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salesforce.com, inc. Message Board

rastarich 73 posts  |  Last Activity: Jan 25, 2015 12:55 PM Member since: Dec 22, 1998
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  • Reply to

    Is CRM about to hit a air pocket ?

    by agm_ny Jan 21, 2015 7:01 PM
    rastarich rastarich Jan 25, 2015 12:55 PM Flag

    yes

    Sentiment: Buy

  • Reply to

    Suppose Salesforce was run sensibly

    by rastarich Jan 15, 2015 5:46 PM
    rastarich rastarich Jan 25, 2015 12:54 PM Flag

    ok, ok, no, no, no, no. Why?

    Sentiment: Buy

  • Reply to

    Suppose Salesforce was run sensibly

    by rastarich Jan 15, 2015 5:46 PM
    rastarich rastarich Jan 24, 2015 5:06 PM Flag

    One cannot look at all the numbers that exist in the present and say anything useful about the proper value of CRM. If one ignores the future, one cannot discount value to the present.

    Sentiment: Buy

  • Reply to

    Suppose Salesforce was run sensibly

    by rastarich Jan 15, 2015 5:46 PM
    rastarich rastarich Jan 21, 2015 5:51 PM Flag

    I am not trashing him, but I think he is in love with his thesis, so he is ignoring 99% of the important factors, and picking out a few numbers in a way that leads to his desired conclusion. I never heard of him nor his team before, and I have no opinion about their abilities or motives.
    But one thing is for sure - Salesforce is an exceptional case, a unique situation. If one says they are over valued because of some metric, one at least has to explain why that metric matters more than the billions in gross profit and operating cash flow. What matters is profits. IMO big profits are on their way to the bottom line, and my calculations are above.
    That said, I must admit, it would be possible to run Salesforce senselessly. Acquisitions can burn any amount of money. And as Google shows, you can invest in projects that generate no profits, as many projects as you have cash for. I expect sensible management, but it is not a given.

    Sentiment: Buy

  • Reply to

    Suppose Salesforce was run sensibly

    by rastarich Jan 15, 2015 5:46 PM
    rastarich rastarich Jan 17, 2015 12:29 AM Flag

    It's not love, just money. In every review I question whether CRM still "has it". Is it still #1 in customer satisfaction? (yes) Is it still growing revenues faster than any IT company of its size ever? (yes) Are all the new products rising to be #1 in their niches? (No, not all) Are there still three smooth rollouts every year? (yes) Is their uptime still the best ? (yes) Are they still the most fully-featured integrated cloud platform? (yes) Do they still have the most powerful point-and-click customization capabilities? (yes) Do they still integrate the latest technologies first, as they did for social-media and then again for mobile devices? (yes) Have security issues been avoided? (yes) Is cash flow from operations still increasing rapidly? (well, it could be better)
    These are the real fundamentals, not deferred-revenue variations and GAAP non-cash expenses.
    If Salesforce loses its edge, I'll sell without regrets.

    Sentiment: Strong Buy

  • Reply to

    Suppose Salesforce was run sensibly

    by rastarich Jan 15, 2015 5:46 PM
    rastarich rastarich Jan 17, 2015 12:07 AM Flag

    Don't know what company you are discussing. Wrong board? Yahoo says CRM operating cash flow was almost a billion in FY14 and will be around a billion in 2015.
    Yes, they spent 2 billion cash for Exact Target. But "bleeding cash" means operations are cash-flow-negative. Spending cash to expand the product line is not the same thing.
    The Trainer article is full of holes and doesn't discuss any of the important factors. It is an amateurish approach: fall in love with one set of metrics, and substitute a formula for critical thinking. If you don't predict the future, you can't pick individual growth stocks. The article doesn't even mention the future, and gives incorrect numbers for "cash flow".

    Sentiment: Strong Buy

  • Reply to

    Suppose Salesforce was run sensibly

    by rastarich Jan 15, 2015 5:46 PM
    rastarich rastarich Jan 15, 2015 7:29 PM Flag

    If 2019 earnings after taxes are around $6/shr, and still growing fast, then the present value of future earnings is substantially above the current price. I wouldn't buy an investment property because I do not know that business, and I have no idea what factors will affect future rentals. OTOH Salesforce has a unique record of growth and success. I foresaw that many years ago, because i understood the reasons for it, which haven't changed.

    Another way to analyze the company's value is that it will be worth more (market cap) than any other company that provides IT to businesses. I believe that Salesforce's products will take most of the market share from all its competitors. If you don't believe it, ok, that's what makes a market.

    I also am not bashing the shorts who compute a different value. Shorts AND LONGS who lie and scream and curse and post insults should instead suck their pacifiers quietly, IMO.

    Sentiment: Buy

  • Cap SGA at 10%/yr growth. Cap R&D at current levels (it already is growing slowly). Assume revenue growth smoothly decelerates from 28% in 2015 to 20% in 2019. (IMO, very conservative, considering they have so many new products.) Take on no new debt. Pay off 25% of the debt which exceeds today's current assets, yearly. (0.25 * ( Total liabilities minus today's current assets) ) . Assume cost of goods will grow at the previous year's rate of revenue growth (very conservative, it should slow down.) Interest expense should be nominal. Call the difference between revenues and these payments the "Pretax Cash Flow". (It is very conservative, because my SGA numbers actually include huge non-cash items). Ignoring taxes, my spreadsheet says that profits should be huge within five years. In CSV format:
    "Year","Revenue Growth","Revenue","SGA growth","SGA","Debt SOY (Net of current assets)","Debt Service","Cost of Goods","R&D","Pretax Cash Flow"
    "All Numbers In Millions",,,,,,,,,
    ,,,,,,,,,
    "CY 2015",28.0%,6438.4,10.0%,3047.0,3400.0,850.0,1300.0,720,521.4
    "CY 2016",26.0%,8241.2,10.0%,3351.7,2550.0,637.5,1664.0,720,1868.0
    "CY 2017",24.0%,10383.9,10.0%,3686.9,1912.5,478.1,2096.6,720,3402.2
    "CY 2018",22.0%,12876.0,10.0%,4055.6,1434.4,358.6,2599.8,720,5142.0
    "CY 2019",20.0%,15708.7,10.0%,4461.1,1075.8,268.9,3171.8,720,7086.8

    Of course, those results would be diluted across more shares, perhaps 30% more shares in 2019.

    anyhoo, i bought more at 55.74.

    Sentiment: Buy

  • Reply to

    Long CRM Again

    by rastarich Dec 9, 2014 2:56 PM
    rastarich rastarich Jan 12, 2015 11:16 AM Flag

    ignored

    Sentiment: Buy

  • rastarich by rastarich Jan 12, 2015 11:14 AM Flag

    CRM stock is where it was fourteen months ago. I've noticed it has done the same for up to two years in the past. SInce rapid growth continues, it seems due for a rise to new highs this year, especially if investors believe that better margins are coming.
    IMO they are now fundamentally the same company, in the same situation and environment.
    But better in the following areas: bigger company, better brand, wider range of products, more growth coming from new high-growth products with large TAMs, progress toward worldwide buildout of data centers, great advances in mobile technology, progress in the venture capital unit, and lower unit costs for computing, storage, and telecomm.
    The competitive landscape is complex. AWS, Azure, SAP, and Oracle are each finding their place and each competes for some pieces of potential Salesforce buisenss. I'd love to see up-to-date info about the client base, rate of new clients, and revenues for all cloud IT products. Please email all that to me if it is on hand. Don't worry about those confidentiality clauses!
    Even better would be customer satisfaction data. Again, just email it to me here.

    Sentiment: Buy

  • Reply to

    What the analysts will say tomorrow

    by faosto Jan 8, 2015 8:55 PM
    rastarich rastarich Jan 11, 2015 9:46 AM Flag

    TY. Maybe the most extreme case is most likely to demonstrate the desired mode of action? Totally speculating, since i do not know the technical details of the treatment. Got some reading to do .... Another possibility is they just decided the other trial was more promising. More negative interpretations also could be correct.

    Sentiment: Buy

  • Reply to

    What the analysts will say tomorrow

    by faosto Jan 8, 2015 8:55 PM
    rastarich rastarich Jan 9, 2015 9:52 AM Flag

    Clinical responses to placebo, with no pharmacokinetic response, for these terminal patients, probably shows that they felt better because they stopped drinking for a while.

    Sentiment: Buy

  • Reply to

    What the analysts will say tomorrow

    by faosto Jan 8, 2015 8:55 PM
    rastarich rastarich Jan 9, 2015 9:50 AM Flag

    Management may have wanted to ensure non-toxicity before exposing less-ill patients.

    Sentiment: Buy

  • Read the news carefully. You cannot continue a study if the patients quit.
    The patients were drunks. Which ones would quit and go on benders? The ones who feel better, of course. These people are almost dead from drinking. A quick clinical response is unlikely in those who are extremely ill, and, placebo is likely to provoke a clinical response from those who aren't extremely ill just because they STOPPED DRINKING during the study.
    My reading: this drug worked as expected, without toxicity.

    Sentiment: Strong Buy

  • Reply to

    Comments

    by arborite2 Jan 5, 2015 11:41 AM
    rastarich rastarich Jan 6, 2015 11:40 AM Flag

    Status quo is extremely unlikely, so much so that it is hard to see why you would bother to post it. Market share gains continue in Sales, Marketing, and Service clouds. The analytics market - which is a larger TAM than the other products - is likely to go to Salesforce too. And the platform is coming on strong, along with services.

    Another way that status quo is impossible is Moore's law: the cycles, storage, and bandwidth that make up the cost of goods all will fall rapidly for the foreseeable future. Lower energy unit costs are another kicker, though that is temporary.

    Besides, status quo would mean no costs of selling new subscriptions, in which case the existing subscriptions would throw off huge GAAP profits.

    For the record, I am long again here already. Some of my other favorites reached my buy points too, some, not yet.

    Sentiment: Buy

  • Reply to

    COO

    by rastarich Jan 2, 2015 10:40 AM
    rastarich rastarich Jan 3, 2015 2:16 PM Flag

    thanx. besides for the smart money, I also am long on this with a small position. Considering getting more. At the least, it seems like a logical acquisition for ISRG

  • Reply to

    The accounting all screams of "doubling down?

    by chenric37 Dec 30, 2014 2:10 PM
    rastarich rastarich Jan 2, 2015 3:24 PM Flag

    That migration to a new release actually was worse IMO than going to Service Cloud would have been! But that would have made somebody look bad. Typical decision making.

    Sentiment: Buy

  • rastarich by rastarich Jan 2, 2015 10:48 AM Flag

    check out the news on the OEX put-call ratio . Very bearish signal. I am now 50% cash.

    Sentiment: Hold

  • Reply to

    The accounting all screams of "doubling down?

    by chenric37 Dec 30, 2014 2:10 PM
    rastarich rastarich Jan 2, 2015 10:47 AM Flag

    disagree to this extent: Salesforce does compete with Oracle Apps, but not the core database business (yet). For instance Service Cloud can replace RightNow, which Oracle acquired. (Based on my experience trying to migrate to a newer release of RightNow, I would say that Oracle may as well write down that asset and sell it to CA.)

    Sentiment: Hold

  • rastarich by rastarich Jan 2, 2015 10:40 AM Flag

    Any idea why the COO resigned? Rumors?

    In my experience, sudden departure is usually misconduct and not job performance. But sometimes misconduct causes liability for the company.

    Sentiment: Buy

CRM
56.55-1.55(-2.67%)3:49 PMEST

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