A few days ago, SeekingAlpha announced a premium program that would allow its contributors to get paid for writing exclusive articles for the site.

The payout is $10 per 1000 pageviews. According to SA, top posts can generate upwards of 20k visits, or a nice $200 payday under the current payout rules. I applaud the management team for taking a bold step and paying well-above the reported market rate for similar programs.

Despite the attractive lure of cash, the response has been mixed.

Many contributors have viewed the premium program as an opportunity to earn something for the valuable content they have created. However, in order to get this something, the author must give up exclusive rights to the article in question.

On one side of the argument, Felix Salmon writes that Seeking Alpha’s new program could actually be an unwelcome development:

“Seeking Alpha here isn’t really paying per pageview at all. (If it were, it would pay contributors of all articles, not just exclusive articles.) What’s really happening is that Seeking Alpha is buying premium content, at zero up-front cost, which it can then resell in any way it likes and for as much money as it likes, with none of those revenues being shared with the author.”

In a follow-up article, Salmon continues (note: emphasis is mine):

“Investors, in particular, tend to value the discipline involved in thinking through their thoughts clearly, and then writing them down and having a permanent record of exactly what they thought when. It’s a great way to stop deluding yourself about why you did what you did — and it’s much less valuable if you’re subconsciously trying to write a post which lots of Seeking Alpha readers will click on and comment on.”

I’m a self-taught investor.

One of the main reasons I started this blog was to get in the habit of writing down my investment thesis. Receiving feedback, via comments or email, is one of the most rewarding parts of this experience.

I believe that this discussion has significantly improved my investment skills.I would hate to lose the valuable debate with my readers or potentially get lost amidst the thousands of other contributors at Seeking Alpha.

Despite the potential drawbacks, there could be long-term advantages as Whopper Investments points out:

“I am pleasantly surprised by the new policy, and I think it will bring a lot of value investors out of the wood work and encourage them to write new articles. Its not hard to imagine articles on seeking alpha drastically increasing, and strong writers will likely pick up some nice pocket change. However, there will definitely be some negative side effects. It will be interesting to see how it all plays out.”

Personally, I have been contributing to SeekingAlpha since July 2010 and currently have 33 articles published.

While I have a few posts that have climbed over several thousand page views, (the FIS tender offer and a writeup on APT being a few examples) the majority of my view counts come in much lower.

At the same time, Seeking Alpha has undoubtedly helped me increase my exposure and profile in the investment community. I plan to continue contributing articles when appropriate, but doubt I will join the premium program.

As you might imagine from one of the most popular investing sites,  much of the content on Seeking Alpha is oriented towards the opposite end of the spectrum compared to my personal investment philosphy, and therefore in turn, the posts here at Value Uncovered.

I enjoy writing long and detailed posts about undervalued microcaps. I spend hours digging through historical SEC filings, reviewing industry statistics, and performing valuations. This diligence results in lengthy, but hopefully detailed and valuable content.

My posts aren’t the core bread-and-butter of Seeking Alpha – but hopefully they continue to be a worthwhile read for my core audience.

Disclosure

Long APT.

As usual, here are a some value investing links from the past few weeks:

DHT Holdings, Inc. (DHT)

Long Thesis. Shipping is an industry I usually avoid, but Whopper Investments makes a good case for DHT Holdings (DHT), a company that operates double-hull tankers in the highly-competitive crude oil shipping market.

The company has a new management team in place after struggling through the economic downturn (basically, by using most of their FCF to continue paying out dividends despite declining business fundamentals).

Based on a recent appraisal, DHT holds ships valued at approx $415m compared to an enterprise value of $440m, meaning investors are picking up the rest of the business and its guaranteed cash flow (due to long-term contracts) for only $25m.

RadioShack (RSH)

Long Thesis. RadioShack managed to survive the economic downturn reasonably well, and now sits on over $700m in cash, or approx. 1/3 of its market cap.

Management has been using this cash pile to buy back shares, repurchasing almost $300m in stock in the past quarter alone.

The company trades at a P/E level of 9 despite stable operating margins and high ROE (averaging almost 20% over the past several years).

Gaming Partners (GPIC)

A stock recently featured on ValueUncovered, Petty Cash provides additional insight into Gaming Partners International (GPIC).

The linked chart tracks GPIC’s improving business fundamentals (CROIC and operating margins) despite significant ups and downs due to the cyclical nature of the business.

The company benefits from a dominant position in its core market (casino chips) with decent tailwinds in the casino sector, which suffered through a sharp correction in 2008/2009.

Diamond Offshore (DO)

Long Thesis. While concerns over drilling in the Gulf of Mexico continue (with new permits unlikely until late 2011 or 2012), the official ban lifted in October 2010, and most drillers have rallied significantly in the past 6 months with one exception: Diamond Offshore (DO).

In 2009, 32% of Diamond’s revenues were from the Gulf of Mexico; that number is down to 21% through the first nine months of 2010. Only 5 rigs remain in the region, with 3 others repurposed to other parts of the world.

The company has generated annualized free cash flow of approx $850m in 2010, with shares priced at only 10 times these depressed free cash flow levels.

DO continues to return cash to shareholders via special quarterly dividends and management remains bullish on the long-term prospects for deepwater operations.

Primus Telecommunications Group (PMUG.OB)

Long Thesis. PMUG recently emerged from Chapter 11 bankruptcy protection (a good signal for additional diligence by value investors) with a repaired balance sheet but depressed valuation due to lack of liquidity and institutional coverage.

The stock is extremely cheap looking at the common valuation metrics: P/FCF – 3.3x, EV/EBITDA – 3.8x, EV/Revenue – 0.38x. PMUG throws off a tremendous amount of cash, with a FCF yield of 31%.

The company also hired a new CEO with tremendous background in the space, who is highly incentivized (via options and restricted shares) to increase the stock price.

Several upcoming catalysts include a relisting on a major exchange (probable in Q1 2011), refinacing of the existing debt load (saving tens of millions of dollars in interest expense), or the possible sale to private equity group or strategic buyer.

Comparable buyout transactions typically occur around 1x LTM revenue or 5x EV/EBITDA, significantly above PMUG’s current price levels.

Suggestions

If you have links or suggestions to detailed analysis from other value investors, please drop me a line using the Contact Form.

I’m always open to ideas from other investors, especially for a thoughtful and well-researched investment articles.

Disclosure

Long GPIC.

In addition to writing up my articles and analysis, I’ve tried to gather helpful tools and websites for other value investors. The Resources page has been one of the most popular sections of my blog.

While most of featured resources are free to use, I wanted to highlight one because, despite the nominal fee, it is one of the best values for other investors: the OSV Stock Valuation Spreadsheets.

Newly Updated

Jae from Old School Value recently released the 2011 version of his stock valuation spreadsheets.

For those who are unfamiliar, the package includes 3 components: a core valuation spreadsheet, a secondary financial statement analysis spreadsheet, and a stock watchlist tracker (brand new in the 2011 update).

Updates and enhancements – and there are many – are included with the package for the first year.

Value of Automation

With the entry of a single ticker, the spreadsheets pull in 10 years of financial data and run through a host of different valuation scenarios – DCF, EPV, NNWC, NCAV, etc. The inputs/variables can then be intelligently adjusted to determine the intrinsic value of a particular business.

Other common but time-consuming financial numbers such as the Piotroski score, Z-score, and Beneish M-score are calculated automatically as well.

In 30 seconds, it provides a quick glance into a stock’s financials to see if it’s worth a closer look, automating much of the tedious work of manually entering numbers for various calculations.

In the past two years, I’ve personally ran hundreds upon hundreds of stocks through these spreadsheets, saving untold hours.

While it will never replace digging through the SEC Edgar database, it does help determine what companies to focus on.

Conclusion

While there are certain capabilities I wish the spreadsheets included (support for OTCBB/Pinksheet stocks comes to mind), there are very few products that are capable of providing so much value at such a price point.

To fellow value investors, I think the risk/reward is pretty compelling!

Disclosure

I earn a referral fee if the spreadsheets are purchased through the links above. As a general rule, I only endorse products that I use (in this case, every single day!) If every one of my readers took advantage, it might even subsidize my next spreadsheet upgrade 🙂