Seeking Alpha

Yoseph West

 
View as an RSS Feed
View Yoseph West's Comments BY TICKER:
Latest  |  Highest rated
  • Friedman Industries: Well-Positioned for the Recovery [View article]
    I am indeed. It is GOOD.
    Dec 9 10:10 AM | Likes Like |Link to Comment
  • Just One Stock: A Pork Producer and More, Integrated from Shipping to Sugar [View article]
    Are you kidding me!?
    Aug 29 02:48 AM | Likes Like |Link to Comment
  • ADDvantage Highlights the Need to Define Investment Type [View article]
    Saj,

    I'm also long AEY. More details on why you like AEY would be appreciated!
    Aug 13 02:33 PM | Likes Like |Link to Comment
  • EDCI Holdings: No Fire Sale Here [View article]
    UPDATE:

    Recently, EDCI's board decided to effect a stock split to delist the company. As part of this, they are buying shares from shareholders with less than 1400 shares at a price of $3.44. I bought at $3.40, so from this, at the very least, I get my money back.

    On top of this, they are making / have made a share dissolution distribution of $1.56 per share. This means that the total I'm getting back for my initial investment of $3.40 per share, is $5.00 per share; a return of 47%.

    It's turned out pretty well and I'm happy with the result. Does anyone know how to be notified when companies file plans of dissolution? I know this might be 1 out of a 100 but still, it's good to keep an eye out.
    Aug 2 01:59 PM | Likes Like |Link to Comment
  • EDCI Holdings: No Fire Sale Here [View article]
    A.A.,

    Thanks for the heads up! I think you're right. I was using I*Metrix by EDGAR. It puts any quarterly or annual financial statements into excel spreadsheets. It's a great tool but can be confusing in this type of situation. I should have checked out the actual 10-Q.

    Nevertheless, the liquidation value I estimated for EDCI ($40.2M) wasn't far off the liquidation value set out in the most recent 10-Q ($36.3M). It was a difference of $0.58 of value, per share ($5.97 vs. $5.39). When I wrote this article, EDCI's shares were trading at $3.35, so there was still a huge margin of safety.
    Aug 2 01:42 PM | Likes Like |Link to Comment
  • Friedman Industries: Well-Positioned for the Recovery [View article]
    J. Duade,

    Things are certainly starting to look up! May it continue!!
    Aug 2 01:15 PM | Likes Like |Link to Comment
  • EDCI Holdings: No Fire Sale Here [View article]
    You're right. I should've, so here it is.

    The liquidation value for EDCI is $40.2M, which equates to $5.97 per share. EDCI is currently trading at $3.35.
    Jun 4 08:26 AM | 1 Like Like |Link to Comment
  • EDCI Holdings: No Fire Sale Here [View article]
    What do you mean specifically? Like EPS, P/E?
    Jun 1 10:44 PM | Likes Like |Link to Comment
  • EDCI Holdings: No Fire Sale Here [View article]
    Interesting. Thanks for the insight!
    May 31 10:32 AM | Likes Like |Link to Comment
  • Friedman Industries: Well-Positioned for the Recovery [View article]
    Hester,

    Thanks for the feedback.

    I disagree with you because I think you're overstating FRD's dependence on particular customers. I won't argue with you on the point about suppliers. The main customer they are reliant on is US Steel. If I remember correctly, US Steel is the only major customer FRD is reliant on. As I mentioned above, they accounted for 30% of FRD's 2009 sales.

    Even though FRD lost this business, they have not gone cash flow negative during this period.

    Additionally, to put FRD's negative operating income down to their loss of USS, completely ignores the current economic situation. If USS was the only reason for a drop in sales, we would see sales drop down to around $133m (Avg of $190m sales (2005-2009) x 0.70).

    It's tough to comment on the operating leverage because while FRD has small margins, they seem to have scaled down well in fiscal 2010, where revenue dropped ~74% from the year before.
    Apr 6 10:02 PM | Likes Like |Link to Comment
  • Friedman Industries: Well-Positioned for the Recovery [View article]
    J. Duade,

    Thanks for the comment.

    1. Yes, I am assuming there will be a return to profitability. That's what I'm betting on. As stated above, I believe this will be in a couple years time. The steel industry is cyclical by nature. FRD had a slow down in 2002 and 2003 as well. Admittedly, it was not as severe but neither was that recession.

    2. The change in book value was $8.35 to $8.14, from Dec 31, 2008 to Dec 31, 2009. Just from taking a quick look to compare the balance sheets. One potential reason that stuck out for me was the depreciation of property/plant/equipment which has accumulated to $1.92m in that period, which accounts for more than the $1.4m reduction in equity over the past year to which you referred. Nevertheless, I would definitely be interested in hearing your thoughts on the matter.

    3. I would be interested in hearing your source for stating that these facilities are seen by Friedman "as being unprofitable for quite some time." While they do say that future profitability is dependent on a U.S. economic recovery, in their 10-K & latest 10-Q, they do not allude to a time frame.

    4. In relation to your comment about the cash on the balance sheet essentially being the result of inventory. This is not completely accurate. A major part of the reason for the increase in cash is the decrease in accounts receivable. If you compare the balance sheet at December 31, 2008 to March 31, 2009, you can see that accounts receivable decreased $9.53m. Admittedly, as did inventory, by $8.69m. For someone who has supposedly looked at all the facts and is long FRD, the tone of your comments and your choice of presented facts makes me skeptical.

    5. You state that when demand picks up, "cash will be used to purchase steel products at spot market prices, which will burn through that pile of cash quickly." If you look back at the past ten years, FRD generally keeps inventory levels at around $20-30m. Currently, it is sitting at ~$18.42m. I decreased cash minus interest bearing debt to $10m in my valuation from its current $20.3m. Surely, this sufficiently considers any future purchases of inventory?

    6. With regards to FRD's revolving line of credit, it does elapse April 1, 2010, which is either today or tomorrow depending where you are. You suggest that Friedman's will either be forced to borrow at unappealing interest rates, which is unlikely considering their cash reserves, or be forced to use its own cash. On the one hand, FRD has sufficient inventory to sufficiently cover itself into the future. On the other, even if it chooses to spend $10m to purchase more inventory, I've already accounted for this in my valuation. I believe that my valuation is conservative and takes into account situations such as this.

    I would like to ask you though, if you are long on FRD, what are you betting on?

    P.S. Apologies if there are any errors in the above. It's late and it's been a long day!
    Apr 1 01:32 AM | Likes Like |Link to Comment
  • Friedman Industries: Well-Positioned for the Recovery [View article]
    Gambler,

    The reason FRD is under the Dividend section is because a 0.70% yield is still considered a dividend.

    Additionally, you should consider that in normal market conditions, FRD distributes approximately $0.32/share annually, which is a 5.5% yield based on current prices.

    In the future, please refrain from throwing around words like "pimping". It cheapens the dialogue.
    Mar 31 08:31 PM | 4 Likes Like |Link to Comment
  • Hidden Value in T.A.T. Technologies (Part 1) [View article]
    Polyorchid, thanks for the comment.

    Just want to clarify your point about the dividend. In the 2008 annual report, it states that management has no intention to distribute a dividend for the foreseeable future.

    IMHO, I would doubt Morningstar's accuracy on that point, unless you have another source.
    Mar 4 11:51 PM | Likes Like |Link to Comment
  • Why Gravity Is a Cheap Stock [View article]
    A key tenant of "old school" value investing is avoiding tech companies. Surely, you've written this article in error?
    Jan 20 02:48 AM | 1 Like Like |Link to Comment
COMMENTS STATS
14 Comments
6 Likes