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ITT Educational Services Inc. Message Board

thedeathrace 43 posts  |  Last Activity: Aug 6, 2014 1:50 PM Member since: Jan 10, 2013
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  • I understand how the Kindle made some sense for Amazon as it tied directly into reading books. The trend towards downloading electronic books has been on the mark, but I think that this has not really been any bonanza for AMZN. I think that the Kindle hardware is a money loser. The electronic books probably are a reasonable money maker, but none of this compares to the money APPL makes from its iPhone (or Samsung).

    So what is AMZN's angle with a phone. I suspect that AMZN feels that it needs to get into the electronic payment system business with a phone. Eventually we are all going to use phones for payments and AMZN wants to be there so you can buy stuff through AMZN with a phone. Funny thing is that I can already go to the AMZN website and order stuff with me phone and pay by credit card. I suppose that AMZN figures that it has all this massive payment infrastructure already in place, so why not try to expand into just other everyday purchases at whatever store you are at.

    What does not make sense to me is that AMZN has to be light years behind AAPL and the Android operating system phones. How is AMZN ever going to catch up with any decent phone applications and all the other amazing stuff that APPL is driving in the iPhone marketplace. I just don't see it. Google couldn't do it and if they can't, should anyone really expect AMZN to be able to do it either.

    AMZN stock price is just reacting to some nebulous excitement that the day traders haven't thought through or even seen. That does not mean that AMZN shares will go lower or higher on this smartphone stuff. I just do not see AMZN being remotely successful in this market. The third fourth fifth and sixthplace players in a market are almost always delegated to significantly inferior positions of revenues and profitability compared to the number one and two players.

    Any thoughts?

  • I just don't see why I would ever trade in my iPhone for an Amazon phone - with or without a 3D gimmick. Who cares what AMZN is doing. The horse has already left the barn on the smartphone market. And APPL has a big iPhone introduction coming up. AMZN smartphone...who cares.

  • Taking a poll right now. Click thumbs up if you are going to trade in your iPhone or Android phone for an AMZN phone. Click thumbs down if you are staying with what you got.

    No cheating. AMZN longs or shorts can not click one way or the other based on their investment position.

  • I just listened to the conference call replay. Looks like the recent decline in the shares is a great entry point. Everything about the 2009 RSA and PEAKS financing guarantees has been laid out. Nothing left for the shorts to beat on. Company has plenty of capital and financial strength to meet any guarantees. Business was weak due to decline in Drafting and Criminal Justice Programs (ie housing and public service - where there are no new jobs). Everything else showing growth.

    The shorts have flooded the market with a ton of new stock and all these "extra shares" are being traded around by retail and other small time investors. I have to think that now that the RSAs and PEAK are all out on the table and well quantified in the marketplace that the shorts are not left with much. There are a couple of lawsuits and the such, but that stuff is just old hat.

    I say buy.

    What will be the new "core" earnings numbers for 2014. Old numbers were for $3.50 - $4.00 per share I think. Company dropped its guidance due to the write down that will come from the PEAKS and RSA programs in 2014. There was no talk of lowered core operating profits (although that still may happen. In any event, with the $3.50-$4 eps number as the starting point, if core (non write off) earnings drop to $3 per share let's say, the stock at $18 is a great long.

  • thedeathrace thedeathrace Jun 5, 2014 2:54 PM Flag

    I would reply to this post by saying that ordering stuff online and reading ebooks were both in effect new things in the marketplace. An AMZN phone will hardly be a new thing in the marketplace. An AMZN phone is something woefully late to a market that is already super well served and developed. Maybe you should call up Google and ask them about their new phone. I assume that AMZN's phone will use the Android operating system. There is just now way I can see the marketplace accepting any new phone, let alone one with a completely new operating system. And Samsung has just introduced its new operating system Timken. We will see how well that does.

  • Reply to

    Discussion re new Amazon phone...

    by thedeathrace Jun 5, 2014 12:42 PM
    thedeathrace thedeathrace Jun 5, 2014 3:06 PM Flag

    nem, I think that you are most probably woefully mistaken in thinking that AAPL has no clue about 3D technology and basically every other major technological innovation in the smartphone market. AAPL's margins are not AMZN's opportunity. AMZN's margin attack in its business was low priced Walmart. And AMZN's results have been huge revenues with no profits. The story against AAPL would be quite different. AAPL products are super high quality high end devices. Always have been across every product line. If AMZN wants to compete on price, it will be going up against the low end Android market. The profitability of this low end market is a joke compared to what APPL earns and I do not think that any AMZN phone will be a money maker for AMZN or move their financial needle at all.

    The commentary here should be about fundamentals, not bashing someone's opinion about a stock price (which I have not done). You are clearly "long" the stock and are unwilling to engage in any intelligent discussion of the merits of anything related to AMZN.

  • Every year there are turnaround plays in the stock market. For example, last year it was HPQ (now up from $11 to $34). Others include AAPL in low $400's, Facebook at $21, AIG at $19, General Motors at $20, Boeing at $50 and so on. Some of the other current turnarounds are AVP (Avon Products) and CLF (Cliffs).

    When stocks of well know companies get a beat down like this and are working hard to right the ship, it is without question time for investors to take a really close look.

    JCP is the poster child for 2014 turnaround. It is just so obvious. And I think things look great from a turnaround perspective. The naysayers are all looking in their rear view mirrors. Sure that rear view picture is as ugly as can be, but it is all in the stock price and that car crash is long behind the company. Anyone short JCP must be making a bet on complete bankruptcy - I see no other possible logic to be short this stock. Yet I do not see bankruptcy as an outcome in the least. The stock will climb out of its funk and the action in the share price has been par for the course - huge volatility in the bottom, a lot of ridiculous commentary, and so in. In the meantime, the company has made nothing but excellent progress and favorable announcements since November 2013. Some analysts are now starting to make positive comments with raised price targets.

    Anyone short this stock must be prepared to see JCP shares run to $20. That will be the magnitude of the shorts' pain if they lose from here. If JCP shares fall, I suspect that we will see $5-$6. That makes the short bet a terrible risk/return bet. Terrible. The play is on the long side.

  • Doesn't anyone remember at all AMZN's recent earnings and guidance. Absolutely terrible. So with terrible results and forward guidance, people are now buying shares because AMZN has some nebulous product announcement, a rumored #D smartphone - years late into a market already dominated by companies much stronger than AMZN in that space.

    All today is just some ridiculous short squeeze followed by every yo-yo day trader trying to participate. They all will be onto some other stock tomorrow.

  • thedeathrace thedeathrace Jun 6, 2014 10:11 AM Flag

    Alloro, can't you read. I never said whether JCP's turnaround would prove successful. I said as you quoted and I stand by my statement. There is no more closely watched or important turnaround in the stock market now than JCP. It makes no difference that you are short the stock. None what so ever. The fact is that JCP is working on a massive restructuring and turnaround. If you do not understand this, you are investing with your head in the sand. My bet is that the JCP turnaround proves t be incredibly successful. Clearly many are betting otherwise. Place your bets and we will see.

  • I read endlessly about people moaning about the cost (price) of education. And the large student loans required to finance an education. Well, guess what. It is the best investment 99.9% of the population will every make. The stats are real simple and well documented. If you do not graduate from high school, your are complete economic toast - a LIFETIME of lousy jobs (if any), low pay, and huge job turnover. If you get out of high school but don't get a higher degree, your fate is not much better than the high school dropout. And you want to date/marry an attractive, intelligent woman or man. If you are not educated, forget about it. You have ZERO chance with anyone reasonable of the opposite sex.

    The only way out is through higher education - ie associates, bachelors and graduate degrees. If you are not in this camp, you are in serious trouble for the rest of your life. So, spend $50,000 now to get educated are reap a lifetime of benefits. It is amazing that education does not cost more - it is worth a lot more than what people are paying.

  • I used to think that the large short interest in a stock, like ESI, was a recipe for a massive short squeeze. Each case must be looked at on its own. I do not think ESI is such a case. Why? There are many large institutions that are long term shareholders of ESI. These owners have lent their shares to the shorts and are not calling their positions in, thereby forcing a squeeze. To create a squeeze requires massive new stock demand from new investors or loaned shares being called in from the stock loan departments.

    Stock loan departments are not calling in the stock and new demand for ESI shares seems to ebb and flow. New demand for shares in effect has been met by the supply of stock created by the short sellers. While the shorts have sold 10 million shares, they have also sold them to new shareholders who bought 10 million shares. These "new" 10 million shares are bouncing around the market while much (I think about 14 million shares) of the regular 23 million shares are locked up with institutions.

    by this math, there are 33 million long shares being held in ESI and 10 million short shares. With 14 million long shares locked up, there are then 19 million "long" shares in the market being traded about. That is plenty of stock changing hands to drive ESI's share price all over the place.

    Frankly, I think that the "short" story on ESI is nearing an end. The PEAKS and RSA "hidden" guarantee obligations are now fully transparent and the those obligations fully quantified. ESI can meet those obligations and despite the enrolment weakness of the past several years, ESI remains solidly profitable.

  • I think the answer is that the shareholder's buying APPL know that AMZN has no mojo in the smartphone market. AMZN shareholders are a different group. They are used to revenues with no profits and a lot of hype. Mysterious 7 years late smartphone from AMZN with no apps fits the bill.

    And who uses a Kindle anymore. My wife got one and it just collects dust. She has much prefers her iPad.

  • Reply to

    The Brand

    by illinigraduate4677 Jun 7, 2014 11:49 AM
    thedeathrace thedeathrace Jun 9, 2014 10:24 AM Flag

    You make a good point, but your point is not a "fact". Question is whether there is any impact on future enrollment. I would say that there are probably potential students that decide not to go with ITT because of the bad PR. I am not sure how widespread or large this is though.

  • thedeathrace by thedeathrace Jun 9, 2014 4:30 PM Flag

    The Macau Casinos are all being used for money laundering. This is all a well known scam by insiders and Chinese officials (as they are the criminals). It actually has been well reported on for several years now. The reason why China expanded the Macau gaming licenses to Wynn and other foreign companies was so that they could increase the amount of money being laundered. This is why there are no major gaming licenses issued to domestic Chinese companies. A domestic Chinese gaming company would have no where overseas to send your money.

    The loophole in the laundering is that a Chinese person can buy chips and casino credit with chinese currency, but then redeem those same chips for US$ and Hong Kong $. The foreign dollars then get deposited and transferred overseas to places like Switzerland, London, and the US (a bit more difficult here). The money laundered is usually from a criminal activity, like political kickbacks, theft, and so on. The money then goes into buying various overseas assets in owner-hidden accounts. The most noticeable assets are the ridiculous homes that these criminals are paying for in both London and New York. Parking $50 to $100 million in a home purchase in one fell swoop works better than having to make 50 separate $1 million investments. As such, a byproduct of this is distorted high end real estate values in these cities, followed by the trickle down effect to lower priced properties.

    The casinos are enablers of this activity, but they are not the perpetrators. The perpetrators are a different set of local Chinese mobsters, politicians, and criminals. The casinos do know very well what is going on. No one can tell me the Steve Wynn and Adelson do not know exactly what the game is.

    So what is the impact to the casinos and their stock prices. I would argue that earnings from the gambling related to the money laundering activity is an exceeding low p/e business. It is of dubious value at best.

  • Reply to

    Fraud at Macau Casino

    by thedeathrace Jun 9, 2014 4:30 PM
    thedeathrace thedeathrace Jun 9, 2014 4:45 PM Flag

    I read today that 75% of the Macau gambling is done through high end gambler VIP rooms. These gamblers are in effect the people laundering money. I am not saying that all of this would disappear, but an anti-money laundering effort could really put the hurt on things. Some people say that April gambling revenues in Macau were up strongly despite the money laundering crackdown. I am of a different opinion. The casino facilitated money laundering activity may (but not definitely) be coming to a close. As such, the window is closing, so the crooks have to use the system while the window is still open. Thus a huge rush in April to get even more money out. The next couple of months will be important to watch at WYNN and LVS. If things taper off, it looks like the game is over in Macau.

    The wild card remains that the Chinese political crooks all want to still get there money out. The pressure to keep the gravy train going is enormous and I am uncertain as to what in the Chinese government is driving the crackdown when so many politicians have a hand in the game. I suspect that some politicians want the game changed as they themselves want a bigger slice of it and are not in the correct position to get it (so they have to change the rules and displace the existing players) or there is a new set of politicians seeking power and they must use the money laundering crackdown to displace those politicians who are ahead of them in the power chain structure. The incumbent political crooks must be displaced so that the new breed of political criminals can take their place. This then will be followed by some new money laundering angle.

    It is amazing that this whole structure of graft has supported so much wealth - the money stolen by the Chinese politicians, the middle men between China and Macau, the Macau Casinos, the stock prices of the publicly traded Macau casino operators (ie Wynn, Adelson), the ramped up high end housing prices in New York and London.

  • Reply to

    Fraud at Macau Casino

    by thedeathrace Jun 9, 2014 4:30 PM
    thedeathrace thedeathrace Jun 9, 2014 4:49 PM Flag

    The recent analyst downgrades of the Macau Casinos based on the expectation of upcoming comp numbers declining is a sign that analysts are thinking April 2014 was the bubble money-laundering top and the rest is downhill for the Macau gaming market. Smart money is already out of these stocks and the shorts are taking positions. If the money laundering crackdown has teeth, watch out. The stocks could go significantly lower.

  • Reply to

    Fraud at Macau Casino

    by thedeathrace Jun 9, 2014 4:30 PM
    thedeathrace thedeathrace Jun 9, 2014 4:56 PM Flag

    With an eps estimate on the order of $10 per share for 2015, WYNN shares are really dangerous if the anti-money laundering crackdown bites. That eps estimate (p/e = 20) will disappear fast and with a declining earnings figure, the p/e ratio will drop to 15 or lower.

    If the eps estimate falls to $9 and the p/e goes to 15, the shares will trade at $135 (not their current $200). If the eps drops to $8 per share and the p/e falls to 13, then the shares trade at $104.

    Remember, all the eps growth in these stock is from Macau. If Macau fails, it is lights out.

  • As a matter of fact, I just posted this below in early May. And there has hardly been anyone who supported my view. Now everyone is coming out of the woodwork because the Ackman deal re Allergan is a joke and VRX just handed Ackman $1 billion of stock market gains for nothing. The Wall Street crowd does not like this at all. Ackman is a snake and the smart crowd knows it. VRX showed its true colors by getting into bed with Ackman. They are all sleazeballs.

    My previous post (one of many)...."VRX shares are up from nothing to $140 all on the back of a debt fueled, balance sheet destroying acquisition program with all sorts of funny accounting. Go read the balance sheet and then come back to everyone. Make sure you check out the company's stockholder equity and all the massive earnings they generate (or should I say losses). This think is just some massive pump job. VRX buys all these #$%$ companies that no one want and that would sell at ten times earnings, but then through accounting gimmicks makes it seem like they are growing 40-50% a year. So the market gives a 40 p/e to something that should get a p/e of 10."

  • There is a nasty hidden US politcal agenda going on behind the scenes against the Macau Casinos and Steve Wynn and Adelson are #$%$. The Macau Casinos are money laundering venues and the largest such in the world. This is all well known and since the Chinese politicians are the beneficiaries, there is only a ingrained interest there to increase the activity. However, step in the US government. Wynn and Adelson are huge supporters of the Republican party and dole out large amounts of political cash. The democrats are #$%$ off abuot this and with a Presidential election coming up (ie Hillary), the democrats are going to go to the source of Wynn's and Adelson's money and shut it down. That means an attack on the money laundering in Macau. Do a google search on the US activity along these lines there. See for yourself. The Chinese have already made one of their own a sacrificial lamb (the political hack got 6 years hard labor and probably all his massive wealth taken away). But this is not the end of it. More to follow. Wait till the press really gets a hold of this story and exposes the US casino operators as major players in the money laundering business. It is going to be ugly.

  • Reply to

    The price (or cost) of education

    by thedeathrace Jun 6, 2014 10:26 AM
    thedeathrace thedeathrace Jun 10, 2014 2:15 PM Flag

    $40k for an associates degree could be a fabulous investment. My daughter is going to college this year. 4 years all in cost will probably be well north of $200,000. Is that a good investment? I would say without question it is a good investment as if she doesn't get educated, her life will be one of flipping hamburgers for the rest of her life. If I had a choice, flipping burgers or paying $200,000 so I could get a good job and have a career, I would do the latter every time. It is a no-brainer decision.

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