Tsachy Mishal

Long/short equity, deep value, value, contrarian
Tsachy Mishal
Long/short equity, deep value, value, contrarian
Contributor since: 2008
Company: TAM Capital Management Inc.
They are hoarding $30 billion in cash. They are generating $8 billion a year in cash. there is enough money for buybacks & smart R&D investments
If you read the entire transcript you will see that they are looking to cut R&D costs, not increase them
How do you explain QCOM's margins in the semi biz? a well run business with costs under control? How do you interpret the comments?
Nice entry. Better than mine
I agree
I was looking at forward numbers, using lower multiples & the actual tax rate to get to $95
Probably but one need not make that assumption in order to get a much higher price on QCOM
You are missing long term marketable securities. There are some one timers in the trailing twelve month number. The normalized number & expected number going forward is ~$8 billion
When there is less uncertainty the stock will be 50% higher & I will gladly sell to you. At a 10% FCF yield & the company repurchasing tons of stock where is this stock going to go on the downside?
This comment proves my point. You are basing your investment decision on the semi business even though its a fraction of the profits
Software companies spend more money on R&D than capex. Their acquisitions are a small fraction of cash flows
The company has repurchased over 20% of the shares outstanding over past few years. That is returning cash to shareholders as each share now represents an additional 20% ownership in the company
I'm using the reported numbers & not making any adjustments. The company has hardly made any acquisitions over the years.
The data doesn't support what you suspect. DOX has been gaining market share. That is a fact
Thanks. Appreciate it
MSFT & ORCL are behemoths with hundreds of different lines of business. They simply cannot compete with the focus of Amdocs and the numbers bear that out.
When HP bought Autonomy it came out that they first approached Amdocs but that Amdocs said it wasn't interested in merging at the time. I don't believe this is an ideal time for Amdocs to sell itself as it still trades very cheap so a tremendous premium would be necessary. Additionally, it would make sense to lever up first, in contrast to sitting on $1.5 billion in cash.
While I think many companies would be interested in acquiring Amdocs I don't think they would be interested in selling right now.
There are a number of reasons Oracle does not worry me:
1. Oracle has been a competitor to Amdocs practically forever and has not made a dent. To the contrary Amdocs has only grown stronger.
2. As I noted customers rarely switch as the costs are high
3. Companies are very weary of Oracle as they have a reputation for luring in customers and then jacking up the price once you are dependent on them
4. Amdocs market share gains have been accelerating, especially among large carriers like Vodafone & telefonica
Is this still a terminal short or has the continued cash flow generation & earnings power of the company made you change your mind?
I think the biggie is resolving the Federal Reserve fine. the timing is unknowable but one would think it would get resolved by then. The second may be an end to tax loss selling. A third may be when they report earnings & people see they are still generating cash
So what? They are generating $40 million in cash a year. They woul pay a higher rate and then quickly pay off the debt
Higher One is a piss ant to the banks. They barely know it exists. Suggesting that the banks want the DOE to regulate Higher You either have not thought this through, have not done enough research.
The banks want the DOE to stay out of the banking business. Plain and simple.
Other banks charge a monthly fee for using the debit option, which is much more expensive than 50 cents per swipe. The banks are simply trying to give people incentive to use credit instead of debit. The banks would rather get their money from the merchants than the customers.

The fact is that Obama was not able to get anything passed in an election year. With Republicans gaining seats it will be even more difficult next year. Furthermore, the banks will not simply roll over on this. They will likely sue and it will get tied up in court for years if the DOE tries to pass this on a unilateral basis. Anything that does get passed will be greatly watered down.
Did you consider what happens if you are wrong and the Dept of Education is not able to pass anything or passes something watered down. At what multiple should a company trade generating $40 million in cash a year?
Did you consider what happens if you are wrong and the Dept of Education is not able to pass anything or passes something watered down. At what multiple should a company trade generating $40 million in cash a year?
Other banks charge a monthly fee for using the debit option, which is much more expensive than 50 cents per swipe. The banks are simply trying to give people incentive to use credit instead of debit. The banks would rather get their money from the merchants than the customers.
The fact is that Obama was not able to get anything passed in an election year. With Republicans gaining seats it will be even more difficult next year. Furthermore, the banks will not simply roll over on this. They will likely sue and it will get tied up in court for years if the DOE tries to pass this on a unilateral basis. Anything that does get passed will be greatly watered down.
Anybody who thinks that the banks are going to let these Dept of Education rules go in without a fight is out of their mind. Read this: http://bit.ly/1nExwLx
If republicans take Senate the rules have little to no chance of going in. Even if they do they are likely to be greatly watered down
Anybody who thinks that the banks are going to let these Dept of Education rules go in without a fight is out of their mind. Read this: http://bit.ly/1nExwLx
@tradebr2010 I agree. I suspect the selling here is a combination of small cap selling, tax loss selling and some hysteria. A company generating cash like this is not likely on the brink.
Higher One charges the same fees as every other bank out there. This is nothing specific to Higher One.
A few comments and some questions
Churn is not an issue since there are constantly new students coming into universities and ONE has a high retention rate of universities and 30 more coming online this semester.
Almost every major bank charges a $2 or $2.50 foreign ATM fee. Management believes the ultimate DOE settlement will be that they need to add ATMs to their network by partnering with an ATM network. While it would cost them some money I doubt it would reduce their foreign ATM fees by much. If a student was so keen on saving the fee they could make sure to take money out from the ATM on campus. A student that needs cash at a bar is going to take out money at the bar. Not seek out an ATM in the network. I believe that people who incur foreign ATM fees do so as a convenience and that will not change.
I used to use a Chase debit card. But once the Fed limited debit card interchange fees Chase started charging me $15 a month to use my debit card. Their intention was to make me switch to credit so they can collect a higher interchange fee from the merchant. I switched. When the cashier asks credit or debit all the student needs to do is to say credit to avoid the 50 cent fee. And 50 cents is a lot better than $15 a month
For the first six months of the year FCF was inline with last year excluding the $15 million class action settlement. Why hasn't the FCF been effected yet? Why would that change before the new DOE rules go into effect?
I agree that the fine by the Fed is an issue but it's in the lenders best interest to work with ONE. The business is producing 40 million a year in cash. They have little incentive to force a default
Its in the 10-K. Do a word search for Berkshire
Warren Buffett gave similar preferred deals to Goldman Sachs and GE. When the time came to convert the shares he opted to take his money back and they were trading cheaper than Dow. Secondly, saying that Warren Buffett cares about "share price momentum" almost made me fall off my chair.
$V was owned by a consortium of banks. Maybe one of them is selling their remaining stake