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Mayukh Mukherjee  

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  • IBM: Revenues Flat But Stock Should Still Climb [View article]
    Thanks Pepo, I personally don't look at quarterly eps estimates - in fact an eps miss might be an opportunity to pick up stocks for good businesses. Cheers
    May 2, 2013. 12:48 PM | Likes Like |Link to Comment
  • IBM: Revenues Flat But Stock Should Still Climb [View article]
    Thanks for your comment. I agree buying back shares alone can't help. In fact focusing on earnings alone is also a mirage as companies like IBM can manage that as well (see how they've consistently improved net margins and hence earnings, despite a relatively flat top-line).

    IBM is a solid long-term stock precisely because of their superb capital allocation process. They tend to get good revenue growth every 3-4 years, followed by flat or declining revenues. They have figured out how to ride out these lean years by managing margins and cashflows. When they do generate solid revenues, they can pay down debt and relax on the margin front. Its a cycle they have ridden before and seem to have perfected.
    May 2, 2013. 12:47 PM | 1 Like Like |Link to Comment
  • IBM: Big Blue's Big Bruise Is Your Opportunity [View article]
    Its called scenario analysis, you should try it sometimes.
    Self promotion on SA, shocking!
    Apr 29, 2013. 02:50 PM | Likes Like |Link to Comment
  • IBM: Big Blue's Big Bruise Is Your Opportunity [View article]
    Yes thats my model Josh. Check out the site in general, would love to get your feedback.

    I've got an article coming out on IBM too, maybe next week.

    Apr 26, 2013. 01:32 PM | Likes Like |Link to Comment
  • Lululemon: Quality Issues More Extensive Than Reported [View article]
    Good use of data. Maybe lulu goes the way of crocks. Its so hard to keep riding the fashion wave. I ran a dcf for this stock and got a value of less than $40...
    Apr 26, 2013. 09:49 AM | 1 Like Like |Link to Comment
  • IBM: Big Blue's Big Bruise Is Your Opportunity [View article]
    I should have mentioned, thats a site that I run (its fairly new so you wouldn't have heard of it). Here are a few assumptions why cashflows reduce as you get to steady state

    Assumptions (the ones driving lowering of free cashflows):
    1. Taxes increase gradually from about 24% at current levels to 40% in year 10. More taxes means less after-tax income to generate free cashflows

    2. Reinvestments at IBM are currently negative.. (net capex - change in working cap). This isn't sustainable and the model corrects for that in the long term. Theoretically the long-term reinvestment rate is tied to long-term growth rate and the return on capital. As the reinvestment rate goes up, free cashflows to the firm goes down.

    Sounds like academic jargon, I know, but dcf's are a theoretical construct after all

    I adjusted some of the numbers and I got upto $160/share as an intrinsic valuation. --
    Apr 26, 2013. 08:35 AM | Likes Like |Link to Comment
  • IBM: Big Blue's Big Bruise Is Your Opportunity [View article]
    Josh, Im researching IBM too at the moment and my findings tell me that while there is an opportunity in IBM it has more to do with IBM's ability to manage and generate steady cashflows (borrowing if need be) and manage its eps numbers well.

    From an intrinsic valuation perspective I get about $120 -- but I feel that a dcf of free cashflows (in the traditional sense) misses out on how IBM is generating positive returns for an investor
    Apr 25, 2013. 05:42 PM | Likes Like |Link to Comment
  • Value Plays In China: China Yuchai [View article]
    The key as you said is many Chineses companies ...and not all. In fact the over-reaction has created an opportunity to buy and hold a few companies for the long term. Im not saying CYD is the one for sure, but there are opportunities in PRC that didn't exist a few years ago.
    Apr 18, 2013. 08:01 AM | Likes Like |Link to Comment
  • Relative Valuation: Facebook Vs. LinkedIn By The Numbers [View article]
    Similar sentiment to Doyle above, I don't see how LNKD valuations are justified,- I'm just choosing to stay away..
    Apr 15, 2013. 05:32 PM | Likes Like |Link to Comment
  • Microsoft Offers Investors An Annualized Gross Return Of Up To 25% Over The Next 5 Years [View article]
    MSFT is undervalued in my opinion, but then its been so for a long time.. The question is what will be the catalyst that drives investors to take a look at its huge pile of cash, strong margins and tremendous growth opportunities in the enterprise space.

    I view MSFT purely as an enterprise play with the consumer segment (search,xbox etc) as an added bonus.
    Apr 10, 2013. 11:14 AM | Likes Like |Link to Comment
  • 3D Stocks A New Way To Grow Wealth [View article]
    I agree the 3D printing market holds a lot of potential. The opportunities are tremendous, however I can't see a clear winner in this space yet.

    DDD seems to be leading right now, but I feel its too expensive even after dropping 30% in 3 months. Despite putting in optimistic revenue estimates of over 40% revenue growth for the next 5 years, I still find the stock being fairly priced at around $30.

    The other concern is what are the barriers to entry in this space ? If the market continues to grow astronomically, I'd expect stronger, well capitalized entrants into this space.

    So yes, very excited about 3D printing, just don't see a clear long-term investing opportunity in it yet.
    Apr 10, 2013. 09:55 AM | 1 Like Like |Link to Comment
  • Red Hat: Application Software Company Perfect Example Of Cloud Bubble [View article]
    I like Red Hat and looking at its performance management has done a great job in running it, but like the author find it's current valuation too high for my taste..

    20% annual revenue growth (steady for 5 years then tapering), 16% operating margins and 10% cost of capital gives me around $26..

    Comparing RHT against Oracle,CRM and CA leads me to believe that while this definitely a strong competitor I don't see anything that stands out

    disclosure: is a tool that I've been working on to help me do long-term valuations. still a work in progress
    Apr 9, 2013. 06:04 PM | Likes Like |Link to Comment
  • Top 25 Above-Average Companies Currently Selling At Fair Prices [View article]
    I took a quick glance at SCSC. From a Net current asset value it definitely stands out (I get $17 compared to current price of $29) -- a higher ratio than a lot of other companies out there.

    However the major concern for me is the -ve gap between operating cash versus earnings and the fact that op cash has been volatile. Haven't done a deeper dive into why that is but maybe one of these days.

    I've liked DELL for the last 3 months now!
    Jan 31, 2013. 04:02 PM | Likes Like |Link to Comment
  • VMware Earnings: Down But Not Out [View article]
    I like VMW as a business, but at current levels ( ~ $77) despite a 20% drop I still consider it expensive. Trailing PE (44) , EV/EBITDA (25), PB > 5 are a little too high for my liking.

    Add that to the level of dilution in shares over the last 5 years makes me not trust how much further they will go that route.

    Still like the business fundamentals though (strong revenues, earnings, operating cash, roe, margins) just not willing to buy at this price.
    Jan 31, 2013. 04:01 PM | Likes Like |Link to Comment
  • General Electric: Expanding And Riding The Economic Improvement [View article]
    Thanks for the writeup. Do you have any thoughts on the rather high receivables as a % of revenue for GE? Its almost twice revenues in any given quarter and so much higher than any large ( > $1bn in revenues) companies.
    Jan 31, 2013. 03:57 PM | 1 Like Like |Link to Comment