David Tsao

America Movil: Time to Reap Rewards

They definitely reaped the benefits, Q3 was pretty strong. I'm going to be taking a look at this company more closely with respect to operational factors and try to take forex out of the equation to see how this company is doing. Will post to seekingalpha in a few weeks.

5 Things You Need to Know When Analyzing Corporate Debt

Great write up, thanks for posting.

Healthcare, Education: Two Reasons to Worry About America's Future

Calling out STRA and APOL on this analysis is a bit of a stretch. For profit education companies serve a specific need in the education market. If you're going to talk education, stick with the fundamentals surrounding these companies, FFEL and Title IV loans, enrollments, the future of auction rate securities that back a substantial portion of these loans, and tuition rates, and the needs these companies serve compared against community colleges, universities, and trade schools.

The New Reality for Higher Education

What Mr.Salomon is eluding too is a possible shift and serious consideration for what was once the trade school circuit (The DeVry's, ITT, and Corinthian's of the world). If the value/price conscious parent/student continues to remain after an economic recovery, these outfits may continue to see strong enrollments... At last check most of these companies are fully valued and have discounted the strength of this sector for the remainder of this year and next.

Amazon Upgraded, Target Set at $100

They will increase market share and revenues. However, their margin picture won't change any time soon. The analysts will continue to focus on revenue growth and their digital strategy. No one can break out how much their digital strategy is bringing in to the bottom line except for the people that work at Amazon.

Margin growth is the only thing that should be propping up their current share price, and that growth isn't going to happen for a while.

Herman Miller: Preparing for the Long Haul

Thanks SwingTimer,

I don't trust the 30 second blips powering some of the major financial networks, so I end up digging for data myself. Reading 10K's, print, and books helps take the emotion out of the analysis. That slow cycle prevents me from doing stupid things in the market.

Three Stocks Positioned for a Downtrend

I agree with you BuffetMaster ... DeVry's fundamentals are good, and the S&P inclusion will only help

Amazon Still Looks Overvalued

It will be interesting to see what Apple comes out at their big confab. Rumors aside, if they are developing some new product they'll have it under a tight lid so as to not cannibalize their current iphone / macbook sales. If there is anything material, it will suck away some of the hype from the recent Kindle DX. Margins not there yet.

3 Reasons Why Mahaney Thinks Amazon Can Go Higher

You have to be careful following Mark Mahaney. He had a price target of $119/share back in Jan/2008 and was throwing out unfounded Kindle sales projections drawing analogies to iTunes business model recently.

A quote from Mark back in Jan/2008
"Margin Expansion alone could drive double-digit EPS Growth"

3-months later in Apr.2008 his research comments for AMZN,
"The margin outlook is disappointing"

Amazon continues to operate with low margins. They've had impressive top line growth in this environment, but until margins expand to justify the valuation, I'm staying away. You'd be wise not to digest too much of Mark Mahaney's analysis.

Something Huge Is Happening with Amazon

The Kindle program isn't broken out on their quarterly reports. Basically no one has any idea what if anything of material effect this is having on margins. I give kudos to AMZN for breaking new ground with Kindle and their AWS program, but until they reach economies of scale their margins will continue to run thin. As an investor it is still to early to tell.

Earnings Disappointment a Good Entry Point for Apollo Group?

You need to pay attention to the quality of the students for these for-profit programs. I'm not saying that University of Phoenix students are of bad quality, but making a reference to the majority of students are coming from. Are they coming from high school, which I would categorize as representing larger risk for defaulting on payment (higher allowance for doubtful accounts), or from employer sponsored tuition or transfers out of 2-year diploma programs (stronger credit and financial backing).

Method of payment also make a huge difference whether the school demands payment up front (like Strayer). I honestly don't know the payment details for Apollo's programs, nor do I have student demographics off the top of my head, but it's best to dig into that before diving in.

For-Profit Education Sector: Recession Proof

The issue is now is that many others have caught on to this and have priced many of these assumptions in, and to a large extent pushed them towards rather lofty valuations. I'm about to exit my DeVry position for this very reason.

Regarding the unfreezing of securitization markets, that was something that was pushed in the previous administration. It obviously helped, but it's still hard to see to what degree on companies like APOL and ESI which had a relatively large exposure to private lending compared to STRA and DV.

I'd be a bit cautious about this sector, as everyone has or will continue to pile on to this boat.

Who Will Benefit from Saytam's Failure?

To add to Hamilton's comments, the company may not recover if they have a growing employee defection problem. Regarding Andrew's original post, you don't know what the increased scrutiny will reveal with respect to other business dealings outside Satyam.

There is enough ammunition for some customers take this incident, along with the the rash of terrorist incidents last year and look at other BPO vendors in other countries as Analysis Caution points out. Hence, best not to pull a quick trigger on WIT or INFY just yet.

Amazon Sales Up While Most Retailers Suffer

It's still to early to tell what's going on with Amazon. Whether its visits/month, comscore readings, or Oprah pumping up Kindle, you need to focus on the company's operating margins which have been historically low. The company has done very well with respect to increasing the value perception with Amazon Prime/free shipping amongst its customer base. It works well in these times. However they've done so well that they can not remove this program without taking a massive order volume hit. Their shipping programs cost the company roughly 2.5% of Net Sales over the trailing 6 quarters. It's been creeping up quarter to quarter and nibbling away some bits from their operating margins.

It's an upward trend. They will have to up their revenues to keep their margins, or face interesting choices:

- Jack up the Amazon Prime membership
- Reduce free shipping coverage on specific product categories
- Drop the program all together (this would hurt them pretty bad, doubt they would do this but you never know)

What would do in Bezos' shoes?

Satyam: A Shameful End

Instead of watching the Indian IT Majors, watch what Satyam's global customers will be doing. If they start to move, other clients from WiPro to Infosys will want assurances that they're doing business with a company that has solid governance. IBM Global Services may want to seize this opportunity to take market share.

PWC isn't looking good here.