Author Topic: CLWY - Calloway's Nursery  (Read 27053 times)

DTEJD1997

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Re: CLWY - Calloway's Nursery
« Reply #70 on: March 17, 2019, 10:49:21 AM »
Hey all:

I am bit surprised that 2018 numbers were lower than 2017's.  Not terrible though.

SG&A and interest expense is up, leading to the lower income.  I wonder if SG&A were up because of the new location being opened.

Sales were up a little.

In 2019, sales should go up because of the new location. 

If SG&A can move back towards 2017 levels, might be able to hit $.80/share in earnings?

If so, the stock might be able to move up a bit?


writser

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Re: CLWY - Calloway's Nursery
« Reply #71 on: March 17, 2019, 02:32:57 PM »
Maybe I'm being to simplistic but I find it hard to see a super compelling investment here at the moment. ~$60m market cap, more or less debt free. Maintenance CapEx is like what? 750k? So what are we looking at? 10x EV/EBIT and a ~7% FCF yield? Is that honestly so attractive for a microcap retailer with hardly any revenue growth? Why would this be much more attractive than, for example Dillard's?

Now I'm exaggerating a bit here. I see that the FCF yield is relatively juicy, they are returning cash to shareholders and there's a smart guy involved. Probably a very decent stock for a high single digit IRR and there's nothing wrong with that. But surely you guys don't expect this to double again in 2019? Or do you expect huge revenue increases? Margin improvements? Is there lots of value in excess real estate? Or can Kamin squeeze even more cash out of the company? The 2018 numbers suggest to me it is unlikely there are easy levers left to pull. Should this trade at double the multiples? What am I missing?

Would be great if someone could explain to me why this is an 'excellent' stock pick rather than an 'above average' stock pick at the moment because I don't see that at first glance.
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DTEJD1997

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Re: CLWY - Calloway's Nursery
« Reply #72 on: March 17, 2019, 10:12:54 PM »
Maybe I'm being to simplistic but I find it hard to see a super compelling investment here at the moment. ~$60m market cap, more or less debt free. Maintenance CapEx is like what? 750k? So what are we looking at? 10x EV/EBIT and a ~7% FCF yield? Is that honestly so attractive for a microcap retailer with hardly any revenue growth? Why would this be much more attractive than, for example Dillard's?

Now I'm exaggerating a bit here. I see that the FCF yield is relatively juicy, they are returning cash to shareholders and there's a smart guy involved. Probably a very decent stock for a high single digit IRR and there's nothing wrong with that. But surely you guys don't expect this to double again in 2019? Or do you expect huge revenue increases? Margin improvements? Is there lots of value in excess real estate? Or can Kamin squeeze even more cash out of the company? The 2018 numbers suggest to me it is unlikely there are easy levers left to pull. Should this trade at double the multiples? What am I missing?

Would be great if someone could explain to me why this is an 'excellent' stock pick rather than an 'above average' stock pick at the moment because I don't see that at first glance.

Writser:

You very well may be right about some things...Sure, CLWY is PROBABLY not a table pounding bargain...but it is not "expensive".  This is especially the case if they can indeed improve upon sales & earnings as I speculated earlier.

I think I could present a very good case that while DDS is "cheaper" on most financial metrics than CLWY, CLWY is probably a better investment.

Look at the history of the two stocks.  I can remember looking into DDS back when I was in Law School and visiting their Houston Galleria location!  That was over 20 years ago!  They really have not done much of anything since then.  I think they've gone up x2 in price (approximately) and this is in about a 20+ year time frame!  They have also paid some dividends also...but certainly NOT a good investment.  If I recall correctly, they have a dual share structure and the founding family controls all the votes, the board and sets the direction.  Their interests have been RADICALLY different than a shareholder looking for a return on their investment.

Contrast that to CLWY!  My family has a cost basis of LESS THAN ZERO due to dividends paying back the initial investment and then some.  Sure would be nice to get another $.50/share in dividends!  What if the stock goes from 8 to 10?  AND they pay another dividend?  A $2.50 return in the next 10 months is probably going to be A LOT more than what can be gained in DDS.

Finally, and perhaps most important of all...you've got a motivated Peter Kamin!  I trust him much more than family at DDS.  Look at his track record.  I predict he will make some goods moves in the future that benefit shareholders.  Can the same be said of DDS?

Fitz

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Re: CLWY - Calloway's Nursery
« Reply #73 on: August 27, 2019, 05:45:59 PM »
After CLWY's pretty poor first quarter they quietly had a decent Q2.

Revenue - 25,793
Gross Profit - 12,214
Net Income - 4,757

Gross profit compressed from 51% 2018Q2 to 47% 2019Q2
Net margin compressed from 19.5% 2018 Q2 to 18.4% 2019 Q2

SGA and Interest expense increased due to 21st store addition, without commensurate increase in revenue, and currently weighting on net income.
SGA and increased interest expense added 1.3 million to expenses in first 6 months with rev decline of 1 mil over same period.

CLWY did do a really good job of burning down some inventory to the tune of 2.7 million reduction and were able to get 7 million of cash flow from operations.

Anyone local have any insight on 2019 weather in Q1. Also looks like the Katy, TX property has come off loop net, not sure if this is due to pending sale or no interest...

writser

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Re: CLWY - Calloway's Nursery
« Reply #74 on: October 23, 2019, 04:12:02 AM »
For the Peter Kamin fans TTS might be an interesting stock to take a look at. -66% yesterday. A SPAC dumped this retailer on the public. Kamin's on the board. What's he doing in this trainwreck? Some juicy stories here .

Though I have to say: it looks like it might be a cheap train wreck. Insiders have been buying a bit the past few years and own ~30%. Might be a nice investment if they can execute the Kamin playbook. Probably too hard for me.
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Foreign Tuffett

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Re: CLWY - Calloway's Nursery
« Reply #75 on: October 23, 2019, 05:52:06 AM »
For the Peter Kamin fans TTS might be an interesting stock to take a look at. -66% yesterday. A SPAC dumped this retailer on the public. Kamin's on the board. What's he doing in this trainwreck? Some juicy stories here .

Though I have to say: it looks like it might be a cheap train wreck. Insiders have been buying a bit the past few years and own ~30%. Might be a nice investment if they can execute the Kamin playbook. Probably too hard for me.

I haven't looked at TTS in two years, but my conclusion back then was that Floor & Decor was going to eat its lunch given the huge difference in gross margin (close to 30% at the time). Looks like TTS is still printing ~70% gross margin #s, so it's not hard to see why SSS are declining.

Peter Kamin was buying TTS shares in the open market in July 2017 at as high as $14.50!

writser

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Re: CLWY - Calloway's Nursery
« Reply #76 on: October 23, 2019, 06:57:15 AM »
Somebody is an eager buyer today. Will be interesting to see if it was Kamin. But it looks like it is a boiler room / Sykes / greater fool favourite today ( https://twitter.com/search?q=%24tts&src=typed_query&f=live )
« Last Edit: October 23, 2019, 07:07:29 AM by writser »
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mwtorock

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Re: CLWY - Calloway's Nursery
« Reply #77 on: October 23, 2019, 07:12:29 AM »
i mean i got tiny bit tts yesterday purely on the technical forced selling from going dark.

longer term though, anyone familiar with Kamin to comment whether he would take advantage of minority shareholders?

CLWY tender looked like a low ball offer in 2016?

Another case was Abatix buyout at about $15, which was about 30-40% premium to market prices at that time. But it did not look like minority shareholders had any choice...

writser

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Re: CLWY - Calloway's Nursery
« Reply #78 on: November 08, 2019, 12:32:04 PM »
I'm hijacking this thread but TTS still looks intriguing. I might open a topic about it if it weren't for the fact that I hardly know anything about the company. After a few hours of DD I can't say I'm super enthousiastic about it. Still, Peter Kamin bought ~4.3m shares the past three weeks, close to 12% of shares outstanding. On top of that another insider and private investor, Peter Jacullo, bought another 2.4m shares or ~5%. Pretty impressive. I wouldn't be surprised to see Peter Kamin taking this private at some point.
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porcupine

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Re: CLWY - Calloway's Nursery
« Reply #79 on: November 08, 2019, 12:45:56 PM »
I will open one.
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