BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
I was exaggerating the negatives to make a point. In reality, the Z10 is doing quite well. That being said, the heart of the story is BBRY's 76M current customers and our survey work which suggests that they have been waiting eagerly for a modern operating system on the form factor (QWERTY) that they love...a.k.a. the Q10.
That alone is enough to overcome most any bearish thesis.
BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
Terribly thought-out premise. With multiple customers, it's impossible to know which is going to feel the pain. A smaller vendor (like BBRY) could conceivably triple its shipments at the expense of AAPL.
BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
AlphaNeria,
Thanks for the great question. FYI, you also provided a great answer -- "I suspect many people are unconvinced that the turnaround story will hold."
Bingo. This is the issue. We believe that the shorts didn't flinch last quarter because they felt they only needed to ride out the initial-sales storm. Based on our research, that storm was only the calm before the real storm.
Having done this for 25-years, we've been on the wrong side of that storm enough times. If our research and forecast are accurate, the shorts are about to experience a multi-quarter storm. First, institutions will buy. Then, weak shorts will cover. The demand will drive the stock up and eventually force the strong hands out. That being said, our prediction that shares will double is purely fundamental. A large short interest will simply accelerate (and possibly exaggerate) the velocity of the move.
BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
Riley,
After 25 years, I've learned that the past doesn't predict the future. Research is a much better ally. In that regard, we did our research / survey work and ran the numbers. Numbers don't lie. However, a methodology can always be flawed...which is why we ran our calculations using multiple methodologies.
$3 sounds like a lot right now, but replenishing 33% of a pent-up installed base isn't much to ask (40%+ is possible if you ask me, but we didn't go there). Run the profitability numbers on 20, 33%, and 40% of 76M customers and see for yourself.
Hope that helps...and many thanks for addressing a great point.
Shares Of Attunity Are Still Poised To Triple [View article]
Gnu,
I don't take anything away from you comments / opinions. At the end of the day, the stock provided great returns during its "Great Find" phase. It is now clearly in "Wait Time" which is notorious for being bearish until the company reaches its "Gold Mine" stage. Details on these phases can be found here -- http://seekingalpha.co...
No matter what, the company is in Alon's control. As investors, we must individually assess whether or not that's a deal-breaker and how much we're willing to invest considering the current risk/reward profile. In that regard, I never judge another investors choice. ;^)
BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
Our basis was 1) primary and secondary research and 2) our desire to hand bearish investors every debatable argument. Our thinking -- we wanted to value the company under the assumption that we should cede every debatable argument. If it still seemed undervalued under those conditions, we'd know we have a winner...
BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
I respect your view. However, in our 19-year experience with institutional investors, they almost always ask about the cash and add it back after deriving an EV/EPS multiple. Think about it this way - if BBRY had $50 in cash, would $24 still be an appropriate target? Of course, $50 of cash would generate interest, but likely only add 50-cents to EPS. At an 8x multiple, that would only add $4 to the $24 target.
Good point about licensing deals. While we're at it, we should all consider the potential to add a hypervisor -- soon, BB10 users may be able to have Android and BB10 running on the same phone. ;^)
BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
Yasch22,
Those are EXCELLENT points and illustrate the homework you've done on your own. Our research led us to the same conclusions, but we didn't want to include such depth in this particular article.
Also, we were trying to be balanced, letting the shorts know that we understand their case. In fact, before doing the research, my personal hypothesis was bearish. Our research changed my mind completely.
Kindest Regards,
Mark G.
p.s. FYI, this weekend's BlackBerry-at-Selfridges article was characteristic of the survey work we did regarding the Q10. http://seekingalpha.co...
Shares Of Attunity Are Still Poised To Triple [View article]
Gnu,
Can you specify? I was on the original Q4 call. I also spoke with the company after the call because they communicated their guidance so poorly.
For anyone who was on the call, it was clear that they expect a slower Q1 and steady acceleration as the year progresses. The company explained that Alon chose 20% as a minimum level of growth for this year.
After 20 years of covering software, I can tell you that software stock valuation is often NOT about the math. Rather, it's about the relative value the software provides multiplied by how well the company builds channels to sell it. This is basically the concept behind Gartner's Magic Quadrants...and it works.
For ATTU, they have the best relative value among "independent" (i.e. excluding the large diversified) vendors...and they are near the top overall. The problem is with their distribution strategy. This is not an uncommon trait among Israeli (and Canadian) companies selling into the U.S. market. ATTU has done a good job of forming partnerships, but getting them to bear fruit is step 2 of the job. Alon has also chosen to augment those efforts with a direct sales force.
Basically, they have the value and are working on the execution.
In the meantime, the stock nearly tripled at its height, fulfilling its promise long before I expected. After that, it started pulling back, clearly marking the end of the "Great Find" phase (and the beginning of the "Wait Time").
Based on my Three Stages article http://seekingalpha.co..., I hope everyone sold enough at higher levels to be playing with house money at this point. If not, I highly recommend reading that article. My profile basically describes it as "required reading". ;^)
Agreed. This is part of the reason why I utilize a 20% stop-loss on my picks from the initial purchase price. If the stock drops 20% from whem I buy it, it's almost always a dud. Losing 20% on the duds is potatoes compared to the gains from the winners that double, triple, or more :)
We currently have no rating on the stock. ALVR was one of our duds -- it happens!. Per our Stocks To Triple Instruction Manual (seekingalpha.com/inst... we waved the white flag after a 20% loss.
We could revisit it, but "fool me once" is another rule we tend to follow...
Shares Of Himax Hit By Flawed Bear Case [View article]
10-years out is very difficult to forecast. Also, EPS should grow significantly faster than 10% for the next few years (more like 40%). My articles sum up the valuation thesis for the next couple years...and by that point, they could simply get acquired for strategic/competitive purposes.
BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
That alone is enough to overcome most any bearish thesis.
BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
Thanks for the great question. FYI, you also provided a great answer -- "I suspect many people are unconvinced that the turnaround story will hold."
Bingo. This is the issue. We believe that the shorts didn't flinch last quarter because they felt they only needed to ride out the initial-sales storm. Based on our research, that storm was only the calm before the real storm.
Having done this for 25-years, we've been on the wrong side of that storm enough times. If our research and forecast are accurate, the shorts are about to experience a multi-quarter storm. First, institutions will buy. Then, weak shorts will cover. The demand will drive the stock up and eventually force the strong hands out. That being said, our prediction that shares will double is purely fundamental. A large short interest will simply accelerate (and possibly exaggerate) the velocity of the move.
Kindest Regards,
Mark G.
BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
After 25 years, I've learned that the past doesn't predict the future. Research is a much better ally. In that regard, we did our research / survey work and ran the numbers. Numbers don't lie. However, a methodology can always be flawed...which is why we ran our calculations using multiple methodologies.
$3 sounds like a lot right now, but replenishing 33% of a pent-up installed base isn't much to ask (40%+ is possible if you ask me, but we didn't go there). Run the profitability numbers on 20, 33%, and 40% of 76M customers and see for yourself.
Hope that helps...and many thanks for addressing a great point.
Kindest Regards,
Mark G.
Shares Of Attunity Are Still Poised To Triple [View article]
I don't take anything away from you comments / opinions. At the end of the day, the stock provided great returns during its "Great Find" phase. It is now clearly in "Wait Time" which is notorious for being bearish until the company reaches its "Gold Mine" stage. Details on these phases can be found here -- http://seekingalpha.co...
No matter what, the company is in Alon's control. As investors, we must individually assess whether or not that's a deal-breaker and how much we're willing to invest considering the current risk/reward profile. In that regard, I never judge another investors choice. ;^)
Many thanks for your contribution(s),
Mark G.
BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
...and we believe we do.
BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
Good point about licensing deals. While we're at it, we should all consider the potential to add a hypervisor -- soon, BB10 users may be able to have Android and BB10 running on the same phone. ;^)
BlackBerry Bear Case Is Flawed - Shares Should Double [View article]
Those are EXCELLENT points and illustrate the homework you've done on your own. Our research led us to the same conclusions, but we didn't want to include such depth in this particular article.
Also, we were trying to be balanced, letting the shorts know that we understand their case. In fact, before doing the research, my personal hypothesis was bearish. Our research changed my mind completely.
Kindest Regards,
Mark G.
p.s. FYI, this weekend's BlackBerry-at-Selfridges article was characteristic of the survey work we did regarding the Q10. http://seekingalpha.co...
Shares Of Attunity Are Still Poised To Triple [View article]
Can you specify? I was on the original Q4 call. I also spoke with the company after the call because they communicated their guidance so poorly.
For anyone who was on the call, it was clear that they expect a slower Q1 and steady acceleration as the year progresses. The company explained that Alon chose 20% as a minimum level of growth for this year.
After 20 years of covering software, I can tell you that software stock valuation is often NOT about the math. Rather, it's about the relative value the software provides multiplied by how well the company builds channels to sell it. This is basically the concept behind Gartner's Magic Quadrants...and it works.
For ATTU, they have the best relative value among "independent" (i.e. excluding the large diversified) vendors...and they are near the top overall. The problem is with their distribution strategy. This is not an uncommon trait among Israeli (and Canadian) companies selling into the U.S. market. ATTU has done a good job of forming partnerships, but getting them to bear fruit is step 2 of the job. Alon has also chosen to augment those efforts with a direct sales force.
Basically, they have the value and are working on the execution.
In the meantime, the stock nearly tripled at its height, fulfilling its promise long before I expected. After that, it started pulling back, clearly marking the end of the "Great Find" phase (and the beginning of the "Wait Time").
Based on my Three Stages article http://seekingalpha.co..., I hope everyone sold enough at higher levels to be playing with house money at this point. If not, I highly recommend reading that article. My profile basically describes it as "required reading". ;^)
Hope that helps,
Mark G.
Alvarion: 10-Bagger Or Bust? [View instapost]
Russell 2000 Update: Long And Short Picks For Easy Gains [View article]
Alvarion: 10-Bagger Or Bust? [View instapost]
Alvarion: 10-Bagger Or Bust? [View instapost]
We currently have no rating on the stock. ALVR was one of our duds -- it happens!. Per our Stocks To Triple Instruction Manual (seekingalpha.com/inst... we waved the white flag after a 20% loss.
We could revisit it, but "fool me once" is another rule we tend to follow...
Kindest Regards,
Mark G.
Shares Of Himax Hit By Flawed Bear Case [View article]