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Investment Ideas / Re: SAUC - Diversified Restaurant Holdings
« Last post by valuedontlie on Today at 04:40:16 PM »
atbed --

I don't see them adding leverage to acquire additional units over the next 18-24 months as they chip away at the debt load.

Alternatively, I would like to see them engage BWLD in a transaction similar to QSR/TAST a few years ago -- BWLD could contribute X locations to SAUC in exchange for a significant equity stake in the company and possibly a right of first refusal on marketed locations. SAUC is already the largest franchisee and a good operator (compare SAUC margins burdened with franchise fees to BWLD margins). This structure would immediately reduce leverage as well. No idea the likelihood of this but I know SAUC is aware of QSR/TAST deal and open to it.
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Investment Ideas / Re: HCG.to - Home Capital Group
« Last post by doughishere on Today at 04:02:14 PM »
I wrote up my thoughts in greater detail on my blog.

https://onbeyondinvesting.com/blogs/blog/home-capital-wtf-just-happened

Still so much to consider here.  Interested to hear what anyone thinks.

I dont have a dog in the fight, shorting seems too difficult and the scuttlebutt makes it hard to go long. So I dont know much but....these "elevated" housing prices are they due to all subprime buyers and not chinese(dont even have to be) buyers who may not be the best quality but can make the payments.....If i remember correctly wasnt a lot of the pain due to interest rates "resetting" after a period of say 5 years(ARMs)........I mean everyone wants to find the next "big short" but does the exact same situation apply?



I guess what im asking is are the customers that HCG serve....are they the stripper that owns 5 condos subprime all with ARMs or more legitimate chinese(again, dont even have to be chinese) buyers who can make the payments. I mean employmeent is basically at full capacity in the states so is the same true for canada? Are the buyers already "defaulting" on the loans?


Edit: I also understand, from your article that theres fraud involved....but is 1/5 enough to stop the party? Is 1/5 legit estimate(keep in mind i know nothing)?  Also, from Ameera's piece...wouldn't tighter lending just force the lowest(crappiest) buyers out possibly reducing volume more than "ability to pay"?


Dont you need to wait until theres forced sellers for the market to start to capitulate...ie. anyone who over paid for their house to loose their job or what not?

Apologies in advance for dumb questions.


Edit2: I dont mean this in a d*ckish way, but have you considered that you're(and its not just you) just wrong? There has to be some sort of possibility that you haven't reached the point of no return yet? Even you say that you "feel...that the housing market was beginning to crack." What happens tipping point just isnt there yet?

Edit3: One final comment I swear. You mention that you have a guesstimate book value of ~17.85 and the stock price is basically right there....so why not get out? Whats the real likelihood of HCGs reserves going to 3% instead of the .13%? And if youre absolutely sure about HCG going to the 3% target....how long could/will it take to get there. Whats the one thing that would guarantee that this goes bust no-matter what? Even if uncle warren or the Canadian govt steps in.
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Investment Ideas / Re: FLYBE.L - Flybe
« Last post by ebdem on Today at 02:56:29 PM »
Sorry. Needed some time to reply.

To add information to the balance sheet talk: Fly.Be owns 27 aircrafts. 20 are Q400 (https://en.wikipedia.org/wiki/Bombardier_Dash_8#Series_400 and 7 are E175 (https://en.wikipedia.org/wiki/Embraer_E-Jets).

I am holding 3-4%, but it also around 25% under water. Greenwood is at 4,5% (https://www.gwinvestors.com/wp-content/uploads/2017.04.06-Q1-2017-Letter-Conscious-Capitalists-w-Appendix.pdf).

I think load factor will increase, while they are reducing the flight network. Load factor is at the moment also lowered by the (i think) Cardiff contract and on the graphic I posted from the IR presentation, we can see the optimization potential for the network. There seem to be many routes with low load factors. I have to look deeper into the numbers of the overhead to get your argument...
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Investment Ideas / Re: HCG.to - Home Capital Group
« Last post by Liberty on Today at 02:27:28 PM »
I wrote up my thoughts in greater detail on my blog.

https://onbeyondinvesting.com/blogs/blog/home-capital-wtf-just-happened

Still so much to consider here.  Interested to hear what anyone thinks.

Just read it. Interesting take, thanks.

Edit: btw, Marc Cohodes complimented you:

https://twitter.com/AlderLaneeggs/status/879085197274238976
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Investment Ideas / Re: C - Citibank
« Last post by racemize on Today at 02:17:07 PM »
It is nice to see some bank discussion on here after so many years. We bought Citi at various levels under book value for the last few years.

I don't disagree with anything said here, but I thought it might be useful to put some more bearish thoughts down for consideration.

Since the GFC, Citi and BofA were both in the penalty box and have been trying to dig their way out of it. Both took quite a bit longer than many of us hoped, but it is especially true in Citi--they have missed targets quite a few times, and I have to say I was disappointed with the recent updated guidance that they could get to 10% returns, if you exclude quite a bit of DTA. They have also been slow on ROA targets.

As a result, I do think they deserve a discount to peers, even BofA. On the other hand, I think they should be at least 1.3x tangible book.

For what it is with, we had 30%+ exposure to banks in BofA, JPM, and C going in to this year--we still hold all of them, but sold each in even proportions, including C based on my thoughts above.  We still have 5% each though, so I do believe the upside is still present.
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Investment Ideas / Re: C - Citibank
« Last post by John Hjorth on Today at 01:38:43 PM »
Thanks again for sharing your thoughts about C here, Viking,

I agree with you on all points and on the overall considerations of yours.

Today, I have been thinking about the C case the whole day on/off, rereading the stuff in the 2016 financials, going to and from it the whole day. There is no more time for thumb sucking here any longer - there is only two days to hopefully grab some more at a decent price - most likely.

I'm still thinking about the downside risk, if we at some point in the future begin approaching an adverse scenario, if something somewhere breaks and bursts. We will have to jump off the train at whatever speed, if we see it start derailing and hope for a not too hard landing.

- - - o 0 o - - -

The C CEO Michael Corbat has approx. USD 30 M skin in the game here. That's not pocket money.

Furthermore - and at least to me, more important - he is the person who has been responsible for winding down the "bad bank" parts of C [Citi Holdings - in the period, before he became C CEO] after the GFC. This fact gives me at least some confidence, that prudent banking has been reinstated and will be maintained going forward. That kind of work - and why it was needed - most likely is in his long term memory like some script hammered with a chisel into a stone, so that a similar situation will not occur again.

- - - o 0 o - - -

Yesterday evening the eyes of the Lady of the House turned big like teacups when I told her about the size of the losses in Citi Holdings from 2008 going forward - it's USD 63.7  B [and over now] - to comprehend this size of a loss I think I need to swich yardstick from tons of spilled milk to multiples of book value of the Great Belt bridge connecting Funen and Sealand here in Denmark.
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Investment Ideas / Re: AT-Atlantic Power
« Last post by SafetyinNumbers on Today at 12:47:40 PM »
The stock got crushed on Friday, i'm thinking mostly due to the Russell re-balance event. At the close, over a million shares traded and just got dumped...

The company posted the AGM audio replay on the website.

https://s3.amazonaws.com/filecache.drivetheweb.com/mr5ir_atlanticpower/214/2017+AGM+Presentation+FINAL.pdf

http://investors.atlanticpower.com/annual-meeting

The CEO said one of his favorite investors is Mason Hawkins. Maybe we should call Mason and have him buy it for his small cap fund!

Was anyone able to go to the meeting? Cardboard, any thoughts lately on this name?

Thank you.

I caught the tail end of the meeting because Polaris Infrastructure (PIF.TO) had its meeting at the same time.

The CEO continues to impress me with how thoughtful he is about where incremental capital should be invested but they continue to deal with difficult market conditions. I didn't hear anything to justify the sell off.

As an aside, if you haven't looked at Polaris before, it offers compelling value and growth but is a one asset company based in Nicaragua but has aspirations to grow in Central/South America via acquisition.
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Good point. However, party needs every vote to pass any legislation (healthcare, tax reform etc.) , so I wonder if Mnuchin will ever take an action as they need Corker's vote as an example. Do you agree?

I believe it's pretty clear that Mnuchin will take action if Congress fails to do so.  I don't think there's anything to wonder about regarding that.  If you want to wonder, I would suggest spending that energy on what action Mnuchin will take and how it impacts shareholders.

On another note, if I send a message to the banking committee "Why are you calling MBA head as 'Honorable' in your June 29th meeting? He is paid by large banks and is a private citizen like us", do you think they would care to respond? I don't want to waste time but it is worrisome as it shows the committee is in pockets of large banks. No reporter has caught this?

It's semantics.  You shouldn't care and shouldn't spend a second sending a message.
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Investment Ideas / Re: AT-Atlantic Power
« Last post by dr.malone on Today at 12:33:09 PM »
The stock got crushed on Friday, i'm thinking mostly due to the Russell re-balance event. At the close, over a million shares traded and just got dumped...

The company posted the AGM audio replay on the website.

https://s3.amazonaws.com/filecache.drivetheweb.com/mr5ir_atlanticpower/214/2017+AGM+Presentation+FINAL.pdf

http://investors.atlanticpower.com/annual-meeting

The CEO said one of his favorite investors is Mason Hawkins. Maybe we should call Mason and have him buy it for his small cap fund!

Was anyone able to go to the meeting? Cardboard, any thoughts lately on this name?

Thank you.
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General Discussion / Re: Cryptocurrencies
« Last post by Jurgis on Today at 12:18:08 PM »
Funny ICO idea from MIT mailing list:

Quote
GSB ICO [1]

Initial Coin Offerings (ICOs) [2] are the hot new way to get rich with very little effort.  To do an ICO all you need is an idea that runs on Ethereum.  Then, you sell shares of your "company" in tokens to raise capital, similar to an IPO.  From this you can compute the market valuation of your company.  These valuations are absolutely insane given that most of these ICOs haven't actually implemented or planned anything.  In one case, an ICO led to a valuation of $300 million [3].

Given all that, we here at GSB are doing an ICO by following the conventional steps:

1.  Come up with an idea.  Deep learning is hot now, so maybe a distributed deep learning thing?  Throw in some internet of things for good luck. [4]

2.  Pitch the idea.  I've put the important bits between asterisks:

"GSB is a *distributed deep learning framework* built on top of the Ethereum network.  The *internet of things* can leverage our GSB layer to access the *global supercomputer*, enabling never before seen levels of *interoperability*.  I'm an *MIT student* doing an ICO of *5%* of GSB with a target valuation of $200 million so I can work full time on GSB.

Note that I'm only offering 5% of GSB.  This is important because it means that your investors have essentially no say in how the thing runs.
 No one will notice this.

3.  (Optional) Write a white paper with some technical details of how you'll accomplish your goal.  This used to be necessary but now a flashy website with no technical details will do just fine.

4.  Pick a date for your ICO and hype it like crazy on Reddit.  Retail investors with no understanding of computer science or Ethereum will buy your coins like crazy.

5.  After you sell out of tokens, cash out everything.  ICOs often perform worse than ether.  Whether you can actually flood the market with your 95% share is yet to be seen, so you should probably do it slowly.

6.  Don't build anything.  You already have the money.  Kick back and relax!

7.  Fight off the paranoia.  This isn't illegal, right?  I mean, sure the SEC will probably make an example of a few people and send them to federal prison for securities fraud for a very long time, but come on, that won't be YOU, right?  Move to a country that doesn't extradite to the US to be safe.

Buy the GSB ICO at this week's [5]

*G i R L     S C O U T     B E N E F i T*

</snip>
---------------------------------------------------

1.  I really wanted to call this email, "How I Made $200 Million From Home," but last week's email (All Natural AWS) got caught in a lot of spam filters and this definitely would too.

2.  http://fortune.com/2017/03/31/initial-coin-offering/

3.
http://www.coindesk.com/ethereum-ico-irrationality-300-million-gnosis-valuation-sparks-market-concerns/

4.  I overheard some people in Kendall square the other day talking about how they wanted to do an ICO but they didn't have any ideas.
Their first mistake was thinking that they *need* an idea.

5.  Thanks to Ben Sherman for the GSB ICO idea.

This is humor. Do try it at home.  8)
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