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  • Conduril: Halftime Update On My Highest-Conviction Pick For 2014 [View article]
    I wouldn't count on those losses getting reversed, although predicting exchange rate movements is of course pretty hard. But Conduril does business in various countries in Africa with higher interest and inflation rates and if interest rate parity holds the African currencies are expected to depreciate versus the euro.
    Jul 10 06:25 AM | Likes Like |Link to Comment
  • Conduril: Halftime Update On My Highest-Conviction Pick For 2014 [View article]
    Conduril doesn't release quarterly statements so it's unclear how they are performing so far in 2014, but Mota-Engil is for example rapidly growing in Africa, so I think this is also good news for Conduril.

    The low operating cash flow compared to earnings is mostly related to timing differences between when income is recognized and when payments are made. In 2013 deferred liabilities (mostly income to be recognized) dropped to 35 million from 55 million. That already explains two-thirds of the difference, and the other one-third is mostly related to the FX losses that bypassed the income statement. Working capital remained roughly unchanged indeed.
    Jul 9 12:56 PM | Likes Like |Link to Comment
  • United Development Funding - Short-Term Upside For Small Investors [View article]
    Yes that is possible depending on your broker and (the lack of) applicable tax treaties between the US and your home country and/or the country of your broker.
    Jun 12 12:07 PM | Likes Like |Link to Comment
  • Schuff International: Attractively Priced Thanks To Turning Construction Cycle [View article]
    I'm not too enthusiastic. I don't like that HCHC isn't extending the offer to minority shareholders, and obviously the fact that management is willing to sell for a bit more than $31 probably is saying something about the intrinsic value of the company.
    May 13 12:39 PM | Likes Like |Link to Comment
  • Going Private Arbitrage Offers Over 70% Annualized Return With Medium Risk [View article]
    Precies, als er een succesvolle manier is om een dergelijke corporate actie aan te passen in het nadeel van kleine aandeelhouders is het een artikel op SA...
    May 9 08:44 PM | 3 Likes Like |Link to Comment
  • ADRs Of Allied Irish Banks Worth Just $1.19; Will Drop To That Level Within 7 Months [View article]
    I have calculated the VWAP from 10 April 2012 to today based on Bloomberg data. The VWAP is €0.0993, and because trading volume has been higher in 2014 than in 2012 and 2013 the number of shares remaining that need to be sold is a lot lower than what you calculated. See: http://bit.ly/1ihmYNc for some more details.
    May 6 07:49 AM | Likes Like |Link to Comment
  • Schuff International: Attractively Priced Thanks To Turning Construction Cycle [View article]
    Thanks!
    Apr 28 02:35 PM | Likes Like |Link to Comment
  • D.E. Master Blenders 1753: A Low-Risk Squeeze-Out With An 8.2% Gross Return [View article]
    Great idea. I tried to buy this earlier this year when the spread was even more attractive, but unfortunately was unable to find a broker that could buy this.
    Mar 14 09:20 AM | 2 Likes Like |Link to Comment
  • Emeco Holdings - The Bear Case [View article]
    Thanks for your article, always great to read a second opinion! But as you might have guessed I don't agree with everything you wrote though.

    * I don't think moderately declining sales at Caterpillar and Komatsu imply anything too negative for Emeco. If there is still a big market for new equipment than there should also be a market for second hand equipment, and while you can easily discount your second hand equipment Caterpillar and Komatsu cannot reduce the price of new equipment by a large amount before they start losing money on sales (they have a 25% gross margin and 10% net margin or so from the top of my head).

    * In addition to this: mining equipment has a relative short life (Emeco writes their equipment down in ~7 years) so every single year the world stock of mining equipment is depleted by ~10% (to round it down a bit to account for idle equipment). Because of the depreciation of existing equipment the resale value of old equipment should remain reasonable coupled to the production costs of new equipment. We aren't talking about ships or oil rigs that can remain in use 50+ years, and if there is oversupply it can takes a decade before a new balance is found.

    * Equipment sales this year are in fact materially higher than in previous years. The table above doesn't include disposals completed after the first half of FY14. Those add an additional A$35 million, making FY14 already the year with the highest rate of asset disposals while the year has 4 more months left (and the asset base started smaller).

    * I agree about the sensitivity of the valuation and the high downside and upside potential because of that. Because of this I haven't taken a big position.

    * I also think the new debt refinancing is negative because the company is paying a lot more interest now just to get rid of the covenants. At the low end of the FY14 EBITDA guidance meeting those covenants would have been tight. Maybe the CEO - that doesn't have a big equity stake - doesn't want to risk a possibly bankruptcy. Or maybe management has been painting a picture for that is too rosy...
    Mar 11 06:10 PM | 1 Like Like |Link to Comment
  • Emeco Holdings: A Bet On Liquidation Value [View article]
    So what give it away that this is a balance sheet play? It wasn't the "A Bet On Liquidation Value" part in the title, was it? I guess it's clear that you don't like balance sheet plays which is fine; that's what makes a market. But if you think that a growth case is a central tenet of the thesis you have misunderstood what I was trying to communicate.

    About the liquidity and the value of it's assets: you cannot argue with the fact that they have been able to turn their equipment into cash: more than A$60 million this year already. And perhaps they are able to sell their equipment to other companies exactly because they are looking for a good deal, and buying used equipment at a discount offers better value than brand new equipment. What would happen with Caterpillars margins if they had to offer an additional 20% discount? Hint: it wouldn't be pretty.

    Also note that Caterpillar is not active in the rental business. What they do is provide financing for buyers, but it doesn't always make sense to buy all your equipment/lease it long-term. Ask yourself why Emeco has been successful for 40 years, how could that have been if it's business model is according to you doomed to fail?
    Mar 11 06:17 AM | Likes Like |Link to Comment
  • PD-Rx Pharmaceuticals: Growth At A Bargain Price [View article]
    The link to the latest audited financials can easily be found in the latest annual report. That said; information doesn't have to be online to be available in the public domain...
    Mar 5 07:12 AM | Likes Like |Link to Comment
  • PD-Rx Pharmaceuticals: Growth At A Bargain Price [View article]
    I haven't done that. I agree that a bit more IR activity wouldn't hurt, but the #1 priority should of course be running the business. What I do think is encouraging to see is that the latest annual report contained a lot more information than in the previous years: they aren't ignoring outside shareholders.
    Feb 13 10:28 AM | Likes Like |Link to Comment
  • Rella Holding: Double Share Buybacks Are Creating Shareholder Value [View article]
    They depreciate their office buildings over a 50 year period so depreciation of land and buildings isn't huge. You can check the exact numbers in Aller's annual report.
    Feb 13 06:46 AM | Likes Like |Link to Comment
  • Rella Holding: Double Share Buybacks Are Creating Shareholder Value [View article]
    That's not a meaningful number, probably would need to check the companies bylaws how that is exactly calculated. But the payout ratio of Aller is 35% in most years, so pretty standard.
    Feb 7 01:56 PM | Likes Like |Link to Comment
  • Rella Holding: Double Share Buybacks Are Creating Shareholder Value [View article]
    If you think that the macro outlook for Danmark and Norway is negative you probably shouldn't invest in Rella. I don't have a view on that: I don't think I can predict such macro issues. And while there are of course a few things that will drive intrinsic value higher (continuing earning from the publishing business, income from the securities, share buybacks) that's not really important. If you can buy it today below intrinsic value you already have a good deal.
    Feb 7 01:55 PM | 2 Likes Like |Link to Comment
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