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  • Did Facebook Pay The Right Price For WhatsApp? [View article]
    Well, FB offered $3 billion to snapshat and they couldn't get it, so I guess they were willing to go farther away this time. Let's say whatsapp gets to about 1.4 billion users and about 70% of them pay the fee after 1st year... that would mean that increasing its annual price to $2 would yield 2 billion in revenue/year if consumer loyalty is not severed. That amounts to $4 billion in revenue in just 2 years... the same amount spent in cash, while keeping the app clean from ads and adding a powerful competitor to your portfolio. Payroll expense is minimum with just 55 employees. The inherent risk here would be... what if somebody else comes up with something better for free? This space moves ridiculously fast.
    Feb 20, 2014. 04:39 PM | Likes Like |Link to Comment
  • Thompson Creek Appears Destined To Fail [View article]
    OK, so Ben was just testing the markets. Only a $10 billion cut to the program. I expected something between 10 and 20 since inflation expectations are still very low. 10 is nothing... and the stock market did like it.

    So QE continues largely unaltered. Not only that, this is also very bullish for stocks:

    “...likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6.5 percent, especially if projected inflation continues to run below (target)”

    That means that (besides all the talk about market bubbles), we should expect the S&P500 earnings yield to remain above the 10Y treasury yield. This bull has the rabies and is on steroids. The conditions remain the same... accommodative monetary policy + improving economic leading indicators + calm bond markets in European large economies = difficult times for perma-bears.

    Now regarding TC, I agree of course with most commenters here. I don't see any quantitative analysis to support any theory about liquidity concerns going forward. The author commented that his article was not intended to contain the math. I think that's wrong. He should have taken more time to do it and say "hey, I concur with the TD report because of this and this and here are my numbers to prove my point..." and so forth

    Like that old commercial... "Where is the beef!?"

    Stockholders should ask themselves... Have something changed with the company fundamentally speaking in the last months to cause this blood bath? Then decide.

    For those keeping score at home:
    P/Book currently around 0.24
    P/cash may be around 1
    Dec 18, 2013. 04:30 PM | 4 Likes Like |Link to Comment
  • Thompson Creek Appears Destined To Fail [View article]
    I just added some shares @1.85... right before Ben's comments (maybe not a good idea)... Adding spice to the day...

    I eat panic for breakfast... LOL ;)
    Dec 18, 2013. 01:06 PM | 1 Like Like |Link to Comment
  • Nobel Laureates Fama And Shiller Duel Over Bubbles [View article]
    Bubbles are much more easier to spot via identification of huge divergences in inter-market trends and market components mechanics. The hard part is to know when it will pop.
    Nov 25, 2013. 03:06 PM | Likes Like |Link to Comment
  • Apple Should Not Give In To Icahn [View article]
    "...such actions are destructive when shares are bought close to the peak"

    Seriously Ashraf? Close to the peak?
    Oct 17, 2013. 12:16 PM | Likes Like |Link to Comment
  • This High-Growth Company Is A Good Addition To Any Portfolio [View article]
    Hey Michael, yes I'm still holding.

    TGE tends to be a rollercoaster. It has been going down during 2nd/3rd Q's and going up during 4th/1st Q's for the last couple of years. It's very seasonal.

    Technicals still look awful, but IMHO, anything below $8 is a very good buy. In fact, I like it better than ever. Like you said, oil has been over $100 for a while. We are mid October already, that means more demand for natgas will be here soon. I think it's time to buy, not sell. Then again, I tend to have too much love for risky stocks sometimes. I would love to hear that 15 crews will be online for the 4th or 1st Q. Will see.

    Beatiful growth and value numbers right now.
    Oct 15, 2013. 12:57 PM | Likes Like |Link to Comment
  • Economic Trends All Long-Term Investors Must Know [View article]
    Thanks for the article Ralph.
    For what is worth... my 2 cents here:

    Although I agree that demographics usually work against developed countries (tempting us to extrapolate this natural trend for the US case for forecasting purposes), I disagree with the prognosis and the pessimistic long-term view for the national population composition given that the younger cohorts will always benefit from inflows driven by policies and immigration dynamics that will prevent a Japan-like inverse pyramid.

    1. The refuge-like properties of the dollar during worldwide distress and widespread turbulent conditions (which tames inflation, providing relief to the consumer and lowering the misery index during difficult times)...
    2. The economic and geopolitical disrupting force of massive natgas and oil production increase...
    3. The long-term labor productivity increase...
    4. And the constant innovation (for which the US is in the world's top 5 and R&D keeps growing)...

    (all this) greatly offset the apparent and temporary income stagnation.

    The reason I say stagnation (and not decline), is because if we look at the nominal disposable personal income (DPI) per capita growth, it has increased more than 50% since 2000. In fact, the inflation-adjusted trend was good until the financial crisis, from which we are still recovering in some aspects. From then, it has been relatively "stagnant", but the major trend is upward. Also, if the adjustment for the current figure is done by going 4 years into the past (as the BEA is apparently doing), that results in a 2009-pegged real income, which can be misleading right now because the average annual inflation rate for 2009 was negative, therefore the lower figure. That gives the impression of a deteriorating purchasing power via income reduction, which in reality was hurt by consumer illiquidity, mostly caused by properties with no equity.
    Sep 6, 2013. 09:40 PM | 1 Like Like |Link to Comment
  • FOMC Minutes: Committee comfortable with initiation of taper [View news story]
    "Well, blaming the Fed is perfectly viable..."

    No. You choose what to do; and you can not make trading decisions solely based on economic fundamentals. The market is not the economy.

    "...when the Fed manipulates risk asset markets directly, it can choose to favor one side or the other, and it does so arbitrarily"

    Not arbitrarily. Not even close.

    "And I am sure you don't deny that buying $85 billion per month in risk assets has a HUGE impact..."

    $85 billions in MBS's and treasuries. Treasuries are not risky assets.
    Aug 21, 2013. 04:27 PM | Likes Like |Link to Comment
  • The Mythical Taper: Why It Is Unlikely To Happen And Why It Is Not The Main Concern [View article]
    Mea culpa Han, you did mention some of it and I understand the point about repeating info in consecutive articles. I like to assess future expectations in numbers and trends, and it seems that I'm a little obsessive about it.
    Aug 20, 2013. 09:51 PM | Likes Like |Link to Comment
  • The Mythical Taper: Why It Is Unlikely To Happen And Why It Is Not The Main Concern [View article]
    Not a single mention of words like inflation, interest rates, housing, etc, etc... in an article that attempts to measure tapering probabilities...
    Aug 18, 2013. 12:09 AM | 1 Like Like |Link to Comment
  • Advanced Cell Technology's CEO Discusses Q2 2013 Results - Earnings Call Transcript [View article]
    Exactly. Nice post.

    Shares are going down mostly because of future dilution and reverse split. To expect a stock to go up after the company suggests it will commit these 2 mortal sins is delusional. Stock going down now is totally normal.

    Disclosure: I own shares, and I'm planning on buying more at some point
    Aug 12, 2013. 01:41 PM | Likes Like |Link to Comment
  • Ignore The 'Beat': Problems Continue At Thompson Creek [View article]
    Thanks, I agree that the long term view is the way to go Johnny.

    Hopefully, the current signs of hope for metals will keep improving the short term forecast too. Fed's decisions will play a major role.

    Regarding Vince's article, I was just trying to apply a different approach in evaluating the future. I was honestly attempting to see if a bearish case can be sensibly established at the current stock price, but so far I can't see it, unless a mining risk come to materialize (is it safe to say that the probability is low, given it's a new open-pit mine?) or if a mill starts having problems regularly.
    This is a press release (yesterday) from the Vancouver Sun...

    So, turning again to the numbers, and trying to be conservative, we have to really cut future expectations to come down to the current stock price and establish a solid bearish case.

    Maybe I wasn't conservative enough on my last post. Another way to see it would be to use Vince's 0.35 EPS and 5% growth per year for five years. In other words, a 5 year DCF valuation that uses a starting point of 1 year from now. That way we use 0.35 as the ttm EPS and we assume just a 5% growth during the next five years. Result for that is $4.30, which is still over current price. Still very difficult to establish the bearish case considering that non-recurring expenses and capex should come down considerably going forward while the new revenue source pours in. I can't simply see it, or maybe I'm too much of an optimist... and again, I like Vince's articles, I'm not trying to bash.

    Meanwhile, China is looking a bit better...
    Aug 9, 2013. 04:18 PM | 1 Like Like |Link to Comment
  • Ignore The 'Beat': Problems Continue At Thompson Creek [View article]
    I liked your article Vince. I appreciate reading about different point of views. Having said that, I disagree with your pessimism here. At this point, TC is mostly about Mt Milligan being on schedule and about metal prices. The worst part of the storm has passed for TC and it survived. We are in August (commissioning?), not January.

    On prices, buying TC is basically a contrarian bet on depressed metal prices, both industrial (moly/copper) and precious (gold).

    Today news: China July copper imports rise to 14-month high... TC up 12%+ in one day in part because of this. Just an example.

    A recent surge in the TIP:IEF ratio could be signaling a softening of the deflationary forces that have been acting on metals. Only time will tell, but so far it is a positive signal for commodities in general.

    On Mt Milligan being on schedule, that's the heart of the matter. It's the growth story; and that's what I think is missing in the bear case. The market tends to like growth a lot more than it tends like pure value. Reuters is estimating an EBITDA growth of 210% in one year (from 107 million to 332 million) and an EPS of 0.76 for 2014. Growth is the real catalyst. Any appreciation in commodities will further accentuate that growth.

    If we use your enterprise value number of $1,500 million , we end up with a 14.0 EV/EBITDA. But projecting the 1 year growth, that number goes down to 4.5.

    If you find those EBITDA estimates too high, consider this...Let's take that 0.76 Reuters EPS estimate and cut it in half. That's 0.38. You commented that you estimated 0.35, so let's cut another 3 points and stick with your number. Now, Reuters is estimating an increase from 0.10 to 0.76 in EPS in 1 year. That's more than 600%. So let's use the 0.10 to 0.35 growth instead. That's 250%. Now, let's take that number and apply a 50% safety factor. That's a 125% growth. So we have 0.35 (EPS) and 125% (growth assumption for 1 year). If we calculate a 1 year DCF using those numbers, we get a $7.87 valuation. That's a 143% increase over the current price using a long term growth of 0% and a discount rate of 10% (the very long term stock market return). If we use the stock market earnings yield, inflation and Shiller's PE to calculate possible future returns, we can easily end up using a 6% discount rate, which will give a much higher valuation for TC. Specially if the bond yield to earnings yield gap keeps narrowing. But let's stick with the more conservative 10% discount rate.

    I know you think that 0.35 is still optimistic, but that's your estimate without including moly operations. What if we use even lower numbers? Using a 0.30 EPS and 100% growth for 1 year, DCF gives $6.00; or using 0.25 EPS and 20% growth for five years gives a $5.50 valuation. Am I missing something?
    Aug 9, 2013. 12:32 AM | 2 Likes Like |Link to Comment
  • Rebuttal: 'Is A House Really A Good Investment?' [View article]
    "Is A House Really A Good Investment?"

    For real estate investors who know what they're doing, it is usually a good investment.

    For the common guy that is just looking for a nice house to live in, it rarely is.
    Aug 6, 2013. 05:00 PM | 1 Like Like |Link to Comment
  • Inovio May Prove To Be Merck's Solution [View article]
    Thanks for the article, nice read D.Mero. There are also many good articles this year about this company by other SA authors and they are all good reads. Just starting to get to know in more detail the science involved here. I'm still digesting the fact that I bought a few shares @ 1.20 some days ago and they are already @ 1.87.
    Jul 30, 2013. 11:02 PM | 1 Like Like |Link to Comment