Andrew Hanson, CFA

Andrew Hanson, CFA
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  • Buy ICICI Bank As Blood Flows On Indian Streets  [View article]
    What about Yes Bank?
    Sep 1, 2013. 11:35 PM | 1 Like Like |Link to Comment
  • Identifying Thriving Small Banks Using Federal Reserve, FDIC Data  [View article]
    Hi Matt:

    I like your thinking. You should take a look at Citizens Financial (CZFS) which I own. Also, you should consider the issues of deposit growth as well as asset mix. Most rural banks are long deposits and short loans. It is important to look at the maturity structure of their investments as well as whether they are reaching for yield.
    Aug 15, 2013. 01:26 AM | Likes Like |Link to Comment
  • Micron: An Optimist's Earnings Estimate  [View article]
    Dear Russ:

    I am following your analysis closely and am long MU.

    Would you clarify Q2 projections. Specifically in your March 7th posting you said that PC DRAM is only about 15% of sales. At a 20% increase in spot pricing that is $54 mill in incremental sales and gross margin.

    I am with you in the long term re industry consolidation, pricing, and operating leverage.

    Thanks for your insights.
    Mar 19, 2013. 09:07 AM | Likes Like |Link to Comment
  • One-third of publicly listed Chinese companies suffered negative cash flow in Q2, according to the FT, as the slowdown spreads from construction, machinery and chemicals to those industries expected to lead the supposed rebalancing of the economy - retail, healthcare, electronics. While non-performing bank loans have yet to be affected by the cash crunch, those classified as overdue leapt 29%.  [View news story]
    Add to this that "Asian-Pacific markets were mixed Monday as investors hoped the U.S. and China would launch stimulus measures" and that South Korean is contemplating a stimulus package.

    The operative word is "hope". The problem is structural. Even Keynes believed that you can not solve structural economic problems with easy monetary policy.

    Not only are the markets "hoping", so are the central banks.
    Sep 10, 2012. 08:24 AM | Likes Like |Link to Comment
  • Bridgeport Education Stands Out Among For Profit Education Companies  [View article]
    The short issue is not about accounting for current and past revenue since 80%+ of revenue is ultimately received from the government. The issue is about the future of government support for post secondary education.

    The government intends to make it harder to receive student loans in the future and the for-profit schools are responding by tightening their admissions standards (so that they are above the cut-off point for loans) and diversifying their revenue streams. The schools are by and large economically rational.

    From a social welfare point of view the government could have either of two thoughtful approaches. The first, and more liberal, is to view lending to students as a way to foster upward mobility. This system is open to all and it will require a government subsidy. The government has clearly not chosen this approach since it is deciding to ration funds based on the ability to repay.

    The decision to ration funds based on ability to repay is equivalent to setting a threshold rate of return on your investment in educating students. It eliminates students who chose low paying careers as well as eliminating students who are at academic risk.

    The for-profit schools are reacting rationally to the government's evolving policy. In Bridgepoint's case, it has tightened admissions requirements. It will no longer accept "Ability to Benefit" students. It has instituted a mandatory two week program, at its own expense, to help a student assess whether he is able to complete an online degree. Additionally, it is diversifying its revenue stream by pursuing corporate accounts and the military.

    I actually think that the shorts, insofar as they have influenced the government, are raising the barriers to entry in the business. In the short run that is a negative. In the long run it is a positive.

    May 25, 2011. 06:37 PM | Likes Like |Link to Comment
  • Bridgeport Education Stands Out Among For Profit Education Companies  [View article]
    Great article. Bridgepoint Education is the largest position in my accounts.

    The online schools, while not the best for every student, have a superior business model. No bricks and mortar and adjunct faculty makes for a low fixed cost structure. Traditional education built on bricks and mortar and tenured faculty has a high fixed cost structure. Operating margins for the online schools are superior because they started from scratch and are not creatures of tradition.

    Traditional schools provide a price umbrella which has allowed the online schools to increase their market share of college students from 2% ten years ago to in excess of 8% today. Even granting Steve Eisman's point that they have figured out how to exploit the student loan system (which is now being addressed with cohort default rates and ability to repay debt based on occupation choice) they are generally still sheaper than private and often public colleges and universities.

    If anyone disputes the quality of an online education, they should talk to the Professor of Nursing at Rutgers University I spoke with over the weekend. Their PhD program in nursing is dependent on online learning, and the use of skype based chat rooms works just as well as face to face study groups.

    As long as our government at all levels spends more than it can afford, the online schools will continue to take make share from public universities as the are forced to raise their prices. The 35% + price increase at the University of California system illustrates this.

    It is worthwhile to scan an international database of education stocks. Of the 139 companies I know of, the top ten are American. Education is one of our largest exports, and it is one industry in which the United States is a leader.
    May 23, 2011. 06:29 PM | Likes Like |Link to Comment
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