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Gasebu Private Investor

 
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  • Investment Rationale For Banco Santander [View article]
    Correct, published at 34, that is 3 shares for each 102 old shares.

    Vincent was right on the net vs. gross dividend equivalent. Sorry about that.

    Gasebu.
    Apr 10 07:54 PM | Likes Like |Link to Comment
  • Investment Rationale For Banco Santander [View article]
    The Bank will communicate today what is the number of rights you need for each new share. This is fixed in relation to the average share price in previous days and in principle, it should be around 40-42 rights for a new share.

    For each 100 shares you would entitled to 2 new shares and the value coming from the sale of 16-20 rights.

    If you want to see it as a ratio, then it would be circa 2.5 new shares out of a 100.

    Today I expect them to release the final figures.

    Gasebu.
    Apr 10 11:31 AM | Likes Like |Link to Comment
  • Investment Rationale For Banco Santander [View article]
    Please review my Instablog on SAN recent presentation release on business cycle.

    Gasebu.
    Apr 8 10:49 AM | Likes Like |Link to Comment
  • 4 Stocks Passing A Contemporary Graham Investment Checklist [View article]
    Thanks for your article.

    I only have looked into CF Industries and even I agree on the ratios, you have to be aware that the earnings yield you calculate is based on a single year earnings of the company and what is perhaps more important on a year with record earnings.

    In my opinion you cannot or you shouldn't take a 1 or 2 year net profit as the base for the yield calculation. Average of 5 to 10 years or the period that represents a full business cycle is a more proper reference.

    If you do that for CF the earnings yield is much lower since it has been growing company. I only have information since 2003 and average EPS is the range of $7.8 that would yield 3.5% at current levels vs. the 14% that you showed, that is correct, but refers only to 2012 earnings.

    Again this is my opinion and I think also defended by the Intelligent Investor or Security Analysis methodology or more important, its rationale.

    In any case thank you for the input, since it is very useful. I like a lot CF Industries but I think is too expensive based on the logic I exposed.
    Mar 12 06:31 AM | Likes Like |Link to Comment
  • Investment Rationale For Banco Santander [View article]
    Not so confident in TEF as I am in SAN, but I agree at these prices might be good too.
    I didn't make an analysis on TEF as to have a proper opinion because general multiples don't seem attractive enough to invest my scarce time in analyzing it.
    Probably is not a bad investment but not so sure it is a good one.
    Gasebu.
    Mar 6 06:56 AM | Likes Like |Link to Comment
  • Investment Rationale For Banco Santander [View article]
    No fear Strike.

    But also no faith either. I just need to see it happening and they have to show it. I believe it and hence my decision to invest but I don't want to be over optimistic. We have to see extraordinary write downs diminish and also a stable rate of non performing loans, that is, that it stops growing.

    Then we can trust the market will start to look at SAN with new eyes.
    Mar 6 06:51 AM | Likes Like |Link to Comment
  • RadioShack: Investment Or Speculation? [View article]
    Hi Dany,

    I wasn't following RSH at that time and it was a really good entry point. Well done.

    Thanks for the input on the shareholder's references, very important too.

    Gasebu
    Mar 5 02:37 PM | Likes Like |Link to Comment
  • RadioShack: Investment Or Speculation? [View article]
    Hi Aventador,

    Understood, but you would have had to mention on your previous comment that the 11% is for $100 million, not the whole of the company's debt.

    The 11% refers to a fraction of the debt they had to arrange in November 2012 to get to their 50% refinancing target of the $375million maturing next August 2013.

    I agree it is a high price and I appreciate you raised the issue. The company can pay that rate for part of the debt but if all of the debt's cost goes to that level, as maturities come, it's a problem to be analyzed and I will review on that.

    They want or need to refinance $187,5 million and they already closed $ 100 million paying, I agree, a high price. But it is also a good sign that tough problems are solved ahead.

    My goal is to look objectively at facts and I have the feeling you are not telling the story as it is and presenting facts in an incomplete fashion.

    I have already commented on facts that invalidate several arguments you mentioned and you don't seem to respond to that evidence, and instead you come with new arguments.

    You can be 100% right on those new arguments, I am not saying you cannot be right, but what counts for me are facts first and their interpretation after. You seem to put the interpretation ahead of the facts.
    It is not a critic, it is an observation.

    Gasebu
    Mar 5 02:31 PM | 1 Like Like |Link to Comment
  • RadioShack: Investment Or Speculation? [View article]
    Totally agree with both of you.

    Thanks for the feedback.

    Gasebu.
    Mar 4 09:42 AM | Likes Like |Link to Comment
  • RadioShack: Investment Or Speculation? [View article]
    I don't know the real company's debt cost. I can figure out from the balance sheet, and the P&L, that in 2012 average cost of debt was 7,54% (interest expense divided by average debt in the year).

    I don't know where did you get the 11% figure you mentioned.

    In any case 7,5% is very high already. I had missed that point on my analysis so thank you for that.

    Gasebu.
    Mar 4 09:31 AM | Likes Like |Link to Comment
  • RadioShack: Investment Or Speculation? [View article]
    Thanks for your input. I write here precisely to get feedback on my investment ideas, and the more different they are than mine, the better.

    I agree the "leading" adjective might be a bit too optimistic.

    There are some things you mention that I don't agree with, simply because they aren't true. RSH does not have a negative balance sheet. In fact I assume you want to say negative equity because there is no such thing as a negative balance sheet. I did a simulation on the article that is one example of what that value could be but as I mention, hypothesis on this adjustment factor are hypothesis and you can make take many different ones, more positive or more negative.

    The equity of the company could be indeed negative if we assume pessimistic hypothesis on the "monetization" adjustment of their assets and we assume that debt holders won't accept any adjustment. That happens for RSH and many other companies as long as there is some debt in the balance sheet.

    Equity of the company as of December 2012 is $599 Mn (therefore not negative) coming down from $753 Mn in 2011. At this rhythm of value destruction the company has got 4 more years of life before being in negative equity. The market has already discounted the same volume of losses for 2 more years, since the company is trading at 50% of 2012 book value.

    I am sure there is a lot of people that know how to read balance sheets and I think I am among them.

    I am not defending RSH, I am thinking the Market may have gone a bit too far on the pessimistic side. I hope and trust everybody takes this as an opinion and is grown up enough to take its own proper decisions.

    I can only guarantee that I back my words with actions. I have bought RSH shares at 3.1 after the issuance of this article. As said on the article I have only dedicated a marginal fraction of my portfolio to this security.

    Gasebu.
    Mar 4 08:22 AM | 1 Like Like |Link to Comment
  • RadioShack: Investment Or Speculation? [View article]
    Thanks for the observation.

    The evolution of the company - and even more the evolution of the stock- allows for very negative views like I think is yours.

    I don't want to be enthusiastic nor pessimistic when dealing with investments. I agree that the company needs a new mindset and that the company is dazed and confused as I also suggested in my article but at the same time we cannot forget objective facts.

    The company is trading well bellow its Book Value and Cash per share reference. In 2012 it has been the first year since I have record (1991) that its EBIT margin has turned negative. This event can repeat itself in the coming year and quarters and put the company under the water but we cannot take that for granted and consider the company is already doomed.

    We cannot forget that at these values there is margin for positive value breakup or other M&A alternatives and it is with this in mind that I risked a bit of my investment capacity with RSH.

    It is not a great company, but it is not a disaster of a company and the value is compelling. I don't look for a turnaround but I think the market as discounted all negative events and maybe has forgotten than positive ones might also show up. Since the price is good enough I think it is worth the ride, not forgetting that we did not buy, at least I didn't, because I love the company.

    I won't feel attached to RSH and I don't have the intention to stay invested for a long time and even less dream with turnarounds but I think pessimism might have taken control of the stock which is a good think when trying to find opportunities.

    Gasebu
    Mar 4 05:28 AM | 1 Like Like |Link to Comment
  • RadioShack: Investment Or Speculation? [View article]
    Hi Danthrax,

    I agree and as I say in the article my most probable scenario is any kind of M&A that brings higher value to the shareholders than current share price.

    We cannot discard a turnaround but it shouldn't be our investment case scenario.
    Gasebu.
    Mar 3 06:35 PM | 1 Like Like |Link to Comment
  • RadioShack: Investment Or Speculation? [View article]
    As an European investor I don't have easy access to US bond investment, but I agree 6.75%/0.74=9.12% yield (for a proper yield to maturity a more complete calculation would be required), seems attractive.

    For a proper opinion I'd have to go through the Bond Prospectus. I'll probably do that in the following days.

    Gasebu.
    Mar 3 06:28 PM | Likes Like |Link to Comment
  • RadioShack: Investment Or Speculation? [View article]
    Hi Jeffrey,

    I agree it is very difficult to turn around RSH. It is a race against the clock. The financial situation of the company as of today is good, but unsold product stock begins to grow, margin is already negative, and things could get tougher, unless the management is able to implement some energetic moves.

    That is why I think we have to be very cautious.

    Gasebu
    Mar 3 04:06 PM | 1 Like Like |Link to Comment
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