coitus

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3 Comments

    • Sun Nov 11th 14:50 PM | Rating: 0 0
      Commented on:
      Blue Nile: A Classic Underpromise, Overdeliver Company
      You deserve congratulations for owning the stock from $35 to $60 - beyond that you've been lucky and I think you'll be biding time. "Being the leading online jewelry retailer" has no implicit value unless the business model and profitability justifies the valuation. You've been right about your ZLC trade but keep in mind that the "leading retailer of jewerly in the US and Canada" also known as Zales has a market cap of $965 mm - that math doesn't seem to support your $2-5 bn market value for NILE.
      View article »
    • Thu Nov 8th 20:18 PM | Rating: 0 0
      Commented on:
      Blue Nile: A Classic Underpromise, Overdeliver Company
      but if they are really taking so much share then why are orders only growing 15%? Wouldn't they be growing far faster given what a small piece of the overall pie NILE represents?

      My other point is this, if the company can grow earnings 25% per year, what multiple do you assume the company will trade on 2010 earnings? Assuming they earn $1.05 in '07 and grow 25% per year then 2010 earnings will be $2.05. Let's assume they slow down to 20% growth after that. At a 1.5x PEG, the mutliple would be 30x. 30x $2.05 in earnings, you have a $61 stock. Congratulations, you've managed to lose $20 per share off of today's close over the next 3 years. To justify this multiple, you need to have hyper growth - 15% growth in orders isn't hyper growth.
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    • Tue Oct 2nd 22:36 PM | Rating: 0 0
      Commented on:
      Deutsche Upgrades Navteq Following Buyout: Totally Pointless
      I'll let you in on a little secret of how the sell side gets compensated in the post Spitzer world. Analysts get compensated for "market moving" upgrades/downgrades. In principal, an analyst makes a smart call that causes a stock to move, they get rewarded for it. As in any comp system, guys have figured out how to game it. So when you have a market moving event (i.e. a takeout), it pays to upgrade from Sell to Hold. In a dumb comp system, boom, you just did a market moving call and you'll get compensated for it even though you had nothing to do with it. Think of it as monkey piling onto good/bad news by analysts.
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