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Aristofanis Papadatos

 
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  • The Oil Price Has Limited Downside
    Yesterday, 8:11 AM BP, CVX, XOM 10 Comments

    Summary

    • The price of oil has pronouncedly declined in the last 3 months, from 105 to 92 $/bbl, largely due to the appreciation of the dollar.
    • However, the dollar is approaching its limit while the fundamentals of the oil market provide a great support.
    • Therefore, there is not much further downside for the oil price.
  • Chevron Currently Offers A Win-Win Profile To Investors
    Thu, Sep. 11 CVX 14 Comments

    Summary

    • Chevron has almost always outperformed the market during bear markets or corrections.
    • However, it currently has promising prospects to outperform the market even if the market continues to thrive.
    • Its major growth projects, which have resulted in extreme capital expenses so far, will start to bring fruit in the next few months.
  • BP: Why You Should Grasp This Opportunity
    Tue, Sep. 9 BP 12 Comments

    Summary

    • Last week's court decision wiped off almost $9 B of the market cap of BP on a single day.
    • However, investors should realize that the net income of BP will be reduced by only 2/3 of the fine, as the 1/3 will be offset by the gain in taxes.
    • Moreover, as it may take up to 10 years for the case to be closed, the present value of the fine will be much lower than its nominal value.
    • Therefore, whoever missed the first chance to buy BP after the accident, has now a second chance to purchase its shares at an opportune level.
  • Is Dun & Bradstreet Still A Bargain?
    Mon, Sep. 8 DNB 3 Comments

    Summary

    • Although DNB has a moat in its business, it has not grown its revenue and its net income in the last 6 years.
    • The aggressive share repurchases have grown the earnings per share by 10% in the last 4 years even though the earnings declined 20% during that period.
    • However, the aggressive buyback program has resulted in a huge net debt, most of which is coming due in the years 2015-2017.
  • An ETF That Has An Edge Over The Market
    Mon, Sep. 8 PKW 11 Comments

    Summary

    • The PowerShares Buyback Achievers ETF allocates all funds on stocks that have reduced their share count by at least 5% in the last 12 months.
    • This ETF has an edge over the market thanks to various factors, which are analyzed in the article.
    • The most solid evidence for its edge is its pronounced outperformance over the market since its inception eight years ago (85% vs. 40%).
  • Should Conn's Shareholders Sell At A Loss After The 30% Decline?
    Wed, Sep. 3 CONN 15 Comments

    Summary

    • The shares of Conn’s collapsed yesterday, losing 30% after the Q2 earnings report.
    • Although the retail segment maintained its great performance with a 12% increase in comparable sales, the financial segment more than offset the benefit, reducing the earnings per share by 4%.
    • Every 1% increase in the percent of bad loans out of the total portfolio reduces the earnings per share by $0.20.
    • Given this extreme sensitivity and the fact that the management will put its whole effort on improving the financial segment, I expect the company to positively surprise us in Q3.
  • Torchmark Has As Predictable Growth As It Gets
    Tue, Sep. 2 TMK Comment!

    Summary

    • With the market at its all-time highs, investors should look for stocks with predictable growth.
    • Almost 1/3 of Torchmark's net income per share will continue to grow at about 10% per year for the next few years.
    • Therefore, given also the consistency of the company in the other portion of its earnings, its growth is as predictable as it can get for a stock.
    • Torchmark will also benefit from the expected rise in the interest rates.
  • This Low-Cost Producer Can Return 20% In A Year
    Mon, Aug. 25 LYB 7 Comments

    Summary

    • Lyondell derives 50% of its profit from its US segment of olefins and polyolefins.
    • Thanks to the booming production of natural gas liquids (NGLs) in the US, the production cost of Lyondell has been reduced by more than 50% in the last two years.
    • At the same time, the selling price of its products has remained essentially flat. This has resulted in record earnings for the company.
    • Given the low P/E, the above growth coupled with the aggressive share buyback program that will eliminate 10% of outstanding shares in 12 months is very promising for the stock.
  • Why Aflac Is So Cheap
    Mon, Aug. 25 AFL 25 Comments

    Summary

    • Investors wonder why Aflac, a dividend aristocrat, is trading at a P/E of 10, while the S&P is trading at a P/E of 17.
    • Aflac has already sold insurance to 1/4th of Japanese households, so it is hard to sustain its past growth rate.
    • Investors are also cautious to see that 40% of the company's assets have been invested in Japanese government bonds. Japan has the heaviest debt load in the world (238% GDP).
    • Nevertheless, part of the low P/E is due to the last financial crisis, which made investors fearful of financial companies. Astute investors should utilize this situation.
  • Target: The Gist Of The Earnings Report
    Wed, Aug. 20 TGT 44 Comments

    Summary

    • In today's earnings report, the management of Target continued its string of lowering its guidance for this year’s earnings. From the initial EPS $5.50 a year ago to $3.20 now.
    • Despite the lower guidance, the company has to improve its performance by 70% in the second half of the year in order to meet the guidance of its management.
    • Given the performance and the debt figures I analyze, I expect the management to lower again its projected earnings in the next few weeks.
  • Share Buybacks: The Good And The Bad
    Wed, Aug. 20 AAPL, AXP, AZO 9 Comments

    Summary

    • Share repurchases increased 50% in the first quarter, standing at $155 B. It is the third largest amount ever spent on share repurchases.
    • Investors should pay great attention to the efficiency of the share repurchases. If they are not executed correctly, they waste the money of the shareholders.
    • Gathering the data of the first semester, I assorted the most popular companies that perform significant buybacks based on their efficiency.
  • When The Aggressive Distribution To Shareholders Is Promising
    Wed, Aug. 13 VIAB 4 Comments

    Summary

    • Some companies offer a very high distribution (in the order of 10%) to their shareholders. However, this does not guarantee a great profit to the shareholders.
    • Investors should check some elements in the balance sheet to determine whether the company can maintain its high distribution rate.
    • Philip Morris has stretched its balance sheet to the extreme and hence it cannot maintain its past rate of share repurchases.
    • On the other hand, Viacom has a healthy balance sheet so its shareholders can rely on the stock to maintain its exceptional returns for many years.
  • Chicago Bridge & Iron: Why You Should Grasp This Rare Opportunity
    Thu, Jun. 19 CBI 45 Comments

    Summary

    • The stock of CBI has plunged lately due to a report from Prescience Point, which accused CBI of manipulating its balance sheet.
    • In an almost identical case, Moody's stock plunged 20% in 2 days last year, but the news was soon forgotten and the stock has doubled since then.
    • The great growth potential of CBI, thanks to the energy boom, the endorsement of Buffett and the technical reaction of the stock, render the current situation an excellent opportunity.
  • Is There An Imminent Bear Market? Don't Ask
    Thu, Jun. 19 SPY, DIA, ROST 42 Comments

    Summary

    • As the market is celebrating its third anniversary without a single correction next month, investors are becoming increasingly worried that a significant correction or even a bear market is imminent.
    • However, no-one can time the market consistently. Humans tend to predict what just happened instead of what is about to happen.
    • There are still many experts waiting for the final collapse after the one 5 years ago. They cannot realize that the collapse occurred and is not going to happen again.
    • The current bull market has been fueled not only by the Fed but also by the great (once in a generation) expansion of the American companies abroad.
    • As history has taught us, the market advances to unprecedented highs every 10-20 years. The market currently seems to be in its first steps of its generational advance.
  • A Great Bargain In Today's Fully Valued Market
    Thu, May. 29 CONN 16 Comments

    Summary

    • Conn's lost almost half of its value a few months ago, when the company reported that the delinquency rate of its customers rose from 8.5% to 8.8%.
    • The stock is now trading at an attractive P/E of 13, and is expected to grow its EPS by 23% next year.
    • Some insiders have already grasped the opportunity, and David Einhorn has acquired a 9% stake in the company, characterizing the concerns as overblown.
  • Target Corporation: The Factors To Consider
    Wed, May. 28 TGT 36 Comments

    Summary

    • The outlook for the EPS of this year has incurred several downward revisions, from $5.50 nine months ago to $3.75 recently.
    • As the current outlook still implies 15% growth for this year, I expect more downward revisions to come soon.
    • The management did not mention any steps to imrpove its Canadian segment, which continues to incur heavy losses.
    • Although the company has consistently repurchased its shares for years, even at elevated prices, the weak balance sheet has recently eliminated share repurchases and leaves little room for future buybacks.
    • The technical picture of the stock shows a clear downtrend, with no signs of bottoming yet.
  • A Rare Opportunity To Profit From Volatility
    Tue, May. 20 VXX 33 Comments

    Summary

    • The market has been consolidating around all-time highs and Fed has been curtailing its program so many investors are seeking a way to hedge against an imminent correction.
    • Selling part of the portfolio or buying put options have both been very damaging strategies during the whole 5-year bull market.
    • The current value of VIX and the time remaining till the expiration of its June futures offer a very rare opportunity to profit from a spike in volatility.
  • Michael Kors: The Factors To Consider
    Mon, Apr. 28 KORS 20 Comments

    Summary

    • KORS has exhibited exceptional growth without raising any debt. The question is whether it is a bargain at the current elevated price.
    • As the company generates 85% of its revenue in North America, there is ample room for growth in Europe. Moreover, the company can even double its stores in the US.
    • Given the example of its competitor, COH, it is reasonable to assume that the high-growth era will end only after the initiation of a dividend.
    • Nevertheless, given its high market cap and its extremely fast growth, this is not a buy-and-hold stock. In addition, only investors who can handle high volatility should consider this stock.
  • General Mills: Some Points That Are Rarely Mentioned
    Wed, Mar. 12 GIS 27 Comments

    Summary

    • General Mills has excellent prospects for further international growth in Europe, Asia, Canada and Latin America.
    • Its double-digit total yield and its growth potential make it a rare value play in today's almost fully valued market.
    • Nevertheless, investors should closely monitor the efficiency of the share buyback program as the company spent $1 B last year with almost no reduction in the share count.
  • Why Total Is Likely To Continue Outperforming Exxon And Chevron
    Editors' Pick • Wed, Mar. 5 TOT 27 Comments

    Summary

    • While capital expenses have greatly escalated for the oil companies in the last few years, Total seems to be better positioned than Exxon and Chevron.
    • As Total provides detailed figures for its projected 30% increase in oil production by 2017 and its recent record is on track, it is likely to accomplish its goal.
    • Based on Total's projection, we calculated that its earnings per share will increase by about 30% in 2017, which means a compounded annual return of 12% till 2017.
    • Given the above and the great difficulties Exxon and Chevron are having in replenishing their oil reserves, Total is likely to continue outperforming Exxon and Chevron.
  • Why IBM Should Follow The Example Of Apple
    Tue, Feb. 25 IBM 31 Comments
  • Ross Stores: A Great Growth Stock With At Least 20% Upside
    Wed, Feb. 12 ROST 7 Comments
  • Has The Market Topped?
    Mon, Jan. 27 DIA, SPY 40 Comments
  • Selling Puts Of High-Dividend Stocks For Maximum Yield
    Wed, Jan. 15 AAPL, BBBY, CTSH 108 Comments
  • Are The Aggressive Buybacks Signaling The Top Of The Bull Market?
    Dec. 5, 2013 SPY 32 Comments
  • The Great Strategy Of Trading On The Fundamentals
    Dec. 3, 2013 COH, IBM, YUM Comment!
  • Green Mountain Coffee Roasters: Why The Market Reacted Like This
    Nov. 21, 2013 GMCR 18 Comments
  • What Are The Real Earnings Of These Premium Companies?
    Nov. 14, 2013 MCD, WMT, PG 2 Comments
  • Why The Oil Companies Are Cheap
    Nov. 6, 2013 XOM 60 Comments
  • Exxon Mobil: Finally A Good Earnings Report
    Oct. 31, 2013 XOM 14 Comments
  • Bed Bath & Beyond: Many Years Of Growth Ahead
    Oct. 24, 2013 BBBY 5 Comments
  • Philip Morris: What To Keep From The Earnings Report
    Oct. 17, 2013 PM 9 Comments