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  • Four Graphs That Vividly Support A Contrarian Point Of View [View article]
    Nate S: You say ''market years ending in 7 are decennially the worst, but market years ending in 5 are decennially the best''.
    S&P 500 total return 2007 & 2005: 5% each. 1997 & 1995: 33% and 36%.
    Dec 9, 2014. 03:27 AM | Likes Like |Link to Comment
  • Philip Morris: A Primer For 2015 [View article]
    Would be helpful insights into the 'reduced risk' products you mention as key to 2015. Is the category 40% of profit growth, or more like 4%? Ballpark figure is better than none.
    Dec 3, 2014. 04:02 AM | Likes Like |Link to Comment
  • Be Careful Betting On The Action At Red Robin Gourmet Burgers [View article]
    George, I'm sceptical about RRGB also. However let's get the facts (for comparison) correct.

    To say Burger King had ''an adjusted operating margin of 69.7%'' in its Q3 is very misleading and incorrect. The 69.7% figure is their Adjusted EBITDA margin, the bulk of which is 'other operating expenses'. These are real, recurring, mostly cash costs of running their business.

    To get a better picture of Burger King's profitability start with operating profit (less than $1 million in Q3).
    Nov 20, 2014. 03:06 PM | Likes Like |Link to Comment
  • How Does Our Global Credit Expansionary Bubble End? [View article]
    All interesting stuff. But as long as the world has confidence in the US, the supply of money can grow friction-free. Would be interested to know if you agree, and what conditions (structural, ie. post-QE) need to occur to slow/stop the printing press?
    Nov 20, 2014. 09:14 AM | 1 Like Like |Link to Comment
  • Lowe's Stock Benefit From Home Depot Breach Is Temporary [View article]
    Agreed that HD is the better company and stock. However, margins (about 400 bp's > LOW) is only one of the many reasons: Free cash (yields), asset turns, debt levels and size are some of the others. Used to be LOW's grew comp sales faster but even that's reversed: Comps at HD have exceeded LOW's every year after 2009 and are set to again beat LOW in 2014.
    Nov 20, 2014. 08:58 AM | 1 Like Like |Link to Comment
  • Coca-Cola Has Become Interesting Again [View article]
    So it's getting interesting again (5% off all time highs) at KO...Can't wait 'til late 2016 when TODAY's new pay package suddenly shows evidence of reviving sales (from declines to growth (of 2%) - 'key' says you] and margins magically bounce another 100bp's from today. Is there more to your investment thesis than flashing tables? because refranchising, for one, would have the opposite effect on revenues (and cash flows).
    Oct 27, 2014. 02:18 PM | Likes Like |Link to Comment
  • For A Housing Recovery, Visit The Doctor: Buy DR Horton [View article]
    Dr. Duru,
    Thanks.
    Not sure what markets you're referring, but as a blanket statement, no I can't think of a market that would cool in a broader recovery.

    Actually the state specific (CA, FL) busts I refer were a generation apart (early 90's, 2007-8), rather than a larger economic malaise.
    Oct 23, 2014. 05:54 PM | Likes Like |Link to Comment
  • For A Housing Recovery, Visit The Doctor: Buy DR Horton [View article]
    I always wonder about hindsight geniuses. Next time you see another great deal on a stock let us know - BEFORE it pops. Don't bother running the numbers and giving an investment thesis, cause that would just slow you down, and its sure you're as good as you claim.
    Oct 23, 2014. 05:34 PM | 1 Like Like |Link to Comment
  • Ranking The Restaurants II [View article]
    Wendy's: Top ranks for its square burgers and thick fries. Love it.

    But as a stock, there's not much to like: OK free cash flows, but zero growth and dubious strategy.

    Most units are franchised yet margins are just 5% (i.e., most owned units probably aren't earning their cost of capital). Trading >10X EBITDA but tough to short - since its financial owners could easily take it private (at say 15x) and re-leverage (its declining shareholder base), or sell more assets and pay themselves a huge dividend.
    Oct 7, 2014. 05:04 AM | 1 Like Like |Link to Comment
  • Ranking The Restaurants II [View article]
    If overvalued go short (start with RRGB). Can't do that with a house.
    Oct 7, 2014. 04:19 AM | Likes Like |Link to Comment
  • Aker Shipyards Continues To Expand Its Upside Potential [View article]
    Thanks for your response. Yes backlog to final sales (after cancellations, deferrals, etc)? Its value partly depends on effectively closing its big backlog (for which costs are accruing).
    Sep 27, 2014. 06:54 AM | Likes Like |Link to Comment
  • Aker Shipyards Continues To Expand Its Upside Potential [View article]
    All solid analysis. Would also be interested to know your views of fundamental-end demand (i.e. the industries/regions their shipping company (equity partners) serve.) It's difficult to make a strong long term case on an industry so cyclical and capital intensive without grappling with the hard reality that shipping's been pretty lousy for a while. (Just look at a long term chart on global freight rates.) How and when does this change?

    The backlogs are impressive at their face. How much of that $1.1 billion is now on the company's balance sheet - net of AKER's funding I mean? (<5% I'd guess)
    Ballpark, what is their record of converting backlog - is it 3/4's or more like 1/4?
    Sep 26, 2014. 06:27 AM | Likes Like |Link to Comment
  • CVS Will Lose Billions In Revenue Having No Smokes For Sale [View article]
    T Brown, As with most service industries, labor is the highest cost in drug retail, especially at the store-level. Compared to tobacco, profits (in % and $) for items like alcohol (''..clerks check IDs'') and pharmacy (esp. non-generic) justify the incremental employee expenses - of which pay is just one significant part. The cost-benefit (advantage over tobacco) for these items is the same whether it's for an hourly clerk or a $100 k/yr pharmacist.

    Keep in mind that for more than a decade the industry (rival WAG included) has been shifting their property tilt into more profitable 'destination' stores, as people spend more there. If the strategic (ie. long term) goal is higher margins & returns (and I believe it is) then exiting tobacco is just one method to getting there. And it's hard to see how an improved corporate image might harm the stock's multiple.
    Sep 25, 2014. 05:37 AM | Likes Like |Link to Comment
  • CVS Will Lose Billions In Revenue Having No Smokes For Sale [View article]
    Regarded Solutions, no cigarettes at CVS is all about the lost traffic tobacco drives toward higher margin products (and not about lost cigarette revenues). Nearly the entire front of the store has better profit margins - partly because the customer requires no assistance to place these mostly novelty items at the register.

    The question to now ask is, ''How much that lost smoking business cuts into the more profitable sales of soft drinks, gum, etc.? and not if ''...(CVS) will stop selling soft drinks, ice cream, candy and all the unhealthful products...''?
    Sep 25, 2014. 03:47 AM | Likes Like |Link to Comment
  • Buy Housing On Continued Recovery In Demand [View article]
    Bond yields trending higher despite your (headline) 'disinflation' might indicate how much the market cares - about it or the other monsters you list. Fine to ignore recent headlines homebuilding investors do think about (e.g., strong Builder confidence; good Q3 results from Lennar) better to spend some time thinking/writing how the mREITs (that's your thing, right?) will do in a rising yield environment.
    Sep 18, 2014. 09:34 AM | 1 Like Like |Link to Comment
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36 Comments
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