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  • U.S. Cellular And TDS: Buy The Milk, Get The Cow On The Cheap [View article]
    Yes, that was a special dividend paid by US Cellular to distribute the proceeds of recent asset sales to shareholders, but the net result is that almost all of that went to TDS
    Aug 9, 2013. 12:39 AM | 1 Like Like |Link to Comment
  • US Airways: A Buy Before The Transformation Into American Airlines [View article]
    Thank you; we believe that US Airways' management team has learned from the America West years that it is essential to include labor in the process, and view them as an asset, not a liability. To date, they've shown this to be the case, and hopefully it will remain so once the new American Airlines is officially created
    Aug 2, 2013. 08:42 PM | 1 Like Like |Link to Comment
  • US Airways: A Buy Before The Transformation Into American Airlines [View article]
    AMR's equity is a special situation; most Chapter 11 restructuring's don't include recovery for existing equity holders. AMR's old shares have risen due to the rally of US Airways' share price. The merger is structured as an equity deal: AMR's various stakeholders are entitled to 72% of the new American Airlines Group (the name of the combined holding company), and will all be receiving stock to satisfy their various claims. However, the dollar value of the AMR's creditor claims is fixed, as is the 72% due to AMR's stakeholders. Once those claims are paid, and everyone else is paid, whatever is left will go to AMR's old shareholders. With US Airways' stock up over 66% in the past year, AMR's old shares have risen as well alongside them
    Aug 2, 2013. 08:40 PM | 1 Like Like |Link to Comment
  • MKS Instruments: Rebounding Profits And A Pristine Balance Sheet Will Not Be Ignored For Long [View article]
    It is easy to pick time periods in which MKS has underperformed or not moved. We could say MKS has fallen by more than half since March 2000, and while that statement may technically be true, MKS traded at well over $60 at that time, inflated by the dot com bubble. Since going public in May 1999 (http://yhoo.it/19rzKCs), MKS has risen more than 94%, while the S&P 500 is up less than 57% (http://yhoo.it/19rzKCs).
    Jun 22, 2013. 09:48 PM | Likes Like |Link to Comment
  • Why We Bought Microsoft: Because 2013 Should Determine Whether Ballmer Stays Or Goes [View article]
    The question is how to define "eventually." At some point, if there is a disconnect between a company's financial results on paper and its stock price, someone needs to be held accountable. It would be one thing if Ballmer was a new CEO who needed time to reshape his company. But he has been CEO for over 13 years, and since then Microsoft has underperformed all its relevant comparisons. Arguments can be made that Microsoft was overvalued when Ballmer took control of the company, but so were the NASDAQ and S&P 500.

    As for Ballmer's behavior, we agree that it has a key influence onf Microsoft's revenues and profits. And it is precisely that behavior that has caused Microsoft to leave billions on the table, as the company continued to pour money into online services and R&D, with little to show for either.
    May 8, 2013. 09:35 PM | 1 Like Like |Link to Comment
  • Why We Bought Microsoft: Because 2013 Should Determine Whether Ballmer Stays Or Goes [View article]
    We would hesitate to compare Microsoft's board to that of HP (but to be fair, there has been a great deal of turnover within HP's board, given the fact that the level of value destruction at HP far exceeds that of Microsoft. That being said, we do believe that the board has given Ballmer and his lieutenants too much latitude in managing Microsoft, and that it should take on a more vocal role in addressing the challenges facing the company.
    May 8, 2013. 09:27 PM | 2 Likes Like |Link to Comment
  • Why We Bought Microsoft: Because 2013 Should Determine Whether Ballmer Stays Or Goes [View article]
    A so-so holiday season could also cause further pressure on Ballmer, due to the fact that it will serve as a highlight of MSFT's continued malaise, and that is something we doubt ValueAct will simply ignore. It could draw in other investors to become more vocal as well, for it takes only 1 to start the discussion in earnest.
    May 8, 2013. 09:24 PM | Likes Like |Link to Comment
  • A Clearwire Update: Bankruptcy And Default As Clearwire's Ace In The Hole [View article]
    It's not as simple as pretending vs. not pretending. In its proxy statements, Clearwire has repeatedly recommended that shareholders vote for the Spring deal, while reiterating that talks with DISH (and now Party J) are continuing. Clearwire, likely at the recommendation of its lawyers, is urging shareholders to vote yes because that represents the lowest risk situation. $2.97 is on the table, and all shareholders have to do to claim it is vote yes. Attempting to extract higher offers can lead to higher profits, but it also has higher risk. Clearwire's June 1 interest payment will likely be the deadline by which a deal will be complete, for we doubt that Sprint wishes to open the Pandora's box of a Clearwire default.
    Apr 14, 2013. 03:37 PM | 1 Like Like |Link to Comment
  • A Clearwire Update: Bankruptcy And Default As Clearwire's Ace In The Hole [View article]
    They could indeed end all of this by simply raising the offer to a price that more accurately reflects the value of Clearwire's spectrum
    Apr 14, 2013. 03:33 PM | 2 Likes Like |Link to Comment
  • First Solar: Long-Term Guidance Shows That Its Potential And Long-Term Upside Remain Intact [View article]
    It is true that First Solar's EPS is set to slide from historic levels, with projected EPS set to reach "just" $5 in 2015. But, First Solar's multiples have come down far more than its EPS, and at present levels, shares of First Solar are not expensive, at least on traditional P/E metrics. First Solar's P/E (comparing its P/E to the rest of the sector is meaningless because the rest of the sector isn't generating profits) is lower than it would be in a vacuum in part because of the discount assigned to solar companies, which is understandable given the situation most companies in the sector are in. First Solar's shares should have never traded at $300 in 2008, but neither should they have fallen to below $12 in 2012. And at under $40, we still believe that they are undervaleud. Will the gains happen overnight? No, and we do not expect more rallies like the 45% rally on the back of the company's analyst day. But, if an investor is bullish on solar energy in general, then First Solar is, in our view, the best way to gain exposure to it, and in the long-term, continued growth in solar energy around the world should lead to continued growth in First Solar's share price
    Apr 10, 2013. 11:01 AM | 1 Like Like |Link to Comment
  • First Solar: Long-Term Guidance Shows That Its Potential And Long-Term Upside Remain Intact [View article]
    Setting aside financial reasons to be bullish, we are bullish on First Solar because of our belief in the long-term growth of solar energy. There are many markets around the world, such as Chile and Saudi Arabia where local dynamics make solar a meaningful proposition when it comes to power generation. Will solar simply replace fossil fuels? That is unlikely to happen, given that the technology is simply not there yet. But, the solar market will continue to grow, and the only company that has been able to consistently profit from that growth is First Solar. Until there is a much more meaningful amount of consolidation in the global solar sector, we would be hard-pressed to find another solar company (perhaps other than SunPower, given its American presence and relatively decent financial profile, and SolarCity, which is exposed to different trends in the solar market) that is worth investing in at this point in time. Another point to consider is First Solar's balance sheet. Their position as the financially healthiest company in the sector allows them to invest in the business at levels other solar companies cannot. In the long-term, this will help the company establish footholds in new markets, as well as win the confidence of utility customers, who are interested in much more than simply finding the lowest cost panels.
    Apr 10, 2013. 10:53 AM | Likes Like |Link to Comment
  • First Solar: Long-Term Guidance Shows That Its Potential And Long-Term Upside Remain Intact [View article]
    LDK has yet to report its Q4 (last year it reported on April 30), but as of Q3 2012 it had over $2 billion in net debt, and Citigroup has been hired to help the company restructure its debt. Given that LDK has the highest overall debt levels in the Chinese solar sector, they are likely to update their progress in dealing with it within the next month, when Q4 2012 earnings are likely to be released
    Apr 10, 2013. 08:45 AM | Likes Like |Link to Comment
  • First Solar: Long-Term Guidance Shows That Its Potential And Long-Term Upside Remain Intact [View article]
    JinkoSolar posted Q4 2012 results this morning, net debt now stands at $482.681 million. The good news (for Jinko) is that they were cash flow positive in Q4. But they have over $360 million in debt due this year, and their cash balance is not enough to make the payments. It remains to be seen what happens with that repayment. And Yingli has $1.2 billion of debt due in the next 12 months, and less than $500 million in cash & investments. We believe that 2013 will be an important year in terms of helping to remove weaker players from the Chinese solar sector, which will, as Trina Solar said, help ease excess capacity in the market
    Apr 10, 2013. 08:32 AM | Likes Like |Link to Comment
  • Apple Q2 Earnings Preview: Scrutinizing Negative Media Coverage, And Watching R&D Expenses [View article]
    It is true that Apple's R&D expenses are less as a percentage of revenue than many of its Silicon Valley peers. But what we believe is more important is what Apple has been able to produce with that budget. Unlike many companies, Apple's R&D budget is, for the most part, focused on creating marketable products and as a result its R&D department is much more efficient than that of many other top-tier technology companies. As for market share, Apple may not be growing unit share, but its profit share is foretasted either to hold steady or increase, and we believe that this is the metric that truly matters in the long-term.
    Apr 8, 2013. 12:12 PM | 2 Likes Like |Link to Comment
  • Why The Best Investment In Salesforce Is None At All [View article]
    But the question to ask is this: how long should capital be tied up waiting for the inevitable? The short thesis for CRM, while valid in theory, has been argued for years already, with little to show for it except occasional pullbacks; CRM is less than $2 away from all time highs as of this writing. Another point that should be noted is that the comparison with Enron, Worldcom, etc... serves to highlight our point about the need to remove hyperbole from the debate. Enron and Worldcom committed pure accounting fraud, and misrepresented their financial condition to shareholders and regulators. And this misrepresentation was not just their CEO's talking about "adjusted EPS." The financial statements were falsified, something that is not happening at CRM. The company's GAAP losses are easy to see for anyone who looks at the company's 10-Q or 10-K filings,. Talking only about non-GAAP EPS may not present the full picture of what is going on at CRM, but it is not fraud in the Enron/Worldcom mold
    Mar 8, 2013. 04:22 PM | 1 Like Like |Link to Comment
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