Brian Mundy

Brian Mundy
Contributor since: 2012
Company: Finance Toolbox
I saw that as well... apparently the SEC has decided that since Kass and LNKD are "winners" they shouldn't be governed by the same rules as the rest of us. Seems like a good gig if you can get it...
http://1.usa.gov/Vp0TOH
Yes - and I get that: Something that has an irrational valuation can always become more irrational...
I'm just saying there's a good reason for that: in this case the guys pumping the stock are the ones that own it. I've just heard that in many regulated markets those actions are "illegal". Apparently not in this one though?
Ok, let me get this straight: Evercore (EVR) hikes their price target and LNKD is propelled to new highs. How is this not an old fashion pump and dump scheme???
EVR's 2 largest institutional owners are FMR and Jennison Associates. These are ALSO 2 out of the 3 largest institutional holders of LNKD. Yeah, I bet we're gonna get a good valuation out of those guys...
$18B - What. A. Joke.
Happy Halloween!
This is the final performance update for the portfolio (if you remember, I recommended selling off TODAY), as such, the portfolio has gained 8.82% over the past three months. The additional gain over our 6% target can be attributed to gains in the broader market. On a per stock basis the results were as follows:
PMTI +7.7%
OMER +5.7%
NMRX +17.8%
CSV +31.1%
FTEK -22.0%
XLV -5%
So... moral of the story is that if you're looking at ways to book some gains, the above strategy seems to be a winner. Good luck and happy trading.
Update #2: After the 60 Day mark, the portfolio has gained 7.55% in value (still exceeding it's expected target). I'll run some risk-adjusted analysis at the 90-day mark. Top performers have been PMTI and CSV. FTEK broke downward when it reached the $5.00 threshold.
You know, I like their LATAM growth, and I'd chalk increased sg&a to macroeconomic fluctuation (eh, it's not a huge spike)... But the issue in my mind is that they live and die on content delivery - and I see that shifting towards wifi / 4g in the near future. That said, winning the 4G contract in Brazil is a good first step.
But here in the US... that also puts them in direct competition with VZ, Charter, Time Warner, and a newcomer to the cable market: gulp... Google.
First of all, I like DTV - I think they do a great job for the most part.
But... How do you reconcile I) rising SG&A costs (q-q-q) II) No internet offering (just speaking to where the industry seems to be going...)?
Update: After about a month, this portfolio has exceeded it's 6% expected return target. On the one hand, the S&P is up about 3% over that timespan. But, the portfolio on the whole has a beta of -.2, so I'm not too certain that the systematic risk is the determining factor here. Time will tell...
Oh right... it's easy to lose track.
Do the markets need re-assuring at this point? We're at 13k right now - why does Berneke feel the need to keep promising more???
Hi Jonathan,
Thanks for your comments - you bring up some excellent points. I'll agree that additional information should be considered when assessing insider trade information. Actually, I think you hit the nail on the head when you noted "Why so many investors (including professionals) think the extra work isn't necessary to make the most of the profitable stream of investment-specific behavioral finance information represented by the insider data is beyond me."
Everyday there seems to be another article about the most recent insider buys or sales, where there should be articles defining what insider buys / sales should be determined "Significant", because as we both (and the data) agree, most of it is just noise...
Great information! It's actually pretty common across refineries to hedge fuel costs with 2/3 long-term contracts and 1/3 spot buys - you would think the other airlines would take notice and follow suit.
That said, man, those are long paragraphs... can a reader get some bulletpoints!
I look at the GME model and I think it has several strikes against it:
1) Changing console design favoring digital distribution
2) The industry's push towards mobile
3) More and more legacy games are being distributed digitally
4) Poor morale (http://bit.ly/MAQ6QZ)
Admittedly, the last one is a stretch but a company who should count customer service as a strategic advantage due to their retail presence seems to be doing anything but that...
At this point, investing in LNKD is a huge gamble with little upside. Even if it is a solid company, it's priced like it can do no wrong. Ever. Even at this point they're buying marketshare because the market has signaled it only cares about revenue growth. Furthermore, just to get to that point they're reporting non-gaap earnings. Ridiculous.
This is a momentum stock. Nothing more.
For gamestop to survive in the long-run (or make sense for any acquiring company), they'll need to scrap their existing business model. I'd say focus on digital distribution, but I can't see any competitive advantage they'd have...
Maybe the comparisons to blockbuster aren't all rubbish?
The assumption here is that MWW is incapable of adapting, and no other social competitors will impede LNKD's complete takeover of the entire recruiting industry? Seems like a stretch...
Regardless of whether or not LNKD does become "The Job Hotspot", I have yet to see a valid financial model (with reasonable growth projections) to suggest LNKD is a legit value play. I love the company, but much of their growth depends on expansion into the global market, a monetization of mobile (good luck with that), and NO competitors entering the market (or adapting to the market in the case of MWW).
Thanks for the reply - I see what you're doing. It's a great idea but I would use somewhat separate methodologies for ETFs vs Mutual Funds. I'd consider them fundamentally different investment vehicles with ETFs providing isolated areas of exposure (and therefore higher rated funds would be those that track closer to their sector), whereas mutual funds should provide that exposure plus some level of optimization (and hence the mgmt premium).
I wouldn't look much past the involvement of the Fed and the fact we continue to benefit from the scared money in Europe... you just need to keep in mind the TLT is being used as a hedge against the exposure you're carrying in the rest of the portfolio.
I would agree with your point about backward looking NAV trends...
But don't your predictive ratings skew your results toward those funds that are carrying more highly valued (and subsequently more expensive) holdings?
I was pretty surprised and disappointed that there wasn't a stronger correction. I think this is a great company - but its stock is entirely overvalued. With a PE ratio hovering @ 45 (47 Tr / 34 Fwd), I keep hearing it's all about their incredible margins growth - well that's slowing... Maybe it's the comp sales growth? Wait - that's slowing too...
One area that you haven't touched on is the insider selling - I can fill the entire page with inside sales - truly remarkable. My favorite part is the "Chief Innovation and Branding VP" sales all last month. Last time I checked, when your Innovation and Branding guy is jumping ship... it's a bad sign.
We know how this one's going to end. They're selling a great product but until that patent on double stitching comes through for them... they're going to end up right back in line with other high-end apparel retailers.
I've been trying to figure out what the issue with NAV might be. Yes, Icahn owns it - wants to merge it with OSK. However, it's P/E ratio is eye-popping. While it's got a little more debt on the books than I'd normally like to see, the debt to asset ratio has been on the fall in recent months.
I know why Icahn would buy it - I just don't understand why more other people aren't... thoughts?