Author Topic: Best Ideas For 2019  (Read 13930 times)

BG2008

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Best Ideas For 2019
« on: October 29, 2018, 09:52:23 PM »
I figure I will get this thread started since the market has been volatile lately.  I have a few cheap names.  But I don't have a single one that is table pounding for 2019.  It's getting awfully close though. 


investor-man

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Re: Best Ideas For 2019
« Reply #1 on: October 30, 2018, 04:58:56 PM »
No responses? I'll bite - FLYB:GB is now trading at about 2x operating cash. Not the prettiest picture, and some obvious clear risks, but very cheap.
Ferengi Rule of Acquisition #3 "Never spend more for an acquisition than you have to."

KJP

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Re: Best Ideas For 2019
« Reply #2 on: October 30, 2018, 05:06:06 PM »
Can you have a large portion of your portfolio in Flybe given the Brexit risk (both risk to operations and effect of likely decline in pound on cost of USD-denominated debt and fuel)? 

I was going to nominate Parkit for this thread, but decided not to because I don't have a significant portion of my personal wealth in it and can't recommend anyone else do so.  But if you asked me what company in my portfolio is most likely to double next year, I'd say that one.

investor-man

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Re: Best Ideas For 2019
« Reply #3 on: October 30, 2018, 05:29:36 PM »
Can you have a large portion of your portfolio in Flybe given the Brexit risk (both risk to operations and effect of likely decline in pound on cost of USD-denominated debt and fuel)? 

I was going to nominate Parkit for this thread, but decided not to because I don't have a significant portion of my personal wealth in it and can't recommend anyone else do so.  But if you asked me what company in my portfolio is most likely to double next year, I'd say that one.

It was up around 10% of my portfolio earlier this year. It has dropped about 75% over the last month. I bought it back up to roughly 7.5% today. I don't think I'll buy any more until after March (supposing it looks good then). "No deal" seems an unlikely scenario to me. Either way, I've got the stomach to find out.
Ferengi Rule of Acquisition #3 "Never spend more for an acquisition than you have to."

Viking

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Re: Best Ideas For 2019
« Reply #4 on: October 30, 2018, 05:36:36 PM »
I think raising cash on strength (stock market run ups) will be a very effective strategy moving forward (the remainder of this year and next year). Being very patient on reinvesting the cash will also be important.

KJP

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Re: Best Ideas For 2019
« Reply #5 on: October 30, 2018, 05:42:48 PM »
Like you, my longstanding Flybe holding has been a gold medal winning downhiller, but I don't have the bravery to add to it.

I'm sure 2019's biggest winner will be something like Flybe -- an existential risk that never materializes -- or something highly levered.  For the same reasons, I suspect I won't own it.

investor-man

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Re: Best Ideas For 2019
« Reply #6 on: October 30, 2018, 06:16:38 PM »
Like you, my longstanding Flybe holding has been a gold medal winning downhiller, but I don't have the bravery to add to it.

I'm sure 2019's biggest winner will be something like Flybe -- an existential risk that never materializes -- or something highly levered.  For the same reasons, I suspect I won't own it.

The difference between you and me is probably experience. Perhaps I'll learn to be more like you after this.

Anyway - anybody have any good ideas? Seems there's got to be some good deals out there and KJP and I have both given out a name.
Ferengi Rule of Acquisition #3 "Never spend more for an acquisition than you have to."

Gregmal

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Re: Best Ideas For 2019
« Reply #7 on: October 30, 2018, 06:34:43 PM »
I can't put a finger on one specifically but MSB IMO should re-rate to $40+, with $3.50+ in distributions along the way.

porcupine

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Re: Best Ideas For 2019
« Reply #8 on: October 30, 2018, 06:50:08 PM »
Deep value play:

CCUR sold off all of their core operating assets at the end of 2017. Since then, they have been looking to deploy cash. They recently signed a letter of intent to purchase 80% of Luxemark Capital, a merchant cash advance lender. This type of business isn't viewed upon with great reverence, but the stock price of CCUR is currently pricing the acquisition at below 0. Also, the payday lending industry faces some tailwinds, as the trump administration is looking to lift Obama era regulations which restricted who payday lenders could lend to.

CCUR is currently performing due dilligence under a period of exclusivity and has until January 30th to do so. They could easily walk away from this LOI. If they do this, I believe the stock price should at least converge to their assets held at fair value (adjusted for recent market developments) less their total liabilities. They also have a significant amount of operating losses which could be applied to a profitable company. If they have reason to believe that LuxeMark isn't profitable, I do not think they will go forward with the acquisition. An activist also has been increasing his stake since 2017. He now owns around 39% of the company and his uncle is on the board of directors. CCUR also has bought back a significant amount of stock (around 725,000 shares) since announcing their repurchase plan in March.

Two catalysts for 2019 - CCUR walks away from the deal. Luxemark capital is profitable.

Worst case scenario - Luxemark Capital isn't profitable... but the valuation of the company is already pricing this acquisition at 0.

Payday lending is very risky... but the decrease in share price of this company doesn't make sense due to the relatively small amount of cash (around 11%) they are investing in this company. They also have the option of granting up to $10 million in syndication capital to Luxemark. If this were to go to 0, the company would be trading at a slight premium to fair value assets less total liabilities.

Long CCUR
“Successful investing is having everyone agree with you — later.” –Joe Robillard

bizaro86

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Re: Best Ideas For 2019
« Reply #9 on: October 30, 2018, 09:17:37 PM »
Like you, my longstanding Flybe holding has been a gold medal winning downhiller, but I don't have the bravery to add to it.

I'm sure 2019's biggest winner will be something like Flybe -- an existential risk that never materializes -- or something highly levered.  For the same reasons, I suspect I won't own it.

My position that most resembles that description is Bri-Chem [BRY.TO]. It trades at less than 50% of NCAV, so there is certainly room for a double. They kitchen-sinked their last quarter, so just about anything will be viewed as an improvement next quarter. I think the risk-reward here is very good, but zero is on the table so it isn't a huge position.

Probably my current best idea is Labrador Iron [LIF.TO]. Premiums for high quality ore are very high, and the market has missed how much it'll help them because of the strike (resolved). Could easily end up paying $4 or more in dividends next year on a $27.50 price.