Research Intensive Investing's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/88173/comments http://seekingalpha.com/article/69202-monster-s-guidance-is-not-guidance?source=feed#comment-128796 128796
Thanks for addressing the substance of my write-up. I apologize if my typo offended you.]]> Wed, 19 Mar 2008 11:32:38 -0400
Thanks for addressing the substance of my write-up. I apologize if my typo offended you.]]> http://seekingalpha.com/article/63380-loopnet-management-can-handle-tough-times?source=feed#comment-114921 114921
Eric
researchinvesting.blog...
]]> Wed, 06 Feb 2008 15:36:43 -0500
Eric
researchinvesting.blog...
]]> http://seekingalpha.com/article/60400-wsfs-financial-the-perfect-short?source=feed#comment-110907 110907 Wed, 16 Jan 2008 18:04:32 -0500 http://seekingalpha.com/article/60062-smith-micro-profit-from-a-fallen-wall-street-story?source=feed#comment-110290 110290
As for taxes, management has guided to a 30% cash tax rate in 08'. I also could see this coming in lower, but I wanted to use the higher rate to be conservative.

Anyhow, sounds like we are generally both in agreement that there is a lot of growth here.

]]> Mon, 14 Jan 2008 15:07:22 -0500
As for taxes, management has guided to a 30% cash tax rate in 08'. I also could see this coming in lower, but I wanted to use the higher rate to be conservative.

Anyhow, sounds like we are generally both in agreement that there is a lot of growth here.

]]> http://seekingalpha.com/article/57632-noah-education-profit-from-a-busted-chinese-ipo?source=feed#comment-109855 109855 Sat, 12 Jan 2008 21:46:51 -0500 http://seekingalpha.com/article/58537-simon-property-group-my-kind-of-dividend-growth?source=feed#comment-107267 107267
Eric
researchinvesting.blog...]]> Fri, 28 Dec 2007 17:23:30 -0500
Eric
researchinvesting.blog...]]> http://seekingalpha.com/article/57768-korn-ferry-monster-heidrick-struggles-recession-risk-not-priced-in?source=feed#comment-106778 106778
Thanks for the comments. In response:

1) Though the stocks have already been hit hard, this is not much unlike the trend that occurred in 2000-2001; these stocks get marked down in 2 stages. The first (which has already occurs) happens when the market stops treating them a growth stories and begins to have more of a flattish outlook. The 2nd stage occurs when the businesses show clear signs of cylicality, and operating performance falls. Check my prior write-up on KFY why for I think there is still more room for these to fall.

2) This is a long debate, but I will say that the fed's impact has been negligible so far (LIBOR spreads have continued to increase, etc.), and that there are many arguments put forth by many smart people supporting serious recession risks.

3) I'm glad you brought this up. On an income basis, it gets ~ 61% from North America. Also, most of its international exposure is to multi-nationals, which have relatively greater exposure to the US than local companies (this is why in the last recession revenues and income abroad also dropped off a cliff, and will likely happen again this time around, though perhaps to a lesser extent).

4) The cash number is misleading. They have $112M in bonus payments due in Q1, and $15M they still have to pay for the Highland Partners acquisition, so lets say the current number is more like $150M. On top of that they are using most that money for buybacks, which are succeeding only to keep the share count basically flat, because of the generous share grants to employees. And they are also buying their stock on peak earnings, which in the long term I believe is destroying--not adding--shareholder value. Buybacks are not good when you are buying your own overvalued stock.

5) This will take some time to play out. But given HSII's sector concentration, I think its more likely than not that we'll see significant pressure in Q1 of next year, if not next quarter.]]> Mon, 24 Dec 2007 22:48:10 -0500
Thanks for the comments. In response:

1) Though the stocks have already been hit hard, this is not much unlike the trend that occurred in 2000-2001; these stocks get marked down in 2 stages. The first (which has already occurs) happens when the market stops treating them a growth stories and begins to have more of a flattish outlook. The 2nd stage occurs when the businesses show clear signs of cylicality, and operating performance falls. Check my prior write-up on KFY why for I think there is still more room for these to fall.

2) This is a long debate, but I will say that the fed's impact has been negligible so far (LIBOR spreads have continued to increase, etc.), and that there are many arguments put forth by many smart people supporting serious recession risks.

3) I'm glad you brought this up. On an income basis, it gets ~ 61% from North America. Also, most of its international exposure is to multi-nationals, which have relatively greater exposure to the US than local companies (this is why in the last recession revenues and income abroad also dropped off a cliff, and will likely happen again this time around, though perhaps to a lesser extent).

4) The cash number is misleading. They have $112M in bonus payments due in Q1, and $15M they still have to pay for the Highland Partners acquisition, so lets say the current number is more like $150M. On top of that they are using most that money for buybacks, which are succeeding only to keep the share count basically flat, because of the generous share grants to employees. And they are also buying their stock on peak earnings, which in the long term I believe is destroying--not adding--shareholder value. Buybacks are not good when you are buying your own overvalued stock.

5) This will take some time to play out. But given HSII's sector concentration, I think its more likely than not that we'll see significant pressure in Q1 of next year, if not next quarter.]]> http://seekingalpha.com/article/55937-will-monster-be-murdoch-s-next-acquisition?source=feed#comment-105969 105969
As a MNST short, my main worry in a buyout, but I hope that the negative macro news will keep potential investors on the sidelines. Also, for what its worth, I think MNST becomes a very interesting long in 2-3 years once things pick up again.

Eric
researchinvesting.blog...]]> Tue, 18 Dec 2007 18:02:50 -0500
As a MNST short, my main worry in a buyout, but I hope that the negative macro news will keep potential investors on the sidelines. Also, for what its worth, I think MNST becomes a very interesting long in 2-3 years once things pick up again.

Eric
researchinvesting.blog...]]> http://seekingalpha.com/article/57680-jarden-remains-a-compelling-short?source=feed#comment-105968 105968
Have you taken a look at all at the debt schedule? Will they be forced to refinance some debt at higher rates anytime soon? Have you done any stress testing to see at what EBIDTA levels they begin to run into significantly trouble covering interest payments?

Thanks,
Eric]]> Tue, 18 Dec 2007 17:57:07 -0500
Have you taken a look at all at the debt schedule? Will they be forced to refinance some debt at higher rates anytime soon? Have you done any stress testing to see at what EBIDTA levels they begin to run into significantly trouble covering interest payments?

Thanks,
Eric]]> http://seekingalpha.com/article/57632-noah-education-profit-from-a-busted-chinese-ipo?source=feed#comment-105916 105916
Yes, they are relatively expensive. I probably should have called this out more clearly in my write-up. Estimated average disposable income per capita in China is about $800/year. For urban households, it's more like $1,500 a year. Noah's DLD's cost between $160-$240. Keep in mind that average disposable include includes millions of incredibly poor people, and hides the earnings power of China's rapidly growing middle class. I do not have numbers for that subsegment, but I would not be surprised if there is a relatively large segment of the population with $5-10k+ in income per year (and that this group is growing rapidly). Even if only 10% of China's population falls into that range, that is an addressable market of about 20M people.

Also, 85% of DLDs costs are input costs (flash memory, etc.) which should come down in price and make the DLD's more affordable over time. NED's content distribution through cell phones, etc. will also be more affordably priced for a larger segment of the population.]]> Tue, 18 Dec 2007 12:09:07 -0500
Yes, they are relatively expensive. I probably should have called this out more clearly in my write-up. Estimated average disposable income per capita in China is about $800/year. For urban households, it's more like $1,500 a year. Noah's DLD's cost between $160-$240. Keep in mind that average disposable include includes millions of incredibly poor people, and hides the earnings power of China's rapidly growing middle class. I do not have numbers for that subsegment, but I would not be surprised if there is a relatively large segment of the population with $5-10k+ in income per year (and that this group is growing rapidly). Even if only 10% of China's population falls into that range, that is an addressable market of about 20M people.

Also, 85% of DLDs costs are input costs (flash memory, etc.) which should come down in price and make the DLD's more affordable over time. NED's content distribution through cell phones, etc. will also be more affordably priced for a larger segment of the population.]]> http://seekingalpha.com/article/55279-risk-may-outweigh-reward-for-newly-public-deltek?source=feed#comment-103132 103132
Eric
researchinvesting.blog...]]> Mon, 26 Nov 2007 22:13:22 -0500
Eric
researchinvesting.blog...]]> http://seekingalpha.com/article/43276-the-long-case-for-sinoenergy?source=feed#comment-92975 92975
My impression with SNEN is that they are to a degree winding down their outsourced construction business to build their own filling stations, which means you can't really rely on those estimates as meaning too much. Also, with 29mil shares vs. 14mil last year, the correct P/E looks like its closer to 20.]]> Mon, 06 Aug 2007 12:17:02 -0400
My impression with SNEN is that they are to a degree winding down their outsourced construction business to build their own filling stations, which means you can't really rely on those estimates as meaning too much. Also, with 29mil shares vs. 14mil last year, the correct P/E looks like its closer to 20.]]> http://seekingalpha.com/article/43276-the-long-case-for-sinoenergy?source=feed#comment-92851 92851 Sat, 04 Aug 2007 11:02:15 -0400 http://seekingalpha.com/article/38291-amazon-com-why-now-might-be-the-time-to-short?source=feed#comment-88672 88672
There is a difference between investing in a stock based on valuation and expected financial performance, and investing it in because you like the company and think they are doing some neat things. This is exactly the kind of thing that helped fuel the internet boom, and will continue to allow for profitable opportunities to short companies like AMZN that get ahead of themselves. Though this is not something I plan to be short for 10 years plus, I do believe its jumping 70% on not much meaningful news is not a sustainable outcome, and that the risk/reward of a correction in the near future is a profitable opportunity.]]> Fri, 15 Jun 2007 05:24:56 -0400
There is a difference between investing in a stock based on valuation and expected financial performance, and investing it in because you like the company and think they are doing some neat things. This is exactly the kind of thing that helped fuel the internet boom, and will continue to allow for profitable opportunities to short companies like AMZN that get ahead of themselves. Though this is not something I plan to be short for 10 years plus, I do believe its jumping 70% on not much meaningful news is not a sustainable outcome, and that the risk/reward of a correction in the near future is a profitable opportunity.]]> http://seekingalpha.com/article/38291-amazon-com-why-now-might-be-the-time-to-short?source=feed#comment-88530 88530
I agree to that they have a great retail business and are doing some interesting things. This is one of those instances where I generally like the company, but think the stock is both a poor investment and has some near term catalysts that could drive the share price lower. I considered puts, but I don't feel comfortable trying to time this, and they are a bit expensive after the recent volatility. Also, I generally believe the upside at these levels is limited (I don't see this running much further, given that even many higher growth, lower market-cap runners like CROX, etc. are not trading for the same forward valuations that AMZN currently does.]]> Thu, 14 Jun 2007 06:27:59 -0400
I agree to that they have a great retail business and are doing some interesting things. This is one of those instances where I generally like the company, but think the stock is both a poor investment and has some near term catalysts that could drive the share price lower. I considered puts, but I don't feel comfortable trying to time this, and they are a bit expensive after the recent volatility. Also, I generally believe the upside at these levels is limited (I don't see this running much further, given that even many higher growth, lower market-cap runners like CROX, etc. are not trading for the same forward valuations that AMZN currently does.]]>