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Shailesh Kumar

 
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  • Look For Significant Improvement In Dex One's Balance Sheet And Valuation Metrics [View article]
    James, taxes do complicate matters since they do have a bunch of allowances, carry forwards and adjustments they can apply as well to negate any taxes. If you wish, you can mark down my estimate by your expected tax rate or we can wait to see what they do in Q1. However, note that I have only used about $223 m in face value debt repurchase in my calculation. If they complete the $500 m repurchase this year than the EPS will of course turn out to be different.

    The offsets to the revenue decline and its effect on the eps are cost savings and interest expense reduction
    Mar 23 02:31 PM | Likes Like |Link to Comment
  • Look For Significant Improvement In Dex One's Balance Sheet And Valuation Metrics [View article]
    Yes, $1.8 is larger than the current selling price. No, it is not a typo
    Mar 23 02:18 PM | Likes Like |Link to Comment
  • Dex One: A Potential 20-Bagger Stock [View article]
    Yes, debt buy back below par is a technical default according to S&P and that prompted a downgrade to SD. Buried deep within the text of the S&P downgrade is a statement to the effect that once the buy back is completed, S&P will review the going forward leverage position and issue a new rating.

    It is hard to comment on institutional selling. Perhaps it is a quarterly rebalance, perhaps something else.

    As far as I see, DEXO is moving in the right direction to get its balance sheet in order. The level of its cash flow all but insures that its debt situation will be handled despite projected declines.

    I don't really base my investment decisions on short term and random price changes. As long as the business continues to execute according to my expectations, I continue to stay long. So yes, I am still long.
    Mar 19 07:07 AM | Likes Like |Link to Comment
  • Dex One: A Potential 20-Bagger Stock [View article]
    Private equity thinks there is value in them yellow pages : http://nyti.ms/wSAa90

    Guys, when I said it is a turnaround situation, that is exactly what I meant. Either you are comfortable investing in special situations, or you are not. There is no specific formula to value a business. Every business is different.
    Mar 8 06:16 PM | Likes Like |Link to Comment
  • Dex One: A Potential 20-Bagger Stock [View article]
    burnchip, there are two other things that are happening:
    - they are transitioning into digital and the local ad market on the internet is currently growing at about 19% CAGR. How much of the market share they get is debatable but they are having some success in it
    - any deleveraging, either by paying down debt on schedule, or if they are able to retire some at discount, will free up additional cash flow for them over time.

    No doubt it is a risky stock to hold as there are lot of unknowns and the amount of debt makes any stumble quite serious in terms of how the stock would react. I just think that the rewards at this time outweigh the risk.
    Nov 28 12:48 PM | Likes Like |Link to Comment
  • Dex One: A Potential 20-Bagger Stock [View article]
    Frank, not sure when Paulson initiated his position but as far as I know he still has a position.
    Nov 28 12:42 PM | Likes Like |Link to Comment
  • Dex One: A Potential 20-Bagger Stock [View article]
    George, SPMD and DEXO are both quite similar and consolidation will definitely help the industry. DEXO appears to be better managed but again, that is just my impression.
    Nov 28 10:32 AM | Likes Like |Link to Comment
  • Dex One: A Potential 20-Bagger Stock [View article]
    Perhaps true, but at current prices it is trading at more than 90% discount to my estimate of intrinsic value so that gives me cushion in case the company falters.

    It is interesting you mention the print and digital bundling. Print will die, at what rate I can not project accurately - but the relationships in the small business/local advertisers that they have built up is something that will be an advantage for them over the competition. There is a value in these relationships that is being dismissed in the market.

    That being said, this is a special situation stock and therefore requires one to be on top of it all the time.
    Nov 28 10:13 AM | Likes Like |Link to Comment
  • Dex One: A Potential 20-Bagger Stock [View article]
    You are right in way although this is a company in transition and has been severely punished by the market. Whether the ongoing business is attractive enough is any one's guess. I just feel that the stock is attractive at this price.
    Nov 28 10:00 AM | Likes Like |Link to Comment
  • Dex One: A Potential 20-Bagger Stock [View article]
    Tim, appreciate your comment. I have disclosed my position and have outlined my reasons and analysis for my belief. I am in for the long haul (or unless the story changes) so temporary spikes up or down are not my concern. If it spikes up and you feel it is unwarranted, feel free to short it down :-)
    Nov 28 09:58 AM | 3 Likes Like |Link to Comment
  • Dex One: A Potential 20-Bagger Stock [View article]
    Perhaps Mack, but I would suggest that LOCM is also fairly valued in the market today so the rewards for being a LOCM shareholder is not particularly attractive in my opinion
    Nov 27 10:50 PM | Likes Like |Link to Comment
  • Dex One: A Potential 20-Bagger Stock [View article]
    The risk/reward scenario works for me and obviously we diverge on the potential of the company
    Nov 27 10:47 PM | Likes Like |Link to Comment
  • U.S. Economic Growth: The Base Of A New Bull Market [View article]
    No doubt there is quite a bit of balancing act going on in the consumer's wallet and the only way to sustain spending is if the perception starts building that the conditions are improving. Don't forget that businesses are still sitting on a goodly amount of cash that will find an outlet and some of it will be in form of more hiring.

    I do not think we are borrowing demand from 2012. If anything, businesses are now satisfying the demand that has pent up in the last few years. There is only so much in cost cutting and lean inventory that they can handle.

    I am sure there are as many arguments against this thesis as there are for. I personally believe that the picture is getting brighter.
    Oct 30 01:14 PM | Likes Like |Link to Comment
  • Identifying New Value Traps [View article]
    @gotribe, perhaps. Chanos has made a career out of shorting. The linked article gives his precise reasons for making this call (click on the value traps link in the first paragraph)
    Oct 18 03:32 PM | Likes Like |Link to Comment
  • Small Caps Are Fertile Ground To Find Undervalued Stocks [View article]
    Small Caps as general have more inefficiencies but it depends on the stock in question. There are many stocks with no following on the wall street and these are the ones that offer greater inefficiency and therefore opportunity. The first citation on the Ibbotson Associates research offers some data on how much these stocks are followed based on their capitalization.

    As for the incremental risk, value stocks are less risky than the growth counterparts in every asset class, as you can see by the std deviation in the first table. Small caps are riskier than large caps but what is more interesting is a look at the Sharpe ratio which tells us that the small caps offer greater rewards than other asset class for the same unit of risk.
    Aug 28 12:22 PM | 1 Like Like |Link to Comment
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