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Southborough, MA, April 22, 2014—Lemelson Capital, LLC, a private investment management firm, today announced that it has taken a significant equity position in Kulicke & Soffa Industries (NASDAQ:KLIC), a global leader in the design and manufacture of semiconductor and LED assembly equipment.


Lemelson Capital’s acquisition reflects the firm’s view that shares of the company remain dramatically undervalued.


Lemelson Capital also announced today that it is urging K&S to initiate a share repurchase plan and has delivered the following letter to the company’s management team, board of directors and other stakeholders.

 

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USA todayLemelson Capital featured in USA today - credits firm with nearly 800 Million drop in market cap. of World Wrestling Entertainment (NYSE: WWE)

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Shares of World Wrestling Entertainment (WWE) fairly priced between $8.25 and $11.88.


On March 17th, 2014 Amvona published Lemelson Capital Managements investment thesis "The Short Case for World Wrestling Entertainment".


The shares have lost approximately 26% of their value in the 16 trading days since publication. On April 7th, 2014 ValueWalk published "Amvona Short Call Sends WWE Tumbling" stating:

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The business World Wrestling Entertainment (WWE) is engaged in is sport or show (or maybe both) designed to manufacture emotions - to this end, the shows are replete with the kind of drama that apparently opens wallets.

 

If the production of emotions however is transferred to the investing public and elicits the same visceral response to the stock as it does to the company's events, then there ought to be significant reason for caution on the long side, for sound investment policy has nothing to do with emotions.

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graph imageOn January 5th, 2012 Amvona published the article American Greetings Corp. and the Triple “W”.  The thesis was comprised of two primary components:

 

a) The value and impact of the stock repurchases the company had made and would be making.
b) An appraisal of the real value of the company’s tangible assets.

 

The following is the price performance one year later of the two purchase made in the shares at the time.

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buy-panic-sell-buttonsPreface:  Given the large number of articles available online that outline virtually every conceivable method of analyzing the quantitative factors of AAPL, the following aims instead to approach the subject from the more subjective, human aspect.

 

“Pain and foolishness lead to great bliss and complete knowledge, for Eternal Wisdom created nothing under the sun in vain.”

- Kahlil Gibran

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skechers shoeOn November 29th, 2011 Amvona published the article “Why we’re still buying Skechers stock”.  The article indicated that shares in the company had been purchased for investor accounts between $11.86 and $12.77 per share.

Here were a few of the reasons for the purchase outlined at the time:

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*May The Lord rest the souls of those who have departed in the destruction caused by Hurricane Sandy, and console their loved ones.

 

MBAsOn October 22nd, 2012 Western Digital Corp. released their Q1 2013 financial results.  Here are a few key points that are worth noting:

 

Valuation Ratios:  The cheapest Company in America?

 

"Citigroup‘s Joe Yoo today cut his ratings on hard drive and storage technology developers Seagate Technology (STX) and Western Digital (WDC) to Sell from Buy, writing that there is a chance of 25% downside to current estimates for the companies this quarter given what may be drastically lower volume of drive shipments.  Yoo cut his Seagate target to $25 from $37, and cut his Western Digital target to $32 from $53. …For Western, his estimates go to $15.3 billion and $9.99 in EPS from a prior $15.84 billion and $10.68 per share."

STX, WDC Cut to Sell at Citi; Estimates Too High Amidst PC Slowdown (Tech Trader Daily, Oct. 12th, 2012)

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Shares of Western Digital (WDC) were sold for investors accounts on August 13th, 2012 at $44.  As of close of market on Friday Oct. 19th, the shares were being traded for a mere 34.88.  A decline of a full $9.12 or almost 21% in barely 9 weeks.  Is the value of the company really less than it was, when the shares recently traded at $44?

 

wdc chart 10-22-2012

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intervention - royal tenenbaumsOn April 25th, 2012 Amvona published the article "Corning from another perspective”.  On May 2nd shares of Corning (GLW) were sold for investors accounts at $14.49 per share - a return of about ~13% in just over 4 months, or almost 38% annualized.  The shares were not sold because it was thought that they were overvalued, rather it was to free up capital for the growing position in Western Digital (WDC) later discussed in the follow up article "Update: Western Digital Discusses Q4 2012 Results”.

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On July 25th, 2012 Western Digital Corp. (WDC) announced their FY2012 results - and beat consensus EPS estimates of $2.47.  In after hours trading on July 24th as well as today, the shares moved up slightly, so it seemed like a good time to take a look back at some of the Amvona analysis of the company.

 

chart

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Spencer Platt/Getty ImagesOn May 17th around 2 p.m. a call came in from a friend, he said he had just received a call from his broker, who asked him “what he wanted to do about Facebook’s IPO”.    The response was intricate and subtle;

 

“wouldn't touch it with a hundred foot pole”

 

The advice was to consider buying Western Digital (WDC) instead if he had to buy something.    Sensing that the answer may have been a bit curt, the following email was sent shortly after the phone call:

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on the sidelines 2According to a research report published last Friday, Bank of America has downgraded Western Digital from Buy to Neutral, and lowered their target from $54 to $46. In the report, Bank of America said:

 

"WD reported significantly better than expected F3Q12 EPS at $2.52 vs. our/Street $1.60/1.55, driven by revenue and margin. WD guidance was disappointing (EPS of $2.35-2.55 vs. our/Street prior $2.67/2.30) and commentary pointed to softer demand than expected going forward, at current/elevated ASPs levels, and some pricing concessions (certain HGST customers, pre-acquisition). It appears the HDD industry can't have it both ways for much longer – pricing/margins at high levels, and expected strong demand, with assumed channel inventory refill. We step to the sidelines for now, despite attractive valuation."

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fiber_optic_cableOn December 19th, 2011 we began purchasing shares of Corning Inc. for investor accounts – these purchases were made at an average price of $12.73 per share.  Unfortunately we didn't have time to write an article explaining all of the reasons why we felt Corning represented a good value for investors, we did however mention the purchases in our February 1st, 2012 article The Prime Ministers "One Dollar" bets  when we published  our correspondence saying:

 

“haven’t always been able to publish all ideas (but always execute for friends and family) – for e.g. haven’t had time to write an article on it yet, but have also been buying GLW (mostly below 13).”

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DSM_IV_2Probably because of some yet-to-be-diagnosed neurosis our idea of a “good time” is listening to replays of company conference calls - the company’s that we own for investor accounts are a lot of fun, but our real interest is their competitors.

Recently when listening to the Q3 2012 CC for Seagate Technologies (at about 9 min and 35 sec. into the call), we stumbled across an interesting piece of information - Seagate indicated that the TAM (Total Addressable Market) in the March QTR was about 143 M units, which was above both the industry analyst and the company’s own expectations of 130-135 M units, mentioned by the company in their January CC. 
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