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Jim Chanos: A Search for Global Value... TRAPS! CNX, CTSR, HPQ, STD, PBR
Posted by: guruhl
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Date: June 28, 2012 08:21AM
In the recent VALUEx Vail Conference, short seller Jim Chanos discussed possible value traps:
CONSOL energy (CNX): faces headwinds 1. Thermal coal, 61% of 1Q12 gross profit – pressure from coal-to-gas substitution 2. Metallurgical coal, 25% of 1Q12 gross profit – uncertain Chinese steel demand 3. Shale gas, 14% of 1Q12 gross profit – ongoing domestic overinvestment Petrobras (PBR) Government intervention reduces inherent value 1. Push for local services. PBR must incorporate 65% of content from local services industry; Brazil must construct a high-end shipbuilding industry from scratch 2. Doenstream: Domestic fuel prices capped 3. Government domination of PBR Hewlett-Packward (HPQ) is a value trap: the death of PC 1. –PCs: LTM operating income down 5% YoY; cannibalization from mobile computing 2. –Printers: LTM operating income down 28% YoY; fall in inkjet printing 3. –IT services: LTM operating income down 23% YoY; lack of Itanium support from Oracle, falling government spending, competitive pressures 4. –Servers/networking: LTM operating income down 19% YoY; fall in UNIX market Coinstar (CSTR) Reaching saturation point 1. –Over 68% of Americans now live within a five-minute drive from a Redbox kiosk 2. –Including the acquisition of NCR‟s DVD kiosks, Redbox will have 45-50K DVD kiosks in operation by YE12, or 39-44K single kiosk locations, which is near the low end of management‟s full saturation estimate of 45K Banco Santander (STD) Significant real estate exposure in Spain –Equates to 166% of TBV as of 1Q12 –33% of commercial real estate loans are classified as NPLs –Residential mortgage NPLs at 2.6% of portfolio •Brazil exposure a headwind, not a panacea VALUExVail 2012 - James Chanos
Re Jim Chanos Presentation A Search for Global Value TRAPS
Posted by: superguru
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Date: June 27, 2012 09:48PM
Anyone surprised that some of the stocks Chanos mentioned as value traps are very popular among the Gurus.
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