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Investment Ideas / Re: WFC - Wells Fargo
« Last post by CorpRaider on Today at 08:39:30 AM »
How do you guys choose which banks to invest in given that they're all trading at pretty low valuation? JPM, BAC, WFC, C? Or even GS and MS?

Tough isn't it?  I think maybe you could argue prefer USB because it is smaller with more room to grow and has a similar historical return profile/quality to WFC.  I don't do the pure investment banks because it seems like they are great businesses....for the employees.  I think I prefer WFC over BAC for lower exposure to IB and I don't like the huge BAC exposure to the wire house business.  JPM...tough...best CEO but how long and WFC is obviously less beloved right now. 

But I've not done anything, probably because these guys have pretty much all almost gone bust like three times in my memory and have been reformed to make it a lot easier/palatable to wipe out the equity holders. 
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Investment Ideas / Re: TEVA - Teva Pharmaceuticals
« Last post by DooDiligence on Today at 08:18:01 AM »
Ole Søberg to me appears to be a very competent investor. One the few Danish I actually listen to, when he's interviewed by media. Thank you for sharing, ebdem.

Globes [December 10th 2018] : US drug cartel probe names Teva.

I find Danish people to be very informative  ;)
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I dont think you can reference the stock price as a guide as mentioned before. The prices have been wrong before for nearly every decision/announcement over the past 5-6 years. It was not a predictor of Lamberth, Trump presidency, Mnuchin comments on Fox, etc, etc. It wasn't a guide then and isn't a guide now.  Shares for both are in total wait and see mode. Nothing more, nothing less.

I look at it a little differently.  The examples you cited were public / binary events where a typical hedge fund couldn't gain an edge with additional research.   The current example is likely different, and the hf sharks -- they are smarter and greedier than many here give credit despite their relative underperformance -- are surely digging in their contacts and avenues to see if something like Moelis is in the cards given the enormous upside potential.  and the market is saying for now, that's not the case.  of course there are some caveats like mnuchin has the tightest vest possible and hasn't started the process yet but i'm trying to be as realistic as possible even though I strongly wish Moelis was implemented for both fairness and policy reasons.

If you want to be realistic, then wait and see what happens. Maybe Moelis, maybe receivership, maybe something different. I think we all understand now that you think a receivership is likely. Thank you for your input. I appreciate the input of others as well. Reality is, we'll all find out what happens at some point in the future. I actually think the 5th Circuit may be helpful in resolving this matter.
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Investment Ideas / Re: RADH - Radisson Hotel Group
« Last post by whistlerbumps on Today at 08:16:09 AM »
I am not sure but it has been rumored that those were actually sold in the market and that HNA and the lenders do not actually have control of them anymore. 

Again, that is rumor but seems somewhat suppported by the fact that JJ has not been able to buy them yet. 

Its very weird to me that no one seems to know concretely where those shares are. 

On the one hand, makes a higher price more expensive for Jin Jiang (more shares to buy) but on the other hand also lowers the worries about a very illiquid stub if they don't make a more serious attempt to get to 90%
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Investment Ideas / Re: CVS - CVS Health Corporation
« Last post by DooDiligence on Today at 08:14:22 AM »
^Similar dynamics were described for Medicaid in replies #125-129 above with the following link:
https://www.whitehouse.gov/wp-content/uploads/2018/03/The-Profitability-of-Health-Insurance-Companies.pdf

This game of cat and mouse has been going on for a long time. And will continue until it doesn't.
Insurers will continue to explore the grey areas and a very effective way to maximize profits has been to inflate the complexity of enrollees using risk adjustment techniques which take some tweaking with new government programs but that eventually result in "healthy" profits, effectively benefitting from the concept of adverse selection through "upcoding".

Conveniently not mentioned in the references mentioned above is the fact that physicians' own reimbursements may be tied to the diagnostic complexity codes used, thereby aligning the "interests" of providers and payers and reinforcing the creative process leading to risk inflation.

Another factor in my decision to get out of CVS is a possible busted thesis with regards to the Minute Clinics.

https://www.forbes.com/sites/brucejapsen/2018/02/23/urgent-care-industry-hits-18b-as-big-players-drive-growth/#2d138d7b4d89

I've noticed multiple urgent care clinics popping up in my area.

They all have advanced treatment & diagnostics (x-rays, broken bones, etc.) which CVS would be hard put to compete with.

Urgent care clinics also seem to have an advantage by being closely tied to hospital labor pools.

CVS would likely have problems staffing up if they decided to offer expanded services which require actual physicians & trained nursing staff.
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Investment Ideas / Re: RADH - Radisson Hotel Group
« Last post by alwaysinvert on Today at 08:12:18 AM »
The pledged shares that represent 20% of the share capital have by all appearances still not been bought by Jin Jiang. I wonder what's going on with them.
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I dont think you can reference the stock price as a guide as mentioned before. The prices have been wrong before for nearly every decision/announcement over the past 5-6 years. It was not a predictor of Lamberth, Trump presidency, Mnuchin comments on Fox, etc, etc. It wasn't a guide then and isn't a guide now.  Shares for both are in total wait and see mode. Nothing more, nothing less.

I look at it a little differently.  The examples you cited were public / binary events where a typical hedge fund couldn't gain an edge with additional research.   The current example is likely different, and the hf sharks -- they are smarter and greedier than many here give credit despite their relative underperformance -- are surely digging in their contacts and avenues to see if something like Moelis is in the cards given the enormous upside potential.  and the market is saying for now, that's not the case.  of course there are some caveats like mnuchin has the tightest vest possible and hasn't started the process yet but i'm trying to be as realistic as possible even though I strongly wish Moelis was implemented for both fairness and policy reasons.
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Investment Ideas / Re: RADH - Radisson Hotel Group
« Last post by alwaysinvert on Today at 08:06:30 AM »
I think this bid is actually a smart attempt to anchor shareholders at a low price so that a future raise seems like a good deal.  I agree that there is no valuation that supports SEK 40 but I also don't think that's where this ends.   They can raise the tender in the future at very little cost so why not start at a low price and go from there?

I think this shows they want to own this (if not, why not just bid 35).  I think the board will recommend that shareholders not accept which will begin a period of negotiations to find a more acceptable price.

Also, AccorHotels recently tendered for the minority shares in its Polish master franchisee Orbis for >8.5x EBITDA.  This is a very good comparable transaction for Radisson. (tender from majority owner, master franchisee etc).  I don't think this gets done at ~6x EBITDA

I agree completely with your assessment. My guess would be that the independent committe says no, but leaves an out for saying yes at a somewhat higher price (43-45), which would put it at a premium comparable to other takeouts with a strong majority owner. Still a stingy takeout but full value probably won't be realized here.

There is still a good opening for an activist to make some noise and it may not be impossible for such an actor to squeeze even more out of the situation - certainly if they are willing to play the waiting game after this mandatory bid has been concluded.

I also note that IBKR has bought over 1m shares at 40 and above today. At least somebody is angling for a higher price.
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and well the common's not showing that at the moment. 

I'm not responding to the gist of your post, but responding only to say that I'd caution against using market prices as a proxy for value or for what the future may hold.  My comment isn't so much for you, but for some reading this board that might have a tendency to read too much into current prices of any security, and especially a situation like the GSE's.

I partially agree, it's not fully efficient.  especially with the buyer base limited due to the pink sheets. 

However if you are Mnuchin and are taking the minority shareholders' interests seriously, you'd likely prefer to avoid a press deluge writing on multi-baggers for hedge funds upon any action; rather, you'd likely leak out positives in increments such that the final action is only a modest gain on announcement day.   imo our hope is that the clock on this process doesn't really begin until after this congress leaves for good.
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