William Trent

107 Comments

    • Motorola's Warning: Unmitigated Disaster [view article]
      Well, to start off I'd say everything is a takeover target these days. Google would never want to bother with an "old" style manufacturing company, though. If they do phones they would do the design and contract out manufacturing. But at 6.4x EV/trailing EBITDA MOT easily fits the bill for a private equity buyer, assuming that buyer believes the EBITDA decline that will happen this year will be overcome.

      At 11x 2006 free cash flow the enterprise value is implicitly assuming the company can grow at a modest rate (say 2-3% annually) going forward. It is not an outrageous assumption, but first a big decline will have to be recovered. That's where the sticky bit comes in - how long will it take to return to peak sales and EPS, and when they do will it just be another peak or will they be able to continue growing past it?

      To me, MOT looks reasonably priced but not compelling. The private equity buyer argument does make sense, though, as they could instill the financial discipline the whole industry needs.       Mar 23 09:18 AM
    • iPhone Versus the Rest: More Evidence Smartphone Makers Are in Trouble [view article]
      Oh, I see... unit growth. Well, whoop-de-doo! They are selling more units because they lowered the price. Its revenue growth that is going to drive earnings growth, which will ultimately drive the stock. The way they are going they'll sell 2 million units, have declining revenue and negative earnings.

      That sure contradicts my thesis. Not.       Mar 22 08:56 PM
    • iPhone Versus the Rest: More Evidence Smartphone Makers Are in Trouble [view article]
      What are you smoking? One year ago Palm did $388.5 million in sales, this year they did $410.5. That is 5.6% using my math. If you are talking sequential growth they did $392.9 million in the November quarter, so the sequential growth was only 4.5%. And the January quarter includes the holiday sales season and is presumably the strongest.

      Maybe it was the guidance? $400-$410 marks a sequential decline and a midpoint growth rate of 0.5% over last year's $403.1 million. Oh, and the consensus estimate was $416.

      If it weren't for buyout rumors there is no way they would be selling at 21x trailing earnings.       Mar 22 08:54 PM
    • Intuit's Implausible Guidance Explanation Isn't Fooling the Street [view article]
      Fair enough. Still, the implication is that there are an awful lot of tax returns in process. Mar 22 03:52 PM
    • Pinnacle Air's Business Model One of the Safest in the Industry [view article]
      Whether jet or turboprop, I think the trend toward smaller regional point-to-point service is something to watch for. In some ways it will be tough for the regional carriers serving as feeder airlines to break the mold though. Mar 19 02:15 PM
    • Accredited Home Lenders Survives To See Another Day [view article]
      Nobody is "bailing out" Accredited. They are selling their loan portfolio to a buyer aware of and willing to accept the associated risks.

      Notice that I reference the LTCM case, which I say "only required intervention from the Federal Reserve because the managers were unwilling to take Warren Buffett’s offer." I disagree vehemently with the bailout they received. They should have been made to accept the highest private offer, which was Buffett's. Then the taxpayers would have been left free of it.       Mar 18 12:39 PM
    • Seeking Alpha Stock Market Email Alerts FAQ [view article]
      You could always turn to the author sites. For example, at Stock Market Beat I am still publishing my own full feed. Quite frankly I find it annoying that SeekingAlpha is publishing their own feed of all my content rather than a link to my feed anyway.

      I can see feeds for individual stocks that are aggregating several authors, but an author feed is going a bit too far when the author already has one.       Mar 16 01:53 PM
    • iPhone Versus the Rest: More Evidence Smartphone Makers Are in Trouble [view article]
      The problem is, many people will at least want to wait to find out for themselves whether the iPhone interface is better. Some will find that it is, some will find that it isn't, but in the meantime the wait can freeze out sales of other models. And given Apple's track record in designing intuitive user interfaces, its a safer bet that it <em> is </em> incredible than that it isn't.

      As far as the "wealth of phones that can play music and receive calls," well that is also indicative of the intense competition, which will mean a real hurting if consumer spending slows further.       Mar 16 11:36 AM
    • Another Reason to Own Sears Holding: Lampert May Acquire BJ's Wholesale [view article]
      I had the same speculation on Stock Market Beat back in July, and got some fairly negative comments about it. Hope you have better luck with the nabobs. Mar 10 09:11 PM
    • The View From Today's GDP Report [view article]
      I would agree, but it has sure been lagging longer than many expected. Feb 28 05:57 PM
    • Intel Adds Insult To Injury With Latest Production Investment [view article]
      I think a writedown is definitely in the cards, but there are a couple of different issues at play. One is what geometry the company needs to produce the next generation of chips as opposed to the geometry at which the company wants to produce them. The other is whether they have enough capacity already at that geometry. Feb 27 07:43 PM
    • Advanced Micro Devices: Will Somebody Please Stage an Intervention? [view article]
      Not only can they not agree to fix prices, they cannot agree to limit their capacity, which would have the same effect. However, no law prevents them from separately limiting their capacity to the level that is appropriate given demand. Feb 22 01:59 PM
    • Advanced Micro Devices: Will Somebody Please Stage an Intervention? [view article]
      It is more likely Intel and AMD that will be burning the inventory of older chips. They usually have price protection and obsolescence agreements built in to their supply contracts. And whether the solution being created is new or old there are a finite number of PCs for them to go into. You can put an old one in or a new one in, but they are essentially interchangeable. It is how many chips that can be made, not how new they are, that is the issue.

      AMD and Intel should continue to innovate and produce chips, but they should do so only at the rate that customers demand them. Both companies are producing more chips to "gain share." They can't both gain share, but if they keep trying they can both lose profit, as they have been doing. And as to having more to lose, Intel can also afford to lose more - it can cut its profit until AMD is actually losing money and forced to throw in the towel - that is the game of chicken that is being played right now, and it is stupid and destructive for both companies.       Feb 21 02:28 PM
    • Advanced Micro Devices: Will Somebody Please Stage an Intervention? [view article]
      AMD is not short of customers now. They are long capacity. They will continue to innovate and produce more chips, as will Intel and all the other chipmakers. The problem is, the new chips will simply crowd out old chips - leaving more of them and resulting in further price cuts. Until new equipment orders slow down to a pace below that of end-sales for semiconductors this will not change even if AMD invents the most marvelous semiconductor of all time. It is a simple function of supply being greater than demand.

      As to Vista, if its impact is underestimated, why is the rate of sales growth slowing down for both Ingram Micro (the biggest PC distributor) and Hewlett Packard (the biggest PC manufacturer?) If anything, it seems that Vista was overestimated.       Feb 21 12:25 PM
    • Bad News For Semis: Equipment Orders Continue To Rise [view article]
      Thanks. Feb 20 09:35 AM
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