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Christopher Bayliss

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  • Willdan Group: Top Line Growth And Margin Expansion Supports Recent Run-Up [View article]
    In recent conference call, management is calling for 5% to 10% growth in 2014 and also an improvement in profitability. Willdan had some contract wins such as a $4.8MM contract at Puget sound and $1.25MM with Southern California Edison. They also negotiated a price increase and are expecting other cost improvements throughout the year. Company has guided for energy growth once the Con-Ed comps roll off. Infrastructure division which is new, has a solid pipeline. Also amended credit facility, mentioning tuck in acquisitions as a possibility for the future. Prorated Q4 results indicate 10+% FCF yield. I plan on adding more to my position.
    Apr 22 01:10 AM | Likes Like |Link to Comment
  • Cairn Energy: Recent Share Price Decline Provides 80% Upside [View article]
    Very interesting and quality article New Capital. Your analysis of the legal situation seems reasonable. I am a little worried about the capital expenditures.

    $530MM for an uncertain $600MM or $900MM (based upon $30 a barrel) years into the future, doesn't seem like the best returns. For example, if the mine is worth $900MM, but takes 4 years to monetize, that's only 14% returns, which seems paltry given the risk. Any further analysis, beyond the strong track record of management, on the mine to increase the comfort level?
    Apr 8 05:34 PM | Likes Like |Link to Comment
  • ChipMOS: Cash Flow Machine In Niche Industry With Tailwinds [View article]
    Well I think conservatively, IMOS is worth at least $26 a share. Some other well respected authors on this site have higher price targets. The share listing could/should provide a catalyst to close this gap. It may not. I plan on holding my shares at least until the price target is reached, unless the story changes. As of now, all developments are positive, so I am inclined to think that the price target is above $26, although I can't give you an exact estimate. Essentially, if you sell without the gap closing, I think you would be selling IMOS for less than its worth. Hope this helps.
    Apr 4 01:00 PM | Likes Like |Link to Comment
  • Steel Excel - Shell Company Turning Into Profitable Business [View article]
    New Capital,

    Very good article. I think your valuation method is very sound and the reasons for the undervaluation reasonable. I think I may have to do some due diligence myself.
    Mar 27 12:14 PM | Likes Like |Link to Comment
  • ChipMOS: Cash Flow Machine In Niche Industry With Tailwinds [View article]
    I'm a little confused as to your question, but I do agree the cash flow calculations are confusing. In terms of relative valuation, I think its best to multiply EBITDA by the proportion of the overall business owned by ChipMOS Taiwan, and then use that as a denominator for EV/EBITDA.

    Still FCF is the more important metric given the large D&A chares and CAPEX. In my model I multiplied all my cash flows by about 60% to reflect the partial interest.

    If this does not answer your question, please let me know.
    Mar 13 04:58 PM | Likes Like |Link to Comment
  • Town Sports Gets Clubbed [View article]
    Thanks for the article Mike. Very interesting. Cash should help them potentially delever to derisk. Certainly cheap.
    Feb 22 10:43 PM | Likes Like |Link to Comment
  • A Compelling Risk/Reward Situation In Luna Innovations [View article]
    Very interesting idea Inefficient. I thought the recent 8-K, and its pro-forma results, also provided some interesting insight and raised some questions that could help refine the thesis.

    Luna will be very close to a net-net proforma, with current assets minus liabilities more than $20MM compared to a market cap of about $24MM currently. More interesting is that patents/secrets are held at next to nothing on the balance sheet. Even before the divesture, the intangible assets were about $330MM and post transaction they will be about $235MM. Thus these intangible assets coudl be very very undervalued.

    Also the product sold had about $3mm prorated 2013 yearly revenue. Thus Intuitive paid at least 4X revenue for the assets, potentially up to 10X. Take these numbers and apply to current revenue and the potential speaks for itself.

    However, how valuable are the other assets? According to pro-forma statements, they will continue to leak money. So the technology isn't viable at this point. But will it be? Or is it already a mature product, with little potential to achieve traction/acquisition in the future? I would be very curious if you had any insight into this.

    I agree that downside is limited from here. However, given the delayed nature of royalty/other payments from the deal, I don't think that the deal by itself makes this a buy. If Luna could extract value from its other lines, then I think this could be a great value.
    Feb 14 02:38 PM | Likes Like |Link to Comment
  • Fission Uranium - Still Undervalued With 50%-125% Upside [View article]
    Interesting article Western. I appreciate the fair warnings about the speculative nature of this because many times on SA authors get too excited about potential upside.

    A couple of questions about valuation. With those past transaction comparables, were those mines already producing ore, or were they also in the developmental stage? Do you have any ideas about how the costs of this mine compare to the others, quantiatively? I know you said it would be cheaper, but I think it would really help the valuation if you could put an approximate number on costs.
    Feb 14 02:04 PM | Likes Like |Link to Comment
  • Apple Continues To Present Tremendous Upside [View article]
    I am not arguing whether we live in a semi strong or strong version of the EMH world. I am saying that companies are valued on cash flows and returns to investors. Let's look at a company a 1% growth rate. It pays out all its earnings in dividends. According to your understanding of the EMH, this firm should theoretically trade at a P/E of 1 to be "fairly valued". Let's say its earnings/FCF and thus market cap are $100MM. It has 100MM shares at $1.00. So for every share I would make $1.00 per year or 100% returns in dividends. THIS DOES NOT MAKE SENSE. Returns like this have not, do not, and will not exist. Not even the staunchest supporters of EMH would say this is theoretically possible.
    Feb 11 01:53 PM | 2 Likes Like |Link to Comment
  • Apple Continues To Present Tremendous Upside [View article]
    So a proponent of the strong form of the EMH would suggest that WMT should at a market cap of close to 0?
    Feb 11 01:30 PM | Likes Like |Link to Comment
  • Apple Continues To Present Tremendous Upside [View article]
    So let's take this to the logical extreme then. So does a zero growth company such as WMT trade a P/E of essentially zero according to EMH?
    If you want to understand how your logic is off, I recommend building a DCF for an arbitrary slow growing company.
    Feb 11 11:40 AM | Likes Like |Link to Comment
  • Apple Continues To Present Tremendous Upside [View article]
    There is a correlation between growth and P/E. But in no way shape or form does the efficient market hypothesis indicate that that a "fairly" valued security should trade at a PEG of 1.
    Feb 11 12:58 AM | Likes Like |Link to Comment
  • Apple Continues To Present Tremendous Upside [View article]
    And what theory is that? Because to be blunt, it appears compeltely wrong. Think about it. If you have a company with earnings growth of 1%, and it trades at a PE of 1, then you would make your investment back in 1 year!!! Not even loan sharks get those returns.
    Feb 10 05:44 PM | Likes Like |Link to Comment
  • Apple Continues To Present Tremendous Upside [View article]
    Wait so you're saying that if the EPS growth rate is 1% then it should trade at a P/E of 1?
    Feb 10 04:45 PM | Likes Like |Link to Comment
  • Lear Corporation: Recent Drop Unwarranted After Recent Results Illustrate Improving Fundamentals [View article]
    Thank you. Happy you found it insightful.

    I established a long position today for full disclosure.
    Feb 4 04:10 PM | Likes Like |Link to Comment