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William Trent, CFA  

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  • Consumer Slowdown? Retail Conference Calls Say Not Yet [View article]
    The retail reports today are a big crack in the invincible consumer thesis.
    May 10, 2007. 01:34 PM | 1 Like Like |Link to Comment
  • Circuit City Revises Downward: Where Does That Leave Best Buy? [View article]
    Retailers tend to come and go, but retail certainly hasn't.
    May 6, 2007. 12:34 PM | Likes Like |Link to Comment
  • DRAM Correction Playing Out Pretty Much As Expected [View article]
    All the inventory for Vista was built up in the fourth quarter. Now they are waiting for Vista to clear it out.
    May 4, 2007. 07:10 AM | Likes Like |Link to Comment
  • Stock Prices Pull Ahead of Profits: Break From Cyclical Valuation Patterns? [View article]
    At a -2% savings rate that doesn't sound like a ton of capital idling around for two weeks.
    Apr 27, 2007. 05:15 PM | Likes Like |Link to Comment
  • Stock Prices Pull Ahead of Profits: Break From Cyclical Valuation Patterns? [View article]
    There's certainly a lot of liquidity in the market, but tighter credit standards could remove some of that liquidity. As far as what will happen in 2007 to P/E multiples I hesitate to guess. I'm more sure of the long-term trend - though as I admit in the article the long term is made up of a series of short terms...

    Also, I don't think there's any such thing as capital "on the sidelines." It is in some asset such as cash, bonds, foreign stock, real estate etc. Any money going into stocks would have to come out of one of those.
    Apr 27, 2007. 02:27 PM | Likes Like |Link to Comment
  • Altera's Q1 Results: The Market's Enthusiasm Was Difficult to Understand [View article]
    I'd look at the growth rate rather than the absolute figures
    Apr 24, 2007. 01:04 PM | Likes Like |Link to Comment
  • Will it Take a Liquidity Crisis for Intel to Rationalize Capital Spending? [View article]
    they are smaller, but Intel appears determined to narrow the gap.
    Apr 23, 2007. 07:21 PM | Likes Like |Link to Comment
  • Will it Take a Liquidity Crisis for Intel to Rationalize Capital Spending? [View article]
    From what I understand Intel is the one company pushing for the latest and greatest from semi equipment, insisting that Moore's law be followed to the letter. If they slow down, everyone else is likely to slow down.

    And nobody <em>has</em&g... to keep making capital expenditures that don't earn an acceptable return on capital. In fact, their duty to investors is the opposite.
    Apr 23, 2007. 07:46 AM | Likes Like |Link to Comment
  • Krispy Kreme: Bewildering Analyst Support [View article]
    Maybe it's the sugar rush.
    Apr 16, 2007. 03:40 PM | Likes Like |Link to Comment
  • Stock Ideas From Friday's PPI Report: Del Monte, Fed-Ex, Dow Chemical, Curtiss Wright, Computers and Semis [View article]
    Excellent point.
    Apr 15, 2007. 02:45 PM | Likes Like |Link to Comment
  • He Said, She Said: Someone in the Chipmaker Chain is Crazy [View article]
    I believe you. Unfortunately, right now the supply of it is huger.
    Apr 14, 2007. 03:47 PM | Likes Like |Link to Comment
  • Research in Motion Conference Call Supports Bearish Outlook [View article]
    It is certainly fair to take a long-term view and be willing to ride out short-term market movements if you have the stomach for it. Many don't, and many others want to know what will happen short term to time their entry and exit. It's up to you which information is important to you. As to your specific comments and questions:

    There are few conference calls on which the CEO isn't enthusiastic about the company's future. Those comments tend to be best taken with a healthy dose of skepticism.

    The data plan "trial" that boosted sales was to start with less money for less service from which many users upgraded. That is fine, but it also suggests that the pool of people who know they want to pay for the service is largely dried up. It is unknown how many will upgrade from the trial over time.

    Even worse, they also said "We are also continuing to see strong phone-only sales of Pearl in the range of 20% to 30% at carriers such as T-Mobile U.S.A., who are choosing to offer Pearl without a data plan." Without the data plan the blackberry is in the commodity phone business, which is a horrible one. I would not be excited about their entry into that business, apparently for the sake of boosting the top line.

    <em>If</em>... they get to 25 million subscribers from the current 8 million - and assuming the handset replacement rate, subscription revenue and margins don't fall (which are extraordinarily aggressive assumptions) it would triple the base. Triple EPS to $10.00 and the stock is already at about a market multiple based on your future scenario. So, no, at that time the company's value will <em>not</em&g... be significantly higher.

    If you get to the 50 million subscribers, even with all the wild assumptions intact, then the stock would be worth twice as much as it currently is - when that milestone is reached. They are currently adding 1 million subscribers per quarter, at which rate they will get there in a little over 10 years (42 quarters.) Even if they do it in five, I'm not all that excited about stocks that double in five years. It is good but not great, and RIMM seems like an awfully speculative way of getting to it. I'd rather take a flier on it at $70 so I could get a potential 4-bagger out of it.
    Apr 14, 2007. 09:27 AM | Likes Like |Link to Comment
  • Research in Motion Conference Call Supports Bearish Outlook [View article]
    The inventories have been building for longer than a quarter, and if stores were short on supply they wouldn't be rebating customers to take the phones. When the RAZR was new it was going for full price. By the time it was being given away it was game over (for a while) for MOT. Furthermore, the 3 weeks is 3 more weeks than the stores had a quarter ago. At some point they will draw the inventories down, and at that point instead of selling more into the channel RIMM will sell less than is activated. So while last quarter was 2 million units out, 1.75 activated, next quarter could just as easily be 1.5 million units out, 1.75 activated. Would RIMM be a good buy right now if the forecast was for them to sell 1.5 million units?

    As to gross margin, it isn't so much about the point or two they have already declined, but the four or five additional ones that could get shaved off if orders slow.
    Apr 12, 2007. 12:15 PM | Likes Like |Link to Comment
  • Making Sense of Semis: Does the Industry Still Have What it Takes? [View article]
    Nice work!
    Apr 10, 2007. 04:36 PM | Likes Like |Link to Comment
  • Visa Cap Issues Offer Excuse for Indian Outsourcing Stocks To Pull Back [View article]
    Deepak,

    Thanks for the insights. There are certainly many pressures acting toward margins - rising wages (in appreciating Rupee) against weaker dollar revenues. Still, they keep managing to grow through it - much to our amazement sometimes.

    I think the valuations, the growth and the margin uncertainty all contribute to a general inability to assign a good valuation, which is probably also why the stock will move on "no-news" items like the visa cap.
    Apr 6, 2007. 09:27 AM | Likes Like |Link to Comment
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