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Jeremy Johnson, CFA

 
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  • Frustrating F5 Networks Zigs And Zags Again [View article]
    I hope all their engineers eat lots of Oreo's. Long Mondelez. :)

    In all seriousness, tech is tough, too much can change too quickly.
    Jan 24, 2013. 05:32 PM | 1 Like Like |Link to Comment
  • HP Could Be A Hidden Beneficiary Of Yen Devaluation [View article]
    http://bit.ly/W74IaQ
    Jan 16, 2013. 11:14 AM | Likes Like |Link to Comment
  • HP Could Be A Hidden Beneficiary Of Yen Devaluation [View article]
    The yen was a little weaker in 06-07, but it is basically stronger than at any time since the Plaza Accord.

    The "platform" of the LDP in an election is not important and I don't regard a stimulus program as being non-conservative. Perhaps non-libertarian, but that is a political philosophy with no currency. The LDP's goal is to protect the established order -- giving money to construction companies fits within that framework.
    Jan 15, 2013. 06:59 PM | Likes Like |Link to Comment
  • HP Could Be A Hidden Beneficiary Of Yen Devaluation [View article]
    1) The yen is not strong right now, not even close. You are just seeing the impact of 20 years of no inflation. A stamp in Japan costs the same as it did 20 years ago. Imagine a stamp in the U.S. costing 25 cents? This is the concept of real effective exchange rates.

    2) Japan needs a strong yen. The old guard companies of Sharp, Sony, etc are not coming back even with a marginally cheaper yen. Japan is luxury / consumer economy and people want a strong yen.

    3) The LDP is only interested in a weak currency to juice the stock market short-term to A) win the upper house in June; B) have a weak mark-to-market on Japan's fiscal year end in March.

    4) The BoJ has been the most aggressive central bank for in the world for two decades, there is no change there. If you think one of the most conservative political parties in the world will nominate a reflationist BoJ governor, I think you are mistaken.

    5) Abe will restart Japan's nuclear industry, this will help the trade deficit.
    Jan 15, 2013. 12:28 PM | 1 Like Like |Link to Comment
  • HP Could Be A Hidden Beneficiary Of Yen Devaluation [View article]
    JPY will be back at 80 in six months.
    Jan 14, 2013. 07:01 PM | Likes Like |Link to Comment
  • Creating A New Valuation Metric: FPEGA [View article]
    1) Analyst estimates have shown to be quite accurate for the next twelve months and progressively worse ending up at near useless for every year thereafter (upwardly biased).

    2) Forward PE is better is than trailing PE.

    These have both been studied many times in various journals.
    Jan 11, 2013. 07:20 PM | Likes Like |Link to Comment
  • MAKO's Performance Still Pretty 'Meh' [View article]
    To be fair it wasn't much of a call. Company burns 30-40 million a year and was down to 30-40 million in cash. What else you going do?

    Next time I will look at the filings before opening my mouth...
    Jan 10, 2013. 07:43 PM | Likes Like |Link to Comment
  • MAKO's Performance Still Pretty 'Meh' [View article]
    Hi Alan! That's funny. I just looked at the financials up to 3Q12 and guessed. Looking at their filings I now see they already raised it! $40 million seems a little light though, I would have guessed low $50s.
    Jan 10, 2013. 07:27 PM | Likes Like |Link to Comment
  • MAKO's Performance Still Pretty 'Meh' [View article]
    In May. Just a guess!
    Jan 10, 2013. 06:45 PM | Likes Like |Link to Comment
  • MAKO's Performance Still Pretty 'Meh' [View article]
    These guys will have to raise some equity in '13. Can't be good for the stock and market probably started discounting this over the last year as it became evident they would not turn the corner on cash.
    Jan 10, 2013. 06:03 PM | Likes Like |Link to Comment
  • Crocs (CROX -1.1%) looks like it could be set to soar, according to Goldman Sachs. Analyst Taposh Bari thinks the company will update its guidance shortly, possibly at an investor conference next week. While Goldman likes the January $15 CROX calls going for $0.60, it also thinks shares could rise 12% over a longer haul of a year. [View news story]
    Must give management a lot of credit for taking the cash flow from a single faddish product and building a real, relatively diversified shoe company.
    Jan 10, 2013. 01:33 PM | Likes Like |Link to Comment
  • Electronic Arts: The Turnaround Is At Hand For This Fallen Angel - Buy On Headline Weakness [View article]
    If your criteria for investing is good mobile apps, why buy EA with all their legacy assets? Why not buy the companies with the top grossing mobile apps?
    Jan 9, 2013. 11:58 AM | Likes Like |Link to Comment
  • Electronic Arts: The Turnaround Is At Hand For This Fallen Angel - Buy On Headline Weakness [View article]
    I would say the vast majority of gaming companies are very poorly run. They are run either by MBA types or gamers and both poor fairly in this environment where you need the right mix of creativity and desire to make money while empathizing with your customer base which the "c-suite" are almost completely incapable of doing.

    Anyway, with respect to EA, I can see over the past five years, the company has generated little to no free cash flow, especially after acquisition costs (which have at least helped keep revenue stable and are depreciable assets the way I see it). This is first sign of a bad business. I don't know if it is driven by "industry dynamics", although those are certainly a factor, or just poor management. I think it is some of both. Gaming companies I think are far too eager to reinvest excess returns from a couple hits into every tom dick or harry project that comes into the door. Game creation cannot be viewed like a factory floor.

    Console gaming is in trouble in my view. The console was a very unique device 5-15 years ago in its ability to provide a unique experience at a reasonable price. Those days are long gone. The market is saturated and new discretionary dollars are going towards the gadgets of today. It is not like these systems will be gone tomorrow, but they fade into the background to a certain degree from where they have been the last 10 years. During that process, I doubt large integrated gaming companies will make anyone a ton of money. The release of a new generation of gaming consoles could be interesting, but I am not at all sure if the uptake will follow the historical patterns.
    Jan 8, 2013. 08:27 PM | 1 Like Like |Link to Comment
  • 6 Market Predictions For 2013 From Bond Guru Jeff Gundlach [View article]
    I believe Gundlach's trade is short yen long Nikkei. In truth, it is all driven by currency, the companies that are rallying in Japan are purely exporters. Even companies that nominally benefit from a strong economy are not moving. The Nikkei move is outsized versus the yen due to operating leverage, but you could add financial leverage to a yen bet and get the same place.
    Jan 7, 2013. 09:07 PM | Likes Like |Link to Comment
  • 6 Market Predictions For 2013 From Bond Guru Jeff Gundlach [View article]
    There has never been a handset manufacturer that hasn't eventually flamed out, and when they do their earnings go from a lot to negative. Motorola, RIM and Nokia are just the three biggest examples; but you can also look at Ericsson and HTC for smaller and perhaps less convincing examples. There is nothing beyond this, no magic formula you can look to in order to convince yourself, nor any fundamental valuation principle.

    How many iPhone 8s will the company sell 5 years from now, and what will the profit per device be? That is the only relevant question to valuing Apple. You could have asked the same question of Motorola in 2004: In 2013, how many RAZR 2013s (or their descendants) will you sell and at what profit per unit? It turns out quite a small number on the bottom line. Luckily they had a patent portfolio Google wanted.
    Jan 7, 2013. 09:03 PM | Likes Like |Link to Comment
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