Invest First and Investigate Later: Sometimes Intuition is Misguided

Posted on August 31, 2008
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Since financial markets are incredibly efficient and since I cannot bring myself to fully research investment opportunities unless I have some real financial commitment, I’ve always subscribed to Soros’s maxim of: Invest First and Investigate Later. This strategy, though, can sometimes backfire, as is the case with UTSI.

Even though my gut instincts prove correct in many instances, in certain cases, such as that of UTSI, my intuition is misguided. In this post, I’ll highlight some additional information that I’ve recently uncovered that show that UTSI, though still an interesting speculation, is not nearly as cheap as my initial thesis implied.

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Buying Some UTSI

Posted on August 29, 2008
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Even though the company is still losing money, UTSI seems like a good buy here, as the stock price appears to assign a negative value to the company’s current remaining business, which throws off over $700 million in annual sales.

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SolarFun (SOLF): Taking a Closer Look at the Numbers

Posted on August 29, 2008
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SolarFun (SOLF), a Chinese manufacturer of polysilicon-based solar modules, recently announced financial results, which were greeted negatively by the market, but which were actually positive in certain respects. Specifically, the company’s detailed breakdown of capital outlays into cap-ex and pre-payments to suppliers, provide a more accurate measure of the company’s true profitability, and give some indication of future financing needs and cash-flow potential of SOLF. In addition, the deal with Q-Cells and the company’s gross margin projections for 2009, both signal interesting possibilities over the next year. Combined, the above factors can provide certain guidelines of how to speculate, and hopefully make money, in SOLF’s stock going forward.

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Taking a Closer Look at Gafisa (NYSE: GFA BP: GFASA3.SA)

Posted on August 27, 2008
Filed Under Members, Brazil Stocks | 1 Comment

In this post, I’ll take a closer look at Gafisa (NYSE: GFA BP: GFASA3.SA), a Brazilian homebuilder which I mentioned in a previous post. What’s interesting about Gafisa is that the company appears almost impossible to value, and yet it still attracts significant interest, both from Brazilian and foreign investors. Though it’s a difficult task, I’ll attempt to provide a general, and yet still very simplified, framework for an evaluation of Gafisa. My basic assumption, given the growing momentum of mortgage securitization in Brazil, is that the best way for an outside investor to value the company, is perhaps to assign some value to the company’s growing receivable balance, while taking into consideration outstanding debt obligations.

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Speculating on a Brazil Bounce

Posted on August 19, 2008
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A good way to play a bounce in the Brazilian stock market (down over 30% in a few months) is via real estate shares.

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ATS Automation (ATA.TO): Reports Exceptional Results Remains a Solid and Undiscovered Alternative Energy Investment

Posted on August 13, 2008
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This morning ATS Automation (ATA.TO) reported financial results that far exceeded my expectations. Overall, my feeling is still that ATA.TO remains undervalued and the stock price should increase significantly as more investors recognize that the company’s turnaround is progressing smoothly and the future outlook for the business is exceptional given the strength in solar and other alternative energy markets.

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IncrediMail (MAIL): Solid Results Stock Looks Great for 2009

Posted on August 13, 2008
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This morning Incredimail (MAIL) announced solid financial results which support my belief that the stock could double in the next 12 months.

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Canadian Solar (CSIQ): Financing of Growth Still a Major Concern

Posted on August 13, 2008
Filed Under CSIQ, Alternative Energy | 3 Comments

This morning Canadian Solar (CSIQ) reported exceptional earnings results, and yet I still remain convinced that the company will need to dilute shareholders significantly in the year ahead in order to meet their lofty 2009 expectations.

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Isolagen: The Company with Nine Lives

Posted on August 6, 2008
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The beauty about stock investing on the long side is that the game is never really over, unless a company declares bankruptcy. No matter how bleak the outlook is and how large the paper losses, a few slight changes can so positively alter the prospects of a firm that the biggest losing investment can turn into a winner almost overnight.

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