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Varadharajan Ragunathan  

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  • Helios And Matheson Analytics: A Potential Candidate For Acquisition? [View article]

    Finally we now who's swimming naked. I am astonished at the kind of vitriolic comments reachmygoals1 wrote.

    Anyway, it's best to ignore such stuff.
    Mar 1, 2015. 11:14 PM | Likes Like |Link to Comment
  • Infosys - Buy The Dip And Profit From Sikka's Speed Of Execution [View article]

    Find attached a link to a research report Motilal oswal published recently. Does concur with a lot of my views but I do diverge from their views on the fcus - which IMHO will be on building non-linearity through better platforms, incubation of new ideas and products rather than chasing large outsourcing contracts.
    Sep 22, 2014. 01:21 AM | Likes Like |Link to Comment
  • Infosys - Buy The Dip And Profit From Sikka's Speed Of Execution [View article]
    Do check out these articles on INFY.

    Even discounting for the heavy PR machine that INFY is famous for, scuttlebutt reveals that INFY's worst seems to be over and the staff who are left behind have reconciled themselves to the new culture and a "different thinking" CEO.

    Again, I expect F 15 results to be marginally better than expected (because of lowered expectations) and that should set up a nice little trajectory for the stock over the next 12-18 months.
    Aug 18, 2014. 12:05 AM | Likes Like |Link to Comment
  • The Big Short - The Need For An Externality In A Short [View article]
    A few points :

    - the point of this article (this is from my blog is not to talk about Tesla as a bubble stock but to make the point about the importance of an externality (an event that has an interface between the company and the external world).

    It's just a thought I have - Happy to listen to others arguments. The mistakes that people make are :

    - extrapolation bias - like the comment from "Research and value" that past is an indicator of the future. No one's saying Tesla has not executed but eventually law of diminishing returns catches up. but when is the question while shorting a stock ?

    - Sampling bias : Take one sample - eg., gross margin or number of cars and just because the company delivered on it, they will deliver on all else forever. Sort of like saying I went to the gym diligently for a month, so I will be a rock star fund manager with a sculpted physique - looks so ridiculous, but imagine the number of times we do it in businesses while evaluating stocks. By the same logic, orkut should have been the largest social network in the world.

    The point is I do agree with Dan that we cannot measure intrinsic value precisely - buying stocks is a probabilistic game and as long as one is 90-95% sure that intrinsic value is between X and Y and valuation is much lower or higher, there exists a margin of safety on the long/short side. I agree with what Daniel says that in the long term, the slope of the price line and the earnings line are similar - does not mean that they converge.

    I am not calling any of them a concept companies - I am calling their stocks concept stocks because of the difference in my perceived intrinsic value and the price they are trading at.

    I've been in the markets long enough to know that each time there is a new fangled theory of " this time its' different" that gets floated around. Then people wake up to reality eventually - remember it took 31 long years for Madoff to get discovered and all along people that he had perfected the art of smoothening returns without increasing risk.

    As a bottomline, it's my thesis that for a short to be compelling, there has to be an externality event that is triggered - not merely fall in gross margins etc. but a fall in gross margins leading to a potential equity dilution or in HLF's case, a regulatory intervention that questions the model etc.

    It's a moot point - happy to be proven wrong.
    Aug 10, 2014. 11:41 PM | Likes Like |Link to Comment
  • A High Conviction Idea With 150% Upside [View article]
    Nice article - how does overstock compare on OCF and FCF front ?
    Aug 9, 2014. 08:44 AM | Likes Like |Link to Comment
  • The 'Come To Jesus' Earnings Report [View article]
    Good article - a while back at Harvard, I listened to a lecture on how difficult it is easy to break habits - a company not used to making profits and chasing unprofitable growth, cannot just like that become profitable in 1-2 years. a 20 year culture takes a long, long time to fade away.

    Most investors who miss this will live in "lala land" and eventually, but surely the truth will out.
    Jul 28, 2014. 02:08 AM | Likes Like |Link to Comment
  • Why Michael Kors Is A Much Better Buy Than Coach [View article]

    You claim you are a value investor but I did not see cash flow being mentioned anywhere. What matters is not PEG or relative PE ratio but OCF and FCF generation.

    Could we have a comparison of that please ? Given that Michael Kors is growing, a comparison of both OCF and FCF would throw light on how much all of this actually translates to what it means for shareholders
    Jul 4, 2014. 12:52 AM | 1 Like Like |Link to Comment
  • Michael Kors: Building A Fashion Empire; Initiating With $119 Target, 31% Upside [View article]
    Interesting article especially in the backdrop of coach's lacklustre performance with an ostensible underlying reason of losing market share to Michael Kors.

    Can you compare these on FCF/sales, EBITDA, ROCE/ROE perspective and their trends.

    Trying to understand if this growth for Michael kors is expanding the pie in markets like China or if it is a market share grab from others like coach
    Jun 29, 2014. 10:16 AM | 1 Like Like |Link to Comment
  • Samsung Blinked - Its Decision To Call Down The Quarter May Be An Indicator Of Slowing Markets [View article]
    This is a very linear thinking. For samsung and apple the "stock in use" of all the phones sold over the years kicks in revenues on increased usage (partnerships with google/apps) and that usage is exponentially increasing in India, China and other emerging markets. Do remember that a lot of early adopters are using samsung and iphone and their usage is bound to be higher, at least in the medium term.

    That should to some extent compensate - that said, it will also allow for google to start slowly exercising its weight in peeling out larger pounds of flesh from the android phones in circulation.
    Jun 29, 2014. 10:07 AM | 1 Like Like |Link to Comment
  • HDFC Bank: Do The Numbers Reveal The Real Story? [View article]
    Sorry. so what's the bottomline on HDFC bank ?
    Jun 28, 2014. 12:56 PM | Likes Like |Link to Comment
  • Lands' End: Growth Strategies, Free Cash Flow, And Short Interest Driving Shares Higher [View article]
    Fantastic analysis .
    Jun 21, 2014. 10:31 AM | 1 Like Like |Link to Comment
  • AthenaHealth: Why I Believe Following David Einhorn's Short Advice Is A Very Bad Idea [View article]
    I am not sure that you mean but gross margins without SG & A for a growing firm is meaningless. The easiest metric is ratio of SG & A increase to sales increase and see if the ratio is falling - that explains if the "moat" is falling or increasing for an unprofitable company. For eg., for a facebook today cost of a new customer is much much lower than what it was in 2009.
    Jun 19, 2014. 09:46 AM | Likes Like |Link to Comment
  • AthenaHealth: Why I Believe Following David Einhorn's Short Advice Is A Very Bad Idea [View article]
    This is a company I have spent six months analyzing and I have high conviction on the short thesis. This article glosses over facts and jumps into opinions straightaway ("confirmation bias").

    The company never has earned above its cost of capital in the last 17 years of existence

    They did an acquisition last year and paid $ 240 MM for Epocrates which is a melting ice cube. Already their revenue projections are down below 30 % - first he company said revenues would grow 30 %, now they are saying order booking will grow 30 % - remember this is after paying $ 240 MM for an acquisition expected to create revenue synergies

    Look at SG & A and sales cycles - as athena moves from smaller clinics to larger hospitals. Their yields have dropped from 5-6 % to 2-3 % (check the conference call transcripts).

    Insiders are selling like crazy. Mr. Bush says its a $ 1000 stock and has sold 50% of his holding in the last 18 months. Why would someone do so ? Actions, they say speak louder than words

    It's an average BPO business that generates profits as a % of the customer's receivables - that's that - just because someone can log into their account on the web, it does not make it a cloud based business. What's more, it neither has network effect - nor has a high switching cost.

    As warren buffet said, time is the enemy of a mediocre business - a business whose margins are shrinking, free cash flows are negative and where insiders are selling. When the water finally goes out, we will know who's swimming au naturel.
    Jun 3, 2014. 01:13 AM | 2 Likes Like |Link to Comment
  • Sesa Sterlite: More Juice In The Rally [View article]
    If oil and gas is a game changer, why not buy cairn instead ?
    May 28, 2014. 07:58 AM | Likes Like |Link to Comment
  • Discovery Communications: Timely And Possibly Cheap, But What Impact Will Secular Viewership Shift Have? [View article]
    Terrific idea - I have been fascinated by Discovery for a couple of months now. They way I looked at it is this - they pretty much have a "moat" around their non fiction contetn and they are expanding rapidly in emerging markets.

    For them, the cost of reproduction of content is zero giving it a true franchise characteristic. The one thing I would be worried about is their ability to monetize given that a lot more of the viewership is going to be online/mobile where attention spans are dwindling - sort of similar to the problem that google has.
    May 25, 2014. 08:31 PM | 1 Like Like |Link to Comment