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Adib Motiwala  

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  • Outerwall: Heads I Win, Tails I Don't Lose Much [View article]
    Good write up. Your screen shots for the bull bear base cases and text do not appear to match.
    Apr 27, 2015. 02:43 PM | Likes Like |Link to Comment
  • Motiwala Capital - Q1 2015 Letter To Investors [View article]
    I think BCOR will keep all their businesses. They could spin TaxAct or spin the legacy infospace business as well. No indications of that. So cannot speculate on that.

    I do not think there is issue staying afloat. BCOR produces cash flow and can service debt fine.Its not in deep trouble. its just not smart about its M/A . Management seems obsessed with m/a to utilize NOLs, even if the acquisitions are poor quality.

    They acquired HowStuffWorks.com. I do not think its profitable else management would have said so , like in the case of MonoPrice. And they over paid for it big time.
    Apr 26, 2015. 01:03 AM | Likes Like |Link to Comment
  • Motiwala Capital - Q1 2015 Letter To Investors [View article]
    There is also cash which almost covers the entire debt. So essentially net debt free. And then the large investments after backing out the deferred taxes (on unrealized gains on BMO shares) backs most of the market cap. I had a 5-6x on the asset manager. Lets see how it works out.
    Apr 26, 2015. 01:01 AM | Likes Like |Link to Comment
  • Motiwala Capital - Q1 2015 Letter To Investors [View article]
    Thanks Mintzmyer for reading!

    For now I am keeping those names private. I

    Joshua,
    Guardian Capital has a very nice presentation on their site from 2014 annual meeting. that is the best place to start. An institutional asset manager that is profitable and growing with lot of protection in terms of assets/ investments such as the large BMO stake that i mentioned in the letter. There is no immediate catalyst for this one. Hopefully management just continued growing business profitably and you always have the discount due to investments.

    thanks
    Adib
    Apr 23, 2015. 06:15 PM | Likes Like |Link to Comment
  • Outerwall Is A Great Contrarian Story [View article]
    Last year company took on debt to do the large tender offer. If they borrow another $200m, their net debt would be $1B or so. and would go over the 2.2x debt to ebitda limit management has said they would stay within..
    Apr 22, 2015. 09:17 AM | 1 Like Like |Link to Comment
  • Outerwall Is A Great Contrarian Story [View article]
    Couple of questions

    Even better, the management raised its share repurchase authorization by $250 M to $414 M in its last conference call, which is sufficient to reduce the share count by an additional 34% at the current stock price. If this reduction materializes, it will boost the earnings per share [EPS] by about 51% (=34/66), which will provide a great lift to the stock, as it is already particularly cheap compared to its EPS.

    Can you explain this statement with actual numbers. I dont get the math.

    Also, why do you think the entire $414m will be bought back this year? It could be over 2-3 years. The management guided to a max debt to ebitda level of 2.2x. I don't think they want to take on debt beyond that.
    Apr 21, 2015. 03:09 PM | Likes Like |Link to Comment
  • Tandy Leather Factory: This Wide Moat Micro-Cap Is A Bargain [View article]
    Very nice write up. Thanks for sharing. The only thing i saw from cash flow statement is inventory detracts from FCF and as a result, FCF generation is weak relative to Op Income.
    Apr 17, 2015. 11:38 AM | Likes Like |Link to Comment
  • Something At GameStop Doesn't Add Up [View article]
    Todd,

    Could the answer be the revenue increase is GAAP revenue ( increase of $257m) while the increase in digital is non-GAAP and that increase ($732m) is not included.
    So where is the question of a difference of $500m?

    I take your point about the difference in gaap and non-gaap for digital is very large. but that does not mean you accuse the company for fudging numbers?

    The short thesis against GME is in its 6th or 7th year and counting...

    Ofcourse, no one will question the following about gamestop
    1) Free cash flow $400m a year on avg last 3-4 years.
    2) low valuation 10x FCF
    3) capital allocation - returns almost all FCF to share holders via dividends and buybacks.
    4) Does anyone report how much it has paid in dividends, buybacks and debt pay down in last 4 years?
    5) does anyone talk about the investments in new concepts and that they are profitable?
    6) does anyone talk about tenure of the management? and the fact that the CEO is required to own 5x his salary in stock?
    7) net cash balance sheet of $250m..
    8) short term leases

    Ofcourse, ending articles with " You just can't make up sales. " is a good and quick way rather than taking the time to address my points.
    Mar 28, 2015. 12:25 AM | 2 Likes Like |Link to Comment
  • Visteon: Interesting Company, But Shares Look Fairly Valued Following M&A Transactions [View article]
    Good write up. Few points

    1) You did not comment on the NOL assets?
    2) On the acquisition, you mentioned $50m of corp overhead. Well can't a lot of that get eliminated and then the EBITDA is much higher at $290m. And multiple is lower
    3) What stock price and share count did you use to compute EV of $1400m.

    thanks for sharing
    Adib
    Mar 27, 2015. 12:39 PM | Likes Like |Link to Comment
  • Vectrus: Black Swan On Horizon Could Drive Shares Higher [View article]
    Or you a much lower price...
    Mar 27, 2015. 12:11 PM | Likes Like |Link to Comment
  • Why Your Only Edge With Large Caps Is Valuation [View article]
    its just a term used to indicate that if your investment horizon is longer and most people are bearish in short term but you are right over long term ( or relative to their time horizon ) you do fine.
    Mar 20, 2015. 01:34 PM | Likes Like |Link to Comment
  • Outerwall - The Company Everyone Loves To Hate [View article]
    thanks Wilson!
    Mar 20, 2015. 12:18 PM | Likes Like |Link to Comment
  • Why Your Only Edge With Large Caps Is Valuation [View article]
    valuation and patience or time horizon. some people call it time arbitrage.
    Mar 20, 2015. 09:39 AM | 2 Likes Like |Link to Comment
  • Outerwall - The Company Everyone Loves To Hate [View article]
    Wilson,

    In the first table, you have 3.92 m shares bought at $66. That uses up the entire FCF you estimated of $259m. You need to subtract some for the dividend right? Or is my match off...
    Mar 20, 2015. 09:30 AM | 1 Like Like |Link to Comment
  • Outerwall - The Company Everyone Loves To Hate [View article]
    Wilson,
    With the dividend in place, 100% of FCF will not be used for buybacks. Just subtract the amount paid in dividends to account for that.

    I am long OUTR.

    I believe dividends and buybacks makes sense. With $200m+ in FCF, there is room for both. Management is investing in ecoATM already and adding Coinstar kiosks as well. Other than that, this is a mature biz and the cap allocation reflects thats. Thats how mature biz should be run. I would prefer a more balance approach to dividend and buybacks and some debt reduction as well. Maybe 33% each or something similar. Dividends anyways will continue to increase just with buybacks. See GME for a similar cap allocation and hated story.

    OUTR has had 3-4 projects shut down so they have tried things and they did not work. Cannot piss away cash for the heck of growth like most other companies do. Run this company for cash and give it back to the owners === we share holders.
    Mar 19, 2015. 07:17 PM | Likes Like |Link to Comment
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