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Bret Kenwell  

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  • How Much Is Yahoo Worth Part II: Alibaba And The Rest Of Yahoo's Assets [View article]
    Hey flashback --

    Like Fraser just said, there will be ways to reduce their tax bill. It can be as simple as buying something, selling it for a profit, and paying the tax man in the end.

    But if YHOO is halfway decent about handling its money, it will reduce its bill, or eliminate it, depending on its future course of action.
    Aug 26, 2014. 03:15 PM | 1 Like Like |Link to Comment
  • How Much Is Yahoo Worth Part II: Alibaba And The Rest Of Yahoo's Assets [View article]
    Hey Fraser --

    I think $120 is too low as well.

    But, as I eluded to in the first article, I would rather estimate a lower valuation into my calculation. YHOO is still attractive with conservative estimates and therefore very attractive if the end result comes in higher than where I've pegged it.

    That's why reason I've used a low valuation for Alibaba. Thanks for commenting.

    -Bret
    Aug 26, 2014. 02:59 PM | Likes Like |Link to Comment
  • How Much Is Yahoo Worth Part II: Alibaba And The Rest Of Yahoo's Assets [View article]
    Hey guys --

    Thanks for all the comments. I largely left the calculations at 'pre-tax' sums, because it's uncertain what Mayer will do with the funds. There will certainly be a hit to the company's windfall due to taxes, but my guess is that the Alibaba will come in far higher than my 'very conservative' estimate of $118 billion.

    In fact, I would be shocked if it came in that low and I only use such a low figure in order to plan for the worst. realistically, this company will come in north of $140b or $150b, and will also likely trade even higher once it is public.

    That will just be icing on the cake for Yahoo!, since the 'low ball' estimate still shows upside promise, even after the latest move higher in the stock.


    Thanks for commenting!

    -Bret
    Aug 26, 2014. 02:36 PM | Likes Like |Link to Comment
  • How Much Is Yahoo Worth Part I: A Look At Alibaba [View article]
    Hey Jax --

    I tend to agree with your thought process on this one. But for me personally -- and maybe this doesn't suit everyone else -- but I like to "plan for the worst, hope for the best."

    I'd rather figure out Ali's valuation on the low end to see if Yahoo is still attractive. Since it was still attractive, I bought it, with the hope that the Alibaba IPO would come in much stronger and my long thesis would be that much more bullish.

    Thanks for the comment!

    -Bret
    Aug 26, 2014. 02:33 PM | Likes Like |Link to Comment
  • How Much Is Yahoo Worth Part I: A Look At Alibaba [View article]
    Comparing to BIDU, I think, would be a good idea.

    BIDU has a PE ratio of about 38, based on a quick glance at Google finance.

    That's almost smack dab in the middle of Google's PE ratio of 31 and analysts' estimates for Alibaba using a PE ratio of 45.

    More or less, it would give Alibaba a valuation of ~$143 billion. To Yahoo, that's a pre-tax stake worth $32.2 billion.

    Most of the Chinese Internet stocks trade with a high valuation, and what I wanted to do was use conservative valuation. Not to be pessimistic, but seeing as though I have skin in the game, I want to 'hope for the best, plan for the worst,' if you will.

    Planning for the worst would be assigning to lowest (reasonable) valuation possible, therefore looking at Yahoo!'s downside, rather than its upside.

    Thanks!
    Aug 25, 2014. 09:08 AM | Likes Like |Link to Comment
  • How Much Is Yahoo Worth Part I: A Look At Alibaba [View article]
    Hey Vogul --

    Part II is precisely that -- a look at the other assets Yahoo! has. I submitted it over the weekend, so it should be out within a day, two days tops.


    Thanks!

    -Bret
    Aug 25, 2014. 09:04 AM | Likes Like |Link to Comment
  • Ford: $24 Is Within Reach [View article]
    I like Ford and am long, but this is spot on:

    You forget that Ford is currently trading at a fair price that is proportional to earnings for 2014, if not on the high side.
    Jul 31, 2014. 01:52 PM | 1 Like Like |Link to Comment
  • Mr. Market Errs In Valuing Ford Motor At 9 Times Earnings [View article]
    It's also worth mentioning that Ford and other autos generally trade with a low earnings and sales multiple. It does not trade with the same value as say, the S&P 500.

    And even though its sales momentum maybe outside of the U.S., the vast majority of total sales do come within the U.S. Now it is up to the reader to decide if this fits in their bull case (economy improving) or bear case (economy faltering).

    In December, management warned that profits would fall, amid lower margins and product launches. With the company earning less this year than it did last year and with concerns over the transition to the 2015 F-150, I don't necessarily think its valuation is all that bad.

    The stock is up 10.5% YTD, and that to me, isn't too bad given the circumstances.
    Jul 31, 2014. 01:27 PM | Likes Like |Link to Comment
  • Mr. Market Errs In Valuing Ford Motor At 9 Times Earnings [View article]
    This is a flawed argument, in my opinion:

    "Ford Motor should be at the top of investors' shopping lists because the company could become a major beneficiary of General Motors' (NYSE:GM) recall disaster as customers lose confidence in the once-mighty brand and migrate over to competitors."

    If it has yet to become a major beneficiary, which Ford has not, why on earth has it not happened yet? GM continues to post monthly sales gain after monthly sales gain, while Ford fails to reap any benefits from the GM recall disaster.


    Granted, I am long Ford, no position on GM, but this argument was valid in March..not headed into August.
    Jul 31, 2014. 01:19 PM | Likes Like |Link to Comment
  • Is It Time To Buy Shares Of Whole Foods Market? [View article]
    It's not a difficult concept. But the company is making its move into organic, where it never was before.

    I don't know why it's so difficult to have a polite and constructive discussion, so I guess I am done here.
    Jul 30, 2014. 10:22 AM | Likes Like |Link to Comment
  • Is It Time To Buy Shares Of Whole Foods Market? [View article]
    Gary

    I don't really get your point. Your making it sound as though I'm a full-blown bull on WMT.

    I am not, for the record.

    But to shrug off the largest retailer on earth and say, 'Oh, it will have not effect on WFM' is purely irresponsible and ignorant.

    WFM has already said it is focused on lower pricing. Seriously, what's your beef?
    Jul 30, 2014. 09:55 AM | 1 Like Like |Link to Comment
  • Is It Time To Buy Shares Of Whole Foods Market? [View article]
    My assumption isn't that WMT shoppers buy a lot of organic. But what I'm saying is that WMT has an incredible amount of pricing power.

    If its lower prices pressure WFM's competitors, it can ultimately put pressure on WFM to lower its prices.

    So WMT won't steal WFM customers away, but it can certainly put pressure on pricing. The question is whether volume will offset that disadvantage.
    Jul 30, 2014. 09:35 AM | 1 Like Like |Link to Comment
  • Is It Time To Buy Shares Of Whole Foods Market? [View article]
    Here's I see Wal-Mart.

    It's rather obvious that most WFM fans aren't going to flip-flop stores. However, Wal-Mart's pricing power may put pressure on WFM's more direct competition, (SFM, TFM, Trader Joe's, etc.).

    If those companies feel like they have to lower price to stay competitive, WFM may have to too. After all, while many WFM shoppers won't switch to WMT, they might to one of its other competitors.

    This is how WMT could negatively effect WFM moving forward.
    Jul 30, 2014. 09:17 AM | Likes Like |Link to Comment
  • Is It Time To Buy Shares Of Whole Foods Market? [View article]
    Hey everyone --

    Thanks for the comments. My real hope here is that Whole Foods does indeed disappoints on Wednesday. Perhaps in-line results would send the stock lower, and I can only hope that that's the case.

    I say that because it would hopefully mean a bottoming in the stock price, and would represent a great buying opportunity. I want to buy more shares, but am also patient enough to realize that I can wait for WFM to prove the decline is over.

    Plenty of upside, just a question of when it's time to make the real push!

    Thanks for the comments!

    -Bret
    Jul 30, 2014. 12:09 AM | Likes Like |Link to Comment
  • Starbucks: Wait For Lower Entry Price After Earnings Announcement [View article]
    Gotcha. I would say near current levels, the stock is fairly to fully valued, depending which metrics you use.

    I would consider a pullback to the low-$70s a gift and where I would be buying my position. But that's just me, because I think it's plausible shares will be undervalued, but not deeply undervalued any time soon. (FD: Long SBUX)
    Jul 29, 2014. 10:52 AM | 1 Like Like |Link to Comment
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