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Mark Lin

 
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  • Douglas Dynamics: John Burbank Takes Notice Of Stock Near 52 Week Low With 6% Yield [View article]
    Thanks Boomerdude for your kind words and comments.

    While snow is completely unpredictable, the 6% dividend yield and some indicator of undervaluation based on metrics you are comfortable with, will be good justification for entry.

    Thanks.
    Jan 29 09:47 PM | 1 Like Like |Link to Comment
  • Douglas Dynamics: John Burbank Takes Notice Of Stock Near 52 Week Low With 6% Yield [View article]
    Dear tongguru,

    thanks for your comments and inputs.

    My responses are as follows:

    1) 100% insider selling

    Your point on insider selling is taken. While insider selling is traditionally not as indicative or conclusive as insider buying, I agree that insider selling is more pervasive than what I have seen elsewhere. Guru buying and the initiation of dividends in 2010 will help to partially offset the real and perceived effects of insider selling.

    2) unsustainable payout ratio

    Dividend payout ratio is not a perfect indicator and earnings may not be the perfect indicator of maximum dividend paying capacity of a stock. In PLOW's case, it delivered 4 consecutive years of positive free cash flow since fiscal 2008, with free cash flow exceeding dividends paid in 2010 and 2011, suggesting dividend payment is likely to be sustainable.

    3) negative revenue growth

    PLOW achieved positive revenue growth in three out of the last four years and three year revenue growth CAGR is a decent 5%.

    4) high P/E

    Your point on high P/E is noted, although P/E is one of many indicators and valuation metrics used in assessing cheapness or under-valuation.

    Thanks for your contribution to the discussion, toneguru.
    Jan 29 09:44 PM | 1 Like Like |Link to Comment
  • Comtech Telecommunications: Buy At Book, Get One-Third Cash Rebate And 4% Yield [View article]
    Dear Tony, thanks for your comments.

    If we were to take only tangible book value into consideration, CMTL's current P/NTA of 1.75 is still trading at a 6% discount (albeit smaller discount) to its five year average P/NTA of 1.87. In addition, CMTL has compounded its tangible book value by a ten year CAGR of 10.6%.

    Also, CMTL has net cash equivalent to 37% of its market capitalization, which is not affected by the choice between book value and tangible book value. Furthermore, its trailing twelve months EV/EBITDA of 4.12 will be even more attractive, if adjusted on a ex-cash basis. In summary, the book value is not the single reason supporting the investment thesis for CMTL.

    I also agree with Robin, that a stock having traded below its tangible book value at any point in its history, is not conclusive by itself.

    That said, Tony, I appreciate your comments and you highlighted a good point that if we use book value in our analysis, we should use tangible book value as a cross-reference. I fully agree with that!
    Dec 20 02:28 AM | Likes Like |Link to Comment
  • Richardson Electronics: Show Me (What You Are Going To Do With) The Money [View article]
    Hi imd85, thanks for your comments.

    Glad that you liked the idea. Patience is one of the most important virtues of value investors. While I could talk about catalysts all day long, undervaluation is the ultimate catalyst to get the share price going for any stock.
    Dec 18 09:47 PM | Likes Like |Link to Comment
  • Websense Inc.: A Company Within A Company [View article]
    Hi Intangible Valuation, thanks for your comments.

    I used WBSN's historical free cash flow ten year CAGR of 11% as a proxy for my assumptions of future growth in free cash flow. On the point about revenue, WBSN's revenue grew at a historical ten year and five CAGR of 26% and 15% respectively. Obviously, its growth has slowed down in recent years, and I am assuming here that WBSN should at least grow at a rate to its historical free cash flow ten year CAGR , once its TRITON content security solutions take off.

    That said, your point on declining free cash flow and aggressive growth estimates is taken.

    Appreciate your comments!
    Dec 18 09:45 PM | Likes Like |Link to Comment
  • Comtech Telecommunications: Buy At Book, Get One-Third Cash Rebate And 4% Yield [View article]
    Dear dmaislen and sstrand1, the one third cash rebate refers to the net cash which represents one third of market capitalization. When you buy the stock, you are effectively buying the business for two thirds of the purchase price and getting "refunded" with one third of the cash on the books.

    Thanks for your comments! Apologies not making things clearer.
    Dec 12 07:47 PM | Likes Like |Link to Comment
  • Courier: Book Manufacturer Selling Below Book With A 7% Dividend Yield [View article]
    Dear Robin, thanks for your comments.

    My responses are as follows:

    (1) If I am correct, the properties refer to the headquarters, offices, manufacturing and warehousing operations of CRRC. Given that these are not exactly "non-operating assets", I will not put too much emphasis on them.

    (2) Based on data I have from their investor presentation in March 2011, RR Donnelley and Quad Graphic have 21% and 8% of the $7.2 billion book manufacturing market. CRRC is third with 3% of the market. This suggests that the book manufacturing industry is very fragmented and probably still undergoing consolidation. But CRRC does have its niche in the various segments: educational (Pearson, Mcgraw-Hill), religious (The Gideons International, Zondervan) and specialty trade (Wiley, RandomHouse).

    Revenues in the publishing segment were approximately 15% of
    consolidated sales in fiscal 2012. After going through the website and the SEC filings, my take is still they will still focus on the manufacturing segment. The publishing segment is merely a complement to CRRC’s core book manufacturing, digital content conversion, and e-commerce skills and helps CRRC provide a comprehensive end-to-end solution for its customers.

    (3) They still do conference calls, the latest Q4 2012 conference call transcript from Thomson Reuters is available for sale at Alacra Store. But the webcasts and transcripts are neither available on their website nor on Seeking Alpha.

    You are right in pointing out the issues involving management compensation. But I typically only view high compensation as a serious problem if the company refuses to return capital to shareholders in the form of either dividend or repurchases. That is not true in this case. CRRC has paid dividends in every single year since 1995, and currently sports a dividend yield of 7.4%. CRRC's Board of Directors also authorized the repurchase of up to $10 million of its outstanding common stock in November 2012.

    Thanks.
    Dec 12 08:18 AM | Likes Like |Link to Comment
  • Himax Technologies: Cheap At 6x P/E, 6% Forward Dividend Yield [View article]
    Dear jtom, thanks for your comments.

    Under the sub-heading "Capital Allocation", I did write about the current dividend per share: "On Jun. 11, 2012, HIMX declared a cash dividend of 6.30 cents per ADS for the year of 2011, representing a 100% dividend payout of 2011 EPS of 6.1 cents."

    However, the current dividend, while important, reflects the most recent dividend paid, and not the future dividends you will be receiving if you purchased the stock now. And, more importantly, based on projected 2012 GAAP EPS and historical dividend payout ratios, HIMX sports a forward dividend yield of at least 6%.
    Dec 11 08:37 PM | Likes Like |Link to Comment
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