Brian Bober

http://www.InflectionResearch.com

9 Comments

    • Cash America: Up 16% on Higher Guidance [view article]
      The pawn lenders definitely do favor jewelry as collateral. While Cash America hedges, rising gold prices definitely help margins.

      Management has stressed focusing on increasing cash flow over revenue growth. Hopefully, this conservative approach and rapid loan portfolio turnover can help keep management focused on earnings not market share. Not having pressure from traders seeking rich annual bonuses should also help.       Jul 08 11:52 PM
    • Cash America: Up 16% on Higher Guidance [view article]
      Alan,

      Thanks for the comment; I have looked at EZPW. I like CSH's online platform because it has higher margins than the storefront operations and the margins should only increase due to low incremental cost.

      While it could be argued that the online cash advance product has low switching costs I think the CashNet brand has increasing value and margins should improve as CSH continues to develop its proprietary models for the online platform through experience and incorporating user reputation. Brand and proprietary data are two great ways to build a competitive moat. While CSH competes on price (e.g. interest rates) knowing who to charge how much is the differentiator. Also, I would imagine that the higher quality customers would migrate to the higher quality brand.

      I read your article in February and agreed with the premise. Unfortunately, I forgot about EZCorp yesterday when I wrote this article as the stock would have returned me about 15% today (including after hours) due to a nearly equivalent guidance raise; congrats. As you stated succinctly, these companies can adapt quickly to a changing environment because of the high turnover in their loan portfolio. Although, I think CSH is a better long and mid-term option because of its management and online strategy.
      Jul 08 11:43 PM
    • Gaming Software Makers Play with the Peripherals [view article]
      I think gaming piracy is underestimated. Requiring and selling peripherals with a game is a great way to reduce piracy. That certainly helps sales. Jun 26 01:48 PM
    • 'Best of Breed' Business Model a Chink in Apple’s Armor? [view article]
      I'm consistently impressed at the zealousness of Apple users, and I enjoy some of the creative analogies in these comments. Understanding how a consumer electronics company built such a religious following may be the greatest example of brand building and will provide material for decades of case studies.

      I believe Apple’s brand has a more devote following than any other corporation. For example, last year Business Week named Nokia the number five brand in the world. In this post I basically trash Nokia for copying Apple and zero commenter’s came to support Nokia. Instead dozens wrote to support Apple even though this post was largely complimentary towards Apple's products. Of course, this has very positive implications for Apple investors.

      Unfortunately, the gist of my post appears to have been missed or largely ignored. I'm not questioning their product quality; I'm examining their business model. In the post I espoused how Apple has great products; currently the best. However, outside a very core following of rabid users, who will always use Apple branded products, Apple relies on having the best of breed products. It is extremely difficult to have best breed products over more than one product generation.

      In recent years Apple has benefited from the lack of innovation from HP, Dell, Microsoft, and others in the consumer computer/MP3 market. However, the next batch of products from HP's Voodoo line appears to be surprisingly innovative. If this is the beginning of a trend it could mark an inflection point of increased competition; potentially affecting Apple's margins. Apple's margins are astronomical compared to other consumer electronics companies. How sustainable is Apple's margins, even with their powerful brand?
      Jun 24 02:58 PM
    • Next Generation Semiconductor Design [view article]
      Thanks for the kind words. To help clarify, Xilinx and Altera have platforms that their clients develop products on top of and Xilinx and Altera make money by selling chips that go into these end products. While it is true that Microsoft needs to care about the layman’s needs, Xilinx and Altera only need to support engineers due to the nature of their products.

      As for whether Xilinx or Altera is in a better position the simple answer would be Xilinx since they have a larger market share and currently appear to have more mindshare. Of course, things are rarely that simple. Altera has better margins and has made some great moves the last couple years such as: partnering with ARM, designing for power management, and having the best path to structured ASICs.

      Both Xilinx and Altera have independently discussed that future growth is in adjacent markets not fighting a battle of attrition between each other; such is the benefit of a duopoly. It typically takes two years from design win to volume production and I don’t expect meaningful revenue growth in the PLD industry for about a year and a half. Right now I don’t see a major difference in design wins between the two companies, but that could change.

      I think both companies are a great value at the current price and I intend, as best as I can, to track the design wins for these two firms. That will be the leading indicator of who will benefit from the next wave of end product innovation. For the foreseeable future the market can support two major PLD companies and the first losers will be those in adjacent markets.       Jun 22 11:32 PM
    • Here's What Will Happen To Apple's Rivals [view article]
      This article points out the compatibility with ActiveSync (e.g. Microsoft Exchange) which is being under-emphasized by most commentators. That is a huge deal as IT departments are continually looking to trim the number of suppliers they must maintain relationships with. I think the 3G / ActiveSync iPhone will choke off RIMM's growth and elevated margins.

      Steve Jobs noted the number of Fortune 500 companies participating in the iPhone version 2. This is directly related to a desire to eliminate the RIMM servers they currently maintain to support Blackberry's proprietary e-mail software. I'm actively looking for a good entry point for a APPL / RIMM pair trade.       Jun 17 09:26 PM
    • Sun, IBM Continue Open Standards Double-Speak [view article]
      I've been a daily or weekly SeekingAlpha reader for well over a year. Dennis makes a good point here and it is discouraging that more and more posts (especially those mentioning Apple, Microsoft, and Ebay) have these nonsensical comments.
      Mar 16 06:24 PM
    • Contradictions in the Solar Market [view article]
      Dr Castellano, I read several articles that you wrote last year of production under-capacity of 71,000 MT in 2010. How much of a downturn in semiconductor manufacturing does this anticipate? How are so many additional wafers going to be available? Mar 05 08:55 AM
    • Navteq: Why Not Profit From a Safe Monopoly? [view article]
      NVT does have a reasonably strong competitor in Tele Atlas. Granted NVT has a much larger and more accurate database. Also, Traffic.com does provide a nice moat with the US government sponsored road monitoring infrastructure, but if all these in car navigation devices start reporting back to a Google or Microsoft database you suddenly have a strong NVT competitor. The only lock-in I see is that Google, Ask, Microsoft, Yahoo, etc are programming against the NVT map data so ripping that out and using a different data source could be expensive. Will NVT ever figure out how to monetize their online map data from Google, Yahoo, etc? Feb 20 02:23 PM
Loading...
Symbols:
Authors:
Quick Links:
Contribute an Article Become a Seeking Alpha Contributor

Transcripts

More Transcripts»