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Christopher Bayliss

 
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  • ChipMOS: Oligopoly At 4x EBITDA, 8x EPS With Pending Buyback - A Holiday Gift [View article]
    Great article Dane. This is a great summary of recent developments and analysis. I think I will look to opportunistically add.
    Dec 19, 2014. 02:56 PM | Likes Like |Link to Comment
  • Cott: Transformational DS Services Deal Brings Multi-Bagger Potential [View article]
    WM,

    Nice article. Also agree with your assessment overall. Long as well. As you said this is a public LBO; however Wall St. is used to looking at things through the PE & EV/EBITDA lens. You really have to look at this through the an LBO/debt paydown framework.

    Couple of items on which I have a different opinion. A 13x multiple for the whole business seems aggressive. I agree DSS is a better business than legacy Cott. But Cott has been trading consistently in the 6x to 7x EV/EBITDA over the past 3 years. Its P/FCF has been sub 10x for a while. 3 turns of expansion is significant.

    Also, I know that you accounted for interest expense in your FCF per share calculation; however, I don't know if FCF yield is the best metric when they will still have multiple turns of leverage of to pay off (3.0x to 3.5x EBITDA in 2018 according to management).

    On the flipside, there could be more upside because your interest expense may be a bit high. Management expects about 3.25x leverage in 2018. Thats about $1.2bn in debt. They will likely have paid off the high cost 10% DSS notes and preferred share, leaving them with an interest rate of about 6% based on their 5.375% notes, newly issued senior notes at 6.75% and ABL facility. At these figures, total interest expense will be about $70mm to $75mm, compared to $120mm your predicting. Granted interest expense will be higher in 2018 than 2017, but that could easily be an extra $40mm a year.

    Like I said, just sharing my opinions so that we can all have a clearer picture.
    Dec 9, 2014. 01:30 PM | Likes Like |Link to Comment
  • Quartet Merger Rights: 40% Upside For A Short-Term Event Driven Investment [View article]
    Agreed. This seems almost too good to be true. What are we missing?

    Anyone have a timeline for the conversion/next steps?
    Oct 1, 2014. 01:34 PM | Likes Like |Link to Comment
  • Deere & Co: A Cyclical Company [View article]
    Bluepac,

    No skin in the game personally but I was at one point contemplating a position in DE. I too saw the little FCF generated and that was a big warning sign. But this is the first well put together short argument on DE I have seen. Don't think I'll be investing now.

    Just curious, what was your thought process for 16x as a mid cycle multiple?
    Sep 15, 2014. 06:14 PM | Likes Like |Link to Comment
  • Layne Christensen: Why We Think The Bottom Is In With Strong Risk-Reward Going Forward [View article]
    Very interesting and well thought out article. I was bearish on the company some time ago but the decline was more than I had anticipated. The SOTP story makes a lot of sense, and margins should improve over time: construction management industry is cyclical. I would need to look into capex spend a bit but I'm intrigued by this.
    Sep 9, 2014. 10:16 AM | Likes Like |Link to Comment
  • Willdan Group: Top Line Growth And Margin Expansion Supports Recent Run-Up [View article]
    Thank you. Its been nice to see a regression to the mean of margins. However, I don't think anyone could have totally seen the blowout in top line numbers.
    Aug 11, 2014. 12:56 PM | Likes Like |Link to Comment
  • Willdan Group: Top Line Growth And Margin Expansion Supports Recent Run-Up [View article]
    They can benefit from the solar trend. However, the companies you mentioned are much larger scale than WLDN. WLDN helps install and design small solar efficient products for municipalities and is not installing solar grids like the others.
    Aug 11, 2014. 12:55 PM | Likes Like |Link to Comment
  • Leucadia Poised To Continue Strong Long-Term Returns [View article]
    Saw that. Another positive development. Although stock has declined since I wrote the article, book value has actually increased. However, it has done so in a very incremental way, and not with a big splash acquisition or sale. Patience will reward in the case of LUK.
    Jul 31, 2014. 05:44 PM | 1 Like Like |Link to Comment
  • USA Truck: Market Giving Little Credit To Potential Turnaround And Hard Asset Value [View article]
    No idea Barinder. Your guess is as good as mine.
    Jun 29, 2014. 11:01 PM | Likes Like |Link to Comment
  • USA Truck: Market Giving Little Credit To Potential Turnaround And Hard Asset Value [View article]
    Thank you. Appreciate your initial piece spurring me to look into the company.
    Jun 18, 2014. 11:57 AM | Likes Like |Link to Comment
  • GNC: Continued Top And Bottom Line Strength [View article]
    Yes. Please see a recent article of mine. If you have further questions, please let me know.

    http://seekingalpha.co...
    Jun 12, 2014. 12:16 PM | Likes Like |Link to Comment
  • GNC: A 'Strong' Pick, But A Few Concerns [View article]
    I like both businesses because they're dominant players in industries with tailwinds and generate FCF. The ability to generate FCF is somewhat hidden in both. ESRX b/c of D&A, and GNC b/c it is still growing and pursuing growth CAPEX.
    Jun 5, 2014. 02:41 PM | 1 Like Like |Link to Comment
  • GNC: A 'Strong' Pick, But A Few Concerns [View article]
    Sounds like we're on the same page. Rent expense while not trivial, is not exorbitant. If they're able to increase prices anywhere close to where they have in the past, they should experience positive operating leverage.

    Good to know about Sprouts and their SKUs. I do think e-commerce is the more pressing concern because e-commerce has a differentiated business model and is much more likely to start a price war. A price war would be much more damaging to GNC than losing market share.
    Jun 5, 2014. 01:20 PM | 1 Like Like |Link to Comment
  • GNC: A 'Strong' Pick, But A Few Concerns [View article]
    Where are you getting $1.1B of operating leases? On page 103 of their recent 10-K, they say they spent $216MM on total retail stores rent expense.

    Why do you believe that natural grocers are a direct threat to GNC?
    Jun 5, 2014. 11:47 AM | Likes Like |Link to Comment
  • Leucadia Poised To Continue Strong Long-Term Returns [View article]
    Agreed. With Leucadia, patience is the name of the game.
    Jun 4, 2014. 02:01 PM | Likes Like |Link to Comment
COMMENTS STATS
295 Comments
156 Likes