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Bryan Wagman  

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  • The Long Case For Schnitzer [View article]
    Hi Crystal Creek,

    Thank you for the insightful comment. I agree that they have done decent in terms of cutting costs but it's a very tough sector to be in regardless, especially right now. Although the stock is cheap, I think you're right in assessing this as a risky play, given there's no immediate catalyst to change market conditions in the industry. Also, though, I was wondering if you could elaborate a bit on some things:

    1) How is SCHN more of a 1950's style as compared to competitors?
    2) What past choices and untimely equipment upgrades have been made, and again, is it just Schnitzer or the whole industry?

    Sep 24, 2015. 02:24 PM | Likes Like |Link to Comment
  • The Case For Colfax As A Compounding Machine [View article]
    Definitely a tough decision to make in light of the nature of end market struggles. There aren't any immediate catalysts that suggest things will get better soon for O&G, steel, etc. But in my opinion, the company has the pricing power and balance sheet to get through this. Although it looks tough right now, if you're able to hold a long term view with high conviction I think these prices are pretty exceptional. It's just a matter of when/if end markets start to pick up, but as long it's not a complete secular decline I think this one could turn out alright.
    Sep 4, 2015. 11:02 AM | Likes Like |Link to Comment
  • The Case For Colfax As A Compounding Machine [View article]
    Thanks for the comment, Guraaf (sorry this reply took so long, must have forgotten and now I'm just stumbling across it). Although Colfax could be a decent fit with Danaher's industrial focused business, I have no real reason to believe this will be done. I suppose there must be a reason the Rales brothers made this company instead of adding onto Danaher, but I'm not counting out the possibility.
    Sep 3, 2015. 02:31 PM | Likes Like |Link to Comment
  • The Long Case For Schnitzer [View article]
    Hi Bess, thanks for your insightful comment. I also just checked, and you're right about the threat of not having a specific part. I wonder if maybe the customer could call and check with the people in the office. Either way, it would be an improvement if they could have some transparency with part availability. Also, it's a good point you make about the number and organization of cars which gives them an edge over smaller yards.
    Sep 1, 2015. 08:25 AM | Likes Like |Link to Comment
  • The Long Case For Schnitzer [View article]
    Hi Doug, thanks for your comment.
    1) You are right about the supply glut. Although I don't mention it explicitly, it is a huge part of the depressed industry environment that I do reference throughout. As I mentioned in the risks section, there are no immediate catalysts to improve conditions. This thesis is more focused on the nature of the biz and how cheap the stock is. At some point things will have to come back around to equilibrium, but no one knows for sure when. You are right to identify this as one of the main risks.
    2) I would have to disagree with your comment about barriers to entry. Anyone can open up a scrap yard, but when the industry is already commoditized and competitive as it is, it's tough to compete with Shnitzer's size. Also, permitted locations as well as their seven deep sea ports are tough to match (although it isn't impossible to gt a permit, it's not necessarily easy either).
    3) The APB is, indeed, competitive. I believe Schnitzer has an advantage in the sense that they compete on the basis of location, convenience, selection, etc. Schnitzer is a big player in the area with lots of firepower to buy solid, competitively advantaged yard locations.
    Aug 12, 2015. 09:44 AM | Likes Like |Link to Comment
  • The Case For Colfax As A Compounding Machine [View article]
    I wouldn't put too much weight on the average ROE over the last five years, that's the middle of a huge transformation period. Just recently, though, before the end markets started collapsing, it was up above 10%. With the combination of bolt-ons and CBS, I can see them climbing their way back over the course of the next few years. Furthermore, it will continue to grow as more successful bolt-ons are added, as the company will have increased capacity for debt.
    Jul 29, 2015. 11:01 AM | Likes Like |Link to Comment
  • Quanta Services' Shares Could Be Staging A Recovery [View article]
    Hello Azam, thanks for the comment. I agree with your assessment of Quanta's cash flows in that they have been challenged in recent years. Nevertheless, there is still tremendous long term demand for Quanta's construction services. I believe that as both the oil and electrical infrastructure in North America is maintained, replaced, and built anew, Quanta will benefit. In a capital intensive industry like this, you also don't see significant threats in terms of new entrants. Although Quanta's cash flows are inconsistent, I believe that this can be expected due to the fact that its work is capital intensive and linked to cyclical industries. The long term opportunity, though, is significant.
    Jun 8, 2015. 03:13 PM | Likes Like |Link to Comment
  • After A Significant Decline, Flowserve Is A Compelling Buy [View article]
    Thanks for the comment. The quote was just a general statement (it was an awesome interview if anyone's interested: As for the EV/EBITDA, I believe you were looking at Colfax's, as Flowserve's is much more attractive at 10.88.
    May 20, 2015. 11:51 AM | Likes Like |Link to Comment
  • The Long Case For LyondellBasell [View article]
    Thanks for the comment, Andrew. Although the impact that a rate hike will have on the market in general is unpredictable, I'm not really worried too much about Lyondell's debt. I'd have to check my notes for the exact numbers, but the first real chunk isn't due until ~2020 and the company has an untouched credit revolver of significant size to help replenish. I expect free cash flow to be strong out to that point as well.
    May 14, 2015. 03:29 PM | 2 Likes Like |Link to Comment
  • Capitalizing On Cannabis: An Interview With Paul Rosenberg, CEO Of MCig [View article]
    Thanks for the response, Alan (and yes, it's going to be a good month!). I guess it's sort of tough (or even impossible) to predict what will happen here. Although conversion would not be favorable, I suppose it really doesn't make much of a difference. For me, this is quite a speculative investment that I plan on holding at least for a few years in hopes that the company can engage these profitable markets and start to see real and significant earnings. In the case that this thesis plays out, I'm happy getting in at low prices, regardless of it's $0.10 or $0.20.
    Jan 5, 2015. 03:04 PM | Likes Like |Link to Comment
  • Capitalizing On Cannabis: An Interview With Paul Rosenberg, CEO Of MCig [View article]
    Although dated, this was a very insightful article. Thanks, Alan. I hold a small position in mCig (a good day today, I'm sure you saw the exciting product releases) and I was just wondering what you thought about the share dilution issue. The date where Rosenberg can convert his preferred shares is fast approaching, and I was just wondering if you had any comments on that or thoughts on when he will convert them. Thanks.
    Jan 5, 2015. 01:04 PM | 1 Like Like |Link to Comment
  • Lindsay Corporation: Long Term Potential Paired With Short Term Struggles [View article]
    Thanks for the input, James. You raise a good point about the variation of purchasing power across geographical markets for Lindsay. I believe that, as of right now, this does not pose much of an issue. Farmers have built up balance sheets over the years and they can continue to invest in the necessary parts of their business, such as irrigation. On the other hand, if we see drops in currencies for Russia, Brazil, Argentina, etc. sustained over a long period of time, this risk could become much more serious (on a global level, of course, and not just for Lindsay).
    Jan 2, 2015. 01:43 PM | Likes Like |Link to Comment
  • Google's M&A Activity Is One Of The Company's Primary Value Drivers [View article]
    Thanks for the comment, Michael. I think that Google is in a position to capitalize off of both M&A and partnerships, but there are a few key things to consider when determining what route will be taken by the company. I think Google will continue to acquire much smaller, more specialized companies. This is because they have the cash to do it, and a large part of the strength of the companies coming together is really derived from the new resources that the acquired company will have at its hands thanks to Google. But I do think that we will see the company partnering with other very large companies in various industries. Wherever these companies are in need of search, Google has an opportunity to capitalize. Likewise, I think we could see partnerships pertaining to the collection of Big Data as the IoT movement starts to take shape.
    Dec 29, 2014. 12:58 PM | Likes Like |Link to Comment
  • Quanta Services: Now Is The Time To Buy [View article]
    Thanks for the comment. I strongly agree, these are some good points.
    Dec 26, 2014. 08:12 AM | Likes Like |Link to Comment
  • Google's M&A Activity Is One Of The Company's Primary Value Drivers [View article]
    Thanks for the comment, KWatanabe. Here's an interesting article on the concept of Moore's Law in technology by the way:

    And you're right, all of the resources Google has to offer are quite remarkable. The very best of the best work there, and are given the best financing as well. World class engineers, scientists, HR, business strategists, etc. all coming together to create game-changing products.
    Dec 23, 2014. 04:12 PM | 1 Like Like |Link to Comment