Ron Sommer

EZCORP: Value Play at Your Local Pawn Shop

I am also long EZPW. I have a target price in the $22-$23 range.

Friedman Industries: Strong in a Weak Market

I agree that FRD is undervalued. It is also on my watch list. I believe the full value of FRD is in the $10-$15 range.

Spotlight on Biotech: 10 Promising Companies

This is not a sector in which I would normally invest. I need to see reliable free cash flow and few companies in this sector have this. Moreover, I am not impressed with the promise of product in the pipeline. Biotech is more a matter of speculation than investing.

Prepare for Significant Growth in Medical Equipment Sector

Compared to other companies in this space, STE appears to be mispriced.


On Jul 12 12:39 PM mdpath wrote:

> Are you recommending STE as a buy?

Why Now Is Not the Time to Own Semiconductor Stocks

If you read this article from Reuters, www.reuters.com/articl..., quoting Craig Barrett, Chairman of Intel, my argument that chip stocks will not see sales increases, let alone earnings increases, in 2009 are substantiated.

TSM at $6 is no bargain; Intel at $12 provides to the current level which I think is fair value.

Why Now Is Not the Time to Own Semiconductor Stocks

Yes, I do expect semi sales to be less in 2010 than in 2009. I could be wrong, of course, but I think the recovery will start later than many expect. Further, the "bits coming out of the foundries" are just that. I don't think there is sufficient data available yet to draw conclusions about performance in 2010.

I don't think the picture is black either. Some companies clearly will do better than others. I see a strong rebound for Intel (FY10 EPS of $1.73), QLogic (FY10 EPS of $1.42), Taiwan Semiconductor (FY10 EPS $0.92), Texas Instruments (FY10 EPS $2.12) and Xilinx (FY10 EPS $1.67). I expect Altera and Analog Devices to be down from FY08.

The point is Intel is now selling at 17X TTM EPS, 40X Est. FY09 and 19X FY10 consensus estimates. If these estimates are reasonable, is now the time to buy? My own estimate, as you can see, is much higher. If I am right, the Intel is selling at 9X my estimate. At $15-$16, I think Intel is fairly priced even considering my higher estimated EPS for 2010.

I would posit that these same arguments are appropriate for the other companies mentioned in the post.

Teva Pharmaceutical: Fairly Priced

364020,

I wasn't rehashing but correcting a misstatement. The curent P/E for TEVA is above 60. For the record, the "E" in P/E includes non-cash charges. Re-stating earnings to reflect non-cash charges is fine if you make that clear but adjusting out R&D is wrong unless you capitalize the expense. I avoid this problem by relying on free cash flow.

Teva Pharmaceutical: Fairly Priced

Perhaps Yahoo does not have the latest. Follow this link www.reuters.com/financ... to Reuters.

Even with Aggressive Valuation, For-Profit Education Stocks Seem Overvalued

I wanted to comment on the valuation issue around APOL. I use a different methodology than used by others who expressed an opinion here. However, in my opinion, APOL has an estimated value in the range of $40.36 to $55.77 with an average estimated value of $46.73. For the record, I use multi-factor analysis. Additionally, I would use $4.89 as an estimated FCF.

Even with Aggressive Valuation, For-Profit Education Stocks Seem Overvalued

As an administrator at a major public university, I can say that we do not accept degrees from any of the online distance learning schools in this discussion. The University will not accept credits for transfer and it does not accept a degree from such an institution as a qualification for any position requiring a college degree. It may be that my employer is behind the times in matters like this but it seems from other comments, that employers in the private sector are not anxious to accept them either.

Something else to consider. Enrollments trends are only part of the story when looking at an educational instition. We also study retention and completion levels which we consider as important, if not more important, than enrollment. Our focus is getting our students through our programs successfully. If they do not stay in school or do not complete their program, we have failed in our mission.

The for-profit schools also lose out if they do not retain and complete students. The high turnover of students, the cost of acquiring students all effect their bottom line.