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David Dyer

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  • Why The Salesforce GAAP Vs. Non-GAAP Divergence? [View article]
    Although the external auditors should be looking at the reasonableness of the balances in Goodwill for impairment, apparently it can take a long time to charge-off. HP didn't charge-off $1.2 billion of Compaq goodwill until several years later, July 2012.

    I noted some about CRM liquidity and cash flow in the next article, the earnings preview, in the comments section here: http://seekingalpha.co...

    I haven't done a cash flow projection or such formality to know when CRM could possibly run out of cash or even if they would. They do generate cash as noted at the link above.

    Interesting comment about the Sarbanes-Oxley. Never occurred to me about that. Are you an auditor? lol

    Provide the the link to the graph if you can, or otherwise contact me via message to make a connection.

    Thanks for your input.
    Feb 26 06:11 PM | 1 Like Like |Link to Comment
  • Salesforce Earnings Preview: 7th Consecutive GAAP Loss Expected [View article]
    Very astute, I almost said "still liquid" but decided I had said enough.

    They had $600M in cash and marketable securities at 10-31-12. Another $800M was in noncurrent marketable securities.

    Current assets / Total assets had dropped to 27%, a multi-quarter low, at 10-31-12, from 42% the prior quarter. The 9-quarter average is 36%.

    GAAP cash flow from operations was $0.74 this past quarter. The 20-quarter average is $0.78.

    We'll see if reporting has changed any this week.
    Feb 26 05:56 PM | 1 Like Like |Link to Comment
  • Salesforce Earnings Preview: 7th Consecutive GAAP Loss Expected [View article]
    CEO Benioff is a great salesman, visionary, and promoter. In another life he may have been an evangelist or started his own religion. Very charismatic. I sometimes refer to his CloudForce meetings and other presentations as "tent revivals".

    The CRM operations are exceptional. No complaints there. I just have this urge, if I was an outside shareholder, to say, "Show Me The Money!".
    Feb 26 05:47 PM | 2 Likes Like |Link to Comment
  • AIG Weathers Storm Sandy, Posts Profit [View article]
    Yes, it is all about risk management, or specifically risk pricing. I saw an AIG program from the 1980s that was mispriced ultimately. The AIG VPs told me about it. Good idea, bad pricing. You either change the pricing (premiums) or terminate the program when you can't justify the loss ratio anymore.
    Feb 26 11:16 AM | Likes Like |Link to Comment
  • Why The Salesforce GAAP Vs. Non-GAAP Divergence? [View article]
    Thanks for your input.

    The amortization of intangibles increased Non-GAAP EPS an average of +$0.13 for the most recent 7 quarters, compared to +$0.49 for stock based expenses, i.e. insider stock incentives. It's a common reconciling item with tech companies and didn't appear to be the problem of driving GAAP down to a loss per share.

    You would have to appraise / value the goodwill, which is detailed in the SEC Form 10-Q financial statement schedules, to determine whether there is an unrealized gain or loss from acquisitions (goodwill) to-date. Then determine the result per share per quarter. Lot of assumptions to arrive at revised EPS and determine reasonableness of amortization of intangibles. That's another reason why I spotted management the item.

    What do you think of open cloud (RAX, AMZN, HP) versus closed cloud (CRM, et al.) prospects?
    Feb 26 07:36 AM | 1 Like Like |Link to Comment
  • Why The Salesforce GAAP Vs. Non-GAAP Divergence? [View article]
    I like VMW and RAX and wrote about their recent earnings on Seeking Alpha. Not sure why cloud would be hit especially hard, I don't necessarily follow daily stock movements. The cloud is the present and the future. I especially like the prospects of open cloud, which RAX is a leader in.
    Feb 25 10:47 PM | Likes Like |Link to Comment
  • Why The Salesforce GAAP Vs. Non-GAAP Divergence? [View article]
    Thanks for explaining in simple terms what it took me all those words in the article to convey, lol.

    That's from me writing literally 100s and 100s of audit reports and analyses that my inner auditor wants to transform into dissertations. I trained auditors and would tell them to avoid, "not seeing the audit for the spreadsheets", lol.

    It's a big Non-GAAP game played by many companies, as noted, but you really should leave some for the outside shareholders, good grief.
    Feb 25 10:43 PM | Likes Like |Link to Comment
  • Why The Salesforce GAAP Vs. Non-GAAP Divergence? [View article]
    Glad I could help. I try to communicate with my experience and knowledge but not get bogged down in technicalities as auditors will do. I would like to make use of all the hours, days, weeks, months, years, decades I spent in auditing companies, especially financial institutions, by explaining to others what I see as an analyst.

    Anyone might disagree with my conclusions, but I am very meticulous about the data and metrics.
    Feb 25 10:37 PM | Likes Like |Link to Comment
  • Why The Salesforce GAAP Vs. Non-GAAP Divergence? [View article]
    I was actually being generous to management with the averages, beginning with the QE April 2011. That's when GAAP EPS dropped to $0.00. If had began the averaging with the next quarter, the averages would have been less favorable / worse to indicate pilfering.

    Non-GAAP is a good indicator for core operations and useful in cases such as HP where there were huge GAAP non-cash charge-offs of Goodwill impairment. You can eliminate the noise of past catastrophic decisions and see what is going on right now.

    Yet in the CRM case with the ongoing Non-GAAP earnings and GAAP losses, all the earnings are vanishing into stock compensation. It is the "ongoing" that bothers me. So, yes, GAAP is a good measure in this case, imho.
    Feb 25 10:32 PM | 1 Like Like |Link to Comment
  • Why The Salesforce GAAP Vs. Non-GAAP Divergence? [View article]
    Yes, I'm generally talking about senior management. The cost data is available in SEC filings when incentives are exercised. Holdings after each sale are also disclosed. The information you want is fragmented, to the best of my knowledge, and would need to be compiled. Of course, the higher up the CRM food chain, the more stock they have. I reviewed some of the filings and all were sellers not buyers.
    Feb 25 10:22 PM | Likes Like |Link to Comment
  • Why The Salesforce GAAP Vs. Non-GAAP Divergence? [View article]
    Thanks, yw.
    Feb 25 10:18 PM | Likes Like |Link to Comment
  • Why The Salesforce GAAP Vs. Non-GAAP Divergence? [View article]
    CEO Benioff et al. are smart, he's a billionaire from this. He did in fact have a great vision. It's the the continued pilfering while pumping the stock that is disingenuous, imho.
    Feb 25 10:17 PM | 2 Likes Like |Link to Comment
  • AIG Weathers Storm Sandy, Posts Profit [View article]
    I knew people long ago who "had the pen" from Lloyd's. That is, they could sign Lloyd's onto risk up to predetermined authorized levels. Whether Lloyd's retained any of the risk, I don't know. I always thought they laid off most or all the risk to carriers and reinsurers. I also knew of "front companies" in USA whereby the property & casualty policy was written on their paper, but they retained no risk. Myself and others would lay off the risk in layers to other companies, including reinsurers. The front company would take a commission and policy fee. So on their books it showed $X premiums written and $X reinsured which was a net of $0 risk retention.
    Feb 25 08:10 AM | Likes Like |Link to Comment
  • AIG Weathers Storm Sandy, Posts Profit [View article]
    The financial noise appears to be mostly eliminated. GAAP EPS volatility should lessen in 2013 and beyond. Hopefully some solidification and then growth of Non-GAAP results in 2013. I'll be covering AIG next quarter, we'll see what happens. Good luck with your long!
    Feb 23 05:31 PM | Likes Like |Link to Comment
  • AIG Weathers Storm Sandy, Posts Profit [View article]
    Thank you. I also remember when AIG was King. I met with them on an insurance program in the late 1980s - took 4 VPs and a coordinator from different parts of USA, including home office, to give the green light. CEO Benmosche has done a good job and, as I noted in the article, proclaimed the door is closed on the past financial meltdown issues.
    Feb 22 04:28 PM | Likes Like |Link to Comment
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