Joy Global: Shares Are Suffering From A More Severe Slowdown In China [View article]
Look's like shares are benefiting from strong US housing data. Maybe the better than expected housing market in the US can drive away investors focus on a slowdown in China
Amira Nature Foods: Stay Away On Concerns About Ownership Structure [View article]
Sorry, it has been busy with public offerings in recent weeks. Hope the warnings is not too late for you, but it might always be good to warn other prospective investors.
Fleetmatics - Not Interesting After A First Day 31% Jump [View article]
Thanks JuanKO
I was just trying to make a rough estimate based on simple metrics the company provides. Despite the fact that the company has a very low churn rate, acquisition costs estimated by you at 18 months are pretty sizable, wouldn't you agree?
Family Dollar Stores - Long-Term Appeal After The Company Guides For Strong Future Earnings Growth [View article]
Sale and lease-back constructions are fairly popular in traditional brick-and-mortar stores as the capital requirements for buying all used real-estate are very high. By selling real estate, the company frees up cash, while making lease payments. (essentially this is the same decision whether you buy or rent a house). It makes the company asset-light, but might not always be the cheapest option. On the other hand, investors do not have to fear large possible write-downs on the value of real-estate in a downturn. What's more interesting is to find out how much the lease payments will be on the $300 million transaction. You can then compare the rental yield which FDO pays, compared to its return on assets, corrected for the leverage of course.
Digital River Buys LML Payment In An Attempt To Restore Profitability And Strategic Strength [View article]
I think we fully agree. I think the stand-alone prospects are not very favorable. While I agree a possible take-out is not very likely, it always remains a possibility if a multi-billion company is willing to spend a couple hundred millions of bucks, to get started in the industry. From the last two paragraphs:
"While I appreciate the strategic rationale behind the deal, I am worried about the long-term prospects for smaller firms in the online payment industry, given that large technology companies and credit card companies have announced their ambitions in the field.
Future consolidation in the industry might result in a takeover of Digital River by a larger competitor, but I remain skeptical on the prospects for the company on a stand-alone basis."
Digital River Buys LML Payment In An Attempt To Restore Profitability And Strategic Strength [View article]
I am skeptical as well for the chances of a possible acquisition of DRIV as the business is structurally weak. Yet large, cash-rich companies might always be willing to pay up for systems, key employees (just look at so many of the deals done in the IT, cloud, social networking space)
Summit Midstream Partners - Another Public Offering Of A High-Yielding Partnership [View article]
Limited Partnerships are special investment cases. Before investing, investors should consider the tax implications and specific risks to investing in limited partnerships and do not get blinded by the 7.6% dividend yield
Qualys - Speculative Buyers Could Drive This Recent Offering Another 50% Higher [View article]
Agree. To be clear, I like their valuation more on a relative basis, than on a stand-alone basis. Profitability is an issue, but that is also true for names like Splunk and Palo Alto Networks. Agree that revenue growth at the latter two is far more impressive, but yet there is a substantial gap between revenue multiples of QLYS vs. the two other names
Danaher Corp - Acquisition Of IRIS Underscores The Company's Acquisition Strategy [View article]
Unfortunately the company did not release many details for the technological, client or product synergies between IRIS's business and the Beckman-Coulter acquisition other than that IRIS will be merged into the division. The title does not say that the acquisition of IRIS is great in terms of price, it just says that the acquisition fits Danaher's laid out strategy of making bolt-on acquisition to its current businesses.
Danaher Corp - Acquisition Of IRIS Underscores The Company's Acquisition Strategy [View article]
As mentioned in the article, Danaher pays roughly 2.9 times annual revenues compared to a valuation of 2.0 times for its own stock. Profitability of IRIS is inferior to Danaher's, but the company did report a modest $2.1 million profit for the first half of 2012
Trulia - 40% First Day Jump Leaves Shares Still Trading At A Discount [View article]
The "discount" remark is aimed at the valuation difference with Zillow.
Agree from a traditional valuation point shares are very expensive as the company is still losing money. Yet revenues are growing very quickly. Graham would never invest, as such. On the other hand the company is valued at roughly half a billion. Although the business is not yet profitable yet, it attracts over 22 million unique visitors every month, who are about to make the biggest purchase in their life. We'll see what time brings
bit surprised by that as well, but the press release clearly states:
"New license, expansion, and upgrade customers include: Allianz Insurance (UK), Bechtel, Hughes Network Systems, ING Direct, Korea Food and Drug Agency, Monster Worldwide, New Zealand Stock Exchange, Ohio State University, Orange France, O'Reilly Media, Pennsylvania Higher Education Assistance Agency, Pixar Animation Studios, Salesforce.com, Shazam (UK), Telstra, Virginia Tech, and the U.S. Postal Service."
Toll Brothers - Investors Are Pleased With Strong Results And Even Stronger Backlog [View article]
I find that difficult to say. While the company is expensive on current earnings metrics, I think key is the valuation of the almost 40,000 building lots under control. I find it difficult to attach a fair value to those assets, which largely determine the value of Toll Brothers in my opinion.
Joy Global: Shares Are Suffering From A More Severe Slowdown In China [View article]
Amira Nature Foods: Stay Away On Concerns About Ownership Structure [View article]
Fleetmatics - Not Interesting After A First Day 31% Jump [View article]
I was just trying to make a rough estimate based on simple metrics the company provides. Despite the fact that the company has a very low churn rate, acquisition costs estimated by you at 18 months are pretty sizable, wouldn't you agree?
Family Dollar Stores - Long-Term Appeal After The Company Guides For Strong Future Earnings Growth [View article]
By selling real estate, the company frees up cash, while making lease payments. (essentially this is the same decision whether you buy or rent a house).
It makes the company asset-light, but might not always be the cheapest option. On the other hand, investors do not have to fear large possible write-downs on the value of real-estate in a downturn.
What's more interesting is to find out how much the lease payments will be on the $300 million transaction. You can then compare the rental yield which FDO pays, compared to its return on assets, corrected for the leverage of course.
Digital River Buys LML Payment In An Attempt To Restore Profitability And Strategic Strength [View article]
"While I appreciate the strategic rationale behind the deal, I am worried about the long-term prospects for smaller firms in the online payment industry, given that large technology companies and credit card companies have announced their ambitions in the field.
Future consolidation in the industry might result in a takeover of Digital River by a larger competitor, but I remain skeptical on the prospects for the company on a stand-alone basis."
Digital River Buys LML Payment In An Attempt To Restore Profitability And Strategic Strength [View article]
Summit Midstream Partners - Another Public Offering Of A High-Yielding Partnership [View article]
Qualys - Speculative Buyers Could Drive This Recent Offering Another 50% Higher [View article]
Agree that revenue growth at the latter two is far more impressive, but yet there is a substantial gap between revenue multiples of QLYS vs. the two other names
Danaher Corp - Acquisition Of IRIS Underscores The Company's Acquisition Strategy [View article]
The title does not say that the acquisition of IRIS is great in terms of price, it just says that the acquisition fits Danaher's laid out strategy of making bolt-on acquisition to its current businesses.
Danaher Corp - Acquisition Of IRIS Underscores The Company's Acquisition Strategy [View article]
Profitability of IRIS is inferior to Danaher's, but the company did report a modest $2.1 million profit for the first half of 2012
Red Hat - Investors Send Shares In The Red After Company Fails To Beat Expectations [View article]
Trulia - 40% First Day Jump Leaves Shares Still Trading At A Discount [View article]
Agree from a traditional valuation point shares are very expensive as the company is still losing money. Yet revenues are growing very quickly. Graham would never invest, as such.
On the other hand the company is valued at roughly half a billion. Although the business is not yet profitable yet, it attracts over 22 million unique visitors every month, who are about to make the biggest purchase in their life.
We'll see what time brings
Trulia - 40% First Day Jump Leaves Shares Still Trading At A Discount [View article]
Splunk - Impressive Quarter And Strong Guidance Send Shares Toward Highs [View article]
"New license, expansion, and upgrade customers include: Allianz Insurance (UK), Bechtel, Hughes Network Systems, ING Direct, Korea Food and Drug Agency, Monster Worldwide, New Zealand Stock Exchange, Ohio State University, Orange France, O'Reilly Media, Pennsylvania Higher Education Assistance Agency, Pixar Animation Studios, Salesforce.com, Shazam (UK), Telstra, Virginia Tech, and the U.S. Postal Service."
Toll Brothers - Investors Are Pleased With Strong Results And Even Stronger Backlog [View article]