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Charles A. Smith

 
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  • Valeant: One Big Injection [View article]
    How about simply running up the final price that VRX pays for AGN to the absolute max? Do I hear $200? $210?
    Sep 12 12:21 PM | 1 Like Like |Link to Comment
  • Valeant: One Big Injection [View article]
    "The reason he's successful is that there are people who believe that his easy alchemy will trump difficult science."

    VRX vs. AGN = a promoter's conception of a business vs. a real business.
    Sep 9 02:47 PM | 3 Likes Like |Link to Comment
  • A Confusion Of Ideas - Micron And The DRAM Industry [View article]
    And to think what trouble the 'BOTs have with it in real time...no wonder the market seems FUBAR at times!!!
    Sep 5 01:48 PM | 1 Like Like |Link to Comment
  • Update: BP Judgment Does Not Change Our Very Bullish Outlook [View article]
    "...where a company whose senior management has made monstrous mistakes..."

    Current management had nothing to do with Macondo. Bob Dudley took over for Tony Hayward in late 2010, and his performance has been exemplary.
    Sep 5 10:40 AM | 8 Likes Like |Link to Comment
  • A Confusion Of Ideas - Micron And The DRAM Industry [View article]
    Why are people making it so complicated? At the Drexel tech conference yesterday, MU management couldn't have put it any more plainly:

    <Q>: So, the general tenor of pricing is stable today, improving? There’s been some speculation on Wall Street that maybe there’s a little deterioration setting in. Would you agree or disagree with that?

    <A>: I really haven’t seen deterioration. No. I think that, again, there are different segments where pricing can move different directions, and you always have a mix of how that can impact your total blended ASP. But if I look segment by segment, I really don’t see anywhere were prices are going down today. No. Not in DRAM.

    My guess is they said the exact same thing today at the Citi event; I have yet to see the transcript.
    Sep 4 02:22 PM | 10 Likes Like |Link to Comment
  • Bank of America raising another $3B after mortgage fine [View news story]
    Raising $ billions to pay extortion...that's productive. Alternatively, if it allows you to stay in business, no better investment!
    Sep 2 02:55 PM | 7 Likes Like |Link to Comment
  • Fuel Systems Solutions Is Worth $3.30 - $4.10 Per Share [View article]
    "The balance sheet is overstated by millions
    [i] Current assets are growing, despite revenue declines,
    [ii] Inventory is practically flat, despite revenue declines,
    [iii] Goodwill, etc."

    That's why I haircut current assets by 15% ($43 million) and EXCLUDED goodwill and all intangibles in my valuation. The $9.61 number allows for lots of bad surprises.
    Aug 21 08:07 AM | Likes Like |Link to Comment
  • Fuel Systems Solutions Is Worth $3.30 - $4.10 Per Share [View article]
    Competent managements ALWAYS have a choice between making a go of it as a "going concern" or liquidating. If they don't make the right one long enough, outsiders buy in and remind them who they work for, particularly if the public share price drops below liquidating value, as has been the case here. Successful investing is all about a margin of safety. Under $9.61, FSYS has it. It may be dead money for a while longer, but given that management owns substantial shares, a catalyst will arrive at some point.
    Aug 21 08:01 AM | Likes Like |Link to Comment
  • Fuel Systems Solutions Is Worth $3.30 - $4.10 Per Share [View article]
    Discounting current assets by 15% yields a value of $243 million. Subtracting current liabilities of $84 million leaves $159 million in net current assets (NYSE:NCA). Subtracting ALL OTHER liabilities of $9 million from this amount leaves a discounted value in the LIQUID ASSETS ALONE of $150 million, or $7.46 per share. As for non-current assets, the value of equipment and leaseholds (leaving out all intangibles, deferred taxes and other assets) is $54 million. Haircutting this number by 20% leaves $43 million, or $2.15 per share. Adding the two together gives a ROCK BOTTOM liquidation value of $9.61 per share. This compares with book equity of $13.31 per share, for a net discount to book of $3.70, or 28%. The only question anyone buying the shares under a price of $9.61 per share needs to answer is the following: Is management dumb enough and stubborn enough to piss away all of the value under this amount? Shorts using a target of 8X to 10X EBITDA obviously believe that they are.
    Aug 20 05:57 PM | 3 Likes Like |Link to Comment
  • Kinder Morgan: Saying Goodbye To The MLPs [View article]
    "Bottom line - ZERO "value creation" will occur outside of providing Kinder with increased ability to buy vs. build in a world where build is becoming more difficult thanks to regulatory hurdles."

    If you think about it, this statement pretty well summarizes the economic and asset market environment throughout the entire U.S. "recovery". IOW, doing "real" things (such as building pipelines) is way more expensive and time consuming than pushing financial markers around on a board. We have a financial analyst's conception of a recovery rather than the real thing.
    Aug 12 01:40 PM | 1 Like Like |Link to Comment
  • Kinder Morgan: Saying Goodbye To The MLPs [View article]
    The investment banks had a huge interest in keeping the ATM (at the market) and periodic underwritten equity issuance game going, but Rich Kinder realized that this was way too expensive and simply created a giant round-trip "ATM" for the banks. What a great gig...collect a big fee for issuing MLP units and then advertise them as a great yield vehicle for individual investors in desperate need of income. Wash, rinse , repeat. Rich says: "how bout not."
    Aug 11 11:08 AM | 6 Likes Like |Link to Comment
  • Kinder Morgan: Saying Goodbye To The MLPs [View article]
    The MLP legal structure is dumb if you want to grow. To put it simply, why pay out 7% or 8% of your capital when you need to turn right around and raise it again for growth? Rich Kinder was first to figure this out.
    Aug 11 10:49 AM | 3 Likes Like |Link to Comment
  • Kinder Morgan +20%, KMP +27% premarket on merger news [View news story]
    With this deal, Rich Kinder is basically saying that the entire legal structure of the midstream/E&P biz is wrong if growth is the object. Why pay out all your cash flow when you just end up raising it again? The tax benefits of the MLP structure are just not great enough if you need capital to grow.
    Aug 11 09:31 AM | 2 Likes Like |Link to Comment
  • Juicy Details From The Allergan Lawsuit: Why Valeant And Ackman May Be In More Trouble Than They Are Letting On [View article]
    From the Globe & Mail piece:

    "Pearson takes pride in getting deals done fast."

    Pride goeth before a fall.
    Aug 8 09:06 AM | 1 Like Like |Link to Comment
  • Juicy Details From The Allergan Lawsuit: Why Valeant And Ackman May Be In More Trouble Than They Are Letting On [View article]
    VRX shares are acting like someone knows that ISS is not going to recommend AGN shareholders push for a shareholder meeting. We'll know in a few days.
    Aug 5 01:54 PM | Likes Like |Link to Comment
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