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Seraphim Blentzas

 
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  • BlackBerry: Strong Buy On Plunging Sales And $4.4 Billion Loss [View article]
    The media tends to focus on only the very worst news for the company, in the worst way.
    $4.4b loss - overblown
    -either say that the company sold 1.9 million handsets or say the company lost $4.4b. the $4.4b loss takes into account that the company sold 4 million devices.
    - the adjusted loss (purely on the business it did) was under $400m which is still nothing compared to the losses Nokia was racking up before Microsoft bought it.
    - Without its cheap devices Samsung would be doing bad too (sales of high end devices plummeted at Samsung). BlackBerry just released Q5 and other low end devices which will appeal to users of the BB7 phones in developing countries.
    - this quarter BlackBerry had the worst kind of media attention possible, talk of the company collapsing when the Chinese company valued it more than gold. Instead there's a turnaround with US Government and Germany curbing the iPhone and sticking to BLACKBERRY. as long as security remains a priority BlackBerry will be a player.
    - cash equivalents up to $3.7b. even without the $1b share issue cash down by less than half a billion. a true $4.4b loss would've put the company in bankruptcy.
    - $4b of the $4.4b loss is structural changes + things that will not happen next year thanks to the foxconn deal.
    - new security technology center in Washington DC.
    - only 442th BB10 phones sold last quarter. That number can only go up, bring down the price of the devices and they will sell.
    - market share remains strong in the middle east. service revenue remains strong given drop in unit sales.
    Dec 22 01:26 AM | 5 Likes Like |Link to Comment
  • The Silver Singularity Is Near [View article]
    Agree that the price of silver is going to get higher but not that's it's going into a singularity. Higher prices will cause many new mines to start construction. Goldcorps Penasquito has over a billion ounces of silver reserves that just started producing, Canada's biggest gold and silver project KSM, if the price increases KSM reserves of silver and gold could go up exponentially because very low grade ore will be economically viable to mine. Cadia Hill Newcrest Mining, Olympic Dam is relatively new, half of Yamana Gold's reserves are at mines that will open in the next two years, Aurico Gold most of reserves are at mines that are still projects, Pretium Resources can't even open its mine because it can't raise the billions needed for construction. At $70 silver the number of new mines that will open would double or triple. Even Osisko Mining said that the 50% or so increase in some of its measured and indicated reserves last year was due entirely to the higher commodity prices. If silver reaches $200 an ounce how many buyers will there be ? most people can't afford to buy it at that price but there will be many more sellers.
    Another thing that will cap the price of silver is the fact that there are alternative precious metals that have in the past been ignored by investors. Silver is produced at a rate 10X gold and 100X platinum and palladium which have a better growth in industrial demand due to more vehicles being manufactured (39% more in 2016 than in 2010).
    A temporary spike in the price will probably be caused by the futures market crashing. But how long will that last? if all of the silver is held by a couple billionaires then they will cash in at $500 an ounce or they will be forced to sell by the government leading to more regulation in how paper futures treat the commodity.
    Palladium, Platinum, Rhodium also have iso currency codes. Considering their very low production and that almost none of their demand is by investors, they are much more attractively priced.
    Remember the Rhodium crash in 2008 ? Silver leads precious metals in supply and production. When one like gold or platinum reaches $20,000 an ounce something in the market will act to lower the price. That puts a cap on the price of silver too because investors will consider its technical merits like the gold silver and gold platinum ratios.
    Following the record high and the subsequent crash, when the dust settles price will be driven by supply and demand and there's more than enough silver to go around. Silver's largest producers in 2010 were not even gold or silver companies. Diversified metal companies like BHP. In fact many of the producers take silver for granted, that's why companies like Silver Wheaton exist ($4 an ounce is what it pays the miners for silver). At $70 companies will put a lot more emphasis on silver exploration then they currently do.
    Jan 27 10:38 PM | 4 Likes Like |Link to Comment
  • BlackBerry: Strong Buy On Plunging Sales And $4.4 Billion Loss [View article]
    nsa scandal influences German government decision to stick with BlackBerry only. http://bit.ly/1j40oH8
    Dec 22 01:32 AM | 2 Likes Like |Link to Comment
  • Paychex Has Lost Its Dividend Luster [View article]
    Paychex is up 22% the last six months and the quarterly improved a bit last quarter compared to no quarter to quarter increase during the last year. Doesn't sound like a sell.
    What do you think of Transforce (TFI) ? Annual dividend on track to be at least 40% higher than last year, that would be the first yearly dividend increase in three years. TFI is up 34.97% last six months.
    Feb 8 01:46 PM | 2 Likes Like |Link to Comment
  • The Silver Singularity Is Near [View article]
    First if you're to consider the big picture ignore the graph used in the article. The graph only shows U.S. production and UNLIKE THE REST OF THE WORLD & 3 OF THE TOP 4 MAJOR PRODUCERS THE U.S. IS SHOWING DECREASING PRODUCTION. Mexico, China, Australia are much more important producers and they are increasing output. Peru also is stable so the graph is showing a trend that is limited only to the US THE SOURCE OF ONLY 5% OF WORLD PRODUCTION.

    The problem with the argument that has ensued is the premise. comex isn't capable of taking on the losses or delivering the non existent asset that it has been selling. In the extreme case comex will give up what it has and people left with paper promises will have to face reality. Silver coins accounted for just 10% of total silver demand in 2010 double jewelry so investment demand outside of comex (physical demand incl ETF's) isn't going to drive the price up infinitely. The problem at comex will have to sort itself out but don't bank on it having a singularity effect on spot price.

    BUT say the price hits $150 and stays there for a period of time. Mining companies will HEDGE at a RECORD HIGH PRICE and that will ATTRACT INVESTMENT from financial institutions. $20M for a mine shaft will be peanuts compared to the credit banks will be throwing at them. Approval process? How hard is that going to be in this economy? Quebec had no problem thowing a couple hundred people off their land to get Malartic started. Detour Lake project offers aboriginals job prospect and it gets approved. There are many other smaller projects that have the green light but are idle because the price doesn't justify the exploration costs.

    With respect to construction time. Ivanhoe needed 3/4 of a year to complete 70% construction at one of the world's biggest copper gold projects. Malartic less than 2 years but it began when gold was a lot lower, as the price moved up delays were compensated for more rapidly. Price affects both the speed and efficiency with which many of the new projects reach commercial production.

    That silver mined as a by product to gold HELPS prove my point. $12000 gold is a major driving factor. Companies could begin DRILLING DEEPER INTO THE EARTH WHERE GOLD IS NOT UNCOMMON.

    "Most primary silver mines have already been operating at full-capacity at these prices"
    In response to frdm45, what price? $30? if the price is $30 yeah there isn't much incentive for primary silver producers to expand operations but we're not talking about $30 silver are we? It's the primary gold producers that are operating at higher capacity because gold is much closer to its 2011 high as evidenced by the gold to silver ratio (even gold to platinum ratio). $10-$20 dollar margins going to $100 dollar margins is a big increase especially in percentage terms. How much of Silver Standards billion ounces of indicated resource will convert to 2P reserves? (currently only 290M ounces). The $20 or so base cash costs at some of the mines will go from being significant to insignificant. Most of the silver producers have many times more resource than 2P. The fact that companies like Harmony Gold and AngloGold Ashanti are still around is a testament to the price of gold, they would have disappeared if the price was what it was only years ago, their cash costs would've just covered the price only five years ago.
    Consider cash cost, the relatively low cost gold producers like Barrick (60-70%), Goldcorp (60-70%), Agnico (60%) have well over half of their gold resource already represented as 2P reserves. For primary silver it's completely different. 22% for silver standard (300 of over 1B), 40% for Hecla, 46% Coer D'Alene, 35% for First Majestic. Much more growth for silver than gold producers when it comes to the amount recoverable. $20M shaft cost is nothing when the value of the silver goes from $100M to $700M (hedge at $100, increase reserves).

    Right now the only limiting factor to Canada's biggest gold-silver-copper project KSM is the construction cost of almost $5B. How fast will that barrier be removed if its silver and gold reserves go from a valuation in the billions to 1/2 trillion dollars? because reserves go up by tens of millions of ounces for gold, hundreds of millions for silver and the price by magnitudes. KSM mine life could be 50 years and construction is only limited by $5B which is peanuts at $10th gold, $100 silver.
    so yes at $100 silver $12000 gold many new mines will open ESPECIALLY IN EUROPE where Eldorado Gold will become the biggest gold producer (also biggest international producer in China).
    Jan 29 01:20 AM | 2 Likes Like |Link to Comment
  • The Silver Singularity Is Near [View article]
    It takes time to construct the mines but not nearly as long for mines already operating. Companies mining two million ounces a day can double production easily if their profit margin quadrupled.
    Like I already pointed out though, there are lots of NEW gold and silver mines reaching commercial production within the next two years regardless of what happens with the price.

    ALSO to remember is that very few companies still have hedge books meaning that they can IMMEDIATELY capitalize on the higher prices. That will allow them to respond more quickly to the higher prices by expanding operations to include lower grade ore.

    "will not therefore invest scarce resources"..."if they do not have confidence that prices can be maintained to justify investment and capital costs"
    Silver is barely $30 an ounce today and they ARE investing to bring mines online because their INVESTORS are bullish on gold and silver. What do you think they'll do when silver reaches $150 an ounce? of course they're going to invest scare resources to bring MANY new mines online. At $200 they'll START TO HEDGE again, opening up their hedge books and selling at $120 an ounce for the next five years. Primary production will grow very fast in that scenario. When it becomes apparent that comex is the problem their investors will shift to physical silver and that will mean silver coins will go from 10% to 30% or more of demand.
    Jan 28 05:42 PM | 2 Likes Like |Link to Comment
  • The Silver Singularity Is Near [View article]
    It has been a while since photography and silverware have been factors in demand. If their demand reaches zero that won't change the demand drivers.

    The biggest industrial demand growth for silver will be from solar and rfid technology. http://bit.ly/zrVau5
    Jan 27 11:11 PM | 2 Likes Like |Link to Comment
  • Stock Market Outlook: Silver Signaling Danger Ahead [View article]
    If you're looking for short term returns as an investor, neither silver nor gold should be at the top of your list, it should be palladium (30% under 2013 Royal Bank estimate). People who buy them at relatively high prices now are thinking long term, like 1 year or more and probably also taking into consideration a possible currency collapse which would make hard assets invaluable (US relies on debt sales for 40% of US spending).

    US mint silver sales were up 15% in 9M11 while gold sales were down 20% meaning there's nothing wrong with investment demand for silver. Gold is still attracting record demand from ETF's (nearly 70m oz) and central banks in Russia, Mexico, Belarus even Colombia. Before getting out of precious metals ask youself has Greece or South Korea sold any of theirs? Greece can't afford to lose asset value, central banks see low prices as an opportunity to buy more and so should you. When global debt becomes insurmountable in 2013 precious metals will become invaluable since central bank buying will skyrocket.
    Dec 29 06:02 AM | 2 Likes Like |Link to Comment
  • Why Smart Investors Should Buy Apple and Google, Sell Research In Motion and Nokia [View article]
    "The bad press Apple has received would be enough to leave any other company shaking (hello Sony (SNE)), but Apple (and its earnings) have held strong through it all"

    don't you mean Research In Motion? Everything for the company is increasing (including playbook sales so that market share is rising) except for its stock. It's easy to understand why, all the news promoted on google.com search engines, google finance point to pessimism they pick apart the company in ways other companies like google and apple aren't. will you report when the playbook takes away half of ipad's market share? American media has been targeting RIM for a while now when QNX phones come out and prove to be popular will they get lots of positive coverage?

    This is a transition time for RIMM/blackberry that's why it has been so easy to attack, its new operating system will be much better than anything google or apple can throw together, everywhere outside of the US blackberry is growing including market share in big markets. it's still a premium brand that offers lots of security and some key apps (apps are the biggest problem but that's the easiest thing to fix, software upgrades don't destroy companies especially not in 2011, many of android's apps are unimportant and drain battery life).

    RIM is the most underrated stock right now just be an economist for a second and consider raw data like the price to earnings ratio, it's clear that apple and google are as high as they'll get while RIM can't get any lower.
    May 19 02:47 PM | 2 Likes Like |Link to Comment
  • What If Research In Nokia Existed? [View article]
    All year I've been saying Research In Motion is not done. 90% of fortune 500 companies remain committed to the company because of BB enterprise server. The playbook is approved for use by the US federal government. Nokia has made a couple releases since the last BB release but Nokia's smartphone sales are falling faster than at RIM.
    Nokia and RIM can't merge because Nokia would have to abandon windows operating system. Microsoft gives Nokia $1 billion every year for that priviledge.
    Jan 2 08:25 AM | 1 Like Like |Link to Comment
  • Why Kinross Is A Long-Term Winner [View article]
    Kinross Gold K is valued lower than it was before it took over Red Back Mining.
    Production cost of sales +17.7% in 2011 to under $600 comparable to Newmont, Polyus.
    Kinross wasn't the only company to have a writedown in 4Q 2011. Newmont did too in the amount of $1.6 billion.
    I also like Agnico-Eagle Mines because though it took on a writedown Meadowbank's high cost nature is dealt with.
    Favorite gold mining stock is Eldorado Gold because of its very low cash costs, and that in 2011 it realized higher profit growth than revenue growth which is rare.
    http://bit.ly/wxbEDM
    Mar 5 04:48 PM | 1 Like Like |Link to Comment
  • The Keystone XL Pipeline Has A Good Chance Of Eventually Being Approved, Here's Why [View article]
    Albertans needn't get discouraged. Remember that nearly everyone in the state of Texas where the oil would go, fully supports the project and have no problem with Alberta's oil. The people against using oil from the tar sands don't seem to understand that in 20-30 years almost all of the oil left to use will be heavy, 'dirty' oil. EU just put an oil embargo on Iran and the EU normally buys 20% of Iran's oil exports. That happened with oil nearing $100/bbl which means that the price will probably rise even higher. Considering OPEC now relies heavily on Venezuela (I think it's now recognized as tops in reserves among opec nations) and Venezuela is one of Iran's best friends, things could get worse (opec already put a cap on crude output. if they want the price higher they could lower the cap).
    Jan 24 04:19 PM | 1 Like Like |Link to Comment
  • Stock Market Outlook: Silver Signaling Danger Ahead [View article]
    Should've also mentioned the gold to silver ratio which is getting close to 60. That's almost double what it was in April when it was 33. Considering demand for the precious metals remains strong and the economy hasn't recovered there's reason to think that prices are being influenced by something new maybe primary production is increasing too fast (Goldcorp's one billion ounce silver mine in Mexico). The fundamentals are still there so expect long term higher prices combined with lower gold to silver ratio.
    Dec 29 06:30 AM | 1 Like Like |Link to Comment
  • Buy Research In Motion Based On Valuation, Not Rumors [View article]
    The article presents a case based on Rim being liquidated and people think that's fair. They have yet to report a loss in any quarter (unlike Nokia with a 21X p/e ratio going on 3rd straight losing quarter) have patents which $200B google is suffering from not having (HTC on verge of getting some android products kept out of US because google doesn't have certain patents), Nokia doesn't even have its own viable operating system while Rim could have 2 within a year, Rim's Belagio phones (expensive = higher margins) gaining popularity in developing countries, subscribers up 35% in 2011, 64% of revenue from outside the USA but for some reason its entire future depends on its performance in the American market? 3X price to earnings ratio is a hard to sell but Nokia 21X is tolerable? motorola 39cents per share is ok but Rim 51 cents is horrible, LG and Motorola losing the same market share in the USA as Rim in the July to September period but no criticism.

    Apple and Google may be better positioned for the future (right now) than Rim but there's nothing fundamentally wrong with Rim's products to suggest the company is about to fold. It doesn't have debt problems, countinues to have strong market share globally and still has a piece of the US pie including a near tie with Apple in the corporate market (no other company comes close). apps aren't a problem anymore either because rim allows Androids apps on its own (unlike google and apple though users start out with only essential apps helping battery life).
    Dec 22 03:45 AM | 1 Like Like |Link to Comment
  • Former Obama economic advisor Christina Romer cites the 1930s and WW2 to argue the government should increase spending to spark growth. She says "aggressive monetary expansion" brought growth of 10% a year from 1933-1937, with  monetary and fiscal retrenchment then helping cause the 1937 recession.  [View news story]
    How do you spend what you don't have? There are too many US dollars already in the system, printing more/increasing debt is going to inflame the problem. What the US government has to realize is that investor confidence is not going to improve until debt goes down, the economy is not going to improve until investors regain confidence. Every country needs to be able to borrow, what the US is doing is putting at risk its future ability to borrow.

    You don't get out of the mess the same way you went into it. What the last 3 years has shown is that stimulus can't correct the problem. Going back to cheap energy (coal 4 cents a kWh compared to 23 cents a kWh for renewables, China building a major coal thermal energy plant every week) and giving big companies an incentive to manufacture in America (yes, they're already rich but there's no law that says they have to keep jobs in the America, a couple extra dollars in their pockets could mean thousands of more American workers because they are capitalists).
    Aug 14 10:57 PM | 1 Like Like |Link to Comment
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