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Intuitive Synthesis

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  • Where Dollars And Portfolio Managers' Track Records Go To Die [View article]
    Disciplined Contrarian,

    While assessing the company, I have been struggling with the question of what is the sustainable number of US child care customers for CRCM and how could one calculate an approximation of plateau level annual revenue for this line of business. Would you have any ideas about how to approach this question? Thanks.
    Aug 7 08:25 AM | Likes Like |Link to Comment
  • Apollo May Be The Government's Next Victim In Its Aggressive Oversight Of Financial Aid Recipients [View article]
    It's rather easy to tell one side of a well-known story, and much harder to take into account both the negatives and the positives, especially in relation to the price of the company.
    Jul 29 08:15 AM | 1 Like Like |Link to Comment
  • Staples: Why Lousy Companies With Great Managements Are Still Lousy [View article]
    Many good points in your article. You wrote that "Sales on fell around 8% in 2013". However, in the quarterly releases the growth rates mentioned for are 3% in Q1, 3% in Q2, 3% in Q3 and 1% in Q4 or 10% if 53rd week and currency exchange rates are excluded from the Q4 numbers.
    Apr 3 02:30 PM | 1 Like Like |Link to Comment
  • Applied Materials Is Substantially Overvalued [View article]
    You said that you don't want to use earnings or cash flows because of the cyclicality/volatility. You also mentioned that the return on equity is lower than the cost of equity. How did you calculate the "return" part of ROE when earnings are cyclical?

    If you are trying to adjust for cyclicality, why have you selected a time period from 2009 to 2013 instead of a full cycle? For example, from 2003 to 2007, the average P/B was well above 3.50.

    If the correct P/B should be 0.57 as you say, what then would be the cyclically adjusted earnings/cash flow yield?
    Dec 26 11:51 AM | 2 Likes Like |Link to Comment
  • Both Apollo And Career Education Shares Went Parabolic This Week. Which One To Short? [View article]
    Fund Manager,

    Instead of current trends continuing to infinity, could there be inflections in some negative trends like enrollment and high youth unemployment? Could the market be predicting an inflection in advance after 11 quarters of declining enrollment?

    What do you think is the value of APOL? To what extent then has the market already priced in the obvious problems that you mentioned?
    Oct 26 02:08 PM | 3 Likes Like |Link to Comment
  • Office 365 Free For Students Is A Big Deal [View article]
    In the latest 10-K, pages 6-7:

    "Office, comprising mainly the core Office product set, Office 365, SharePoint, Exchange, and Lync"
    "Office [...] generates over 90% of MBD revenue"

    Dynamics is the other component of MBD.
    Oct 17 07:43 AM | Likes Like |Link to Comment
  • Applied Materials Loses Top Spot In Solar Equipment Market [View article]
    Couple of things to note:

    You make it sound as if AMAT had acquired Varian because of its solar tehnology, which quite cleary isn't the case.

    In your article you write: "Applied Materials passed on an opportunity to invest in privately held SolarPA" and make it sound as if this would have been a major opportunity that AMAT missed.

    At the end of your profile, you describe yourself in the following way: "Also in the solar area, he is CEO of SolarPA".

    So, basically you're the CEO of a company that AMAT didn't invest in? This could also be part of the reason why your latest two articles have been perhaps overly negative on AMAT.
    Jun 12 03:36 PM | 2 Likes Like |Link to Comment
  • Marvell In Transition - Future Profitability At Risk? [View article]
    Thanks for the insightful comment.

    OCZ is a single example of a larger trend. STX and WDC will say anything to make it sound like the companies are safe and sound.

    I agree that Marvell and LSI currently have a strong position in the SSDs. However, the point is that the long-term sustainability of this position is at risk. Marvell is an innovative company, but so are its competitors. It's in the nature of high tech companies to gain and lose technology based competitive advantages. You're extrapolating the current competitive position even though the competitive environment is changing.

    I agree with that you say about higher ASPs that come with SSD components in the hybrid drives. However, I'm less sure it will translate into higher profit margins. It will more likely be an extension of the HDD margins since Marvell and LSI are likely to dominate hybrids. In addition, maintaining three major product lines, HDDs, SSDs and hybrids, is operationally less efficient than a purely HDD based product portfolio.

    If HDD ASPs begin to fall, the probabilities are that it will affect all the components that go into an HDD. Why wouldn't it? The STX/WDC duopoly has enough negotiation leverage to make sure that the burden is shared. In addition, scale contributes to margins. If the number of HDDs sold goes down, the scale advantages diminish.

    You say that the risks are already priced in. I would say that an average scenario is priced in. A negative is not.

    When competition gets fierce, there's no rule that states that one company will have a substantial enough lead to command a significant price premium. Intel is an anecdotal example that is not generalizable.
    Jun 3 02:50 PM | Likes Like |Link to Comment
  • Marvell In Transition - Future Profitability At Risk? [View article]
    The segment doesn't have to be new to qualify as diversification. In terms of diversification via resource allocation, Marvell has grown the relative share of the segment for years.
    Jun 2 08:15 PM | Likes Like |Link to Comment