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Jeremy Johnson

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  • Talking Soda [View article]
    It would an extremely predatory thing to do for any retailer, legal questions aside.
    Nov 29 07:06 PM | Likes Like |Link to Comment
  • What Amazon.com Selling Double The Kindles Really Means [View article]
    How much discretionary cash flow do you think AMZN generates at run rate?
    Nov 29 06:46 PM | Likes Like |Link to Comment
  • Talking Soda [View article]
    I think it was an attractive short for 3 months in mid-2011, but that was quite some time ago now.
    Nov 29 06:14 PM | Likes Like |Link to Comment
  • Talking Soda [View article]
    Regardless of what happens to this specific company, this is exactly the wrong sort of business you want to short. It is just hard for me to believe the short ratio is caused by a genuine desire to have short economics on this business at the level of 50% of the float. The only other reason I can proffer is that event driven funds are using it as a proxy on West Bank tensions. Anyway, I haven't heard any compelling case how a short expects to make 20%+ on this name. If I am going to short something I want their to be a good chance the name will go down 50%+, and little to no chance it could double. Is there really such a dearth of short candidates out there?

    What does it cost to short this thing? Has to be astronomical.
    Nov 29 05:39 PM | Likes Like |Link to Comment
  • The cloud infrastructure market is officially seeing a price war. A day after Amazon (AMZN) cut prices by 24%-27% for its popular S3 storage service, Google (GOOG) is cutting prices for its storage offering for the second time this week: between today's drop and Monday's, Google has slashed prices by over 30%. Google and Amazon probably have the scale and cost structures needed to handle a price war, but Rackspace (RAX), which has already said it won't compete on price, could be in a tougher spot. Will Microsoft cut prices next? [View news story]
    My understanding is that Google's customer service is quite poor. They make up for it in the fact that their products typically work fairly well. I can't say my knowledge on this matter is great, but I would not be surprised is Rackspace genuinely had customer service that blew Google's away.

    And from a consumer point of view, Amazon's customer service really isn't that great either. Their only response is to basically either take the item back or give you a discount. That is better than nothing (perhaps much better), but doesn't solve many of the problems that crop up. It turns their service into take it or leave it (but we'll make it very easy for you to leave it).

    What customer service really is about is getting problems fixed, not just saying sorry we can't help you, but here is your money back.
    Nov 29 04:48 PM | 2 Likes Like |Link to Comment
  • Talking Soda [View article]
    The following is speculation, but I don't think there are genuinely many bears on this company. There is something a bit strange about the high short interest. I am curious if banks are shorting the stock in order to sell more shares to preferred clients, not because they are actually bearish. The list of holders is almost a who's who of institutional buyers. You would need a pretty keen understanding of the microstructure of the markets involved: especially option market makers, OTC derivative markets and the willingness of prime brokers to create shares for clients to know for sure what is going on here. Given all the companies I see that trade at very rich valuations with no growth story, the option value of this company alone would make it a very attractive investment to any small / mid-cap growth manager who are also desperate for anything like this. In addition, this is ripe target for a strategic buyer. Short sellers are typically a very savvy bunch, because mediocre performance as a short seller will end your career quickly because you are fighting against the stream at all times. Shorting growth stocks at reasonable valuations that 5-10 global consumer product companies could offer a 50% premium on at any moment is extremely foolish.
    Nov 29 04:41 PM | Likes Like |Link to Comment
  • Apple (AAPL) has fired the manager behind the mapping software which put a cloud over the iPhone 5 release, reports Bloomberg. Maps manager Richard Williamson was let go by Senior VP Eddy Cue, who recently was put in charge of Maps and Siri amidst a management shakeup that saw the departure of iOS chief Scott Forstall. [View news story]
    The answer depends on if you are long, short or indifferent.
    Nov 27 08:38 PM | 1 Like Like |Link to Comment
  • Is Occidental Petroleum Oversold? [View article]
    NGL price decline in general not just permian, plug it into your model versus 1 year ago and see how it impacts your run rate cash flow. If OXY was worth $100 per share a year ago, just based on this one line-item change you are around $90 (very rough of course). Short of giving you my model, I am not sure how to walk you through this, I assume you have some sort of model where you can input the value impact of commodity price changes.
    Nov 27 08:02 PM | Likes Like |Link to Comment
  • Is Occidental Petroleum Oversold? [View article]
    NGL realizations in the permian are down 50. This decline is worth more than $10/sh for OXY. Now even more drilling is going to focus on the last remaining resource that gets double digit profits per unit.
    Nov 27 06:45 PM | Likes Like |Link to Comment
  • Is Occidental Petroleum Oversold? [View article]
    The NGL cliff (50% y-o-y decline in realizations) is a bigger deal than the fiscal cliff.
    Nov 27 05:25 PM | 1 Like Like |Link to Comment
  • Tesoro: Undervalued [View article]
    According to Dow Jones, it is 8.9% FCF yield for LTM period. The next twelve will not be the same. Cash flow is highly variable for these companies quarter to quarter. Fourth quarter will probably be strong due to wide cracks in CA although they have normalized in the last 2 weeks.
    Nov 21 08:54 PM | Likes Like |Link to Comment
  • Will Tesla Disrupt? [View article]
    There was zero chance you were going to get equal bang for buck from a global luxury car manufacturer with 10s of billions of invested capital and Tesla. That's just not a balanced fight.

    My guess is current Tesla investors will have it rough, but in 15-20 years an electric luxury car will be de facto. Tesla will pay to develop the market and BMW et al will reap the benefits.

    It isn't that Tesla will make a car that is not good enough, or even "the best" all things considered, but rather that the capital costs will always be too great for the company to internally fund its development at a fast enough pace.
    Nov 21 08:29 PM | 13 Likes Like |Link to Comment
  • There Is Still Time For A 27% Return On The Nexen Deal [View article]
    If you read the comment sections of your newspapers about 95% of people are fervently against this.

    Nexen's assets are so international that I don't see why anyone should really care. However, it would set some precedent.

    I have followed this company closely as a subordinated bond holder, and I think Canada should allow it to be sold. It is not really a first class player. The money coming into Canadian investors (at a significant premium mind you) could be better put to use by reinvesting in new oil & gas projects.
    Nov 21 12:17 PM | 2 Likes Like |Link to Comment
  • Tesoro: Undervalued [View article]
    Refineries have large swings in profitability from year to year. Nothing about tapping a new resource is going to change that. The story changes every five to ten years. The last story was heavy oils and the industry paid billions on hydrocrackers and cokers. Doesn't matter though, the crack spread is volatile as history has proven.

    http://bit.ly/UdEgOZ
    Nov 20 05:17 PM | 2 Likes Like |Link to Comment
  • Tesoro: Undervalued [View article]
    1) Cyclical business, use cycle-adjusted normalized cash flow not peak nor trough figures.

    2) CA refiners will be spending huge sums to meet new environmental standards taking effect through this decade which is the reason BP sold and Valero is selling CA. TSO will milk the cash flow for a couple years then come back to shareholders with huge increases in capex.
    Nov 20 04:34 PM | Likes Like |Link to Comment
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