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Investment Ideas / Re: ALS.TO - Altius Minerals
« Last post by linealdin on Today at 12:29:06 PM »
http://www.sokomaniron.com/news/2018/11/16/sokoman-iron-cuts-24-90-m-of-33-56-g-t-au-at-eastern-trend-nl

Sokoman hits a spectacular follow-up hole at Moosehead: 24.90 meters of 33.56 g/t gold. (Altius holds a 2% royalty and a lot of equity in Sokoman).

Geology is complex. They missed on the other holes. But the grades x lengths of the two holes that hit are clearly worldclass..

Some analysis:

https://palisade-research.com/sokoman-iron-deposit-confirmed/
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Investment Ideas / Re: ADS - Alliance Data Systems
« Last post by vince on Today at 12:28:42 PM »
My typical holding period is multi-year and I look at multiples as heuristics for a DCF. So if you get to higher numbers on the DCF based on your FCF yield and growth estimates it should distill to a much higher multiple in the SOTP. So forget the re-rating for now, my question is what do you think intrinsic value is? What's the upside / downside?

I really dont understand the first 2 sentences.  I am simply stating that when you buy something at a 10 times multiple of fcf, and assumimg its growing at least with gdp (without needing much of the 10 percent yield to grow with gdp) you will realize a great return with no re rating, assuming they dont burn any of the fcf.  Now when you find yourself in a situation like that you have a better chance of unloading at a higher multiple because historically a higher than 10 multiple is justified assuming interest rates average less than say 7-8 percent.  So u basically have the luxury of not letting the short run unpredictability of the multiple enter into and cloud your valuation.  Now as far as what I feel a proper multiple is for ADS, I think you could easily get to 15 or more with the growth rates and returns they have keeping in mind this is probably not a 20 multiple business over the longer term.  So to summarize, I dont have a specific answer for you because I don't really know except to say that I feel there is a very high probability that it is worth more than 10 times and a similar probability that it will average a higher multiple than that over next 5 years.  Now if the asset sales produce a 7-8 multiple for the stub, then I will increase my investment, all else equal, hence the initial questions surrounding the values of the 2 subs being sold.  My apologies if I sounded rude, not my intention
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Investment Ideas / Re: ADS - Alliance Data Systems
« Last post by KCLarkin on Today at 12:25:09 PM »
"Ander, a true investor would not bank on a re rating or a quick rise in price." I guess I'm not a true investor ;).

My typical holding period is multi-year and I look at multiples as heuristics for a DCF. So if you get to higher numbers on the DCF based on your FCF yield and growth estimates it should distill to a much higher multiple in the SOTP. So forget the re-rating for now, my question is what do you think intrinsic value is? What's the upside / downside?

I would not use an analyst's valuation. They are (almost) always going to use the current stock price as their starting point and adjust their assumptions accordingly.

I think the other poster is saying that the investment merit doesn't depend on a re-rating.

Let's assume that ADS will forever trade at 10x. Will grow receivables at 10% per annum. Reinvest at 20% ROE. Payout the rest as dividends. In that scenario, you would earn 5% yield + 10% growth = 15%. This seems like a good investment even if the stock doesn't re-rate.

---

What you are saying is not wrong, it is just the inverse of what Vince is saying.

Intrinsic Value: Stock is trading at $200 but it is worth $300, so I will buy.
Investment: Projected returns are 15%, so I will buy.

Implicitly, the "investment" view is saying that 10x is not the right price. But it doesn't care what the "right" price is. And you can conveniently ignore the discount rate quagmire.

Personally, I always look at my projected returns from the current price. I never try to calculate the intrinsic value or do a DCF. If I think I can reasonably expect to earn 15%, then I buy. This works well for GARP investments but doesn't work as well for more traditional value investments. In this case, I think there is the opportunity for 15% underlying returns (on the stub) plus a multiple re-rating.
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Politics / Re: WTF is going on in Sweden
« Last post by flesh on Today at 12:23:33 PM »
You are correct Schwab. I was on #2 whiskey/coke and wasn't paying attention.

I subscribed to NYT for one year and read nearly every paper a year or two ago. I was constantly astounded as to how left leaning it was compared to WSJ which is near center afaik. Not much different than MSNBC in tone. The indoctrination level felt high, like being in church growing up. Very one sided. Certainly not antifa far left.

Also, although the journalistic quality was high, they rarely used evidence to make any points where it was warranted, it was frequently feelings.  Which makes sense considering lefties test higher in compassion and openness.

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Investment Ideas / Re: ADS - Alliance Data Systems
« Last post by LowIQinvestor on Today at 12:13:13 PM »
Long term I think this is worth $300 + per share. Yes seriously...

Too much analysis is assuming a static / status quo. I think they have much bigger ambitions than what they currently do. The business will evolve dramatically.

Mgmt quote from Q3 call:

" we expect to be a much larger payments solution outside of private label cards"
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Investment Ideas / Re: ADS - Alliance Data Systems
« Last post by Rasputin on Today at 12:11:42 PM »
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Investment Ideas / Re: ADS - Alliance Data Systems
« Last post by vince on Today at 12:09:48 PM »
"Ander, a true investor would not bank on a re rating or a quick rise in price." I guess I'm not a true investor ;).

My typical holding period is multi-year and I look at multiples as heuristics for a DCF. So if you get to higher numbers on the DCF based on your FCF yield and growth estimates it should distill to a much higher multiple in the SOTP. So forget the re-rating for now, my question is what do you think intrinsic value is? What's the upside / downside?



So are people playing for a $240 fair value?  20% upside doesn't seem attractive enough given the possibilities of credit turning more negative. Their adjusted EPS #'s also have a lot of adjustments.

I used to following this company very closely about 6 years ago, but have not followed as closely since. Their track record hasn't been as great overall since then it seems. I'd like to be a buyer here, but I want to make sure there is appropriate upside given the downside risks.



For those trying to get a rough idea of SOTP:

Here are the 2017 Annuals & a bank's valuation (attached)------- ( which I believe is too conservative )

Loyalty One:
Revs     = $ 1.3 B
EBITDA = $ 260 M

Epsilon:
Revs       = $2.3B
EBITDA   = $480 M

Card Services:
Revs      = $4.2B
EBITDA  = $1.35 B


Ander, a true investor would not bank on a re rating or a quick rise in price.  He would look to his starting fcf yield and the potential growth in cash flows.  The increase in multiple, if it happens is icing on the cake.  My initial inquiry was to see how much cash the sales would bring in so I could figure out mt starting fcf equity yield for the card stub

Ander, my bad, I didn't mean to insinuate that but you asked about playing only to a 240 value and I was just trying to describe how that didnt matter to the way I understand valuation.  I will choose my words more carefully
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Can you link the hearing? I didn't realize Corker was speaking yday.

Chris, did you see the 2 questions addressed to counsel on Collins? One is specifically on the NWS. That has to be good news, no?

Also, did anybody hear Corker today at the hearing? He said something like 'the wh will take some actions and then leave other things to congress' or similar. Looks like he has accepted the fact there will be administrative reform. He then insisted on the GSEs being SIFIs. Probably, thinking the only way to contain them once out c-ship is by over-regulation/overseeing. He seems to be anticipating, perhaps correctly, this is going the way of Treasury/FHFA.
It's around minute 43'.

https://www.banking.senate.gov/hearings/10/22/2018/the-semiannual-testimony-on-the-federal-reserves-supervision-and-regulation-of-the-financial-system

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Investment Ideas / Re: CTL - CenturyLink
« Last post by longinvestor on Today at 11:59:30 AM »

CTLs huge fiber footprint is needed and someone will pay for the use. We will not see it going in chapter 11


Someone will certainly need to pay. Whether they need to pay enough to support an EV of $60bn is another thing. But I remain long, for now, and I hope you are right.

CTL is sitting on the best fiber assets. Comcast inked a DF deal with LVLT in 2005 for 20 years (I believe); Too bad for us shareholders that it was a giveaway. But we will see how the marketplace is when that that comes up for reneg. It is only 6 years from now (sigh!). Comcast Business nationwide rides on that DF. Keeping a seat at the table in a fully consolidated telecom world is key. Getting paid a (fat)dividend to wait for that is a big deal for long termers like myself.
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Investment Ideas / Re: NVR - NVR Inc.
« Last post by KJP on Today at 11:55:45 AM »
Has anyone looked at the stock option grants to management?  To me it is enough to kill the thesis. 

Does it make sense to look at one year and draw conclusions about the management/investment? I know shares outstanding have declined significantly over time. I don't know if management has gotten greedier in recent years, other than the year you cite.

The company has new stock incentive plans every four years, e.g., 2010, 2014, 2018.  They issue a very large number of options during the year in which the new plan is put in place, and then issue significantly fewer options in other years.  Some of the options are also subject to performance vesting, while others vest based solely on continued employment.  So, to get a fair picture of option issuance, you need to look at four-year intervals.  Is the issuance under the 2018 plan any different in size relative to shares outstanding than the prior issuances?

Also, what do you mean by income hasn't increased in a decade?  2018 will be far higher than 2008, though that's not a fair comparison because 2008 was near the bottom and included a large impairment charge. 

You're right that NVR is just now approaching the earnings it had in 2005, but that was the peak of a bubble.  In 2005,  there were 1.2 million housing completions in the three census regions in which NVR competes (Northeast, Midwest, South), and NVR closed on 13,800 houses.  In 2017, there were only 615,000 completions in those regions, and NVR closed on over 15,900 houses.  So the company has had massive market share gains.  The last  year that completions were comparable to 2017 was 2008, when completions in those three regions were 629,000.  As I noted above, NVR is far more profitable today and has a far greater market share today than it had in 2008. 

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