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Chris Drane  

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  • MBIA Is A Zombie Slowly Being Resurrected [View article]
    Good article but I think you should mention the reduction in operating expenses that MBIA is projecting due to reduced spending on legal and consulting services. Management thinks they can reduce annual operating expenses by over $100MM per year by 2Q14.
    Aug 28, 2013. 01:42 PM | Likes Like |Link to Comment
  • Bank Of America: Despite Uncertainty And Unpopularity, It's Capable And Attractively Priced [View article]
    No attempt to quantify the off balance sheet liabilities?
    Sep 22, 2011. 04:03 PM | Likes Like |Link to Comment
  • A Useful Metric for Evaluating Shipping Companies [View article]
    What do you think about SB? Its PE (4.5) and dividend yield (8%) seem really attractive to me.
    May 26, 2011. 03:43 PM | Likes Like |Link to Comment
  • Is AIG the Perfect Short? [View article]
    Nice call.
    May 16, 2011. 01:33 AM | Likes Like |Link to Comment
  • Microsoft After Earnings: Still a Screaming Buy [View article]
    Bret,

    Have you seen this? www.winrumors.com/micr.../

    Rumors that Windows 8 will incorporate Kinect technology. I'm sure I don't have to tell you how much of a game changer that could be, if executed properly.
    Apr 29, 2011. 01:01 PM | 4 Likes Like |Link to Comment
  • More on Possible Eddie Lampert/Sears Holdings Buyout Candidates [View article]
    I'm of the school of thought that it is riskier to overpay than to buy a "risky" stock. Some of my other holdings include Corinthian Colleges and SuperValu. I also have way too much of my net worth invested in a biotech called Provectus Pharmaceuticals. Fortunately, I am up on these investments... it helps balance out what I'm down in BBY so far.

    Right now I am eyeing the $30 Jan 2013 BBY calls. I'm thinking that if I can buy them for $3.50 I might make the trade. I've been eyeing them since they were at around $4.50 about a week or two ago.

    I'm totally not chart guy but one of the things that really drew me to BBY is that if you look at its price action historically, it is a very cyclical stock. Right now it is trading below its 2-year low. Obviously you cannot rely entirely on the past to predict the future but things like this move in cycles. The worst performing stocks in one year tend to the best performing stocks in subsequent years. Plus, the most important thing to me is to buy in cheaply.

    Less than a year ago, BBY was trading at nearly $50 and with a P/E of, I'm not going to bother to look this up, but probably low teens. BBY's business model hasn't materially changed since then. AMZN, et al, were just as serious competitors back then. BBY still churns out pretty much as cash as it did back then. Cycles are what drives this.

    The other piece of upside I like is that right now, BBY puts out a lot of cash, but it does with a large amount of unnecessary overhead. Namely, functionally obsolete stores. As BBY's leases roll over, BBY will be able to trim leasing costs with minimal effect on revenues. I don't see anyone talk about that.

    I could go on but this is getting a little long. Is this all extensive rationalization for being down 16%? Maybe, but I'm still confident in the situation.
    Apr 4, 2011. 08:48 PM | Likes Like |Link to Comment
  • More on Possible Eddie Lampert/Sears Holdings Buyout Candidates [View article]
    Few thoughts. I think that Sears was largely a real estate play for Lampert, not to mention whatever various non-retail businesses Sears still owns.

    Also, the Best Buy name still has cache. Sears doesn't. I don't know why anyone would want to dilute the Best Buy brand by merging it with Sears. A Best Buy / Sears combo would basically just be a Sears with a bigger electronics division.
    Apr 4, 2011. 06:31 PM | Likes Like |Link to Comment
  • Bridgford Foods: A Peter Lynch Ten-Bagger? [View article]
    Nice job with this pick.
    Jan 19, 2011. 07:06 PM | Likes Like |Link to Comment
  • CoStar Group Is Priced for Perfection: Tech Bubble Deja Vu? [View article]
    REIS provides a strong product, but its customer base is smaller than CSGP. My gut feeling is that few brokers subscribe to REIS as they have little need for its analytics. Instead, REIS's primary subscribers are most likely investors and appraisers. REIS provides a nice service but it does face competition from other services such as PPR (recently acquired by CSGP) and CBRE's Econometric Advisors. REIS provides very nice custom tailored reports and good data analytics, but PPR provides good reports as well and CBRE's data analytics tool is very nice. REIS I suppose provides the best package of the three, but I'm not sure whether I would go so far as to call REIS essential.

    I'd be interested to know what fundamentals of CSGP you identified that are "not on the books".
    Jan 6, 2011. 09:49 AM | Likes Like |Link to Comment
  • Skechers (SKX -7.9%) taking heat after Sterne Agee tagged shares with a Sell rating, warning of bulging inventories and collapsing margins as toning-shoe sales slow. "We see increasing headline risk, the likelihood of EPS evaporating, and no sign that inventory issues will be addressed with the appropriate vigor," firm says.  [View news story]
    This company's earnings are so volatile. Sure it looks cheap on trailing twelve month numbers, but how can we be sure that they aren't an outlier? Also, the sketchers brand isn't very strong in my opinion. Not enough margin of safety for me.
    Dec 22, 2010. 04:10 PM | Likes Like |Link to Comment
  • Corinthian Colleges: A Contrarian Play [View article]
    I just don't agree that there is no salvage value. Corinthian Colleges is not just one homogeneous mass of branches. The company is comprised of three separate brands: Everest, WyoTech, and Heald, the latter being just acquired in January 2010 for $395 MM. Heald's student body has a better composition that the other three brands and is demonstrating very strong growth as well (4Q revenue was up 36.6% y/y primarily due to Heald). So the only way to say there is no salvage value is to make unfair a priori assumptions about what the future regulations will look like. I should add that with the recent purchase price of Heald as a data point and COCO's market cap currently at $368 MM, COCO is practically being given away for free.

    Lastly, going back to my comment about what might best be described as the fallacy of composition above, I want to make one other point about the proposed gainful employment rules. These rules are impactful at the program level (e.g. one's major), and not at the school or OPEID level. This should give the company better flexibility in adjusting going forward.
    Dec 15, 2010. 08:24 PM | Likes Like |Link to Comment
  • Why It's Time to Buy Best Buy [View article]
    Mark--

    I agree with you. The metrics look attractive and the recent dip affords a good buying opportunity. I might want to wait and see whether momentum continues to drag this down before buying in though.
    Dec 15, 2010. 06:49 PM | Likes Like |Link to Comment
  • Corinthian Colleges: A Contrarian Play [View article]
    Wendy,

    I am glad you enjoyed my analysis. While I believe that COCO is being undervalued by the market, I do not believe that it is a good idea to put 45% of one's funds in any one investment.

    Chris
    Dec 15, 2010. 04:42 PM | Likes Like |Link to Comment
  • Corinthian Colleges: A Contrarian Play [View article]
    Kev,

    What do you think about the rest of the edu space?
    Dec 14, 2010. 01:26 PM | Likes Like |Link to Comment
  • Corinthian Colleges: A Contrarian Play [View article]
    Kev,
    Fair points, and I agree that COCO is risky. However, a few items.

    1) The gainful employment regulations and the 90/10 rule conflict with one another. COCO isn't the only school that relies extensively on Federal dollars, and if the government pushes hard on the 90/10 rule, schools will need to raise tuition rates (violating the gainful employment rule, potentially).

    2) Even in the event of regulations that are more significant that I anticipate, COCO still has salvage value. It's price to book is cheap enough to make it a very attractive acquisition target. Granted, a lot of its book value is in the form of intangibles, but I do not think that it is fair to completely discount the value of these. Already, rumors on the street are swirling that COCO is a potential target.
    Dec 14, 2010. 10:33 AM | Likes Like |Link to Comment
COMMENTS STATS
15 Comments
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