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Apollo Education Group, Inc. Message Board

hageneriksson 529 posts  |  Last Activity: Nov 21, 2014 12:52 PM Member since: Oct 13, 2009
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  • hageneriksson hageneriksson Oct 27, 2014 11:40 AM Flag

    where's the catalyst here ? Everyone knows about the Frozen success and management put out some pretty aggressive short term margin and FY15 revenue assumptions which it will most likely miss again. If they miss there's plenty of downside here. The stock has done well with everyone betting on Frozen but actually even the Frozen success is not enough to overcome the company's multiple challenges.

  • Reply to

    aeishh

    by jjwalker964 Oct 26, 2014 9:12 PM
    hageneriksson hageneriksson Oct 27, 2014 9:40 AM Flag

    I see plenty of downside here. Management margin guidance for next quarter as well as revenue guidance for 2015 look far from reality here.

  • hageneriksson hageneriksson Oct 27, 2014 7:21 AM Flag

    they already guided Q4 and be informed that Q3 is the big quarter as these items are invoiced. Even with the guidance raise Q4 will come in well below Q3 which is always the case.

  • First lesson:

    "cheap" shares are actually cheap for reason - in case of JAKK there are in fact plenty of them:

    (1) incapable management which has worked pretty hard rebuffing the financial community
    (2) a volatile business environment dependent on the success of licensed stuff
    (3) severe margin pressures mostly caused by
    (4) increasing competition
    (5) current revenue outperformance mostly caused by a one time windfall profit
    (6) an uncertain outlook going into 2015 as the Frozen tailwind will be mostly gone then

    Actually these kind of "cheap" shares are only getting even cheaper over time once investors realize that they aren't cheap at all. Current analyst FY15 estimates are still giving management the benefit of the doubt and model for flat revenues and earnings but this looks ill-fated given the current frozen tailwinds. If they have to take down either revenue or margin expectations in the future the shares will be absolutely doomed.

    And be informed that current management will never recede voluntarily and agree to any kind of takeover approach as they won't give away their very personal ATM. Actually no one in the outside world would ever give this idiots a job again.

    So clearly the shares remain uninvestable here - I would still view this as a good short idea going forward as management already stretched things pretty far when guiding for another revenue increase in 2015 and 30% margins next quarter which both do not look realistic here. I will be back next quarter for another funny conference call.

  • Reply to

    this stock is destroyed by the Shorts

    by tvhomer88 Oct 24, 2014 12:06 PM
    hageneriksson hageneriksson Oct 24, 2014 2:07 PM Flag

    There's no need to cover - management has set very ambitious goals for 2015 and again promised the magic 30+% margin which might again rapidly backfire on them.

  • hageneriksson hageneriksson Oct 24, 2014 2:05 PM Flag

    (1) They increased sales almost solely due to the Frozen windfall
    (2) Margins DECREASED unexpectedly and were in fact a far cry from what management promised a few months ago

    While I don't get why anyone still considers the shares a good investment, it is ok with me. But stay with truth please.

  • Reply to

    this stock is destroyed by the Shorts

    by tvhomer88 Oct 24, 2014 12:06 PM
    hageneriksson hageneriksson Oct 24, 2014 1:22 PM Flag

    actually they missed income projections by a mile and initially tried to conceal this

  • Reply to

    this stock is destroyed by the Shorts

    by tvhomer88 Oct 24, 2014 12:06 PM
    hageneriksson hageneriksson Oct 24, 2014 1:20 PM Flag

    The stock price has been destroyed by management not delivering on its promises and rebuffing the financial community instead. Shortsellers don't short shares randomly - they just pick the companies which give plenty of reason to expect that their share prices will move lower.

  • Reply to

    Capitulation at it finest

    by jrkkek Oct 24, 2014 1:06 PM
    hageneriksson hageneriksson Oct 24, 2014 1:17 PM Flag

    Apart from a dead cat bounce - where's the opportunity ? Management already guided for huge upside in Q4 and an even better 2015 but actually analysts and investors do not believe them anymore as management's ability to accurately forecast the business has been pretty underwhelming for many quarters now. The company faces severe margin issues, increased competition, decreasing Frozen windfall profits and a shame of a management . Should they miss their own projections once again (margins need to be at least 30%) the shares will easily make new lows.

    Betting on a takeover ? Not with current management.

  • hageneriksson hageneriksson Oct 24, 2014 10:06 AM Flag

    actually he trades VERY successfully as evidenced again yesterday and dozens of other times.

  • Reply to

    B. Riley cut JAKK to neutral. Reason is unknown

    by ksu_50 Oct 24, 2014 8:40 AM
    hageneriksson hageneriksson Oct 24, 2014 10:02 AM Flag

    actually the downgrade was because the huge earnings miss they initially tried to conceal by including a $6 mln one time item.

    but on the other hand Needham is pounding the table here:

    Needham recommends using the post-earnings pullback in shares of JAKKS Pacific as a buying opportunity. The firm believes JAKKS is better positioned for the holiday season than it has been in many years. It keeps a Strong Buy rating on the stock with a $10 price target.

  • Reply to

    takeaways from the CC

    by cragi Oct 24, 2014 1:45 AM
    hageneriksson hageneriksson Oct 24, 2014 9:59 AM Flag

    My takeaway is that management can't be trusted and really has no clue about anyting - they are just lucky to have the huge frozen windfall profits this time otherwise the shares would have been down 60% yesterday. And even Frozen comes at a prize as they have to pay penalties on cannibalized product lines.

  • hageneriksson hageneriksson Oct 24, 2014 9:50 AM Flag

    He's just wrong in this case (like in many others, too). The stock will be sold by him shortly as he has to cut his losses.

  • Reply to

    And the upgrades begin...with BofA/Merrill

    by newelectricfan Oct 24, 2014 7:35 AM
    hageneriksson hageneriksson Oct 24, 2014 9:45 AM Flag

    bad idea - covered for a loss

  • Reply to

    And the upgrades begin...with BofA/Merrill

    by newelectricfan Oct 24, 2014 7:35 AM
    hageneriksson hageneriksson Oct 24, 2014 9:39 AM Flag

    changed plans - sold out for breakeven and shorted because of expectations of a weak trading pattern today

    will cover the short and go long again at session end

  • Reply to

    And the upgrades begin...with BofA/Merrill

    by newelectricfan Oct 24, 2014 7:35 AM
    hageneriksson hageneriksson Oct 24, 2014 8:56 AM Flag

    had hoped for some upgrades and a huge short squeeze which clearly won't happen now - but I will hold on to the shares anyway.

  • Reply to

    And the upgrades begin...with BofA/Merrill

    by newelectricfan Oct 24, 2014 7:35 AM
    hageneriksson hageneriksson Oct 24, 2014 8:08 AM Flag

    disappointing though - only ONE upgrade to neutral is far below my expectations for today

  • hageneriksson hageneriksson Oct 24, 2014 8:05 AM Flag

    I really wouldn't want to own shares of a company with that kind of management.

    They intentionally concealed a huge miss in the earnings press release and made it appear like a big beat.

    They are virtually incapable to answer even the most simple analyst questions.

    They have been promising margin improvements for several quarters now just to make things even worse each quarter.

    They are promising improvements again and at the same time talk about new competitive pricing pressures.

    They are happy about the Frozen windfall and on the other hand have to pay penalties because of the cannibalization of other Disney products which fail to make their agreed minimum revenue contributions.

    After the huge sell off some investors are now hoping for a takeover - the company has turned down approaches in the past (when the company was on much more solid footing) as I guess current management is anxious to never get a job anywhere else.

    It is hard to imagine that things will be better in 2015 (actually I suspect them to be much worse) so I don't see why anyone should reach out for the company at this point just because the price is down 12% and a one time Frozen windfall is masking the severe problems of the company.

  • Reply to

    Just listened to the CC

    by aeishh Oct 23, 2014 3:26 PM
    hageneriksson hageneriksson Oct 23, 2014 6:26 PM Flag

    (1)
    Management has been promising margin improvements for several quarters now just to deliver even worse results form quarter to quarter. Clearly investors and analysts don't buy this story anymore.

    (2)
    Including the extraordinary gain in the reported eps number within the pr is just inexcusable as investors and analysts were intentionally mislead. Bad move but initially successful with the shares up 20% in pre-market.

    (3)
    CEO and CFO refused to clarify reported numbers and actually made things even worse by rebuffing analysts. This is the second time in a row this has happened on the conference call.

    (4)
    Clearly investors and analysts are worried about next year with most of the current Frozen hype gone then. Even slight revenue and earnings growth would be pretty difficult to achieve given the ongoing problems the company is facing.

    (5)
    Management cited increased competition as another reason for margin pressures. No investor wants to hear about even more problems.

    These are the main reasons the shares have reversed course today and won't go up much going into next quarter's earnings release as investors fear more bad news going into 2015. With major earnings or revenue growth seemingly illusive the only reason for investors to stay with the shares might be an acquisition bet. The company has turned down such approaches in the past so I would doubt that this will happen anytime soon.

  • hageneriksson hageneriksson Oct 23, 2014 6:06 PM Flag

    Agree - except for the very poor service provider market results and ongoing weak product sales in general (the outperformance was mainly service related) - otherwise very solid execution and outlook although somewhat helped by the seasonally strong federal business. Revenue remains heavily concentrated in North America for now.

    The shares look VERY cheap here trading at below $250 mln enterprise value (using today's closing price) and $4 in cash with no debt. This looks like one of the best deals in today's market especially when looking at the renewed revenue growth.

    If the company will be able to exceed expectations again by a wide margin next quarter (which seems a real possibility) the stock might be easily double from here.

    I am willing to take the bet here and bought 25k shares just below $13.50 in after hours. Hoping for some upgrades tomorrow or next week.

APOL
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