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Nitin Gulati  

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  • Qualcomm - Quantifying The Capital Return Program [View article]
    According to the press release " Qualcomm intends to repurchase $10 billion of its common stock within approximately twelve months of the date of this announcement, in addition to its current commitment to return a minimum of 75% of its free cash flow to stockholders through stock repurchases and dividends."

    So this is on top of returning 75% of free cash flow
    Mar 10, 2015. 07:15 AM | 1 Like Like |Link to Comment
  • Abercrombie Shares At An Inflection Point Now [View article]

    That's exactly I have been saying. At this price level, risk-reward is shifting
    Mar 2, 2015. 10:09 PM | 1 Like Like |Link to Comment
  • Coty: Can't Cut Your Way To Growth [View article]
    Let me ask you this ; " would you pay 20 times for company whose revenues probably will grow at anemic 1-1.5% overall". Even though they are growing in emerging markets , majority of their revenue still comes from US.
    After this cost cutting , what's next : revenues aren't going to grow in high single digit even

    Why that multiple then
    Feb 28, 2015. 04:36 PM | 1 Like Like |Link to Comment
  • J.C. Penney Has Less Volatility Ahead [View article]
    Retail space in U.S. Is undergoing capex cycle to integrate omni channel strategies . While store rationalization was much needed to stop it from bleeding , low hanging fruit is vanishing now. Company needs to steer itself towards a sustainable path and omni channel will be a key.
    Feb 28, 2015. 04:28 PM | Likes Like |Link to Comment
  • Can U.S. Equity Still Deliver If The Fed Hikes? [View article]
    My simple take : fed' intent though indirect from QE was to suck out the volatility from market . Now when they get back to normalized stance, a natural consequence would be volatility
    Given the levels valuations are currently at , upside volatility will be limited and overshadowed by downside volatility
    Feb 28, 2015. 04:21 PM | 1 Like Like |Link to Comment
  • Abercrombie Shares At An Inflection Point Now [View article]
    Ralph Wanger

    I agree completely teen retail is an extremely fickle market. And congratulations on making the dough from your short position. Stock has now lost almost 50 percent of its market-cap.

    Who is to say ANF rivals who are enjoying their success now wouldn't suffer as fashion changes.

    Risk reward is changing to the upside
    Feb 27, 2015. 12:40 PM | Likes Like |Link to Comment
  • Abercrombie Shares At An Inflection Point Now [View article]
    While I agree that revenue decline better than expected is not the definition of growth but my friend in real lot it changes the perceptions. At the end it's a game of managing expectations. I am not saying stock can't go down from here but risk reward is shifting to the upside . Even though this time it's for ANF, people behavior doesn't change much: how ppl reacted to AAPL, NFLX , COH , WFM in last two years .
    Yes ANF became a victim of its own success , and it's paying for it's self inflicted wounds.
    Feb 27, 2015. 09:01 AM | Likes Like |Link to Comment
  • Abercrombie Shares At An Inflection Point Now [View article]
    I m not saying ANF can't go down from here but risk reward is shifting to the upside given extremely bearish sentiment. Fashion my friend changes very swiftly and people switch to it similarly.
    Feb 27, 2015. 08:56 AM | Likes Like |Link to Comment
  • Abercrombie Shares At An Inflection Point Now [View article]
    Trust me bulls will get rewarded here ! Its a test of patience. Markets are pricing sales bleed to continue, skeptical about international business.

    We saw the same sentiments towards Coach, Whole Foods earlier last yer and see where the stocks are now.

    ANF still makes almost $3 billion in revenues, its a matter of getting the cost structure straightened out , which i think under the present scenrio the board is pushing for.
    Feb 27, 2015. 05:36 AM | Likes Like |Link to Comment
  • Why The Fresh Market's Weak Start To The Year Is An Opportunity In Disguise [View article]
    I haven't followed this stock for the last couple of months so news of CEO resigning suddenly was little bit surprising but not out of awe. I published an post on it around fall last year highlighting the case that the way company is calculating its comp sales is markedly different from how it actually should be done. Essentially, comp sales were elevated to aggressive opening of new stores, with new stores enjoying a fad status. As these new stores get older, honeymoon period fades , there will be a notable decline in comp sales.

    I need to re-visit my valuation and analysis to reflect all the new information. You are more than welcome to read that @ SA
    Feb 26, 2015. 08:50 AM | Likes Like |Link to Comment
  • Pier 1 Imports - Overreaction Drives Stock Into Value Territory [View article]
    While I agree that shipping furniture is an over whelming process with heavy costs and PIR at this juncture needs some one with that expertise. If they continue to post market accepted GM's against the backdrop of single digit comps and low double e commerce channel growth, market will give it the time to get its act together. This uncertainty has depressed its mutliple relative to its peers , once this uncertainty abates multiple expansion will drive the stock higher
    Feb 16, 2015. 06:50 AM | Likes Like |Link to Comment
  • Hold Your Nose And Consider Pier One Imports [View article]
    As per my calculations, each store generates sales of around $1.45 m during a year, almost $220K per in occupancy costs, and the same for variable expenses. E-commerce channel is expected to generate > 20% of total sales by the end of next FY. Closing 50 stores in the next few years will only lead to sales loss of $75 m, which can e-commerce channel can easily offset. But $31 m in savings from expense reduction will flow in right away to the bottom line.
    To improve their cost structure, they need to accelerate their store closing plan. They already have re-modeled their stores recently, so this expense should level off in the next few year.
    I could see fears among the investment community on margin erosion but I believe the worst is behind us.
    Feb 11, 2015. 11:02 AM | Likes Like |Link to Comment
  • Hold Your Nose And Consider Pier One Imports [View article]
    with zero growth assumption, stock is valued around $14.50 , ,and with 3% growth over the next 5 years, its fairly valued at $18 / share. Market overreacted to this news.

    Its gives management one more reason to pull up their store closings plan to steer the business towards sustainable profits.

    Went long in the last night @ 11.85,
    Feb 11, 2015. 09:14 AM | Likes Like |Link to Comment
  • Abercrombie & Fitch - Not At Inflection Point Yet [View article]

    I agree ANF still has a strong brand , product quality is amazon . But ANF lost its fashion relevance and unfortunately in teen retailing that is a key business driver. Company management needs to do a lot to bring its customers back .
    Feb 5, 2015. 06:30 AM | Likes Like |Link to Comment
  • Update: Netflix - Subscriber Retention Issues Flagging The Troubles Ahead [View article]
    Well I agree that change in total reported subs from one quarter to next doesn't completely equals to gross additions but it is an approximation. Considering NFLX reports churns, and we have the net paid subs we could calculate the exact gross subs number .

    However, what is more intriguing is the differential between total paid subscribers reported and what it should be

    For eg : Dec Qtr, total domestic subs are 39.11 m , addition of 1.89 m since last reported quarter. If you add 1.89 m to last qtr's paid subs it should equal 38.16 m versus as reported 37.7 m , a differential of 465k subs. Since Netflix is already reporting these numbers after the churn, this is the number of subs which are defecting after a trial or after using the service for couple of months.

    One more thing to note, why is this number higher for Dec qtrs and drops for March qtr in particular. One explantation is more people sign up during holidays and stick around considering Netflix launches its original content in Feb.

    This is the reason I am more interested in looking at the trend of this ratio.

    Now coming to cash flow model assumptions. Since I modeled it last Feb, I assumed 25 % top line growth over the next 5 years versus consensus estimate of 22% at that time. My estimate was 5.46B against reported $5.50. In hindsight, one can argue my expectations for operating margins were lower than reported ( 6.45 % versus 7.30%) . Anyways, I am assuming operating margin expansion against the backdrop of higher ARPU, contribution margins.

    One issue is the off - balance sheet liabilities which still need to accounted for .
    Feb 4, 2015. 03:22 PM | Likes Like |Link to Comment