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Aristofanis Papadatos

 
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  • Target: The Gist Of The Earnings Report [View article]
    ARG1,
    Now that I remember, I have seen the formula of the net debt that I always use (net debt = total liabilities - cash - receivables) in a presentation of KPMG, the well-known company that performs internal auditing and consulting services.
    In any case, you made your point clear.
    Thank you for your comments.
    Aug 21 04:03 PM | Likes Like |Link to Comment
  • Share Buybacks: The Good And The Bad [View article]
    Thank you for your comment.
    Indeed TPL buys back its shares at a significant rate. However, it has a low market cap (about $1.5 B) and I could not include all the companies that repurchase their shares, as there are several companies that are running a buyback program right now.
    Aug 21 03:15 PM | Likes Like |Link to Comment
  • Share Buybacks: The Good And The Bad [View article]
    Rvvolpe,
    Be careful because Buffett disagrees with you.
    However, he says that buybacks should be performed only when the stock price is cheap relative to its book value (for banks) or its earnings per share (for other companies).
    As mentioned in the article, unfortunately the most buybacks are performed at high stock prices, as this is the time when few expansion projects are promising and hence much cash is available.
    Aug 21 02:11 PM | Likes Like |Link to Comment
  • Target: The Gist Of The Earnings Report [View article]
    Arg1,
    The reason you see a different figure in other reports is because some companies like to subtract the inventory from the debt.
    However, this is misleading because the company cannot pay its debt using its inventory. Sure it can reduce its inventory by a small amount but it cannot greatly reduce it because that would sent the company out of business.
    The practical thing to do is to subtract all current assets that can be used to reduce the debt. These are the cash and the receivables.
    On the other hand, companies like to subtract the inventory to show a better figure for net debt but that number does not reflect the easiness of paying off the debt, which is the important thing.
    I hope I made my point clear.
    Aug 21 01:37 PM | Likes Like |Link to Comment
  • Target: The Gist Of The Earnings Report [View article]
    Arg1,
    I cannot spend time on teaching you about net debt.
    Long term debt is different from net debt. You don't need the experts, just read the balance sheet on your own. The practical importance of the net debt is how difficult it makes the everyday life of the company. And in this you have to include all parts of the debt, not just the bank debt or the long term debt. You have to include everything.
    Aug 21 01:22 PM | Likes Like |Link to Comment
  • Target: The Gist Of The Earnings Report [View article]
    Alexander,
    Thank you for your comment. I remember that you hold a position in Target. As I have said previously, the market seems to like very much TGT, as it assigns a P/E=20 for current earnings. Even if the company turnarounds and returns to EPS $4, the stock now trades at forward P/E=15, which is normal, not low. Usually the market hates uncertainty (leading to low stock prices) but with TGT it seems to be very confident.
    The past performance (earnings growth) of the company has been excellent so its shareholders have the right to hope for a rebound. No-one can be sure for the future growth of a retailer in such a competitive environment.
    The only undisputable facts are the multiple downward revisions of the management and the fact that the headwinds caught the management off-guard in respect to the leveraged balance sheet. On the other hand, the future growth is really unknown.
    I am always cautious when I have a different opinion from you, as you have proved that you are excellent in your due dilligence.
    Aug 21 01:59 AM | Likes Like |Link to Comment
  • Target: The Gist Of The Earnings Report [View article]
    Portage,
    The article is honest, as I detailed the calculation of net debt above.
    The long term debt alone is $14 B, just look at the balance sheet in today's report.
    The current liabilities are another $11.3 B.
    It is the management who has not been honest; lowering the guidance several times in 12 months is not honest.
    Aug 21 01:46 AM | Likes Like |Link to Comment
  • Target: The Gist Of The Earnings Report [View article]
    I detailed the calculation of net debt above. The long term debt alone is $14 B but the important thing is the whole debt.
    You don't need me to calculate it, just look at the balance sheet in today's report.
    Aug 21 01:43 AM | Likes Like |Link to Comment
  • Target: The Gist Of The Earnings Report [View article]
    CPO111,
    Thank you for your comment.
    I believe that the current stock price of TGT is quite optimistic. It is about 20 times this year's earnings and, if the company turnarounds and returns to EPS $4, it is 15 times those earnings. That's why I don't consider the current stock price a bargain.
    The company will definitely continue to be profitable but its growth is questionable. Its past record is excellent but its future growth is unknown.
    Aug 21 01:40 AM | Likes Like |Link to Comment
  • Target: The Gist Of The Earnings Report [View article]
    Premiump,
    There are various formulas for calculating the net debt but the most widely accepted (and the most practical for the operations of the company) is:

    Net debt = Total liabilities - Cash - Receivables

    From today's earnings report:
    Total liabilities = $28 B
    Cash = $0.8 B
    Receivables are not mentioned but they are lower than the "other current assets", which are $1.8 B.

    Therefore, even if you assume that most of these assets are receivables, you end up with a net debt of $26 B.
    Aug 20 06:02 PM | Likes Like |Link to Comment
  • Target: The Gist Of The Earnings Report [View article]
    Kevinconway,
    Thank you for your informative comment. I agree that I don't see any sign of improvement in the Canadian segment.
    Aug 20 05:56 PM | Likes Like |Link to Comment
  • Target: The Gist Of The Earnings Report [View article]
    Lakeaffect,
    I agree with you on everything except for the buybacks. Target has stopped buying back its shares because its balance sheet has been deteriorating.
    It is buying back only very few shares to give them to its managers as part of their compensation.
    Aug 20 05:55 PM | Likes Like |Link to Comment
  • Ensco PLC Offers A Sobering Look At The Dynamics Affecting Its Core Markets [View article]
    Alexander,
    Thank you for your excellent article.
    I have ESV shares for the 6% dividend while waiting for the "wild card" (share buybacks) to play out. Unfortunately, although almost every company has initiated a buyback program (even those with the most expensive stocks), the management of ESV does not appreciate this option even though it is recommended at such a low P/E.
    When you get such a high dividend and such a low P/E in a cyclical company, it is either mispriced by the market (this happened with Total) or we are near the peak of the cycle. The company may stumble for 1-2 years as you say but I think that the long-term trend is that oil companies need to drill deeper and deeper in the ocean because the easy oil has already been extracted.
    We will have to wait and see...

    P.S. I can wait for many years as long as the 6% dividend is not cut. How confident are you that the dividend is not at risk?
    Aug 20 04:19 PM | Likes Like |Link to Comment
  • Target: The Gist Of The Earnings Report [View article]
    Yes, the market rewarded the company for reporting in the conference call that its comparable sales were up more than 1% in July. If the company maintains this for the whole Q3, it may be an improvement but we will have to see at what cost (price discounts) it achieved this. If the increase in sales comes from deep discounts, it is not beneficial to the shareholders.
    Aug 20 04:10 PM | Likes Like |Link to Comment
  • Share Buybacks: The Good And The Bad [View article]
    Yes, it is buying back its shares very aggressively, raising great amount of debt. In the last 2 quarters its equity declined from $500 M to a negative $400 M. It is doing its best to fight the short sellers but it has to improve its earnings, otherwise it will get into trouble.
    Aug 20 04:04 PM | 1 Like Like |Link to Comment
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