Diego Stendardo

China Natural Gas: Deeply Undervalued

This simple tool is NOT what i used , but it gives you an idea

www.gurufocus.com/fair...

I used the following parameters:

EPS $0.86 (Year 2009)
Growth rate in the next 5 years = 15% (very conservative)
Terminal Growth Rate = 5% (very conservative!)
Discount rate = 11%
Book Value = $5


On Sep 24 03:50 AM sorsorday wrote:

> "A simple discounted cash flow valuation with a very conservative
> earnings growth of just 15% per year for the next five years and
> an 11% discount rate, returns a fair value of $19 - $20 per share."
>
>
> I have no idea how your math works. Can you show how five years of
> earning (eps 0.86?) give a value of $19-20???

China Natural Gas: Deeply Undervalued

You judge a company only by the dividends paid? Is that all that matters to you? Great, just buy some REITs and bonds etfs and be happy with your 6% pretax yield / CHNG is a growth energy company, not an utility, and obviously is not paying dividends in its corporate infancy / investors in CHNG are in for the long term / Microsoft paid its first dividend in 2003, after 17 years as a public company; Berkshire has never paid a dividend in its corporate history; based on their dividend policy i bet you might have considered them bad investments 20 years ago, yet investors in those companies in the 80s are now millionaires. Good luck with your dividend strategy

Ten ETFs that Don't Exist, But Should

Good ideas, nice article

China Natural Gas Plans to Raise More Capital for Possible Expansion

Touchè ! :-)

Rick's Has Great 2008, but Fails to Provide Guidance

Great article Chris. I have opened a small position in Rick, taking advantage of the current stock price. Rick is a company i have been following for some time, but it only makes up a small portion of my current portfolio. My two cents:

1. I've run a DCF model like you did with similar numbers this summer, and i came to the conclusion that when it was trading around 15 it was overvalued. Even if we don't factor horrible numbers like yours, the stock's intrinsic value is, as of now, not higher than $8 - 9 per share IMHO. Moreover, the put options lingering, reckless acquisitions and the coming recession are pushing down the price even further.
Also, i didn't like some of Eric's answers during the CC; he gave me the impression he was too vague and insecure, too many 'i don't know how we're going to deal with that' and 'we'll figure that out'. JMHO.

2. I was expecting some acquisitions abroad in 2008, considering the company is called Rick's Cabaret International, but i see no international business. In hindsight, it was much better if they used the cash to buy a couple of clubs in growing markets like Brazil, in the financial capital Sao Paulo, Mexico or China, maybe in Shanghai. Diversifying outside of the US could have been a great move, but maybe Rick's is still too small to handle international business.

Is Eni Becoming Gazprom's European Twin?

Another update...

A2A, Iride in gas sales joint venture with Gazprom
Reuters - 25/09/2008 18:53:56
MILAN, Sept 25 (Reuters) - Russia's Gazprom has signed a joint venture deal for gas sales on the Italian market with utilities A2A and Iride (IRD.MI), the companies said in a joint statement on Thursday.

The companies also signed a long-term gas supply contract for an initial volume of 900 million cubic metres per year, which could be increased.

The contract starts on Oct. 1, 2008 and runs to 2022 and could be extended for another five years. Gazprom will have 50
percent of the joint venture while A2A and Iride will divide up their half, giving Iride 30 percent of their share and A2A the rest.

Gazprom will appoint the chairman of the joint venture while the Italian utilities will appoint the managing director.

Another group of Italian utilities, Sinergie Italiane, was also working on creating a gas sales joint venture with Gazprom before the summer.

Ascopiave joined Enia and Blugas in the venture along with three small northern Italian utilities and in July they were looking at a venture with Gazprom.

(Reporting by Jo Winterbottom; editing by Elaine Hardcastle)

Is Eni Becoming Gazprom's European Twin?

Well, Italy has had a poor energy policy in the past 30 years and is largely dependant on foreign oil and gas supplies. Both Eni and Gazprom are partly state owned enterprises, so it's not just money here, but politics as well. Although Italy has been a strong ally of the US for the past 50 years, things are going to change in the future; new superpowers , the BRICs, are beginning to eat into US's supremacy; also the recent financial crisis has made a big dent in the US economy and Bush will soon be gone, while Putin is still there and Berlusconi knows this. Also peak oil is a menace and gas, at least until renewable energies become widely adopted (but my guess is that it will take decades to completely replace hydrocarbons), is the only ready to use alternative to generate power. Nuclear power plants take years to build and Italy won't have a working plant for the next 10 years at least.
So it's not just a question of money; of course Eni will get its share, i can't quantify how much, too many variables, but the point is that our country's economy has been lagging these past years, and high energy prices an oil dependancy are big obstacles. So Italy is trying to mend all the mistakes it made in the past decades and it is not a coincidence that now Eni it is trying to get hold of oil and gas reserves in risky places like Angola, Venezuela and Libya. Russian gas is too important for Italy and the russians know this so, in exchange for their supplies, they're exploiting this situation buying strategic assets to sell their gas in Europe wearing Eni's mask.

Three Stocks To Be Held To Infinity and Beyond

well, i could swap GE, JNJ, and BAC with XOM, MSFT and KO or , you choose, any successful story of the past decade. For example: "had i bought $10000 worth of PTR in 2003 for $20 a share and sold it in 2006 for $120 and reinvested the $60000 i made in FSLR in january 2007 i would own circa $600 thousand worth of FSLR stock now"

Point is: everything is easy in hindsight - finding today the next 10 bagger is a different story;

Investing in great companies is safer than trading on margin, but investing requires great fundamental analysis skills and a lot of PATIENCE - It took Buffett DECADES to become what he now is, and we're talking about an outlier, a one in a million phenomenon.

Ask yourselves:Are you willing to hold a stock of a promising mid-cap company you buy today until the year 2025 and reinvest all the dividends you get? How old will you be in 2025? How much stock are you going to buy? What if 5 years from now it is only up 40% from your buying price?

Are you willing to put aside all the extra money you could spend today to have fun while you're young , to save it for investment in a promising company because MAYBE it will make you rich 25 yrs from now when you'll be 55?

On the other side we have Trading, which may seem like a shortcut to riches, (a lot of successful stories are there on the web - what they don't advertise is that for every guy that made it with trading there are 500 more that went bankrupt) but it requires guts, blood, costly experience and emotional skills very uncommon - not to forget that luck plays its part and that it's very easy to go bust when you play with margins, leverage and futures.

Diversify? You risk investing too little in the next ten bagger

Don't diversify? You risk putting too much money in the next Bear Stern.

Making money is NOT easy.

Ukraine: Overlooked, Yet a Promising Emerging Market

Well, a lot of interesting points here - it looks like the main theme here is "Avoid Ukraine" because of this and that - BUT - imagine this thread was shifted ten years backwards and substitute Ukraine with Russia, Brazil, India, China...i know these are much bigger countries with lots of natural resources, but back then a lot of people was raising the same questions about politics, infrastructures, energy, inflation etc etc - the point is, once an economy is in its infancy it's easier to overweight the risks and overlook the opportunities.
To michaelschn: come on! Climate the big difference? What about the baltic states, scandinavian states or Canada then? they should all be living in the dark ages according to you. Besides, back in soviet times, Ukraine was providing most of the crops for all of the CCCP. Open Wikipedia and read about the climate in Crimea - you'll find out something interesting.
Once again, some of you are missing the point: we're dealing with Frontier Markets here, so avoiding risk shoud be taken out of the picture and thus risk shouldn't be made the case against investing in a frontier country. What i was stressing is that, compared to other frontier markets, Ukraine is overlooked; i am not complaining for the lack of a single country etf or fund, although i would like to see one, but for the lack of interest from the financial community in a country that has a lot of upside potential.
"A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty."
- Sir Winston Churchill -

Ukraine: Overlooked, Yet a Promising Emerging Market

Well netscorer, i know investing in Ukraine implies a lot of risk, but aren't we talking about Frontier Markets? Are Pakistan, Nigeria or Oman any better regarding corruption, political instability and the like? Yet they're all included in the Frontier 150 index - If i had to place a bet on a single state, for sure i'd choose Ukraine in place of the above mentioned countries.

Claymore Launches First Ever Frontier ETF; PowerShares, Van Eck Close Behind

I am disappointed in not seeing any stocks from Ukraine in the new Frontier etfs - Ukraine is one of the most promising country in the frontier world and it's being completely overlooked

Online Gaming Equals Profits for GigaMedia

Where did you read that Gigamedia is developing games for mobile phones? If you're referring to the Gigaslots website, well, it looks like it belongs to a company called Gigamedia SA from the Comores Islands which is NOT the Gigamedia from Taiwan we're talking about. Am i wrong?