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  • 2 Must-Own Stocks For 2013 [View article]
    Nice article. Quick question: if these are "must own" then why don't you own them? Kind of hurts the message.
    Jan 9 04:56 PM | 3 Likes Like |Link to Comment
  • Xerox Is Simply Too Cheap To Ignore [View article]
    Vince, I'd through it back at you - what do you believe makes stocks go up? HPQ was cheap at $20, Dell was cheap at $15 - there are tons of examples. Cheapness is a great reason to do work on a stock. It creates potentially greater upside and offers a greater margin of safety, but cheapness does not cause stocks to rise.
    In my experience it requires, revenue growth, EPS growth, improving comps, positive estimate revisions, new product cycles (that are expected to help in any of the prior), etc. Cheapness is not a catalyst and cheapness does not make stocks go up.
    And so you know, I love buybacks when stocks are being done with shares trading below intrinsic value. Buybacks exist to reduce share-count, thereby growing EPS, a catalyst. I went so far as to suggest Apple add $50bn of debt to its balance sheet to do a massive, and massively accretive buyback
    Anyhow, would love to learn more about your perspective and if you could provide some examples of cheap stocks moving up without catalysts am extremely interested. Thing about cheap is it can get cheaper.
    Nov 14 09:44 PM | 3 Likes Like |Link to Comment
  • Why Apple Doesn't Care About Its Competition [View article]
    Felix, while I believe Apple has developed an ecosystem second to none, and has the marketing clout and customer loyalty to make any new product successful, I respectfully disagree with your conclusion - I think price matters.
    As a parent of young children, I was contemplating purchasing a mini - had it come in about $100-$150 cheaper. Now it's probable they get something from LeapFrog. I'm not unique - I know this is true with many parents.
    But it's not just that. I also proudly carry an iPad with me just about everywhere I go. I was thinking I would get a mini too - say I'm just reading a book and want a few apps. But again, at $329, that's a luxury. At $199, pretty close to a no-brainer.
    Is the mini additive to the Apple line-up? Sure. Is it nearly as compelling as at $199? No. And while it may be more profitable to sell fewer at $329 than more at $199 - fewer sales arguably grows the opportunity for the Android (and possibly MSFT) ecosystems. And boy do they need it. So perhaps Apple is making the short-term profit-play, and giving competitors a bigger long-term opportunity. Or perhaps, Apple truly has become an arrogant company that thinks price doesn't matter.

    In full disclosure - short Apple and long puts, based on our view of significant miss (worse than whispers) on iPhone 5 guide for December Q.
    Oct 24 05:36 PM | 3 Likes Like |Link to Comment
  • AMD - Near Term Revenue Outlook Is Terrible, Yet Investors Should Applaud Aggressive Restructuring Efforts [View article]
    At this point, AMD has had more facelifts than Joan Rivers. I can't believe they are not also cutting muscle with the fat. Ugly situation that will get uglier.
    Oct 21 01:49 PM | 3 Likes Like |Link to Comment
  • Nam Tai: Shares Could Double By Year-End Driven By Apple Ramp [View article]
    Company provides LCD Modules ("LCMs") for Sharp and Japan Display (consortium of Hitachi, Sony and Toshiba). The modules are a sub-assembly and NTE acts as a subcontractor for Sharp and Japan Display who focus on fabricating LCD panels.
    The LCMs are for iPads (commenced volume production in June), and iPhone 5 (commences volume production in September). It was a lengthy and rigorous qualification process which gives us confidence that this program is unlikely to be dislodged anytime soon. Moreover, NTE is working with regional government authorities trying to secure more land/facilites given their expectation of significant ongoing growth. This is documented in their press releases and 20-F filing. It is worth noting, that to date, NTE has not mentioned Apple by name, but anyone/everyone following NTE knows its Apple.
    Aug 27 02:54 PM | 3 Likes Like |Link to Comment
  • ChipMOS Shares Should Triple To $30 In 2012 [View article]
    Rick, do a little work on the name before you jump to conclusions. In '09 most of COGS was depreciation.
    Regarding LCD pricing see - pricing is firming
    Moreover, LCD driver-IC assembly and test has different dynamics than the overall LCD market, with basically 2 players, ChipMOS and Chipbond, creating a duopoly with limited price competition. If ChipMOS traded at the same multiple as Chipbond, it would be about $45 a share. So, if I'm wrong at all (and I'm not), what's it worth, $30, $35? Not bad for an $11 stock.
    I have no certainty regarding timing, but I am aware of multiple catalysts over the course of 2012 that make achieving my target within 12 months highly realistic.
    Feb 27 12:13 PM | 3 Likes Like |Link to Comment
  • ChipMOS: Catalysts Plus Excess Capital Should Drive 50% Upside [View article]
    This is from Randy W. Furr, CFO of Spansion, from last week's 1Q earnings call: "Our Flash was, as I said, pretty much in line with what we thought it would be, but just to stay on top of inventory there, we chose to pull the utilization back just a little bit. But we expect to see that bounce back up to similar rates or maybe even slightly better than what we were in Q4, we expect that to bounce back up in Q2."

    As an aside, 4Q was the high point for utilization, so this bodes well for Spansion/IMOS in addition, some of the Taiwan-based research suggests that new integrated flash/microcontroller products from Spansion may be an incremental opportunity for IMOS in 2014. Not counting on that, but would be nice.
    May 13 04:45 PM | 2 Likes Like |Link to Comment
  • ChipMOS: Catalysts Plus Excess Capital Should Drive 50% Upside [View article]

    You ask a fair question, and to be clear, we are not simply using the profit figures from the consolidated financials.

    US (IMOS) market cap is 30 million shares times $20.73 per share or approximately $620 million. Assuming cash is ONLY the cash "owned" by IMOS, and not the entire ~$200 million of corporate cash, EV would be $545 million. We expect EBITDA of at least $225 million. If we consolidated the entire EBITDA, that would be 2.4x EV/EBITDA. Assuming that IMOS only "owns" 60.2% of the EBITDA (or $135 million) generates an EV/EBITDA of 4x. A 6x multiple, plus 60.2% of anticipated cash generated over 2014 results in EV/EBITDA of 6x at year-end equating to approximately $31.

    With the above said, the way we are (expect to continue to be) looking at IMOS is based off the valuation of 8150. Currently 8150 trades at around 4.3x EV/2014 EBITDA. At 6x it would trade over 50ntd, resulting in IMOS at about $32, assuming IMOS trades at par, which we believe it will - if not in the short term, then when a deal collapsing the share structure is consummated.

    All of the above being said, the fact that a question on valuation methodology requires such a long-winder response speaks to the undue complexity of ChipMOS' corporate structure and the hindrance it has been on investors getting their arms around the story. We think this all changes soon.

    Our aim is to be analytically rigorous and intellectually honest and if you differ in how you would model it (we believe we are modeling using more conservative assumptions in terms of what we include for IMOS than the Street) then we are open to other approaches. Still, a sanity check for us is 1) considering what a reasonable, ongoing dividend, can/will be, and 2) what a private equity buyer would pay for a single structure Taiwan entity with the potential to achieve an acceptable return. Using both those checks we arrive at a price in excess of $30 per share.

    May 12 07:27 AM | 2 Likes Like |Link to Comment
  • Pro-Dex: Potential Insider Buys Suggest Dramatic Stock Rise [View article]
    Yes, we were trying to give the company the benefit of the doubt re: listing costs, but definitely "smells like an easy way for management to increase ownership cheaply."

    Will be interesting to see if management issues a press release in the not too distant future explaining their plans. One would think a Board, particularly one comprised of activists, would be a bit more responsive.
    Jan 27 11:24 AM | 2 Likes Like |Link to Comment
  • Valuable Insights Positions For 2014: Still An Abundance Of Unique Ideas In Small Caps [View article]
    Given the somewhat arbitrary nature of valuation (what discount rate to apply? what's the right multiple? etc.) there are bound to be disagreements - that's why I think price targets are kind of a squishy concept as they are largely a personal viewpoint. All that being said - am absolutely open to discussion regarding valuation on any stock, I appreciate getting other perspectives.
    Jan 9 09:12 AM | 2 Likes Like |Link to Comment
  • Crossroads: Data Storage Turnaround And IP Story Could Yield Multi-Bagger Return [View article]
    Thank you. Call was better than I anticipated, and obviously, my expectations were high. Sounded like the Millennium analyst was short and hoping for something negative from management with his questions, but didn't get it (Izzy Englander's going to be none too pleased).

    We continue to suggest that there is a wide dispersion of potential outcomes with CRDS...this is not P&G or IBM...but the market is simply not correctly pricing the stock relative to the weighted average value of expected outcomes. And it sure sounded to us, like things might get pretty exciting.
    Dec 12 05:09 PM | 2 Likes Like |Link to Comment
  • Crossroads: Data Storage Turnaround And IP Story Could Yield Multi-Bagger Return [View article]
    We think this is a good story, and one that will get significantly better in the next couple quarters. We did NOT hype tomorrow's results. It is our hope that by publishing when we did, investors will 1) listen to the call, 2) focus on the issues that stand to create value over time (i.e. new cost structure, StrongBox traction/anticipated growth profile, management view on litigation). If the recently completed quarter is terrible, but CEO Coleman speaks a message of optimism, this stock is going a lot higher, no lower.

    We are trying to get investors to focus on the right things.

    We absolutely get your point. It's always a difficult call. Again, our view is that this security is materially mispriced relative to our view of expected outcomes (and we acknowledge there is a HUGE range of potential outcomes). This could prove to be a money loser, we don't know yet, but we don't think it will be. However, we are comfortable holding a portfolio of companies whose prices are significantly below our view of where they should be priced based on available information, and our view of probability weighted expected outcomes.
    Dec 11 01:11 PM | 2 Likes Like |Link to Comment
  • Crossroads: Data Storage Turnaround And IP Story Could Yield Multi-Bagger Return [View article]
    According to the rules of being a Gold Contributor to Seeking Alpha, we can't sell shares for 72 hours following the publication of the article, so we are not "lightening up."

    We provide full disclosure of the risks associated with an investment.

    We expect a significant loss to be reported on tomorrow's call. We also outline how losses will diminish significantly within 1 to 2 quarters.

    In addition, with shares at current prices, if outstanding warrants and options are exercised, over 4 million shares (already included in our share-count calculation) will be added, resulting in ~$8 million in new capital on the balance sheet (not to mention the conversion of the convert will decrease interest expense).

    We hope that you also read the piece today from Markman Advisors
    These are seasoned attorneys. We believe the stock price does not accurate reflect the expected value of the ligation, nothwithstanding that there is a wide range of potential outcomes.
    Dec 11 11:13 AM | 2 Likes Like |Link to Comment
  • On Track Innovations: Improving Ops And Valuable IP Is Formula For Multi-Bagger [View article]
    We anticipate that as top-line grows, there will be GM leverage. We believe NFC/wave devices will see margins rise with scale.

    In addition, they will receive 25% of EBITDA from France Parx - so that will be revenue with 100% GM.

    Also, would anticipate royalty revenues looking out 6-12 months.

    Bottom line for us is there are multiple moving parts, but this is a story in the early innings that becomes far bigger and more interesting over the next 12 months.
    Nov 28 11:40 AM | 2 Likes Like |Link to Comment
  • Bloomberg: Intel asking for $500M for TV business, Verizon thinking big [View news story]
    Considering this was hoped to be a major initiative, this would have to be seen as another major FAIL by Intel.
    Nov 25 07:31 PM | 2 Likes Like |Link to Comment