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Austin Lehman's  Instablog

Austin Lehman
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I worked at Ernst & Young in Audit, focusing primarily on real estate companies. I now work at a local public accounting firm in Indianapolis, IN. I focus primarily on small cap companies with few analysts following them, as I believe individual investors may be able to compete at the small... More
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  • News and Q2 predictions
    Wow, huge news for CNU today!!! Values the company at 6.45/share. The acquisition makes sense for MDF as well: Bought CNU at 14.6 forward P/E and 1.1 forward annual revenue (based on my expectation of .44 EPS and $335M of sales for year ending 6/30/11). I would expect MDF to trade at 12 times 12/31/11 earnings due to its diversification of earnings from this transaction. I expect 12/31/11 EPS to be around .76, ignoring one time transaction costs. This values the company around $9/share, obviously with more risk due to it using debt for a large portion of the acquisition. Still, though, as they alluded to in the press release and as Wellpoint showed in their acquisition of Caremore, this does appear to be the industry to be in over the next 5-10 years.
    This also reminds me why I was not listening to Zack's, who had them on a downtrend alert and illustrates to me the shortfalls of purely technical trading.
    A few more random thoughts:
    CLCT- I expect CLCT's stock price to drop when 6/30/11 earnings are released and its P/E resets to around 20 (.76 EPS at current stock price), the change in P/E is due to tax credits taken in the prior year whereas none will be taken in the current year. The company continues to perform well but a 20 P/E may be high/
    VSEC- I am looking forward to reading its terms of financing.
    JPM- still waiting for banks to recover...
    LULU- growth expectations have not changed significantly. I believe there is not a ton of upside at the current price but that its price will not drop until its growth expectations drop, which could still be a year or 2 away.
    EXLS- would like to jump in around $22/share. High growth company that has been performing well.
    Jun 27 7:50 AM | Link | Comment!
  • VSEC Debt

    Saw this today- "In connection with its acquisition of WBI, VSE entered into a five-year $250 million senior credit facility with a bank group that includes a $125 million revolving credit facility and a $125 million term loan." I am curious about the terms of the loan, but it looks like we will have to wait until the next 10Q to find out more.

    Tags: VSEC
    Jun 06 10:26 PM | Link | Comment!
  • Recent Earnings Releases
    Collector's Universe's (NASDAQ:CLCT) management continues to perform well. I am calculating a forward P/E of 23, so stock is potentially starting to get pricey, as management appears to be expecting approximately 8-13% growth over the next few years. This growth expectation comes from management expecting to cash flow its dividend in the next 3-5 years. While not a direct correlation, CLCT is definitely still impacted by commodity prices. If commodity prices drop significantly, that could be a selling indicator.

    VSE Corporation (NASDAQ:VSEC) had a very disappointing quarter. I underestimated how bad things were and have sold my position. Also, the quarter was worse than the EPS number suggests based on the earnout liability reducing and thus increasing income. I am writing an article that goes more in depth, but suffice it to say I have a "sell" rating on VSEC probably down to $25/share or so.
    Tags: VSEC, CLCT
    May 10 5:59 PM | Link | Comment!
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