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The Unintelligible Investor  

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  • Ebix: Not a Chinese Fraud, But a House of Cards Nonetheless, Part I [View article]
    Well ... if you read through even the first paragraph ... hell, if you read the TITLE, you would understand that he is NOT comparing it to a chinese reverse merger. For god's sake, the title says: "EBIX: NOT A CHINESE FRAUD" He is simply saying that it is probably way overvalued.

    And, frankly, who gives a damn what his identity is!?!?! Does it matter if this was written by Ben Bernanke, David Einhorn, Seth Green, or Santa Clause????

    If you think the analysis is correct, then sell. If you think the analysis is incorrect BUY.

    If you are upset that you own a stock that has been revealed to be waaaaayyyy overpriced ... too bad for you. that's how the market works. you can't be throwing people in jail everytime they make a reasoned argument.
    Mar 24, 2011. 05:33 PM | 15 Likes Like |Link to Comment
  • Ebix: Not a Chinese Fraud, But a House of Cards Nonetheless, Part I [View article]
    Would you suggest that anyone who writes a positive article or research report and discloses that they have a long position "be investigated"?

    If you are long EBIX, you should probably just read the report, which I doubt you have, and make a judgment based on the facts. If you believe his statements to be incorrect, the market will come around.

    He in no way deserves to be investigated for sharing his views, all of which have a reasonable basis.
    Mar 24, 2011. 04:01 PM | 12 Likes Like |Link to Comment
  • Here's What Happened The Last Time The Fed Owned All Outstanding Treasuries [View article]

    It looks like an interesting article and I look forward to reading it tonight, but within the first 3 paragraphs I was struck by this thought ... wouldn't the end of the deadliest, costliest conflict history has ever known help to improve investor sentiment somewhat???? Thus supporting equity markets even in the face of recession? A short-term recession related to decreased demand from the military industrial complex is an afterthought when investors once again have complete assurance of the ongoing survival of the free world.
    Apr 5, 2013. 10:16 AM | 11 Likes Like |Link to Comment
  • Ebix: Not a Chinese Fraud, But a House of Cards Nonetheless, Part I [View article]
    ya, I believe Enron was also well covered by analysts. And Worldcom too. And Lehman Brothers. And Parmalat, and SunBeam, i could go on forever.
    Mar 24, 2011. 04:04 PM | 8 Likes Like |Link to Comment
  • Ebix: Not a Chinese Fraud, But a House of Cards Nonetheless, Part III [View article]
    the stock is not down ~20% because of a scandalous short seller undertaking a baseless smear campaign.

    the stock is down ~20% because a well reasoned, well researched argument has been made as to why EBIX is a flaming turd.

    I await the CEO of EBIX's response, which will without doubt be a rehashing of the same defiant, empty rhetoric of every other man whose lies have caught up to him.
    Mar 24, 2011. 03:41 PM | 7 Likes Like |Link to Comment
  • Premier Inc.: Healthcare Crisis Creates A Growth Environment [View article]
    Well written article ... unfortunately, after reading it in detail, I still don't really understand how PINC earns its $$.

    Do the members pay for software that gives them access to healthcare data?

    I read "group purchasing organization" and I think "buying group". Does PINC buy medical supplies on behalf of or facilitate the purchase of medical supplies by its members?
    Oct 18, 2013. 09:39 AM | 5 Likes Like |Link to Comment
  • National Research Corp.'s Class B Shares: The Low-Risk Double [View article]
    While I agree that the B shares should trade at a much greater premium to the A shares, you have failed to address the whether the current price of the firm as a whole is a fair one.

    B Shares market cap is ~$670 mil
    A shares market cap is ~$430 mil

    That's a $1.1 bil market cap for a company with perhaps $20MM - $21MM in net income in F2014. Thats about 50x P/E.

    If the Bs were to double, the multiple would be closer to 100x.

    The company appears to have grown very well in the past 10 years, but do you have any sense if this will continue in the future.
    Oct 31, 2013. 10:29 AM | 4 Likes Like |Link to Comment
  • Contango Oil & Gas: A Bright Future for Free [View article]
    i love it. he sounds like exactly the kind of guy i want running my company.
    Jul 2, 2010. 06:17 PM | 4 Likes Like |Link to Comment
  • High Conviction: A 'Stunningly Cheap' Telecom Stock [View article]
    The insider selling seems to be overhyped at this point. The managers and directors received large stock option offerings when the company went public and now that the options are vesting, they are exercising and selling their stakes. even after all that selling the company is still held 11% by insiders. If you are looking at future incentives, consider their current option plan.

    I don't think everyone should get excited about the share repurchase either, however. It might signal the stock is undervalued. It might signal that TNDM doesn't know what else to do with its money. At the least, it signals they believe the return on the stock is going to be better than the return they could generate internally with the cash. Maybe its that undervalued or maybe they can't grow like they used to.
    Feb 27, 2010. 02:12 PM | 4 Likes Like |Link to Comment
  • Consumer price data may still point towards deflation, not inflation. Prices excluding food and energy actually fell in January, which hasn't happened in more than a quarter-century. But others are convinced it's only a matter of time before we see another long-ago phenomenon: stagflation.  [View news story]
    sorry INFLATION ... not deflation
    Feb 19, 2010. 01:53 PM | 4 Likes Like |Link to Comment
  • The Oil Sector Stock I Dream About Owning One Day [View article]
    At a run rate EPS of ~$4, the current valuation is still pretty hefty, so I, like you, am going to wait (and pray) for a major, all-out capitulation.

    I have further research to do, but my initial thoughts are that the fears of a severe decline in technical spending due to declining shale are somewhat overblown. Oil production from cheap, conventional sources is still in long-term decline and CLB has played a major role in the technological innovation that has led to, among other things, the cheaper shale plays that have altered the Peak Oil paradigm.

    There are a couple of things that provide a buffer to this low oil price environment. First, CLB's main revenue driver, shale, is not the highest cost of production ... that would be deepwater and oilsands ... so I suspect in the long-term shale will remain while oil sands in particular suffers deep cuts (although shale might be more volatile in the short term).

    Second, if shale does experience a prolonged period of lower spending ... now all the unconventional oil plays that have provided production growth over the past few years will be severely impacted, and, with cheap traditional production in decline, there would be a supply pinch that should bring oil prices back up. So CLB would experience continued pain over the medium term, but with its high free cash flow, it will survive the lean period without any real risk to its future as a going concern ... and then it would be primed for explosive growth yet again upon the return of higher prices.

    Third, CLB may be somewhat counter cyclical in that its services can help bring the cost of new production down. So its services (or at least some small portion of them) may become MORE valuable as prices decline.

    All that to say that this is likely to be a great company for years into the future. Just have to get it at the right price, as you say.
    Jan 30, 2015. 09:46 AM | 3 Likes Like |Link to Comment
  • Education Companies Finally Reflecting What Their Degrees Are Worth [View article]
    BTDSTR, I read your article as well. In an avalanche of bad data, you are essentially focusing on the fact that new student acquisition increased in the university segment for the first time in a long time and pointing to that as the early sign of a turnaround. This may be wishful thinking, but it is a distinct possibility.

    Fact remains they burned $35MM in cash in 1Q.
    Jun 13, 2014. 01:06 PM | 3 Likes Like |Link to Comment
  • MTY Food Group Inc. - A Restaurant Stock For The Wallet [View article]

    Great article on a great company. I wrote a piece on MTY a couple years ago, back when it was trading at ~$10. Check it out here:

    I love the depth of brands, I love the smart acquisitions, I love the branding (and re-branding, in some cases) of their various banners, and I even love the food.

    BUT my big concern is your valuation and the use of a 20x multiple on F2016 earnings. MTY is running out of businesses to buy in Canada. At 2,500 locations, they are already the 3rd largest restaurant operator in the country, behind only Tim Horton's and Subway. They've already got 1,000 more locations than McDonald's! And the bigger they get, the less these bite-sized acquisitions will impact their growth rate.

    And as you've indicated, growing in the US or elsewhere is a much different animal. Canada just isn't as competitive.

    I respect your take on this, but I just don't think MTY will have the same growth going forward and, therefore, doesn't warrant the same multiple.
    Dec 18, 2013. 01:35 PM | 3 Likes Like |Link to Comment
  • Netflix: Reloaded [View article]
    Obviously the DVD business is still very valuable to Netflix, however, I am not suggesting that NFLX will choose to discontinue the service or otherwise dispose of it.

    I am saying the DVD business is in a secular, technological decline and demand for the DVDs will become increasingly immaterial (just like wireline phones or CDs or walkmans or any other technology that has been rendered obsolete by something different), to the point that income from the segment will be negligble.
    Nov 26, 2013. 12:04 PM | 3 Likes Like |Link to Comment
  • Netflix: Reloaded [View article]
    Not reasonable to project future value in today's dollars????????? Discounting cash flows at the cost of equity is one of the fundamental cornerstones of finance. You are assuming that in 2028 NFLX will have the same growth prospects it has now, which it won't because it will have substantially saturated the market, so you wouldn't pay the same multiple in 2028 that you are paying today.

    This "rule of thumb" that prices double every decade is also highly suspect. How is that a rule exactly? There have been plenty of decade stretches where share prices haven't increased at all (like the decade we just got out of). And while I may grant you that stock prices over VERY long periods trend upward, that does not mean that every individual stock goes up. Some individual stocks decline or disappear entirely. This is not a steadfast rule I would follow with any conviction.

    Your comment is exactly the kind of thing that makes me thing NFLX is overvalued ... the longs at this price don't seem to have a clue.
    Nov 26, 2013. 10:23 AM | 3 Likes Like |Link to Comment