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The Scepticist

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  • Burelle SA, Most Hidden Gem On French Equity Market [View instapost]
    Undoubtfully the illiquidity plays an important role but this can't be the only reason for the enormeous discount. I've seen holdings (even when liquidity is limited) go at a discount of max 20% peak.

    I stand by my argument that discount is most likely caused by the limited transparency:

    1. The consolidated report the three subsidiaries makes it harder to interpret. The earnings statements are pretty clear but the contribution of assets on the balance sheet are not traceable.

    2. The reporting language of Burelle is in French, while French investors are bearish on any stock related to car manufacturence. Plastic Omnium does not share this problem: it reports in English and can rely on foreign investors demand for the stock to keep price at a reasonable levels.


    Even after the 80% stock increase I'm not hasty to sell ...

    Based on the price of plastic omnium: the stock is worth 560€ at the moment.
    Based on a conservative DCF model (12% discount rate; growth rate of 14% for the next 4 years; 0 % growth after) the stock is worth 650€
    Based on a technical analysis price could go to 440€
    Mar 20 06:02 PM | Likes Like |Link to Comment
  • 2 Oil Companies That Should Be On Your Watch List For The Coming Weeks [View article]
    Seems like you are right: (I wasn't 100% sure for UK, for the other countries tax rates also depend on double dividend treaties)

    UK holds 0 % taxes on dividends of UK companies:

    UK does hold 20% taxes on dividends of REITS

    Thnx for correcting me
    Feb 22 11:07 AM | Likes Like |Link to Comment
  • SkyPeople Fruit Juice An Undervalued Healthy Growth Stock [View article]
    Yes, you're right: gross margins of Pepsico and Coca (for their orange juice manufacturance) are around 50% and are larger.

    But you're missing the point here: if your company is a virtual nobody without any branding, retailers will give you just enough to cover operational costs. You think retailers don't do research about margins when they negotiate a price? Gross margins of 28% don't make sence when you're claiming you're dealing with large retailers like Wallmart. This is how retailers do business!
    Feb 6 12:01 PM | 1 Like Like |Link to Comment
  • SkyPeople Fruit Juice An Undervalued Healthy Growth Stock [View article]
    Hehe, in a comment above you stated: " To be cautious and skeptical is good"

    Well, I just raised 8 very straight forward points and you simply throw them off the table by saying you already rebutted them. Well, if you stated it be4, it should be just copy and paste wouldn't it?

    Please enlighten me!
    Feb 5 12:35 PM | 1 Like Like |Link to Comment
  • SkyPeople Fruit Juice An Undervalued Healthy Growth Stock [View article]
    There is a huge serie of red flags on this company. I would write an article about it, but I don't want to get sued like the last guy. I'm not stating this company is fraudulaus, I'm just giving my opinion.

    1. Audit firm has changed 3 times over short time span

    2. Audit firms are unknown: Last audit firm also (Paritz&company) received a very negative review from PCAOB in 2009 (

    3. Gross margins: margins are coming close to these of PepsiCo and Coca. This means that company is very efficient and well positioned at the same time. Pretty impressive for a small business without any branding. Especially when it claims it does business with Wallmart, a retailer notorious for its (profit squeezing) supply chain power. In fact the whole picture seems weird to me: an unknown, unbranded product positioning itself as a high quality product.

    4. Sales growth is driving itself? Sales costs are pretty low and it seems like growth is growing on trees.

    5. Capex is very low: FCF is higher then profit. This company claims to work with ultra modern equipment. If you have some industrial experience you'll find out that everything breaks down after a while and you have to keep investing in maintenance of equipment in order to keep things running. This company is amazingly efficient in extracting cash from business.

    6. CEO is also owner of China Tianren Organic Food Holding. China Tianren Organic Food already got delisted for being a fraudulaus shell company.

    7.Ghost product: I've searched Chinese websites for hours with a fellow investor, hoping to find some customer review on their product. I found nothing but stock related info... (I suggest you try it yourself: also do the test with any other product in your fridge.) I also can't find any info of stores selling the product.

    8. R&D and patents are a joke?: Company filed some patents in China. Intelectual property rights in China are virtually worthless. If they were really on to something they would file patent in EU or US.
    Feb 4 05:50 PM | 1 Like Like |Link to Comment
  • China's Doldrums Hit Xiniya Fashion, But Growth Prospects Are Still Strong [View article]
    You are right: rent is practically zero (apart from the 7 flagship stores) and this can be easily understood when you look at their business (distributor) model. Revenu is mainly received trough sales to distributors. Distributors in fact do the selling and the renting of the outlet stores.
    Feb 4 04:09 PM | Likes Like |Link to Comment
  • Parke Bancorp: A Chronically Undervalued Financial Stock [View article]
    Q4 results (besides profit increase) revealed that non-performing assets decreased significantly without booking substantial losses.

    This shows that value in their books does not deviate much from market value (as I stated in a comment below: market discounts this stock like the non-performing assets are wortless while they are clearly not).

    Far more important, this could indicate that we've seen the top in non-performing assets and they will begin to stabilize or hopefully even decrease.

    Market reaction to latest results wasn't exagirated. I think there's plenty of potential left as P/B is still 0,6 (40% discount)
    Feb 4 03:06 PM | Likes Like |Link to Comment
  • Is Harman Overpriced Or Still Worth A Buy? [View article]
    Future senior analist in spe!

    Great article!
    Jan 30 04:56 PM | 1 Like Like |Link to Comment
  • Parke Bancorp: A Chronically Undervalued Financial Stock [View article]
    Thank you for giving a detailed image of the related risks.

    I agree Texas ratio isn't encouraging. But much of the downside is already calculated in the stock price: I don't believe NAL and OREO are completely worthless either. As long as texas ratio isn't >100 % the bank can absorb the shock (if the growth trend doesn't continue)

    I strongly believe this one has massive potential once the asset disposal process is progressing.
    Jan 24 02:58 PM | Likes Like |Link to Comment
  • Parke Bancorp: A Chronically Undervalued Financial Stock [View article]
    Time will tell:

    Non performing assets increased in 2010, 2011 and 2012.

    This is still a back log effect of the economic crisis and the collapse of the real estate market.

    Three trends are emerging:

    1.It gets harder and harder to get controle over troubled assets. Legal processes take up to 900 days.

    2. Economie shows signs of a slow recovery and less business go bankrupt:

    3. Real estate prices recover and interest in "illiquid" troubled assets start to increase.
    Jan 24 02:23 PM | Likes Like |Link to Comment