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Cabeza Howe

 
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  • LendingClub, OnDeck sell off [View news story]
    Maybe a better idea is to buy in at a major market selloff. LC is a great financial tech company. But P/S=49 (on 1-3Q14 annualized revenue) indeed appears too steep. ONDK is essentially a unregulated, nontraditional bank (and subprime lender) with great FinTech edge. But its P/TBV (adjusted and pro forma, assuming overallotment option exercise) of 5.56 appears out of whack too.

    Market might be ripping higher now. But a selloff in early or mid January won't be so far fetched. LC and ONDK might just lead that selloff. No trees grow to the sky. Look at how MBLY has behaved lately after initial rip.
    Dec 20, 2014. 02:33 PM | Likes Like |Link to Comment
  • Rediff, Sify post big gains [View news story]
    Do you follow this company? How likely for it to be acquired? Without a bidder, this stock appears worth less than book value to me.
    Dec 20, 2014. 02:01 AM | Likes Like |Link to Comment
  • Caesars - Short Or Buy Puts Before Chapter 11 And The "Institutional Dump" [View article]
    Out of curiosity, I just casually Googled for short position filing requirement. SEC explicitly stated that firms should not report short position or net long position (instead just the long portion) on any equity. Here's also a link (http://goo.gl/6ievUZ) that said this:

    "They are not required to disclose their cash, shorts, or positions in other markets such as currencies and commodities. We've been lucky that some managers have revealed short positions in their investor letters, but that's about it. Unless they volunteer this information, we typically can't see it. That is, until you find a firm who discloses it to the SEC for no reason."

    This is not to be confused with the reporting of short interests (on customer accounts) twice a month to FINRA from brokerage firms alike. FWIW.
    Dec 19, 2014. 08:23 PM | Likes Like |Link to Comment
  • First Internet Bancorp: Turnaround Banking Story Taking Shape [View article]
    Here we are at support level. Hope it holds and bounces from here. Fundamentally there isn't any reason we shouldn't rise from here. The company is on the right track and EPS is rising. The company is rising from where it fell. Mortgage banking resurrection, if sustained, is better news than 25-30% asset growth. Given their new focus on purchase mortgages and national as well as their local INDY markets, there's no reason they can't continue to get more ground. With the Fed more optimistic on the economy the housing market could well strengthen more than expected in the next two years. Asset growth is also on track with potentially more commercial lending growth. So the visibility of growth appears quite good. That all points to improving ROE (although not necessarily straight up each quarter), which is the most important parameter for an outperforming stock (in particular a banking stock). You can be sure market will wake up to the real story in the next 12 months.
    Dec 19, 2014. 12:28 PM | 1 Like Like |Link to Comment
  • Caesars - Short Or Buy Puts Before Chapter 11 And The "Institutional Dump" [View article]
    As far as Omega Advisors' 13-F filing showed, there's no CZR debt/bond positions. (But 13-F filings do not reflect shorts. I do not even know if short positions are required to be reported and where to check them. Someone share the info please if any.) However, Cooperman's recent addition did not indeed appear to be a conviction buy. He basically added ~825K shares recently such that his beneficiary ownership crossed above the 5% threshold that required him to file a schedule 13. It's as much logical to speculate that he just bet on odds (or Ifs as HJK put it) as to speculate that he really knew something extraordinary. Any black swan event could quickly turn him upside down.
    Dec 19, 2014. 10:12 AM | Likes Like |Link to Comment
  • CVSL: The Rollup Will Accelerate [View article]
    Hi Randy,

    I just got to know this company and read your articles on it. As of the end of Q3 there appeared only two quarters worth of cash (including marketable securities) left. Do you know if they are going to issue shares or debt to fund the operation soon? (I have not listened to any of their conference calls -- if there's any.) Also curious how you view this company now. Thanks.
    Dec 19, 2014. 02:57 AM | Likes Like |Link to Comment
  • First Internet Bancorp: Turnaround Banking Story Taking Shape [View article]
    I share your frustration, Echman. Management really needs to put financial targets in writing as I spelled out in the article. They should target efficiency ratio, return on equity, growth and be able to deliver. I do expect Q4 to boost the stock.
    Dec 18, 2014. 06:22 PM | Likes Like |Link to Comment
  • Caesars - Short Or Buy Puts Before Chapter 11 And The "Institutional Dump" [View article]
    Tomorrow? On this one, time does not appear to be on Singer's side.
    Dec 18, 2014. 01:43 PM | 1 Like Like |Link to Comment
  • OnDeck Capital IPO: A Treadmill Lender [View article]
    Larry, your bearish call appears to be prescient. Now the rally appears to be fizzling. I also like your treadmill loan observation. But I'm taking a slightly different stand here. The treadmill loan risk they are taking might have been compensated enough by the super high yield they are earning. With their attractive net interest margin and technological edge, they might deserve a premium to traditional banks. However, they are currently trading at P/TBV of 6+ (after adjusting for IPO conversion/proceeds including overallotment option exercise). That valuation is too steep. I would argue for P/TBV of high 4s or 5, which would imply $19.5-21.7 price range/target. Just my two cents.
    Dec 18, 2014. 01:36 PM | Likes Like |Link to Comment
  • Caesars - Short Or Buy Puts Before Chapter 11 And The "Institutional Dump" [View article]
    Anthony,

    Glad to see your idea finally published. Great insight.

    Maybe a long strangle will work. When you see it rally to a near-term technical top buy puts and when it retreats to a near-term bottom buy calls. So, if the stock do really explode or implode you are in a position to profit. Only options are hard to buy (il-liquid) and volatility does not work to the favor of a long position. So if the stock rang bounds you are still losing.

    Based on your GTATQ data, it appears we would still be able to profit from a short after BK news is out. Only that there might not be shares to borrow and long put options are even harder to work with.
    Dec 18, 2014. 11:53 AM | 1 Like Like |Link to Comment
  • From $16 To $60? Where's The Magic Wand For Caesars? [View article]
    Leon Cooperman is no ordinary investor. I'm sensing that he knows something extraordinary in this case as well.

    "It could really go either way and could be a wild ride." So you just spelled out a trading strategy: long straddle. Seriously, for those who dislike directional bets that could just be the answer. Again, looking forward to reading your article.
    Dec 17, 2014. 04:58 PM | 1 Like Like |Link to Comment
  • Caesars unit misses $225M interest payment [View news story]
    FWIW, I do have an alternative opinion now: http://goo.gl/NKvz1P
    Dec 17, 2014. 04:08 PM | Likes Like |Link to Comment
  • From $16 To $60? Where's The Magic Wand For Caesars? [View article]
    According to the author HJK:

    "There is little doubt among observers both in the financial community as well as industry insiders that a dramatically restructured Caesars will emerge in 2015."

    LEON COOPERMAN's latest 5.41% stake, along with institutional ownership actually increasing in Q3 per Nasdaq, suggests to me that HJK's statement above might be credible. HJK himself should also be regarded as an industry insider in my opinion.

    Looking at SZR's P/L for 1-3Q, when D&A and special items were excluded, there was roughly $1.1B of adjusted operating profit (similar to an adjusted EBITDA). CZR's balance sheet is total crap; but that could be cleaned up with a restructuring.

    So, the probability of a CZR bk does not appear to be very high. Just make the restructuring proposal attractive enough to creditors and a prepackaged CEOC bk plan might just go through. Now the question appears to be how much dilution would be incurred to please creditors. That ties in directly to how much success a short trade can be.

    I'm still watching from sideline. Would rather do some near-term trade than committing to a potential CZR liquidation.
    Dec 17, 2014. 03:50 PM | 1 Like Like |Link to Comment
  • From $16 To $60? Where's The Magic Wand For Caesars? [View article]
    Can someone explain why would the registered holder of the Second Lien Notes, The Depository Trust Company, NOT distribute CEOC funds to redeem the Second Lien Notes holders? What leverage did the second lien creditors get out of this? http://goo.gl/feUrxw

    So that they can claim another default? Did this make CZR a more compelling short?
    Dec 17, 2014. 11:56 AM | Likes Like |Link to Comment
  • Caesars unit misses $225M interest payment [View news story]
    Got that. I will probably only nibble at first. I actually prefer to add to the position only when the liquidation news is out. Will miss a big chunk of profit that way but will also limit any potential downside. Thanks again.
    Dec 17, 2014. 02:51 AM | Likes Like |Link to Comment
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