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Adam Muller

 
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  • Carmike Cinemas: It's Time To Revisit The Movies [View article]
    There are several factors that can lead to EBITDA growth diverging from box office.

    You have to look at price, concession per patron, and screen count. Carmike purchased a 40 screen chain last year in Q4. By my count Carmike will average 2,245 screens in Q3 2012 vs 2,217 in Q3 2011, a 1.3% gain. This can make up for approximately half of the negative 3% Q3 box office decline.

    It's also worth noting that CKEC could be a great acquisition for a chain like RGC. In addition to additional scale helping RGC negotiate lower film rental costs, CKEC has approximately $20mm in annual G&A, a material portion of which could be captured as synergies. I believe an acquirer like RGC or CNK could pay well into the $20 range and still have the deal be accretive to earnings. While I do not recommend investing in CKEC (or any company for that matter) just on the potential for a take-out, it does add to the margin of safety of the investment.
    Sep 2, 2012. 04:32 PM | Likes Like |Link to Comment
  • Carmike Cinemas: It's Time To Revisit The Movies [View article]
    A very well written article and I agree completely. I don't believe the bomb threat had a material impact given i) it was dealt with quickly and ii) some movie-goers were likely not even aware of it.

    My model conservatively suggests Q3 EPS of $0.21 assuming no increase in average ticket price or concessions per patron, attendance per screen down 3% vs Q3 2011 but the average screen count is 2,245 vs 2,217 in Q3 2011 (Carmike acquired MNM in Oct 2011). As a result of the increased screen account my model suggests aggregate attendance falling only 1.8%.

    I don't expect ticket prices to increase in the quarter given the success of the Dark Knight, which was not available in 3D. Also, given the adult nature of the film concession per patron growth was likely also muted, although it may be greater than 0%, which is upside to my $0.21.

    I also agree that the movie slate in Q4 is extremely strong. Further, as a long term investor, I want to take a view on the movie slate for the next few years. With a Hobbit film each December for 3 years, Iron May 3 and the Hangover 3 in 2012, a Super Man reboot produced by Christopher Nolan in 2012, sequels to Thor and Captain America in production in 2013 and 2014, respectively, a new Hunger Games film in November 2013, 2014, and 2015, sequels to the Avengers and Avatar in 2015, there are ample tent pole movies that will generate significant buzz and box office.

    Carmike is a great long-term way to participate.
    Sep 1, 2012. 10:55 AM | Likes Like |Link to Comment
  • Dark Knight Index: Batman's Success Really Matters [View article]
    You are neglecting to list Carmike Cinemas (CKEC), which in additional to benefits from the 2012 box office, is less expensive than Regal or Cinemark, operates in smaller cities and towns with less alternative entertainment options, and is a potential acquisition target for either Regal or Cinemark.
    Jul 26, 2012. 12:52 PM | Likes Like |Link to Comment
  • Joe's Jeans - The Potential For A 200% Return Is Supported By Q2 Earnings [View article]
    Cotton is a very small input in Joe's denim product. Even a significant increase in cotton pricing has a minimal impact on Joe's margins.
    Jul 17, 2012. 01:54 PM | Likes Like |Link to Comment
  • Joe's Jeans - The Potential For A 200% Return Is Supported By Q2 Earnings [View article]
    Thanks for the comment and I hope it plays out the way you describe. Fashion is tricky and they need to stay on top of trends, etc. It wasn't that long ago that they got stuck with a lot of jeggings inventory. They also need to be disciplined in store openings and carefully select their locations. For example, the SoHo New York store was a long time coming but has been exceptional. I like the product and think the strategy makes sense. You make an excellent point that at these levels it is largely a retail stock - it will take some time before it can be appealing to institutional buyers, but I'm rooting for it.
    Jul 17, 2012. 01:43 PM | 1 Like Like |Link to Comment
  • Billionaire Steven Cohen Recently Purchased These Dividend Stocks [View article]
    JC Penney canceled their dividend in May when they reported Q1 earnings.
    Jul 2, 2012. 04:26 PM | 2 Likes Like |Link to Comment
  • Tronox: The Newly Vertically Integrated Titanium Dioxide Producer Could Be A Double [View article]
    Thanks for the question. I believe the sell off is technical in nature as distressed debt investors who acquired their equity in Tronox and event-driven investors roll out of the stock now that it has i) completed the Exxaro deal, ii) listed on the NYSE, and iii) announced the near-term capital deployment plan. The shareholder base turnover could continue in the short-term. However, with the quarterly dividend now known and offering a significant yield dividend investors should be taking a very hard look at the company. Further, while some short-sighted investors may view the lack of a near-term special dividend as a negative, I believe that management's decision to advance a significant buy back because of the weakness in the stock is a very bullish signal.
    Jul 2, 2012. 08:48 AM | Likes Like |Link to Comment
  • Darling International's Joint Venture With Valero Makes This Value Stock More Valuable [View article]
    Thanks for the comment. I think about it as follows. DAR will sell the fat input to the JV at the market price. So from a fat revenue perspective DAR is agnostic as to whether it sells the fat to the JV or on the open market. However, the JV then turns that fat into bio fuel,s sells it at a profit, and DAR makes 50% of that profit. Finally, since DAR is selling to the JV, that "supply" is no longer available to the current buyers - reducing the supply, assuming demand remains constant, will increase the price. Hope this makes sense.
    Jun 27, 2012. 10:38 AM | Likes Like |Link to Comment
  • Tronox: The Newly Vertically Integrated Titanium Dioxide Producer Could Be A Double [View article]
    I would not be surprised if some people shorted as it listed on the NYSE for technical reasons. Perhaps high yield investors that have equity would look to sell post-listing. Other post bankruptcy equities like LYB have traded this way, but eventually they get out and the stock migrates towards its intrinsic value. The key is to be patient.
    Jun 25, 2012. 01:08 PM | Likes Like |Link to Comment
  • Apple: The Growth Of The iCloud User Base Is The Most Important Metric To Focus On [View article]
    Thanks for the comment. The 100% iPhone ownership is just an assumptions - the idea being that to be on iCloud you have at least 1 Apple device...whether it's an iPhone or an Ipad is not as relevant to the analysis. The focus should be on what percent of iCloud users have more than 1 device...2,3,4, etc. And the conclusion is that most probably do or will and those devices will get upgraded over time as new versions are released.
    Jun 4, 2012. 12:58 PM | 2 Likes Like |Link to Comment
  • Facebook: More Risk Than Reward, Wait For Q2 Earnings Before Investing [View article]
    Thanks for the question. I'm not certain what you mean by income from the IPO. Certainly the balance sheet as of June 2012 will reflect the cash proceeds from the IPO, but this is just the cash raised by the company from selling ownership in the company and is not earnings. The focus will be on Q2 sales growth.
    May 29, 2012. 08:24 AM | Likes Like |Link to Comment
  • No Real Faith In True Religion [View article]
    I think your short thesis is misguided and dangerous. Joes Jeans reported last week and had strength in their wholesale business. TRLG may show stabilization or even growth. Further, cotton is a very small component of the cost of high end jeans and should not have a material impact either way. TRLG also has a strong balance sheet. I believe the largest risk would be if they missed a fashion trend and sales fell as a result. My impression is they they are on trend. With strong retail sales I think a short on TRLG is risky.
    Apr 16, 2012. 09:47 PM | 1 Like Like |Link to Comment
  • Lions Gate Entertainment Has More To Offer Than 'The Hunger Games' [View article]
    Interesting article, but you don't seem to quantify anything. How does Lionsgate get paid for Anger MAnagment? What do they get per episode? What do they get for each Breaking Dawn DVD? I agree with your premise but it's important to understand how it translates to earnings and cash flow for LGF.
    Mar 30, 2012. 11:38 AM | Likes Like |Link to Comment
  • FXCM, Inc.: A Small Cap Name With a Big Cap Future [View article]
    Thanks for the note. I am happily still long FXCM and think that there is more growth to come. I am very bullish on the deal they did with eTrade and the downward direction of the yen vs the USD is likely resulting is significant F/X volume in Japan, one of the largest F/X markets. It's important to note that the U.S. is a small market for FXCM relative to Asia, where F/X is considered an asset class.
    Mar 27, 2012. 06:49 PM | Likes Like |Link to Comment
  • Darling A Buy Before Earnings Reveal The Full Year Impact Of Griffin Acquisition [View article]
    Excellent point. Further near-term upside.
    Feb 1, 2012. 01:39 PM | Likes Like |Link to Comment
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