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Ravee Mehta

 
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  • AVG: Stale Short Thesis = Great Opportunity! [View article]
    this was a trade based on the short interest being too high. since i wrote the article the short interest has come down by over 50%. As of now, i currently am not confident in a near term catalyst to bring it down further. no strong view.
    Dec 23, 2013. 10:28 AM | Likes Like |Link to Comment
  • Our Favorite Misleading, Factually Inaccurate, And Utterly Illogical Statements From Veeva's Underwriters' Initiation Reports [View article]
    any updated thoughts after the quarterly results?
    Dec 6, 2013. 09:20 AM | Likes Like |Link to Comment
  • Autobytel A Potential Triple: 1x Sales For Double-Digit, Profitable Growth Is Rare [View article]
    if you look at the comments section of my ROVI article, you will see that i sold a long time ago. the same is the case with AVG. AVG is lower than when my article came out, but if you look at the comments section for when i sold, you will see that i sold at a profit. i do not have a view on ROVI right now but am discouraged given the lack on insider buying. p/e of ABTL is currently high because margins are low. operating margins were 6% last Q up from about 3% in the quarter before. they have already shown great operating leverage as revenue grows.
    Dec 4, 2013. 08:56 AM | Likes Like |Link to Comment
  • Autobytel A Potential Triple: 1x Sales For Double-Digit, Profitable Growth Is Rare [View article]
    i don't know if it will dip or not. it is a fact that the stock is up a lot and that the top holder has been reducing. it is also a small cap. it makes sense that one's sizing should reflect that.
    Nov 29, 2013. 12:33 PM | 1 Like Like |Link to Comment
  • Double Your Money With Phoenix New Media, China's Online Content King [View article]
    interesting idea. Definitely understand why they should have premium pricing but why is it that pricing is currently so low?
    Nov 6, 2013. 02:33 PM | Likes Like |Link to Comment
  • Altisource Asset Management (AAMC) Is A Great Short [View article]
    I am new to REITs but if a lot of the value from RESI is going to AAMC, why isn't RESI a short?
    Oct 18, 2013. 08:47 AM | Likes Like |Link to Comment
  • AVG: Stale Short Thesis = Great Opportunity! [View article]
    after thinking more about this idea and doing some more work, I have decided to exit. While I still think it is cheap and the high short interest is unwarranted, I am less confident in a near term catalyst to squeeze the shorts further given what PERI just reported and the back-end loaded guidance for the full year. The idea was always more of a trade vs investment and I think I got a good portion of the short covering I was looking for over the last couple of months.
    Aug 12, 2013. 10:21 AM | Likes Like |Link to Comment
  • AVG: Feb 1st Google Policy Updates Threaten AVG's Growth Engine, Signals Steep Downside [View article]
    As I expected, AVG's subscription revenue offset weakness in search and unlike what the bears expected, search results are still growing. Moreover, the company specifically stated that revenue per search went UP in the Q which implies that the deal they have with YHOO is comparable to GOOG. the company also increased FCF guidance for the year. I believe the bears have now gotten their catalyst. they have seen what a full quarter of the google policy change has done to the search business and it is nowhere near as bad as they thought it would be. Moreover, I think part of the deceleration in search is temporary as the company had an email campaign in q1 to drive that part of the business and will likely do another email campaign in q3. The company also likely promoted subscription products vs search to users which is what you want them to be doing. again the deceleration in the Q was NOT revenue per search but the number of searches, which is more in the company's control and related to what products it choses to promote to its users. In summary, I still think the high short interest is unwarranted. the company is transitioning to a more predictable subscription business and this transition will accelerate as mobile products start to get monetized next year. the transition should result in a higher multiple. the only negative i see is that the revenue guidance appears more back end loaded, but I also think that q3 revenue guidance is very conservative. The implied EBIT margin guidance also appears very conservative relative to what they have been doing. The company has a history of beating its guidance significantly and with a new CEO they probably even had an even higher incentive to make sure expectations are set low. EPS at less 8x EV/FCF for a business that is still growing nicely, it is difficult to understand what shorts are thinking. Would be interested to hear from bears on where I am wrong.
    Aug 2, 2013. 08:20 AM | 2 Likes Like |Link to Comment
  • AVG: Stale Short Thesis = Great Opportunity! [View article]
    i saw on bloomberg. if you pull the filings, you should see the form 144s
    Jul 31, 2013. 04:34 PM | Likes Like |Link to Comment
  • AVG: Stale Short Thesis = Great Opportunity! [View article]
    IACI reported strong search revenue and specially stated, "Yahoo and some of the other guys have really stepped up and made competitive offers to Google which a lot of Google’s partners have chosen to take." This statement is confirmation of the thesis I laid out above. BBYL in Israel - another company that gets most of its revenue from search toolbar related revenue also reported strong results overnight.
    Jul 31, 2013. 04:34 PM | 1 Like Like |Link to Comment
  • AVG: Stale Short Thesis = Great Opportunity! [View article]
    if you look at the filings, you will see recent form 144's
    Jul 31, 2013. 10:23 AM | Likes Like |Link to Comment
  • AVG: Stale Short Thesis = Great Opportunity! [View article]
    Thanks. Insider selling is never good. That being said, this selling was all pre-planned 10b5-1 selling vs open market. TA Associates has been in the stock a long time. They actually sold less shares than they did in December. The CEO announced that he would be leaving the company so him selling is not that surprising. the most concerning sales are from the CFO but I do not know when he instituting the 10b5-1 plan. It looks like a large portion of the sale was associated with options exercises so he should still have a fair amount of stock and un-vested options left. I found it surprising that the stock was up today on this news, but that shows you how heavily shorted it is.
    Jul 17, 2013. 04:14 PM | Likes Like |Link to Comment
  • AVG: Stale Short Thesis = Great Opportunity! [View article]
    The terminal multiple I use in the DCF is a price to earnings multiple not a EV/ebitda multiple. 10x is actually lower than most comps and I think is very conservative given that at that point most of the revenue will be subscription at a high renewal rate and that the business should still be growing relatively healthily. When comparing to other companies you have to also take into account the fact that free cash for lor AVG is higher than net income. This is not the case for some of the comparables. On my estimates, AVG trades at a about 9x 2013 free cash flow and about 7.5x 2014 Free cash flow. I think a discount rate of 10% is very reasonable given where the risk free rate is currently at. Using a higher discount rate doesnt change the outcome that much as a very large portion of the DCF value is actually not in the terminal value given the relatively high free cash flow yield today.
    Jun 30, 2013. 08:09 PM | Likes Like |Link to Comment
  • Air Lease: Leverage Backed Growth To Continue [View article]
    thanks. isn't there an offset to rising interest rates? I thought they were able to raise rental rates as interest rates rise?
    Jun 25, 2013. 07:01 PM | Likes Like |Link to Comment
  • Rovi: Compelling Reward To Risk [View article]
    you are right that the penetration is very low today but I view this as an opportunity. There seems to be increased interest in it from service providers mainly because it is something that consumers increasingly need.
    Apr 30, 2013. 01:52 PM | Likes Like |Link to Comment
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