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S. Hilgemann

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  • General Motors: A Contrarian's Opportunity [View article]
    Best piece of advice by a mile in this article is this: "Narratives are not reliable tools for investing. Avoid thinking in narratives." - If only people listened!
    Sep 29, 2014. 08:59 AM | 3 Likes Like |Link to Comment
  • Sell-side weighs in on GM [View news story]
    GS raised their target from $46 to $48..
    Jul 25, 2014. 09:07 AM | Likes Like |Link to Comment
  • Amorality, Ligon, Omnitrition And A Diamond Studded Fraud [View article]
    Very well written article - thanks for that!
    Jul 23, 2014. 09:37 AM | 4 Likes Like |Link to Comment
  • An Open Letter To The General Motors Board Of Directors And Shareholders [View article]
    As opposed to a passionate analysis? When it comes to investing I'm well served leaving emotions and passion to one side and focusing on hard facts and numbers. That doesn't mean I have no passion for people in tragic accidents, that passion simply doesn't belong in a financial analysis.
    Apr 23, 2014. 04:59 AM | 2 Likes Like |Link to Comment
  • An Open Letter To The General Motors Board Of Directors And Shareholders [View article]
    Duly noted, of course I'm aware of the PR sensitivity around this issue. But shortly after an investigation and the establishment of a compensation fund for the victims' families, this should be the very next thing to think about for the Board.
    Apr 16, 2014. 10:31 AM | Likes Like |Link to Comment
  • An Open Letter To The General Motors Board Of Directors And Shareholders [View article]
    GM could do all of the above and initiate a repurchase program and still be overcapitalized given the company's strong cash flow generation. When all is said and done the recall might end up costing $3bn+ in a worst case, but note that in Toyota's case it took 4 years to come to a settlement of $1.2bn on the legal challenges. I.e. none of this threatens the near-term liquidity of GM, they don't call it a 'fortress balance sheet' for nothing. In four years from now GM will likely have earned more than $20bn (perhaps even more than $25bn), and yet a potential legal battle that may cost them $1.2bn sometime in the future is deemed dangerous to the company's liquidity? Surely not, especially given the $33bn in cash on the balance sheet and additional free cash flow being added each quarter.

    The opportunity to buy back your own stock at fire-sale prices is something that great managers should seize upon. GM would be well advised to recognize this opportunity and act sooner rather than later.
    Apr 15, 2014. 09:19 AM | 4 Likes Like |Link to Comment
  • General Motors Is Still Undervalued [View article]
    Good question, I think you're spot on there, mid cycle around $5 eps sounds reasonable to me too. Peak cycle could be as high as $7-10 eps, depending on how efficient they can make GM over the coming years (margins, margins, margins!). In a 2008-like crash I'd currently see about break-even, excluding restructuring costs. So that's the big short-term whammy to watch out for over the coming decade. It's still a hyper-cyclical stock, so it's important to keep that in mind.
    Jan 23, 2014. 04:20 AM | Likes Like |Link to Comment
  • General Motors Is Still Undervalued [View article]
    My rough target numbers of $48-52 are for Dec 2014, i.e. slightly less than 12 months from now. Don't forget the 3% dividend on top, which you can currently reinvest to compound a little quicker while the stock trades far below fair value. Once the stock trades in the 50s it'll likely be less attractive to reinvest the dividend. Personally I'm just converting the dividend payments into 2019 B warrants, I feel comfortable with those because the expiry date is so far out that I can have a high confidence in saying that the stock will be higher by then.
    Jan 23, 2014. 04:17 AM | Likes Like |Link to Comment
  • General Motors Is Still Undervalued [View article]
    Fair value in my mind would be 10x forward earnings plus the DTA, so as of year end I'd say about $50-54 plus 8, i.e. $58-62. I doubt it will be fairly valued by then though, so $48-52 is probably a fairly conservative and achievable range to target.
    Jan 22, 2014. 05:34 PM | Likes Like |Link to Comment
  • General Motors Is Still Undervalued [View article]
    Yes, every quarter the DTA turns into cash on the balance sheet, and part of it is being paid out as a dividend, parts are spent on capex and better products, and parts of it will undoubtedly be available for buy-backs in the second half of 2014 or first half of 2015. The Canadian stake you mention is 'for sale' but I remember them stating that they want a 'fair price' and that GM currently is too cheap to sell. So perhaps close to $45 to $50 they can be convinced to sell.

    Undervaluation never makes sense, it always appears crazy, and investors have to be willing to look silly for a while. Eventually it'll correct itself, who knows when. I'd guess by 2015/16.
    Jan 21, 2014. 12:13 PM | 2 Likes Like |Link to Comment
  • General Motors' Stock Is Much Cheaper Than You Think [View article]
    Yes I like the warrants, but you must be mindful of the fact that they introduce leverage, which may or may not be appropriate for your portfolio. Also the liquidity is limited (for large institutional investors this matters, to private investors it doesn't), and they are simply harder to buy for average Joe since not all brokerage accounts will allow you to trade them. If you can get access to them, then I'd mix them into a core stock holding.
    Jul 16, 2013. 06:31 AM | Likes Like |Link to Comment
  • Grab Best Buy: The 'Downside' Is A Quick 30% Profit [View article]
    Finally someone who writes some sense about Best Buy. The rampant negativity in the media and financial community has led to a company so cheap its minority owner wants to take it private (I'd do the same at that price!). You are a better analyst than those guys at Jeffries who think the bid is "too low", yet rate the stock "hold" with a target of $21. Laughable. Either this company will be taken over in the 30s, or we'll sit here in 2015-17 with a public stock that will be much higher than that. Win-win for investors, but don't tell that to all those news-reading, analyst-opinion-abiding speculators.
    Aug 9, 2012. 06:05 AM | 2 Likes Like |Link to Comment
  • Ghost Rally [View article]
    More buyers who desire to purchase, less sellers who desire to sell. Of course the trades would match up, but the bid/offer jumps would be upward with more bids in the market than offers. Extreme example, 10 buyers at 50, 1 seller at 51, 1 seller at 52, 1 seller at 53 .. etc.. all the way to 60. 10 buyers and 10 sellers, but the price moves up.
    Apr 18, 2012. 08:55 AM | 1 Like Like |Link to Comment
  • Ghost Rally [View article]
    More buyers than sellers perhaps? Daily movements are perhaps more like a random walk? Stocks are fundamentally cheap, it doesn't take too much to move them higher? So many explanations for those who don't seek to find the cause of a move in every headline they read ;)
    Apr 18, 2012. 06:18 AM | Likes Like |Link to Comment
  • Reading The Treasury Tea Leaves [View article]
    I've written a response to this article here on SeekingAlpha:
    Apr 17, 2012. 04:51 AM | Likes Like |Link to Comment