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Director‟s Cut
Sprint splat, blood flat
It is a truism that the hardest competitor to influence is the collective industry
dynamic.
As Kevin Smithen emphasises, Sprint Nextel (US) is likely to turn up to the
party brimming with smiles and all dressed up, but a day too late – they should
have read the invitation more closely!
Kevin points out that there is enough evidence to show Sprint will launch iPhone
4 onto their network just as the competitors move to the next new thing – iPhone
5. It‟s hard for an Apple FanBoy to impress his friends by whipping out the 4
when someone pipes up, „so what, look at my 5‟.
As T and VZ move to iPhone 5, it is likely they will drop the price of iPhone 4 to
$99, which Sprint will need to match, leaving them with a big subsidy bill. So you
are left to compete on price rather than features – in a commodity market such
as voice/data carriage, having a client base disproportionately skewed to value
purchases is not a comfortable position.
Further, the subsidy bill drag on FCF comes at a time when Sprint is facing large
debt maturities and an expensive capex choice in continuing the Clearwire 4G
strategy at a time when the industry transitions to LTE devices. It seems the
industry is moving on again to the next location.
With 35% downside from current prices, that is less a Sprint and more a Splat.
>> Read Report
Fainting is the body‟s autonomic defence mechanism to put you in a prone
position as blood pools away from the vital organs – as I read Craig Collie’s
analysis of the plasma therapeutics market, I get a similar feeling.
What stood up as many years of good growth is now looking very flat. Keep in
mind, this is essentially a slow moving industry (due to regulatory entry/exit
barriers and therapeutic switching costs) but, nonetheless it is still at heart a
commodity product. As Craig details, the 15% industry growth rates of the
recent past are actually an anomaly and growth rates closer to the long-term
norm of 3 – 5% are likely to prevail going forward.
Whilst the focus of the report is CSL (AU), the industry structure trends he
articulates are equally relevant to other plasma market stocks such as Baxter
(US), Grifols (ES) and Talecris (US, currently being acquired by Grifols).
CSL is trading at a PER premium of around 50% to the Australian market due to
a strong track record coupled with quality management, a premium that is now
looking increasingly hard to justify. >> Read Report
The old maxim of when good management meets a bad industry, it is the
industry that maintains its reputation looks set to play out once again
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Director‟s Cut
Sprint splat, blood flat
It is a truism that the hardest competitor to influence is the collective industry
dynamic.
As Kevin Smithen emphasises, Sprint Nextel (US) is likely to turn up to the
party brimming with smiles and all dressed up, but a day too late – they should
have read the invitation more closely!
Kevin points out that there is enough evidence to show Sprint will launch iPhone
4 onto their network just as the competitors move to the next new thing – iPhone
5. It‟s hard for an Apple FanBoy to impress his friends by whipping out the 4
when someone pipes up, „so what, look at my 5‟.
As T and VZ move to iPhone 5, it is likely they will drop the price of iPhone 4 to
$99, which Sprint will need to match, leaving them with a big subsidy bill. So you
are left to compete on price rather than features – in a commodity market such
as voice/data carriage, having a client base disproportionately skewed to value
purchases is not a comfortable position.
Further, the subsidy bill drag on FCF comes at a time when Sprint is facing large
debt maturities and an expensive capex choice in continuing the Clearwire 4G
strategy at a time when the industry transitions to LTE devices. It seems the
industry is moving on again to the next location.
With 35% downside from current prices, that is less a Sprint and more a Splat.
>> Read Report
Fainting is the body‟s autonomic defence mechanism to put you in a prone
position as blood pools away from the vital organs – as I read Craig Collie’s
analysis of the plasma therapeutics market, I get a similar feeling.
What stood up as many years of good growth is now looking very flat. Keep in
mind, this is essentially a slow moving industry (due to regulatory entry/exit
barriers and therapeutic switching costs) but, nonetheless it is still at heart a
commodity product. As Craig details, the 15% industry growth rates of the
recent past are actually an anomaly and growth rates closer to the long-term
norm of 3 – 5% are likely to prevail going forward.
Whilst the focus of the report is CSL (AU), the industry structure trends he
articulates are equally relevant to other plasma market stocks such as Baxter
(US), Grifols (ES) and Talecris (US, currently being acquired by Grifols).
CSL is trading at a PER premium of around 50% to the Australian market due to
a strong track record coupled with quality management, a premium that is now
looking increasingly hard to justify. >> Read Report
The old maxim of when good management meets a bad industry, it is the
industry that maintains its reputation looks set to play out once again
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