Re: Cobas AM: Nueva Gestora de Francisco García Paramés
Oppenheim
Ya lo dije en otra ocasión, veo todos los vídeos de Paramés y los Azvalor, son gente que merece la pena escuchar. Otra cosa es que creo que sus métodos de inversión tienen puntos débiles.
Lo del tan cacareado "PER normalizado" de 8 de la cartera es como poco cuestionable. Su PER normalizado lo calculan con los beneficios medios de 10 años, pero cuando te lo están contado el "PER instantáneo" puede ser de 30, de hecho con su método las cíclicas se compran con PER alto (beneficios en el punto bajo). Están asumiendo que el ciclo se volverá a repetir durante los diez años siguientes y volverán a pasar por un PER bajo porque se recuperarán los beneficios. Pero eso es mucho suponer y muchas veces el ciclo no se repite y sucede la manida "trampa de valor".
Yo creo que el value está fallando por dos razones: tipos muy bajos (y no pueden subir pq empiezan a quebrar estados) y que los mercados son cada vez más eficientes (cualquiera puede invertir en cualquier cosa desde el otro lado del mundo). La inflación podría forzar la subida de tipos, pero en mi opinión no puede haber inflación alta mucho tiempo porque hay grandes fuerzas deflacionistas, las principales: la tecnología y el no crecimiento de población. El mundo está cambiando muy rápido.
#138691
Re: Cobas AM: Nueva Gestora de Francisco García Paramés
Energy fuels: algo que podria ser(o no) un notición
This fact has been largely attributed to risk factors stemming from China's tech crackdown.
It was also partially due to real, material costs, such as a $2.8 billion fine and an increase in the company's tax rate.
In this article, I will make the case that BABA is likely to deliver strong earnings growth next year, as this year's headwinds fade into the rearview mirror.
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Lintao Zhang/Getty Images News
Alibaba (BABA) stock has been struggling this year. The stock initially started falling in 2020 after the Chinese Communist Party (“CCP”) scuttled the Ant Group IPO. Later, a $2.8 billion fine contributed to a losing quarter, which reignited the selloff. Things got worse after that. Stories about forced content sharing, anti-trust regulations and common prosperity contributions led to more losses for BABA, which had previously been a high-growth tech name.
Then second quarter earnings came out. For the second quarter (corresponding to the third quarter of the calendar year), BABA missed on both revenue and earnings. Revenue was just barely a miss, rising 29% year-over-year. Earnings missed badly, declining 38% in adjusted terms and 81% in GAAP terms.
Driving Alibaba’s second quarter earnings decline were two factors:
Higher taxes.
Investments in non-core business units.
Higher taxes hit BABA hard in the quarter. Because of its loss of Key Software Enterprise (“KSE”) status in fiscal 2021, the company’s tax rate jumped from 12% to 24%. The increase resulted in $944 million in total taxes–BABA would have paid $472 million without it.
Likewise with investments in new business units. Alibaba is investing heavily in cloud computing, innovation initiatives, and digital media. Most of these businesses are losing money–the cloud being one possible exception, with positive adjusted EBITDA. In the second quarter, BABA upped its investments in all of these segments, which led to lower earnings.
As of December 2021, this is pretty much where we stand. Alibaba isn’t known for putting out a lot of press releases, so the second quarter earnings were the most recent data dump we got. As mentioned, they were a miss. That being said, it is quite likely that BABA’s profits will begin to ramp up in 2022. The company’s earnings in 2021 were depressed by non-recurring factors, such as the $2.8 billion fine. Therefore it’s quite likely that profits will grow in 2022, compared to the relatively weak 2021 base period. This is one of the key reasons why I remain bullish on BABA stock this year, despite the many headwinds it faces.
Year-over-Year Comparisons to get Much Softer
When analyzing Alibaba’s 2021 results, you need to look at the 2020 base period. Here I’m referring to the 2020 calendar year, not Alibaba’s fiscal 2020.
In the December quarter of 2020, Alibaba delivered the following results:
Revenue: $33 billion, up 37%.
Operating income: $7.5 billion, up 24%.
Adjusted net income: $9 billion, up 27%.
GAAP diluted EPS: $3.38, up 21%.
Free cash flow: $14 billion, up 31%.
Very strong results overall. And it was much the same story for the full year. For the other three quarters of calendar 2020, the results were:
| Revenue | EPS September quarter | $22 billion, up 30%. | $2.65, up 37%. June quarter | $21.1 billion, up 34%. | $2.10, up 18%. March quarter | $16 billion, up 22%. | $1.30, up 7%.
As you can see, every single quarter of 2020 saw double digit growth in revenue, and most saw strong growth in EPS as well. That year was easily one of BABA’s best ever. Unlike certain other companies, BABA did not lose as a result of the COVID-19 pandemic. Apart from the March quarter, its growth was strong all year. In fact, it may have even profited from COVID-19 public health measures. Online shopping generally increased in 2020, as retail stores were forced to shut down. Ecommerce giants like Shopify (SHOP) and Amazon (AMZN) captured a lot of revenue as a result. 2020 was Shopify’s best year ever, with revenue up 86% for the year. That fact was widely attributed to the COVID-19 pandemic. According to the United Nations’ UNCTAD agency, the pandemic led to a boom in online sales. That fact was reflected in Shopify’s 2020 earnings which, prior to the pandemic, had been decelerating.
It appears that BABA benefited from the pandemic much like Western eCommerce companies did. Early on in 2020, China implemented a lockdown much more strict than any seen in the West. In the Wuhan area, entire cities were quarantined and cut off from supplies. Factories were shut down, putting a strain on output. In the March quarter of 2020, BABA felt the effect of this, as its 7% earnings growth for the quarter was pretty weak. Later in the year, though, it posted strong growth, consistent with the experience of North American eCommerce giants.
Which brings us to today.
BABA’s 2021 results are showing year-over-year declines. Partially that’s because of higher taxes and business investments. But it’s also partially because of base effects–the effect of a change in the base period. Economists use the term “base effect” to refer to the effect of the previous year’s inflation on this year’s inflation. If inflation was low last year then it will take a comparatively small price increase to produce high inflation this year. The reverse is also true.
“Base effects” are often discussed in the context of inflation, but they apply to corporate earnings as well. If growth in year ‘t’ was high, then it will take even more growth to deliver a high percentage change in year ‘t + 1.’ 2020 was a very strong year for Alibaba, and the stronger a given year is, the harder it is to beat.
So, in part, Alibaba’s poor showing in 2021 is a consequence of its success in 2020. When your earnings rise 37% in a given quarter, that makes the quarter hard to beat. For some very small companies, 37% growth is nothing, but when you’re a large cap like Alibaba, that’s a killer quarter. The quarter Alibaba most recently reported was widely seen as disappointing, as earnings declined 38%. However, the prior-year quarter was a tough act to follow. A huge beat after that quarter would have been very surprising. This isn’t meant to minimize the significance of the tax increases or fines that Alibaba took this year. They played a significant role in the decrease in earnings–perhaps more so than the tough comparison. But the latter factor can’t be ignored.
Much of the Damage has Been Done
As we saw in the previous section, Alibaba suffered in 2021 partially due to high expectations. BABA’s 2020 was a record breaking year–a very tough act to follow. It’s not surprising that the most recent quarter missed. For the same reason, it’s quite likely that the results in 2022 will be comparatively strong. Base effects work both ways. It’s tough to beat a good year, it’s easy to beat a weak year. In 2022, BABA will immediately begin releasing earnings that will be compared to the weak 2021 base period. The first (calendar) 2022 quarter to be reported will be the March quarter. The prior-year quarter included a $2.8 billion fine, which caused net income to swing negative. That will be a very easy quarter to beat. Even in the weak September quarter, earnings were positive. If the March 2022 quarter only shows slight growth over September, that will still be a huge improvement over March 2021.
Likewise for the higher tax rates. It was in the September quarter that those started being felt very strongly, with the tax rate going all the way to 24%. That took a bite out of earnings. But next year, BABA will have the same tax rate (all credits are already gone), while possibly having higher revenue. So there is a real possibility for strong year-over-year growth in 2022’s September quarter as well.
Financials and Valuation
Having looked at why BABA’s earnings will be better next year than this year, the next place to look is at the company’s financials. To simply say that BABA will do better next year isn’t saying much; 2021 was very weak, a slight improvement over that wouldn’t mean a lot. To really see where things are headed, we need to take a deep dive look at BABA’s financials.
For the most recent quarter, Alibaba delivered:
$31.1 billion in revenue, up 29%.
1.24 billion customers, up by 64 million.
$2.3 billion in operating income, up 10%.
$4.4 billion in net income, down 39%.
$1.74 in diluted EPS, down 28%.
$3.4 billion in free cash flow, down 45%
As you can see, they were pretty weak numbers. Apart from revenue and operating income, they all declined. More importantly, the top and bottom line both missed analyst estimates. Revenue missed very slightly while EPS missed by a wide margin. As mentioned already, this was due to a combination of tough base effects, higher taxes and investments.
Now, let’s look at the most recent full year. In the 2021 fiscal year, Alibaba delivered:
$109 billion in revenue, up 41%.
1 billion active customers.
$13 billion in operating income, down 2%.
$30 billion in adjusted EBITDA, up 25%.
$26.25 billion in adjusted net income, up 30%.
$26.35 billion in free cash flow, up 32%.
These results were much better than the most recent quarter. They were also more in line with historic norms. According to Seeking Alpha Quant, BABA’s five year-CAGR growth rates in revenue and earnings are 45% and 30%, respectively. If BABA can get back to that kind of growth, then its stock, at today’s prices, is very cheap.
Today, BABA trades at 13.5 times adjusted earnings, 18 times GAAP earnings, 2.7 times sales, 2.3 times book value, and 11 times cash flow. These are very low multiples. Partially, they are justified by the company’s declining earnings. But as I’ve shown in this article, it will be much easier for BABA to grow its earnings going forward. 2021 has been an unusually weak year, but even with the weak EPS, revenue is still growing at nearly 30%. The foundation for strong earnings growth is certainly there. Even if growth were to decelerate to 20%, BABA would still be catching up with its valuation at a rapid pace. It takes about 4 years for earnings to double growing at 20% annually. If BABA’s earnings were to grow at that pace, and its stock price didn’t move, then its adjusted P/E ratio would be just 6.75 by the end of 2025! It’s almost unheard of for high growth tech stocks to get that cheap, so it looks like there is solid potential for BABA to rise in 2022.
The Bottom Line
The bottom line on Alibaba is this:
It’s a company that is just finishing up one of its most trying years ever, and it's ready to bounce back in a big way. In 2021, Alibaba took some damage, some of which it will shake off, some of which it will carry long term. The $2.8 billion fine is in the rearview mirror, the higher tax rate is probably here to stay. It’s a mixed bag of non-recurring and recurring costs. But in 2022, BABA will be comparing its earnings to a period in which all of that – fine, tax hike, investment ramp up – was in the picture. The probability of strong growth next year is therefore very high.
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Financial journalist. Passed CFA Level 1. "Growth at a reasonable price" investor. Tech and dividend growth. Follow me on Twitter: twitter.com/AJButton2
Disclosure: I/we have a beneficial long position in the shares of BABA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Re: Cobas AM: Nueva Gestora de Francisco García Paramés
Hal9k
Es que tu te piensas que todos los CEO y los directivos de una empresa, son genios y visionarios ? que estan muy por encima de las personas corrientes ?
No, muchos de ellos son personas normales, como tu y yo, que tienen un puesto de alta direccion y responsabilidad que muchas veces te inunda el miedo de acertar o no, y que explicaciones dar a los accionistas, otra al reves, te da igual acertar o no, porque no hay dueños y tomas decisiones en funcion de como TU ves la vida y no como la vida ES. realmente.
Son humanos, no son alienigenas, van a cometer errores como los nuestros.
#138694
Re: Cobas AM: Nueva Gestora de Francisco García Paramés
yo lo que veo, después de llevar ya un lustro siguiendo lo que hacen, es que esta gente -los "value" históricos españoles- se meten en empresas que suelen tener alguna parte del negocio horrorosa y de la que esperan que los gestores sean capaces de desprenderse o darle la vuelta. Y esto, a veces no ocurre, y cuando ocurre, se tarda muchíiiiisimo. Con lo cual, a veces acabas con pérdidas porque la restructuración no funciona; si funciona y la acción se recupera, lo hace a lo largo de mucho tiempo, con lo cual habría que ver cuál es la rentabilidad anualizada, y espérate que por el camino no se la levante un Private Equity a precio de derribo. Muchas vienen de adquisiciones o crecimiento en áreas donde han metido la pata o se ven sometidas a un declive, y es lo que el mercado valora.
Es el caso de Aryzta con el negocio de Norteamérica y la sobrecapacidad en Europa, salieron trasquilados con la ampliación.
Con Dixon's-Currys, que es en cualquier caso un negocio con márgenes bajísimos y riesgo de obsolescencia del inventario continuo, el problema estaba con los contratos que tenían con los operadores móviles, cerrar la parte del negocio no rentable (tiendas de aeropuertos por ejemplo), poner en marcha un online eficiente... Hoy leía en la prensa inglesa un análisis que apuesta porque se expandan a otros países fuera de UK, los nórdicos y Grecia para apalancar su poder de compra frente a proveedores. Lo dudo. En España han tenido la oportunidad de comprar Worten, que Sonae quería desprenderse del negocio porque no siendo el lider o el 2º (MediaMarkt o FNAC imagino) pierden dinero, y al final han vendido una parte de las tiendas a MediaMarkt, que es el líder y otras las chapan.
O Correios de Portugal con el negocio de correo de postal de toda la vida, que está en clarísimo declive sin apenas posibilidad de recortar costes porque no deja el gobierno; tiene la paquetería que crece una barbaridad o el banco, pero es que partiendo de un 80% de facturación en negocio tradicional, se tardan años hasta que la fuerza de los números de lo que crece frente a lo que decae se imponga. Mismo análisis se puede hacer para Babcock,etc.
#138695
Re: Cobas AM: Nueva Gestora de Francisco García Paramés
Doctor Yes
El problema es que se creen que unas tiendas cutres disrupteadas y mal gestionadas a PER 5 son mejores que Amazon a PER 50 y de ahí no los sacarás nunca.
#138696
Re: Cobas AM: Nueva Gestora de Francisco García Paramés
Aquí no valen ya disculpas. Un -20% en 5 años y pico no se justifica de ninguna manera. Yo estoy fuera hace mucho y muy contento. Las posiciones que llevan no invitan al optimismo.
