Seeking Alpha
  • Valuable Insights
    Companies in my portfolio reporting tomorrow: $AAPL (Short), $DECK (Long), $ESI (Short) - hope I get at least 1 of 3 right.
    10/24/12
    Reply (18)
    • Ashraf Eassa: You're short $AAPL common?
      10/24/12
    • Valuable Insights: Yes & some puts. Am long $NTP which is supplier, so that's a hedge. Also long $IMOS (read my articles) which likely moves in-line w apple
      10/24/12
    • Valuable Insights: I sold some $IMOS at $14-$16, now adding to position. Co net debt free by year-end, $4 FCF per share this year, last year, next year.
      10/24/12
    • Valuable Insights: $IMOS leveraged to smartphone/tablets, great story. Mgmt is terrific operationally, horrible communicating. Stock will be $30+ in 12 months.
      10/24/12
    • Ashraf Eassa: I looked into $IMOS after reading your articles. I have been considering a long position myself.
      10/24/12
    • Valuable Insights: I don't usually play it so cute taking money off the table at $15 when I think a stock is worth a lot more - this was mostly luck.
      10/24/12
    • Valuable Insights: However, at $11+, it's ridiculous. They already gave a mediocre 4Q guide - although it will still be $0.50-$0.60 per share. And $1+ of FCF
      10/24/12
    • Ashraf Eassa: What risks/downsides do you think keep the price suppressed?
      10/24/12
    • Valuable Insights: Management awful at communicating, lack of coverage, they don't provide Non-Gaap EPS, so volatility in EPS due to Fx.
      10/24/12
    • Valuable Insights: Also, they want to list in Taiwan for multiple reasons. 1) parent co in Bermuda, so they need to div cash to bermuda and pay taxes.
      10/24/12
    • Valuable Insights: then divs from bermuda to you and me get taxed. 2) In Taiwan they are well-known, would get lots of coverage/investor interest.
      10/24/12
    • Valuable Insights: 3) Listing cleans up corp structure. 4) Comps in Taiwan trade at HUGE premium to $IMOS multiple - look at Chipbond.
      10/24/12
    • Valuable Insights: However mgmt has a shelf outstanding, needed for subs to sell stock to make arms length a listing in Taiwan. 2.5 mil share shelf is a big
      10/24/12
    • Valuable Insights: overhang, but if they get it cleaned up by placing with good institutions, stock can rip. However, not sophisticated in hiring experienced
      10/24/12
    • Valuable Insights: underwriter. Also, as you know, average semiconductor investor looks at EPS, not FCF or EBITDA. This trades at under 2x EV/EBITDA and
      10/24/12
    • Valuable Insights: 3x EV/FCF. Depreciation this year is ~$160mil down from $195mil last year. $105 mil by 2014 - so EPS explodes if everything stays flat.
      10/24/12
    • Valuable Insights: But co should grow. Anyhow, its a stock where no one cares until they care. Look at price/vol in Sep 2003. $8 stock that was $50 by year-end
      10/24/12
    • Valuable Insights: History will repeat itself. I feel safe bc as bad as they are communicators, excellent at operating their business.
      10/24/12