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  • Telefonica: Cheap For A Reason (Equity) - A Comparative Valuation [View article]
    jjnscbusin thank you for the comment. I agree and for those reasons I didn't include the DCF/FCFE calcs that I originally did because I was ending up with valuations that for TEF for example ranged between $12.45 to $23 depending on the assumptions used. I also had this problem with TI and FTE, while VOD is a difficult beast to value using any method. I don't see how it adds value for readers by stating TEF on a DCF basis is worth $12.45 to $23.00 per share and then listing all of the assumptions used.

    My preferred means for valuing telcos is EV/EBITDA along with a fundamental analysis of their respective businesses.

    I believe that the main reason Igor made the comment was not on an objective basis to dig deeper into the conclusion reached but rather to be argumentative and undermine the validity of the article for reasons of his own choosing. While it is only a short period since this article was published, to date my conclusion has held up.
    Aug 15 08:09 PM | Likes Like |Link to Comment
  • Telefonica: Cheap For A Reason (Equity) - A Comparative Valuation [View article]
    jjnscbusin thanks for the information and the update appreciated.
    Aug 15 02:49 AM | Likes Like |Link to Comment
  • Gafisa: A Speculative Play On Brazilian Residential Property [View article]
    Tashton thank you for the comments, those are some good points that I should have considered. But in the research that I conducted there was no mention of whether Gafisa was involved in the tendering for any aspects of the Olympic building program. It would seem intuitive for them to be involved..

    There was also no mention of how the Olympics would impact the the government's Minha Casa Minha Vida program. So I wanted to focus only on what was certain to impact the company and determine its chances of survival in the short to medium-term.

    I think it is just too easy to make speculative comments about how significant events may or may not affect a company and when the company is facing the problems that Gafisa was and still is they tend to puff up the view and mislead readers rather than provide hard facts.
    Aug 14 07:52 PM | Likes Like |Link to Comment
  • Colombia: Poised To Reach Its Economic Potential [View article]
    Rich thank you for the clarification. I think there is still a substantial amount of growth to be seen in Colombia as it still has the distinct benefit of catch-up growth. it also hasn't moved as far along the development curve as say Peru or Brazil, which means that there is still substantial growth to be seen and opportunity. This catch-up growth is what created the rapid appreciation and will continue to fuel it for sometime yet, if the global economic headwinds or security issues don't interrupt it.

    Overall there aren't signs of an emerging consumer credit bubble, if anything people within Colombia are talking about it because of the inherently conservative nature of the culture and approach to finance combined with a greater awareness/fear of bubbles resulting from Europe particularly Spain and Portugal. But of some concern is that the Colombian economy is incapable of sustaining a high credit to GDP ratio at this time and I doubt that it will be able to do so for sometime.

    I do believe that there has been a significant appreciation in house prices, but if anything I feel that this has happened more so in Medellin rather than Bogota primarily due to the influx of foreign investors buying properties in Medellin. There are also signs of a localized property bubble in Medellin which is becoming increasingly speculative in nature.

    While I have an optimistic view of Colombia's potential there are still risks the primary ones being the security situation, lack of infrastructure, regulatory and political risk. Along with which there are language and cultural barriers.

    For these reasons I always believe that investors should exercise caution but not because of the economic risk but more because of the other risks mentioned. There will reach a time where these economic risks may blow-up but that is sometime off yet, which will give the government sometime to manage them. Although to date the government seems overly focused on FDI and exploiting commodities and exports rather than building a more robust domestic economy. The overarching mentality is one of little to no regulation on the basis that increasing inflows of capital will create growth through the trickle down effect. Which as history has repeatedly demonstrated doesn't work and leads to asset bubbles and rampant speculation.
    Aug 9 04:37 AM | Likes Like |Link to Comment
  • Telefonica: Cheap For A Reason (Equity) - A Comparative Valuation [View article]
    Hi Larry Telefonica (TEF) which until the suspension of the dividend plan recently had a dividend yield of around 11%.
    Aug 8 10:32 PM | Likes Like |Link to Comment
  • Telefonica: Cheap For A Reason (Equity) - A Comparative Valuation [View article]
    Labutes thank you for the comment. The companies were chosen on the basis that each has significant operations in each of TEF's markets.
    Aug 8 06:48 PM | Likes Like |Link to Comment
  • Ecopetrol's Second Quarter Results Indicate A Disappointing Year Ahead For Investors [View article]
    DG thank you for the offer and I will be certain to contact you if I need any information, have any questions regarding my analysis or identify any gaps that I can't explain.

    Also thank you for the additional insight on the security situation and how this affects Ecopetrol.
    Aug 8 05:20 PM | Likes Like |Link to Comment
  • Telefonica: Cheap For A Reason (Equity) [View article]
    adiviono thank you for the comment and the video. I will certainly be having a look. I have recently submitted for publication a follow-up to this piece which is a comparative valuation of TEF to its peers, to make up for the lack of a ratio based valuation in this article, which may offer some additional insight. Although I am not really a big fan of determining if a company is a buy or a sell based on fundamental valuation ratios alone.
    Aug 8 02:50 AM | Likes Like |Link to Comment
  • Colombia: Poised To Reach Its Economic Potential [View article]
    Rich thank you for reading. I am unsure what you mean by a new story or bottom floor? I am also a little uncertain as to the point your raising or how it ties in with the article. However, I am more than happy to answer the question if you can clarify it?


    Aug 8 02:36 AM | Likes Like |Link to Comment
  • Ecopetrol's Second Quarter Results Indicate A Disappointing Year Ahead For Investors [View article]
    I am hoping that the issues facing Ecopetrol are resolved in the medium to long-term and it has been my preferred choice for exposure to Latam's oil boom. But for these issues to be resolved it will be necessary for management to develop and implement a plan to do so. It is on that basis that I continue to hold EC.

    The issues concerning Colombia's internal security situation are far more complex and it will be many years before they are satisfactorily resolved. The situation is quite fluid and changes weekly. Many within Colombia thought they were a spent force particularly with the death of Alfonso Cano in November of last year. Much of their strength is derived from the general insecurity, poverty , lack of the rule of law and failed government institutions throughout much of Colombia.
    Aug 7 03:24 PM | Likes Like |Link to Comment
  • Telefonica: Cheap For A Reason (Equity) [View article]
    Nationalism is just an ever present risk of investing in Latam. It is also on the rise in Colombia but tends to have different outlets to other Latam countries.

    I am also currently up a profile on VIV and investigating further the mining sector and recent developments in Peru for future articles.

    With regard to Petrobras the manner in which the current government is using the company as a national policy tool has always been a risk, but even I misunderstood how deep that would go.

    I also believe that the deeper Brazil's problems the more protectionist and interventionist the government will become particularly with the lead up to the FIFA World Cup and the Olympics creating considerable pressure for the government to ensure the success of those games and present a favorable domestic image for the world media that will be present.
    Aug 6 11:21 PM | Likes Like |Link to Comment
  • Telefonica: Cheap For A Reason (Equity) [View article]
    My pleasure, one of my projects that I am working on at the moment is an update on the Argentine telco sector as a follow-up to my earlier article.
    Aug 6 08:32 PM | Likes Like |Link to Comment
  • Telefonica: Cheap For A Reason (Equity) [View article]
    William thank you for raising that issue. Regulatory change in Latam is a key risk being faced by telcos operating in Latam particularly in Brazil, Argentina and Peru. Overall I think the risk of nationalism is low because it takes a distinct level of expertise to effectively run a telco.

    The foreign ownership issue is quite interesting because it depends on the company and the country. In Colombia Telmex which is AMX is resented but the other foreign operators including TEF are not. While in Argentina there has been ongoing resentment towards TEF and also among some people to get TI out of TEO.

    At the moment with Peru and the ongoing issue over ground water pollution and the gold and copper mining protests there has been a tremendous groundswell against all foreign ownership. It is also not unfounded, the environmental record of foreign mining companies operating in Peru such as NEM, ABX and Xstrata to name a few has been abhorrent. This issue is providing fertile recruitment ground for a resurgent Shining Path and has also been a factor in the surge in coca growing in Peru. Overall I wouldn't be investing in any foreign mining companies that operate in Peru, but that is another story.

    Also the level of investment in infrastructure required in Latam is tremendous and if the governments start shutting out or scaring off private business then the money just won't be there to invest in infrastructure. If anything at this stage both Peru and Argentina are placing pressure on the telcos to make their services cheaper, more accessible and reliable along with greater infrastructure development.

    I took a close look at the Argentine telco sector and the risk of nationalization earlier this year where I concluded nationalization more than likely won't occur. But the government will use regulatory and political pressure to drive the outcome they are seeking.
    Aug 6 07:11 PM | Likes Like |Link to Comment
  • Ecopetrol's Second Quarter Results Indicate A Disappointing Year Ahead For Investors [View article]
    dgalvan thank you for the feedback. It is always good to get that feedback from a critic of my work and someone such as yourself who has a strong knowledge of Colombian equities as they are still relatively new to me.

    The inspiration for the article came from your comments regarding EC's 2Q performance that you made on Ecopetrol & Petrobras Barometers of . . .

    Thank you for providing the information and insight that you did. While I quite like EC and believe that the company has tremendous potential, hence my positive view, there comes a time when you need to state where the company is at and take a realistic view of whether it will continue to provide value for investors. At this time until management step up and provide a clear strategy of how they will deal with the risks facing the company it is difficult to take a positive view.

    Since publishing the article it is also appearing more likely that additional shares from the government's holding will be offered to the market in 2013, with a bill now before Congress to approve the sale.

    I am working on CIB at the moment and again that it is another favorite company. But it has also reached the point where management can no longer rely upon 'catch-up growth' and need to have a clear executable growth strategy in place in order to continue delivering investors value. I am also quite keen to take a closer look at Davivienda, EEB and Exito.
    Aug 6 06:53 PM | Likes Like |Link to Comment
  • Global Headwinds Bite Deeper In Latin America As Colombia Orders First Rate Cut In 2 Years [View article]
    Yellow thank you for the feedback. One of my favorite Colombian stocks would be EC though I feel that they aren't getting serious about dealing with their risks and 2012 is going to be a disappointing investors in EC . Over a 10 year time frame the biggest issue with EC is their low proven reserves, which at the current rate of production will only last for 6 years.

    I also quite like Bancolombia (CIB) which is also available as a NYSE listed ADR and I am working on a review of the bank's 2Q 2012 results. I also like a number of locally listed stocks on the Bolsa de Valores de Colombia; including EEB (largest electricity utility in Colombia), Exito (largest supermarket/department store chain owned by the French company Casino) and Davivienda bank. There was talk of EEB and Davivienda issuing ADRs on the NYSE earlier this year but it seems that they have decided to not proceed.
    Aug 5 06:46 PM | Likes Like |Link to Comment