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Dominick Lombardo, CFA

 
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  • Lululemon's Q3 2014 Results Show Promise... Again [View article]
    Would you consider LULU socially responsible?

    As per my comment on online sales, other than the risk of dilution, there is also the risk of online-discounting.

    However, the company's turn-around will take time and I am patient.
    Dec 17, 2014. 05:18 PM | Likes Like |Link to Comment
  • Lululemon's Q3 2014 Results Show Promise... Again [View article]
    Let's give the company some time, as it needs to execute on its turnaround plan. LT growth in Yoga/Athletic clothing is quite good and there are just a few good competitors in my view (e.g. Gap/Athleta, UnderArmour). Victoria's Secret is supposed to be a big competitor but I always seem to get very, VERY distracted by their other clothing when I visit.

    Though I think margins will remain below-peak of 55-56% b/c of the sale of more trendy/seasonal clothing. Trendy clothing is more expensive as it requires more design-work and it has print-patterns (rather than just plain ole black).

    I examined their men's clothing and thought it was plain-looking and overpriced. Ended-up buying UnderArmour instead (for running).

    Direct-to-Consumer sales growth is a mixed-bag for me. Not sure if this will dilute the brand and lower margins (via online sales).
    Dec 16, 2014. 10:41 PM | Likes Like |Link to Comment
  • Time To Buy Mobileye [View article]
    thanks James. I did confirm what you said.
    Dec 8, 2014. 05:23 PM | Likes Like |Link to Comment
  • SodaStream Holiday 2014 Inventories Cap Year-End Performance [View article]
    Despite lower inventories in the retail channel, I believe the company will have to take some sort of write-down during the next year, whether its from inventories or its manufacturing plant. I find it hard to fathom that system inventories will decline so fast. I will wait for quarter-end to see what they really are.
    Nov 28, 2014. 03:45 PM | 1 Like Like |Link to Comment
  • Mattel Inc. Brings Out The Big Toy Guns This Holiday Season [View article]
    I like MAT as an investment, but I do worry (greatly) about 1) toys from big studies (e.g. Disney/Marvel) and 2) Internet/app competition.

    I do think this is a great acquistion target for the right company.
    Nov 28, 2014. 03:25 PM | Likes Like |Link to Comment
  • Time To Buy Mobileye [View article]
    I wrote very good reasons why I like Mobileye that are on the last article. However, I now think the Tesla news is a net Negative. This is because Elon Musk believes you cannot just rely on Optical technology. You also need Radar and Sonar. Think about it...If it's snowing or really foggy, optical simply won't do!
    Oct 15, 2014. 10:27 PM | Likes Like |Link to Comment
  • Mobileye: $11B Valuation Has Zero Basis In Reality, 60%-Plus Downside Ahead [View article]
    ValueStreet:

    Your article is well-written and well-researched. I'm a tech/growth/value investor and must say Mobileye is a very unique company. There are very few new companies that have the combination of strong sales growth, market share and high margins. Mobileye should be viewed as a fabless-software company, whose end-market is Automotive. I wouldn't rely on that FINVIZ screener for margins b/c it doesn't give you an accurate list (i.e, operating earnings) that a Bloomberg would give.

    I respect and appreciate your methods of valuing MBLY, but this company cannot be valued using EV, Revenues, P/E, P/B or even DCF. Take a look at the DCF values calculated for most any company whose shares subsequently rose hundreds of percent, and you'll see that the DCF, let alone any other model wasn't accurate. Also your (and Morgan Stanley's Debt-cost of 10% is too high). I have never seen a WACC where the cost of debt and cost of equity are equal.

    I agree that MBLY is very expensive, but I believe in the company's business model and its Industry Structure (i.e, wide & deep moat, few players, high entry barriers).

    I disagree about using 2013 World Car Demand (it should be a LT forecast). Revenue/car will rise w/ autonomous technology. Also, your disagreement w/ the 5% perpetuity-growth-rate makes sense, but the problem is the DCF model.


    Here are some reasons why I like this company:

    1.) I believe if they're a leader in ADAS, the probability is high they'll be a leader in Autonomous Driving. I think the Google threat is exaggerated and their system is radar-based, expensive and mounted atop cars (not visually appealing). Google's also a threat to Yelp, but they're doing quite well.

    2.) Industry Growth will accelerate as regulations stiffen (the key here will be the Chinese market, which is not conducive to MBLY's technology).

    3.) Super high margins. Yes they'll decline but remember the company has a favorable tax-rate bc it's Israeli.

    4.) There is always the chance that this company's software becomes the "Operating System" of cars (given how agnostic it is from any OEM). Other valuable past-present O/S companies included AOL, VMWare, Splunk, Microsoft, SAP, Cisco).

    5.) I'll present just one percentage for you just to make a point. Mobileye's Free Cash Flow may be as high as 50% of their revenues in a few years. I have never seen a growth company w/ such high cash-flow return!

    You know, sometimes you need to get away from your Left-brain so you can clearly appreciate the amazing story.
    Oct 5, 2014. 07:53 PM | 5 Likes Like |Link to Comment
  • A Growth Story That Has Just Begun [View article]
    Great brand, but not only are they expanding slowly, you also need to appreciate that only very Wealthy countries (actually, more like Cities) will be the TAM (total addressable market).

    I also think that Under Armour is a very strong competitor even more so than Nike. LULU's mens-line is weak..

    Great company if they could just manage to turn-around the business!
    Sep 19, 2014. 05:25 PM | Likes Like |Link to Comment
  • Dreamworks Animation: Not Just A Film Studio [View article]
    I think DWA is not executing and the "diversification" is an attempt to revive the company and lower EPS volatility (i.e, risk).

    DWA has long-term value perhaps at around $20/share. Can you provide us valuation using Asset Value, Film Library, Relative Comps, and discounted FCF ?
    thank you.
    Sep 18, 2014. 11:19 AM | Likes Like |Link to Comment
  • When Life Gives You Lemons, Invest In Lululemon [View article]
    My apologies about giving you feedback so late. I think that Industry Structure is the most impt part of analysis so I really liked your focus.

    I also like discounting of the FCF. Though I would need more details on long-term profit margins, and WACC. I suspect profit margins will be suppressed for a year or two, then rise (but remain below historicals bc of increasing competition). WACC should probably be at least 10%.
    Sep 16, 2014. 10:55 AM | Likes Like |Link to Comment
  • Mobileye - More Risk Than Opportunity Looms Following The First Public Earnings Report [View article]
    Hmm, I kinda agree w/ the author and several comments. While shares have sky-high valuation, I think it's good to own some and wait for the dip.

    Mobleye is one of the strongest growing and most profitable firms I've ever seen. And their runway of growth (i.e, Total addressable mkt) is huge for at least one decade. Most expensive shares tend to have high-growth but little profits (e.g. Splunk).

    These shares maybe should be priced like a chip or software company (not automotive-supplier)

    So yes, expensive shares, but I love the company.
    Sep 14, 2014. 08:07 PM | 2 Likes Like |Link to Comment
  • Baidu And Tencent Look Attractive With New E-Commerce Approach, Looming Alibaba IPO [View article]
    I also like that Baidu is more focused than the other mega caps.
    Sep 5, 2014. 07:09 PM | 1 Like Like |Link to Comment
  • The Puzzle Of SodaStream Accounting [View article]
    SODA's business model leaves it open to Aggressive Accounting. For example, they sell to Distributors, Retailers, etc. which leaves lots of inventory floating around. Then one has to grasp they're Intl Acctg standards versus ours. This is complicated stuff in my opinion.

    Do I think they're a fraud or using aggressive acctg. Certainly Not.
    Aug 21, 2014. 06:20 PM | Likes Like |Link to Comment
  • The Puzzle Of SodaStream Accounting [View article]
    Enrique:
    Kudos for trying to get into the accounting-side of SodaStream. I think your point about the long Depreciation-Life for CO2 Cylinders is a valid one if you're investigating Financial Shenanigans. Regardless of their value, Cylinders' life should be shorter and they should have disclosed their average life.

    SODA's proprietary cylinder design likely allows them to boost their asset-values. Should sales continue to slow, the company will be forced to write-off a portion of the cylinder-value. So, I disagree w/ Seth and others on this point.

    Unfortunately, the time-consuming process of forensic-acctg left you little time to understand the business. This is why your OVERALL article is being criticized.
    Aug 13, 2014. 11:23 AM | Likes Like |Link to Comment
  • SodaStream Q2 2014 Quarterly Recap [View article]
    Soros just bailed-out of its SODA position
    http://buswk.co/1ltJqAY
    Aug 4, 2014. 05:38 PM | Likes Like |Link to Comment
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