gga's Comments

Starbucks' Dismal Quarter

Sat, 02 May 2009 16:57:00 -0400

Todd,
Did you read the conference call transcript before writing this? Cost cuts and efficiency improvements were identified during the call. Mentioned were improvements in purchasing, labor scheduling, among others. Some of these will take more than a quarter to fully implement or realize cost savings.

The ongoing store closings were noted during the call. They are finding that ongoing stores located near recently closed stores are seeing a noticable bump up in traffic & sales.

Not mentioned during call: Not all closings are due to poor traffic or sales. I've been told that a busy store near me (Dana Pt, CA) is planning to close only because of a pending huge increase in the lease cost. (It is in an upscale commercial building.) That store is in a desirable location (beach, library & hotel proximity) and draws a steady crowd. I believe it was the first in the city, but their remaining newer stores have good or better traffic. The closing is not yet etched in stone so they may reconsider, especially if a proposed surf museum nearby pans out before the lease expiration.

Starbucks' Dismal Quarter

Sat, 02 May 2009 16:21:38 -0400

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Most retailers, "watering holes" & restaurants are experiencing similar and/or worse numbers. Its called a recession, so these comp. numbers were to be expected.

The company readily admits they have never had to focus on efficiency and expenses while they were going full throttle with the store openings. During the expansion mode, it was race to grab the best location at that time, even if it meant comprising on leasing costs. And, some of those locations & high leases are no longer desirable, which is to be expected in a fluid real estate market. These cost savings & efficiency improvements will be more pronounced when FULLY implemented and when the economy improves. That is a characteristic shared by other smartly managed companies: When challenged, you don't just cut: you improve your procurement, your process, your product, etc.

Humans are social creatures and they'll always seek to interact in a like-minded crowd environment. Yesterday's corner tavern has been replaced by today's coffee shop. And the nice thing is, coffee shops serve all ages throughout the day & evening.

Patient investors with the long term horizon already have been rewarded and further rewards will be forthcoming as the recession ebbs.

Qualcomm's Recent Progress on 3G and 4G Notebooks

Mon, 12 Jan 2009 01:36:16 -0500

"...since for the first time since 1995 it doesn’t have a mobile phone standard of its own."

This is misleading information. Simple research would reveal Qualcomm has plenty of essential LTE (ORMD-related) patents and has publically claimed a royalty rate of 3.25% for LTE, subject to negotiations. Not too shabby and the 15yr agreement with Nokia affirms QCOM's ORMD patent portfolio. Royalty-bearing LTE agreements have also been made with other prominent licensees, according to previous company announcements.

SunPower Is a Semi - It Deserves to Be Valued Like One

Mon, 04 Aug 2008 02:07:23 -0400

"Bottom-line: Semiconductor companies with gross margins between 20 to 30% do NOT deserve premium valuations regardless of growth rate. A technological advantage [like multi-junction] will sure help, but SPWR does not have that."

This is strictly "your" categorization, for whatever your purpose or day-trading agenda. It is now obvious it wasn't written just to generate discussion. Using that logic, then Apple is a semiconductor company also, and its stock should automatically have the same valuation metrics as TI, AMD, ARMH, etc.

The fact is SPWR is far more than just a commodity chip company. Their mission is to become the leading system provider, encompassing more than just silicon. And the facts (PEG ratio, etc.) appear to indicate the stock is not overvalued, but perhaps undervalued when looking longer term than the next trading day. End of my participation on this "discussion" with a day-trader.

SunPower Is a Semi - It Deserves to Be Valued Like One

Sun, 03 Aug 2008 22:23:37 -0400

On the other hand, SPWR is much more than just a PV chip/panel manufacturer. SPWR is focusing on the total installed cost of the systems, be they residential, commercial or utility installations, with the goal of providing the lowest cost installed system with leading edge performance and configurations. Maybe today's version of Apple might be a better comparision, of course excluding the "Apple premium" product price??

SunPower Is a Semi - It Deserves to Be Valued Like One

Sun, 03 Aug 2008 18:57:10 -0400

"My real hunch though, is that this pie is going to be big enough to sustain a lot of players for the next decade. "

I agree--just as there were lots of semiconductor companies in the 90's chasing the expanding PC pie. More than a few leaders then are still around and prospering...

Cypress Semiconductor owns a chunk of SPWR. Wouldn't their design/management expertise provide some advantages? Granted, CY is not considered a tier 1 player but they do have chip design knowhow.

SunPower Is a Semi - It Deserves to Be Valued Like One

Sun, 03 Aug 2008 17:59:15 -0400

Interesting comparision with those mature semiconductor stocks. But not exactly apple to apples. Unlike SPWR, those companies cited are not funding sigificant capacity or expansion or exhibiting similar consistant earnings growth. (Yes, they once did so and were once rightly rewarded with higher valuations due to their then current/projected growth.) Looking at published data, I find the consensus earnings estimate for SPWR's current FY (Dec 08) to be $2.31/share, equaling a current P/E of 32. With the current growth rate (despite their current high levels of capital investments), the PEG ratio is still less than 1.00, indicating the company is fairly, or even perhaps, undervalued as some might argue. The forward P/E (using FY09 ests) is just under 22. Of course there are the risks as you mentioned but SPWR has a recent history of exceeding estimates, unlike some of those semi's you mentioned. And lest anyone here forget, LTBH investors do not value any stock only on last year's numbers, but more so on projected current and future revenues & earnings.

Five Great Companies to Buy at a Drop

Fri, 01 Aug 2008 22:24:18 -0400

Re: Qualcomm: Based on the current superiority of its chip division, QCOM will likely be out front of the competition with leading edge LTE chips as well. A read of their recent agreement with Nokia shows that LTE is also included in the royalty agreement. That is 40% of the handset market, assuming Nokia maintains it's dominance. QCOM's annual report and numerous press releases has QCOM stating they support ALL technologies, not just their UWB for 4G. And most importantly, the carriers will need multi-mode phones to address the LONG-TERM transition to 4G, be whatever it be. So the various 3G flavors of CDMA (HSPA, wCdMA, EV-DO, etc) will be with us for YEARS to come.

In the Battle of Best Solar Plays, U.S. Is a Distant Second

Wed, 23 Jul 2008 22:00:43 -0400

"For a $6 billion company, $28.6 million net income is simply not enough to encourage investors. "

This statement is intentionally misleading. Since when is quarterly net income stated as a percentage of market capitalization ($6 billion)? Comparing quarterly net income relative to QUARTERLY GROSS REVENUES is the accepted accouting norm, unless one has an agenda.
Dislosure: Long SPWR