Redbox Will Keep Raking In Big Profits For Coinstar [View article]
joey - you need to take emotions out of your posts. the fact of the matter is people respond to price more than time windows. so i have to wait another month for a movie to come out? big deal. when it comes to a $1.00 or $1.20 movie (if they increase prices), it's waaaay cheaper than $9 a month subscription or $5 on demand.
Redbox Will Keep Raking In Big Profits For Coinstar [View article]
Sounds like your own opinion (position?) is getting in the way of the truth: market share continues to increase for Redbox. Market share of the $6 Billion DVD rental market grew from 12% to 35% from 2008 to 6/30/11.
Also, as an anecdote, the kiosks around me seem to be quite full every Friday and Saturday night.
Yeah it's just a silly assumption made by DA Davidson. It's clear the stock took a direct hit yesterday from their comments released today (which is shady in and of itself). Visa wouldn't jeopardize billions of transactions of $1 or so by levying a 23% transaction fee. I'm actually shocked that they came to that conclusion and even more shocked that people would listen to them.
Again, what most likely would happen if there were to be a fee raise is for them to raise the total potential fee (on larger transactions) and possibly raise the % they charge on smaller transactions, say from 1% to 2% or something like that.
Joe - My point is the volume of business Visa gets from $1 transactions is enormous. Think about things like 7-eleven purchases, small purchases from Dollar type stores, Redbox, etc...This all amounts to a huge amount of business to Visa. There is zero chance that they would enact a 23% fee on transactions of $1. That would be terrible business and they're smarter than that.
Again, most likely if they're going to raise fees it would be to raise it to a maximum of $0.23 for larger dollar value purchases. So it would most likely be something like 1.5% up to $0.23.
Additionally, given the recent Durbin Amendment to protect merchants, there is a snow balls chance in Hell that a fee this large (that is, 23%) would ever pass.
DA Davidson clearly didn't think through this rumor well enough.
People have this completely wrong: The turmoil at Netflix is DIRECTLY related to Redbox eating their lunch in the DVD rental business. Redbox is incredibly cheap, at 9 times last years cash flow, which grew over 30% last year and which will double over the next 2 years.
Why is it trading so low? Because of the perception that streaming will destroy the physical DVD market over time. I think the transition to an all streaming market will not only never happen, but if it does it will take many years. How many people in the US watch movies? I'd argue maybe 80% of them. Currently the number of streaming video users totals about 4% of the entire US population. So that means 95% of the total viewing population still uses DVDs to view movies. Additionally, the recent closing of the majority of Blockbuster stores and the bad media coverage of Netflix has significantly raised customers' awareness of Redbox. Within a year, the market share of the $6.5 Billion DVD rental market for Redbox could be greater than 50%. That would translate to over $3 Billion in revenues for Redbox (Redbox did $363 Million last quarter), which would translate into a huge amount of growth for CSTR.
The DVD rental business is currently about $6.5 Billion per year. CSTR grew its market share of this business from 12% to 20% in 2009 and then from 20% to 35% as June 2011. Given the convenience (most Americans live within 5 minutes of a Redbox kiosk and can reserve the movie they want from the kiosk they want ahead of time at redbox.com) and affordability (most people watch 2 to 3 movies a month which is $2 to $3/month thru redbox vs at least $9 thru Netflix and $10 to $15 through on demand cable), and given the fact that the majority of movie viewing consumers (95%) still use DVDs, I'd say that Redbox has a great business going for it.
There are still some major issues with streaming that won't be resolved soon: (a) people are not willing to set up streaming because the perception is that its difficult to set up (b) streaming requires a fast internet connection and even with a wireless broadband connection there are issues with the picture freezing if the TV is not within close range of a cable/DSL modem. (c) picture quality suffers when compared with Blu ray.
So why is the stock down? On bogus rumors by DA Davidson about Visa raising minimum fees on transactions from $0.05 to $0.23 per transaction. Visa understands the value that companies like Family Dollar Store and 99 cents Only brings to their business. These companies generate BILLIONS of transactions a year and this move would completely wipe out the business they get from these stores. It would raise the percent that these stores pay on $1 transactions from 5% to 23%. First of all, this rumor was most likely spread around so that large players could get into the stock at cheaper prices because they know it’s a huge growth story and they want in (No way Wall Street would do this, right? They’re on the up and up at all times…). Second of all, the recently enacted Durbin Amendment was put in place to protect merchants from excessive fees placed on them. These rumored fees would enact a 23% tax on all dollar stores and stores that charge $1 for goods.
It’s a great way to instill fear in people so they can sell it for the bigger investors that want in at cheaper prices.
Netflix: Beginning Of The End Or End Of The Beginning? [View article]
this whole fiasco going on at NFLX has absolutely nothing to do with their strategy and what not...it has EVERYTHING to do with Redbox. They saw the writing on the wall with how Redbox was killing them and decided to use it as an excuse to split up the business and use the confusion to hide the real reason why the company is going down.
Also, when Redbox does add a streaming service, I guarantee that people will be using Netflix less and less. The convenience that these kiosks offers people is a HUGE competitive advantage. Plus, their pricing strategy with no strings attached is just a no brainer.
Give me the ability to rent movies for $1 a night and also have the option to stream movies...why would I use NFLX at all? Redbox has already announced that it would be offering a streaming service by the end of the year.
In my opinion it doesn't even matter because I think the switch to streaming will take YEARS. In the meantime, Redbox will grow from 20% market share to 60% market share of the $7 Billion per year DVD rental market.
They generated $160 Million in Free Cash Flow over the past 12 months. They're trading at 9 times that cash flow. When they have finished growing the number of kiosks and they have and they have a 60% market share of the DVD rental business they will be generating $600 Million a year in free cash flow and the stock will be trading at 3 to 4 times its current price. In 2 to 3 years they will have generated 3/4 of their market cap in cash.
I think a lot of people are missing the story on this company.
CVD Equipment: More Than Just A Pure Play On Graphene [View article]
this is a pretty simple article...please back up your assertion that: "There is simply an enormous demand for a product with extremely limited supply. " Do you know that there is a limited supply?
Also, please address these issues: 1.) Do you know of larger competitors offering the same product they offer at lower price points? AMAT comes to mind. What barriers to entry do they have in comparison with AMAT and others?
2.) from your article it doesn't quite seem like you understand what products the company offers. For example, are you aware that the company doesn't actually make "graphene chips"? Have you gone on their website and gotten an understanding of what products they sell?
Long-Term Market Energy Charged for a Move Higher, Short-Term Needs Time to Rebuild [View article]
You may want to take a look at the 1973 period, which is quite similar in price action...you had a long steady pullback from January through August, then a sharp throwback rally, and then a nasty 20% drop over a month...the moves here are more compressed but there are a lot of similarities. After that move down a rally ensued up to the 200 DMA and the market basically traded sideways for 6 months...before giving way to significantly lower prices.
5 Tech Takeover Targets And Their Most Likely Acquirers [View article]
Here are some more figures on TZOO's revenue/earnings growth over the years:
EPS 2000 - $0.02 2001 - $0.02 2002 - $0.04 2003 - $0.10 2004 - $0.33 2005 - $0.45 2006 - $1.01 2007 - $0.57 2008 - $0.19 (after adjusting for one time charges/tax items) 2009 - $0.32 2010 - $0.80 2011 - $1.45 estimate (first 6 months after exluding one time settlement with state of Delaware were $0.67)
Since 2002, that is annualized EPS growth of 40%.
Here are Revenue figures: 2000 - $4 MM 2001 - $6 MM 2002 - $10 MM 2003 - $18 MM 2004 - $34 MM 2005 - $51 MM 2006 - $70 MM 2007 - $79 MM 2008 - $81 MM 2009 - $94 MM 2010 - $113 MM 2011 - first 6 months: $75 MM
5 Leading Stocks That May Crash 30-50% Before A True Bottom Is In Place [View article]
hehe...great timing man. i predict you close your shorts at a loss. what if we ARENT going into a bear market? what if this was merely a normal correction and that a rotation may be under way?
You can't ignore cash flow. This company will get a private equity buyout in the mid 40's. It's trading at 6.5 times free cash flow and with that free cash flow they have been buying back stock...they bought 5% of shs outstanding last year.
As rumored, Alpha Natural Resources (ANR) moves ahead with a $7.1B, $69.33/share purchase of Massey Energy (MEE). Alpha CEO Kevin Crutchfield says the 21% premium is well worth it and that Massey has been at the top of the company's acquisition list for some time. (PR) [View news story]
Redbox Will Keep Raking In Big Profits For Coinstar [View article]
Again, take your emotions out of your posts.
Redbox Will Keep Raking In Big Profits For Coinstar [View article]
Also, as an anecdote, the kiosks around me seem to be quite full every Friday and Saturday night.
Who Benefits From Netflix Folly [View article]
Again, what most likely would happen if there were to be a fee raise is for them to raise the total potential fee (on larger transactions) and possibly raise the % they charge on smaller transactions, say from 1% to 2% or something like that.
Who Benefits From Netflix Folly [View article]
Again, most likely if they're going to raise fees it would be to raise it to a maximum of $0.23 for larger dollar value purchases. So it would most likely be something like 1.5% up to $0.23.
Additionally, given the recent Durbin Amendment to protect merchants, there is a snow balls chance in Hell that a fee this large (that is, 23%) would ever pass.
DA Davidson clearly didn't think through this rumor well enough.
Who Benefits From Netflix Folly [View article]
Why is it trading so low? Because of the perception that streaming will destroy the physical DVD market over time. I think the transition to an all streaming market will not only never happen, but if it does it will take many years. How many people in the US watch movies? I'd argue maybe 80% of them. Currently the number of streaming video users totals about 4% of the entire US population. So that means 95% of the total viewing population still uses DVDs to view movies. Additionally, the recent closing of the majority of Blockbuster stores and the bad media coverage of Netflix has significantly raised customers' awareness of Redbox. Within a year, the market share of the $6.5 Billion DVD rental market for Redbox could be greater than 50%. That would translate to over $3 Billion in revenues for Redbox (Redbox did $363 Million last quarter), which would translate into a huge amount of growth for CSTR.
The DVD rental business is currently about $6.5 Billion per year. CSTR grew its market share of this business from 12% to 20% in 2009 and then from 20% to 35% as June 2011. Given the convenience (most Americans live within 5 minutes of a Redbox kiosk and can reserve the movie they want from the kiosk they want ahead of time at redbox.com) and affordability (most people watch 2 to 3 movies a month which is $2 to $3/month thru redbox vs at least $9 thru Netflix and $10 to $15 through on demand cable), and given the fact that the majority of movie viewing consumers (95%) still use DVDs, I'd say that Redbox has a great business going for it.
There are still some major issues with streaming that won't be resolved soon:
(a) people are not willing to set up streaming because the perception is that its difficult to set up
(b) streaming requires a fast internet connection and even with a wireless broadband connection there are issues with the picture freezing if the TV is not within close range of a cable/DSL modem.
(c) picture quality suffers when compared with Blu ray.
So why is the stock down? On bogus rumors by DA Davidson about Visa raising minimum fees on transactions from $0.05 to $0.23 per transaction. Visa understands the value that companies like Family Dollar Store and 99 cents Only brings to their business. These companies generate BILLIONS of transactions a year and this move would completely wipe out the business they get from these stores. It would raise the percent that these stores pay on $1 transactions from 5% to 23%. First of all, this rumor was most likely spread around so that large players could get into the stock at cheaper prices because they know it’s a huge growth story and they want in (No way Wall Street would do this, right? They’re on the up and up at all times…). Second of all, the recently enacted Durbin Amendment was put in place to protect merchants from excessive fees placed on them. These rumored fees would enact a 23% tax on all dollar stores and stores that charge $1 for goods.
It’s a great way to instill fear in people so they can sell it for the bigger investors that want in at cheaper prices.
Netflix: Beginning Of The End Or End Of The Beginning? [View article]
Also, when Redbox does add a streaming service, I guarantee that people will be using Netflix less and less. The convenience that these kiosks offers people is a HUGE competitive advantage. Plus, their pricing strategy with no strings attached is just a no brainer.
Give me the ability to rent movies for $1 a night and also have the option to stream movies...why would I use NFLX at all? Redbox has already announced that it would be offering a streaming service by the end of the year.
In my opinion it doesn't even matter because I think the switch to streaming will take YEARS. In the meantime, Redbox will grow from 20% market share to 60% market share of the $7 Billion per year DVD rental market.
They generated $160 Million in Free Cash Flow over the past 12 months. They're trading at 9 times that cash flow. When they have finished growing the number of kiosks and they have and they have a 60% market share of the DVD rental business they will be generating $600 Million a year in free cash flow and the stock will be trading at 3 to 4 times its current price. In 2 to 3 years they will have generated 3/4 of their market cap in cash.
I think a lot of people are missing the story on this company.
CVD Equipment: More Than Just A Pure Play On Graphene [View article]
CVD Equipment: More Than Just A Pure Play On Graphene [View article]
"There is simply an enormous demand for a product with extremely limited supply. " Do you know that there is a limited supply?
Also, please address these issues:
1.) Do you know of larger competitors offering the same product they offer at lower price points? AMAT comes to mind. What barriers to entry do they have in comparison with AMAT and others?
2.) from your article it doesn't quite seem like you understand what products the company offers. For example, are you aware that the company doesn't actually make "graphene chips"? Have you gone on their website and gotten an understanding of what products they sell?
Long-Term Market Energy Charged for a Move Higher, Short-Term Needs Time to Rebuild [View article]
5 Tech Takeover Targets And Their Most Likely Acquirers [View article]
EPS
2000 - $0.02
2001 - $0.02
2002 - $0.04
2003 - $0.10
2004 - $0.33
2005 - $0.45
2006 - $1.01
2007 - $0.57
2008 - $0.19 (after adjusting for one time charges/tax items)
2009 - $0.32
2010 - $0.80
2011 - $1.45 estimate (first 6 months after exluding one time settlement with state of Delaware were $0.67)
Since 2002, that is annualized EPS growth of 40%.
Here are Revenue figures:
2000 - $4 MM
2001 - $6 MM
2002 - $10 MM
2003 - $18 MM
2004 - $34 MM
2005 - $51 MM
2006 - $70 MM
2007 - $79 MM
2008 - $81 MM
2009 - $94 MM
2010 - $113 MM
2011 - first 6 months: $75 MM
Since 2002, that is annualized Rev growth of 40%.
5 Leading Stocks That May Crash 30-50% Before A True Bottom Is In Place [View article]
Whistling Past the Expanding Graveyard as Spain Goes 'On the Clock' [View article]
Best Buy: Bargain or Value Trap? [View article]
Youku.com Valuation Reaches Nose-Bleed Levels [View article]
As rumored, Alpha Natural Resources (ANR) moves ahead with a $7.1B, $69.33/share purchase of Massey Energy (MEE). Alpha CEO Kevin Crutchfield says the 21% premium is well worth it and that Massey has been at the top of the company's acquisition list for some time. (PR) [View news story]