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Phaceliacapital

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Posts posted by Phaceliacapital

    UBS: Best of Americas

    in General Discussion

    Posted

    Hi all,

     

    I am attending a conference in London next week and was wondering which companies you guys think are most interesting to go listen to?

     

    Participating companies 2013:

     

    Alaska Air

    Anadarko

    American Tower

    Ameriprise Financial

    Cisco

    City National Corp.

    CBOE Holdings

    Colgate-Palmolive*

    Dow Chemicals

    Dunkin' Brands, Inc.

    Ford Motor Company*

    Lennar

    Marathon Oil

    Monsanto

    PerkinElmer

    Rogers Communications

    Royal Bank of Canada

    TripAdvisor

    Zimmer

     

    I am already going to DD and hope that they offer free company products!

     

    Thanks in advance

    CFA Exam

    in General Discussion

    Posted

    Yeah it's a maximum, I didn't account for retakers as these numbers are indeed not disclosed, so in fact we're even smarter??? (if I pass L III next June :D)

     

    I am going to sign up once it is cleared through HR!

    Measuring Risk

    in General Discussion

    Posted

    I see risk comes from 2 sources in any assets.  There is fundamental/business risk which is intrinsic to the business.  This is what most investors think about when you say risk.  It includes the uncertainty of future cash flows or asset values and everything that causes that uncertainty.  The second (probably more important but less recognized) is price/value risk.  It comes from what price the market puts on an asset, is extrinsic to the asset and is based upon the facts and emotions. 

     

    Value investors typically focus on the second source of risk and minimize it by paying a discount to value for assets.  Most people try to minimize both sources of risk.  This leads to "crowded" trades in low uncertainty value names from value investors.  This can work well when there is a panic but that is not most of the time.  But if you decide to minimize pricing/value risk but maximize uncertainty risk, then you get some interesting assets.  This is what Mohnish Pabrai calls "low risk/high uncertainty" situations.

     

    Packer   

     

    +1

    Rigor of Wall St. Analyst Reports

    in General Discussion

    Posted

    Agree with the above, sell side research has excellent industry/market research that would otherwise take me days to compile (I sometimes pity the young IB'er that finishes this material at 4 in the night) concerning competitive/regulatory landscapes, market research where they for instance go to China and ask local bypassers what kind of luxury products they're buying (let me tell you, it's not LVMH) etc etc..

     

    In terms of rationales to buy the price, unless it's a turnaround story I mostly don't really pay attention to what they are writing. But yeah, you can't earn commission on a "Neutral/Hold" and they typically have 12-18 months horizons.

     

    That's sometimes even funny because they go like, yeah you should sell it now and buy it back after Q2 results because the rain will cause a 50bps decline in their EBIT margin and will be unfavorably looked at by the market.

    And then I go like: But what if I like it as a Long term investor? Their reactions are sometimes quite surprising :D

    Uralkali Breaks Potash Cartel to Grab Market Share

    in General Discussion

    Posted

    I guess that's the end of BHP's Jansen mine?

     

    Anyone that has been looking at other names that have been dragged down but have less to do with Potash itself?

     

    For instance compass minerals? Beaten down around 17%, although its main source of revenue is salt (for which they are low cost producer if I am not mistaken) and 25% is a special form of potash fertilizer (SOP) ?

    Latest Muddy Waters Report - AMT American Towers

    in General Discussion

    Posted

    Muddy Waters latest target, US based American towers:

     

    Muddy Waters rates American Tower Corporation (NYSE: AMT) shares a Strong Sell. In this latest report Muddy Waters highlights how:

     

    ■We rate American Tower Corp. (NYSE: AMT) a Strong Sell and value it at $44.57 per share, representing downside of 40%. AMT has serious challenges domestically and internationally that have not been factored into the stock price. It has engaged in a value destroying investment binge overseas, and we have identified a significant material misstatement in the Company’s accounts that could amount to fraud.

    ■There is an approximately US$250 million discrepancy between what AMT claims to have paid for the acquisition of towers in Brazil, and the actual selling price. AMT claimed to have paid US$585.4 million for the towers, but the real price was close to US$300 million. If AMT is aware of this discrepancy, it would amount to fraud. We have provided our research to the SEC.

    ■CEO James Taiclet’s consistent sales of approximately 90% of the shares he receives from option exercises suggests a lack of faith in the sustainability of AMT’s business – ironically, this is a view we share with him.

    ■AMT’s international business is in part a de facto lending business that artificially inflates revenue, EBITDA, and AFFO. It is also part carry trade and part levered directional currency bet. This bet has resoundingly gone south this year.

    ■AMT’s international IRRs are generally poor and far below cost of capital.

    ■While wireless data usage will grow, much of this growth will circumvent cellular towers. Wi-Fi and more recently introduced technologies are making towers the data delivery option of last resort.

    ■AMT’s REIT-focused investors will be disappointed by their inability to access AMT’s overseas cash flows.

    ■Wall Street is setting investors up for a fall in AMT. We have reviewed five analyst models, and it is clear that they do not understand the company or know how to model it.

     

    Full Report:

     

    http://www.muddywatersresearch.com/research/amt/initiating-coverage-amt-full-report/

     

    Slide Deck:

     

    http://www.muddywatersresearch.com/research/amt/initiating-coverage-amt-slide-deck/

     

     

     

    Lumber Industry + Ainsworth Lumber

    in General Discussion

    Posted

    Hi all,

     

    I stumbled on the following article: http://www.theglobeandmail.com/globe-investor/lumber-supercycle-could-spell-opportunity/article12590017/ which I thought was rather interesting, haven't done a lot of research on it yet but already took a quick look at Ainsworth (given it was the only company with an A and I wanted to start arbitrarily) and looks like it might be an interesting case.

     

    • Low cost and leading manufacturer of Oriented Strand Boards (https://en.wikipedia.org/wiki/Oriented_strand_board), most often used in construction (roofing, flooring, etc) ==> So heavily impacted by construction (mostly housing I guess) outlook
    • Geo. Diversified: 72% US (still large) 18% Canada and around 10% for Japan and ROTW ==> Despite Yen weakness no strong impact (mentioned in 2013Q1 CC)
    • Due to higher OSB pricing EBITDA margins went from 11% to 44%, and capex looks to currently be high due to startup of High Level mill, after which I expect capex to substantially decline to the "maintenance" level, (Do note, I still have to look further into this)
    • Although very subjectively (only read 1 CC) the management seems to be capable and prudent

     

    Happy to hear your thoughts on the lumber industry in general, or one of the companies mentioned in the globeandmail article?

     

    Besides West Fraser, other prominent names in the sector are Canfor Corp., International Forest Products Ltd., and Ainsworth Lumber. For the more speculatively minded, there are also lumber futures in the United States.

     

    Some additional links on possible future for wood used in "greener" construction:

     

    http://www.economist.com/blogs/babbage/2012/08/building-materials#comments

     

    http://www.economist.com/blogs/babbage/2013/07/tall-buildings

     

    Thanks in advance and happy investing

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