah999,
Thanks for commenting, and for your input.
I agree with you completely. I have only noted that Fiat's net profit was low this H1 '14, but I also think Fiat is cheap and I believe in its upside potential.
Hi dtails,
There are a couple of points that are gradually being know that deserve to be mentioned (this is an ongoing and complex process that has a vast number of implications).
PT has saved 128 million euros which are no longer deposited in BES, and won't go to the bad bank (deposits of shareholders with at least a 2% stake in BES will stay in the bad bank). On the other hand, PT will naturally lose almost its entire 2% shareholder position in BES evaluated in June 2014 at around EUR 45 million.
Hello dtails,
Please read my article about Banco Espirito Santo. In my opinion the present situation doesn't change the problems that PT will have to get a small recovery of the debt in default, and it will have no additional effect on the OIBR-PT merger.
About OIBR earnings I don't have a clue about any kind of surprise.
Hi James,
Maybe. CEO S. Marchionne just said "...we have VW coming in...when we have something to announce we'll make it clear."
In my opinion we have to read between the lines.

Thank you for the kind words. Surely, I'll keep following GOL closely.
Hi Pony01,
Thanks for the input.
You are absolutely correct as the World Cup in Brazil meant for GOL a modest increase in passengers. Nevertheless, it was relevant and should be mentioned accordingly.
Hi manyaO5,
Thanks for your opinion.
This was an update article about Q2 '14, and the World Cup was played in Brazil between June 12 and July 14. During this period 3.4 million passengers were transported. Though it doesn't change much I think you are right. As it was an important event it should be mentioned, and I have edit the article.
Hi Burt,
After a good earnings report CALM shares are selling on the news. I think if prices will drop that much it will be a great entry point IMO.