2015 picks

Here are my big holdings for 2015, and a brief description of my rationale for each:


Still undervalued even after Alibaba's IPO. Maybe 60% upside to the end of 2015. Lots of positive catalysts here:

  • Spinning off the BABA shares to investors in a tax-efficient manner
  • Continued growth from Yahoo's mobile segment may significantly increase valuation of Yahoo's core business
  • The recent deal with Firefox, and other potentially profitable search deals (eg, iPhone) and catalysts for search, such as finally ditching the agreement with Microsoft and producing a search engine of its own
  • Lots of cash from the BABA IPO to use for accretive acquisitions and buybacks
  • Continued appreciation from BABA growth


A Canadian oil E&P company that operates mainly in Egypt. Severely undervalued from recent turmoil in Egypt, relatively minor pump equipment failures, and sudden plunge in oil prices. One of the most undervalued stocks in the oil industry. Easily a 4-bagger when oil prices return to normal.

  • Excellent balance sheet and good liquidity
  • Breaks even on oil at low prices (I estimate in the $40's), since it is an onshore producer. Remained profitable during the last drop in oil prices in 2008-09
  • Collecting on its AR (the Egyptian gov't has promised payment in next 6 months) would be a positive catalyst
  • Excellent recycle ratios up until last year
  • Vast tracts of largely unexplored concessions leave plenty of room for growth
  • Political risks in Egypt are overblown


Israeli semiconductor company. Very depressed at the beginning of this year due to loss of a major customer (MU) after their contract expired and high levels of outstanding convertible debt. Since then, after a change in leadership it announced a JV with Panasonic and a lucrative deal in India. Still undervalued even after more than doubling this year. Probably another 85% upside through 2015. Positive catalysts:

  • Joint venture with Panasonic should experience high revenue growth over the next two years as it adds customers and ramps up toward full capacity
  • Deal with India yet to be closed
  • Debt was recently refinanced; further refinancing or other deals could decrease risk of share dilution from convertible bonds, although the company is still undervalued even if all the convertible debt is converted
  • Recent closing of a factory and transferring its capacity will significantly decrease fixed costs
  • Non-JV business is experiencing solid growth
  • Good market conditions for TSEM's products as 4G is rolled out across China
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