Brian Schieble

Long only, value, growth at reasonable price, medium-term horizon
Brian Schieble
Long only, value, growth at reasonable price, medium-term horizon
Contributor since: 2013
Really not fond of the school of thought behind share repurchases. I'd take a dividend 10/10 times, share repurchases should be for extreme times of undervaluation to ward off hostile take overs.
I wouldn't necessarily call it impossibly cheap. It looks very cheap, especially when you consider management indicates that desktop search is still viable.
Downside seems pretty minimal, since it's trading at a low multiple to it's legacy business without even factoring in the mobile future, while upside is obviously a pretty significant unknown. It's worrisome, I agree, but still has a compelling potential.
By your own logic there are 15 stocks that are significantly cheaper than GLRE.
For an insurance company it's sitting at 10x forward projected earnings.....that's a fairly rich ratio for an insurance company. No wonder the stock hasn't gone anywhere, it's earnings have had to catch up with it's valuation.
The higher the net profit margin the higher the selling price of a company generally is. A McDonald's franchise, with high revenues around 2.6 million and low labor and food costs around 25% a piece, sell for 3x sales. That's all relative to it's profit potential, which is seen as rather solid, not tenuous.
If a company is selling at P/S of .5x you can assured it's profit margins must be very low. Everything comes back to profits.
Thanks in snarky bastard......
The story going from this bad to much worse is a low probability in my eyes, sure seems like a bottom is very close if not already in. Since there is visibility on the backlog from a margin perspective, it shouldn't be a stretch to think they can work out their issues with the creditors.
Fracking has fundamentally changed the landscape of oil. Methods will become progressively cheaper for extraction, and desperate companies will increase production to fund debt. This is iron ore and metallurgical coal all over again. I honestly can't see it returning to June levels for a long long time.
The farther it goes down the less risky of an asset it is, or so it is said. No one should cry over buying an asset, watching it drop 20%, and within 5 years seeing it double. That's good investing. It might do that within 24 months.
I agree from a sentiment perspective we probably will see 5's. I see your point. But from a long term view it's just timing, and that is a notoriously inconsistent practice.
Even with HPT overhang, if this company can earn $1.25 per year or more it's undervalued by at least 30%.
This is a solidly profitable company that will see higher nonfuel revenue due to lower gas prices and capex falling off heavily. If you don't view this equity as undervalued Idk what the hell you're thinking.
So far not so much damage pre-market....erasing double digit billions from it's valuation seems a bit excessive, don't you think?
A few questions I'd like your opinion on....
1. Will non-fuel revenues steadily increase to the point where Q1's and Q4's will be predictably profitable going forward.
2. Assuming no further acquisitions and capex related to that, what EPS number would you project as an average of the next three can be a range because obviously it's not a precise thing. Personally it seems like $1.20 isn't unreasonable.
Well it's at $5.44 fellas. Which by your logic means good a time as any.
Buying up every share right now would cost you 6.5 billion, for a company projected to make around 750 million a year next year with accelerated earnings going forward in a rising interest rate environment.
The main point here with GNW is the overwhelming reason for the low BV here is the LTC charges and that only represents $2.00 a share in worth at it's maximum charge. It was trading at $18 before the LTC talk.
How could a major insurer have such horrid underwriting standards across their categories as to justify a .4x BV? That's irrational, man.
Insurers selling at well under BV is free damn money.
Please be cautious of what appears to be undervalued equity simply because it is lower market capitalizations.....zz... conventional thinking..........
High debt isn't really an issue if it's serviceable. They simply would not be able to open 8 new stores a year for the next 5 years if it was truly crushing debt. Their ROIC on new stores is compelling and their stated objective of 25% net income growth is very favorable for investors. Management seems modest and unaggressive, not prone to making stupid moves, like say the situation Conn's has found itself in.
A significant contraction of the US economy could spell trouble, but otherwise this company seems to be on firm footing.
Barstow, the town of many gas stations? What wouldn't close there?
I see very little wrong with CAP right now, seems poised to deliver a safe 20%. Better to find the stories after they've been given an irrational drubbing by the market.
If growth is one of your reasons for owning a stock shouldn't you then at least be playing through some scenarios about potential EPS numbers in the next 2-3-idk 5 years?
If it's producing $1.00 EPS now and only adds .25 EPS normalized a year by the end of five years, it's making 1.25 EPS (roughly 22 million dollars), 15x that is 333 million valuation, now assume they made $1.00-$1.25 EPS for the previous four years, tack on roughly 40 million on the balance sheet and assume no share dilution or repurchase. You've got a 333 million dollar business, add the cash it's probably around 400 million valuation.
That's where these $23.00 price targets are coming from. That's if it's only doing $1.25 EPS in five years. Now what if it's doing $1.50?
It's the optimistic scenario. Shorts have the double advantage of potential cyclical downturn in AFOP's business in the medium term and also the very real possibility of a plunge in overall equity prices in the short term.
Honestly I'd much rather them increase the dividend on a steady upward path with earnings in parallel. Extremely modest buybacks aren't going to make a dent in EPS numbers. One time special dividends when cash is in excess of need would be great.
Take a $9 million chunk for example. Spend that all right now at this PPS, you'll remove ~600k shares. You'll increase EPS 3-4% or something lousy like that.
Now take $9 million and do a dividend. That's almost 50 cents a share. I'd take that over the former in a heart beat.
You get my vote for the most excessively odd post I've read in months.
He still owns 8.5% of the company and has very real interest in it's success.
Reducing the share count by 10% of the float would require a 1/3 of the war chest at this point. It drops to 8-10 in the next 6 months maybe they do repurchase some shares. Right now it's not worth it.
Do we know if Chang has ever sold shares before?
Selling a quarter of your shares at close to a momentary all time peak in share price isn't exactly a dumb thing to do if you were Peter Chang. If he wasn't rich before he is now, with more coming down the road.
The thing is with that is all it takes is one to three maximum small firms taking a short position on this company before the short interest is this high, could one to three smallish firms be foolish? You damn right they all could be. Index funds beat the managers 90% of the time right? These are talkers, not thinkers, potentially.
That is extremely optimistic and I'd be willing to bet completely wrong. Why not tone down the optimism a bit and be rational? How about $10?
When it first IPO'd it was immediately obvious how expensive it was and it did not take that long to crater. But right now? Hard to worry about this valuation. Look at their presentation for christ's sake. They're doing a lot of good things. Their comps coming up here will be very favorable. Maybe not long term, but near term this looks like a significant opportunity.
Investors must always take care to remember that they likely have a quarter horse mentality on a coal train rolling up hill. BBRY could be at $50 three years from now. With leadership from someone like Chen, who not only sees and understands but acts, it's entirely possible.
Sounds like you should be running sales teams, if you aren't already.
I don't really think survival is an issue at this point. Not entirely sure on what's a normal profit margin for these chip makers but if they can do anything near INTC's margins they're a value stock even with the LT debt.