Seeking Alpha

Envoy Global Research

 
View as an RSS Feed
View Envoy Global Research's Comments BY TICKER:
Latest  |  Highest rated
  • Scalable Growth And A Substantial Addressable Market Make Health Insurance Innovations A Compelling Buy [View article]
    Just had a chance to read HIIQ's conference call and I'm even more morally repulsed by this company's insurance products than I was previously.

    At least short-term medical insurance has some viability for a very tiny small segment of the population. However, the company's new supplemental insurance plan under ACA, is completely useless for anyone under 65. I am shocked that regulators even allow this type of "junk" insurance product to be sold. Anyone who buys this product is either entirely misinformed or being mislead. In so far as HealthPocket.com is concerned, the website basically replicates Healthcare.gov, and so is entirely useless for consumers, as well.

    In terms of financials, as evidenced by the quarterly earnings, HIIQ's business has little operating leverage (EBITDA flat on a 50% jump in revenues), which is what one would expect when a company sells mostly useless products. The only way to sell these kinds of useless products is to offer very high commissions to high octane salespeople and market the product incessantly in an effort to find a dwindling base of gullible customers (kind of like the magical weight loss products hawked on infomercials and the web). Plus, since these are at best, short-term products, the churn in the customer base is huge, which makes the business entirely unsustainable long-term. Finally, I maintain my prediction that regulation in the healthcare insurance industry will ultimately catch up to this company rendering most of the products obsolete.
    Nov 12 02:57 PM | 1 Like Like |Link to Comment
  • Scalable Growth And A Substantial Addressable Market Make Health Insurance Innovations A Compelling Buy [View article]
    This company sells short-term medical insurance, i.e. "junk" insurance. This has been around for years, even before ACA. Practically speaking, in today's day and age, post-ACA, the only people who should ever consider this type of health insurance are those who are between jobs and miss the ACA open enrollment and therefore need some coverage. This is a very small market and will get smaller with time (despite the nonsensical political rhetoric, ACA is not going anywhere, and in worst case will get some improvements from Republicans, who actually developed the main tenets of ACA).

    Other than the extreme situations mentioned above, there is no rational reason, post-ACA, to buy the insurance HIIQ hawks, nor do I suspect that anyone who is bullish on this stock would ever actually buy this insurance for themselves or their family members. I imagine the growth in HIIQ simply comes from a certain percentage of uninformed individuals who are duped into buying these short-term insurance plans, thinking they are getting real health insurance or some sort of insurance bargain.

    I have no idea what the stock is worth or where the stock price will go, but a business plan predicated on the above seems iffy to me and is certainly not a growth market (there are a limited number of people to dupe and with more education around what the ACA actually means, this number will dwindle further). Plus, there is significant regulatory risk, given the nature of how these plans are marketed. Even those who are opposed to the ACA, are not in favor of allowing companies carte blanche to market short-term plans that masquerade as real health insurance. What seems more likely, to me at least, is that short-term plans will become part of ACA with time, which would completely destroy HIIQ's business.

    Anyway, a good overview of short term health insurance can be found at http://bit.ly/1xfSXpj
    Nov 11 05:25 PM | 2 Likes Like |Link to Comment
  • Lakeland Industries May Be The Next Big Winner In The War Against Ebola [View article]
    Certainly, no margin of safety here anymore, I agree, so I would't call this an investment. But, there are a different set of shareholders now in this stock now, so it needs to be analyzed a bit differently, I belive. As the financial impact from the surge in orders won't be known until sometime next year, and given the potential for continued large orders, I think the "path of least resistance" now is upwards (or at least that's how I'm betting). It's kind of funny, though, how LAKE management couldn't get anyone to buy this stock at half of book and now everyone rushes to buy at 2X book.
    Oct 30 11:20 AM | 1 Like Like |Link to Comment
  • Lakeland Industries May Be The Next Big Winner In The War Against Ebola [View article]
    Unfortunately, even though I share your hope, I do not think we will see single digits again here for quite some time. Personally, I think the potential for another massive move upwards, is more likely now and after the recent press release, there is ironically less risk in this now as a short-term trade (at least over the next 2 quarters). Shorts have been proven completely wrong, in so far, as it pertains to demand for LAKE's products, and the demand is even way bigger than most longs could have imagined. So the only issue now is what the exact financial impact is and how do you capitalize it. I suspect shorts again are underestimating the financial impact of 1 million orders. Even though I am just as clueless as everybody as it pertains to what the orders may mean to LAKE's bottom line, I've worked thru a couple of financial scenarios, and the upside is potentially enormous. I don't see how anyone could be short this, with such uncertainty in terms of upside.
    Oct 30 10:59 AM | Likes Like |Link to Comment
  • Lakeland Industries And Sharps Compliance Announce Spikes In Revenue From Ebola Threat [View article]
    Surely some institutional investors put in $10 million into this company because they believed LAKE makes $4 on a Hazmat suit? You must be joking. Doctors without Borders already publicly stated how much they pay for the suits and it is well known what DuPont suits sell for. I think the numbers are relatively easy to extrapolate here. Shorts are wrong again, as always.
    Oct 30 10:52 AM | 2 Likes Like |Link to Comment
  • Lakeland Industries May Be The Next Big Winner In The War Against Ebola [View article]
    Good call. It's quite unbelievable how many were sold already. The only question, of course, is what's the wholesale price? $25? $50?
    Oct 29 06:27 PM | 1 Like Like |Link to Comment
  • Lakeland Industries May Be The Next Big Winner In The War Against Ebola [View article]
    I just had to comment on this short argument again: "I certainly doubt a tiny company like Lakeland is going to sell 500,000 suits. "

    According to the PR today, LAKE has already sold 1 million suits!
    Oct 29 05:00 PM | 1 Like Like |Link to Comment
  • SolarCity's Value [View article]
    You need to get a sense of humor. I was just being facetious.
    Oct 24 10:56 AM | 4 Likes Like |Link to Comment
  • SolarCity's Value [View article]
    The flaw in this article is that Musk has developed a technology to capture all the sun's rays, and within the next decade SCTY will soon own the sun and everyone in the world will have to pay them some money to use it. What's that worth?
    Oct 24 07:49 AM | 2 Likes Like |Link to Comment
  • Now Is The Time To Buy Travelzoo [View article]
    The problem is that half of TZOO's subscribers don't even open the emails, so they aren't worth anything really. You can't simply divide the market cap by the subscriber base TZOO report. I'd cut the subscriber base in half, and start a valuation from there.
    Oct 21 03:27 PM | 2 Likes Like |Link to Comment
  • Lakeland Industries May Be The Next Big Winner In The War Against Ebola [View article]
    I think the estimate of the number of suits needed is quite low. In the article linked to, the WHO says they shipped at least 240,000 suits in October alone, but they expect the epidemic to be 10X worse by January. So even with the epidemic magnitudes worse, they expect to need to same amount of suits per month? I think if the epidemic is not contained by the end of the year, they may soon need at least 1 million suits per month in Africa to contain the epidemic, especially given how problematic the supply chain is in those countries.

    That being said, I don't think LAKE will garner more than a 5% market share in these scenarios at best (there is simply too much competition), which if you work the numbers is still a huge boost for the company, of course. However, I concur with strategicinvestors, that you can't necessarily capitalize those earnings for LAKE, by using median market multiples. However, the run up in the stock price was not all that irrational, given that there is undefined and potentially massive increase in earnings coming for the company (the only argument being how you capitalize it - but the market tends to ignore such things at first, which is why the stock took off).

    Ultimately, the best way to look at LAKE as an investor is simply to try to understand the earnings potential of the company without any Ebola impact or hype. Based on my estimate of the company's core cash-flow potential, I still estimate the value at between $12 - $15, so if you buy significantly below those numbers you have a good margin of safety based on the core business. Buying above those prices is playing a game of speculation and momentum.

    I suspect that given how crazy this stock has become in the last few weeks, LAKE may very well drop to $10 again (shorts need to make some money too, after all), in which case it may warrant another look as a potential investment. Just remember that Ansell originally bought at $9 at sold at $24.
    Oct 19 01:18 PM | 1 Like Like |Link to Comment
  • Lakeland Industries May Be The Next Big Winner In The War Against Ebola [View article]
    Ansell, the insider with the most knowledge of LAKE, filed on the 17th that they sold their shares of LAKE for around $24. So now we have two firm numbers to use for valuation purposes ($9 where Ansell bought and $24 where they sold). Obviously, the valuation LAKE should be somewhere between $9 and $24.
    Oct 18 10:57 AM | 1 Like Like |Link to Comment
  • SolarCity: Undervalued In The Face Of Possible Obstacles [View article]
    Great strategy. Financial markets don't and never fund borrowing binges into eternity for assets that decline in value. If you borrow to buy assets and income that will and must decline precipitously over time, you will assuredly go bankrupt when the music stops.

    Of course, at first, Wall Street is always gaga over growth and will fund anything. But, once they realize that the underlying asset depreciates and the income from that asset goes down, the lending stops. This happens all the time.
    Oct 18 07:31 AM | 1 Like Like |Link to Comment
  • SolarCity: Undervalued In The Face Of Possible Obstacles [View article]
    OK, I will stop responding to you, as I don't respond to infantile, ad hominem attacks. I've followed SCTY since it went public and have been involved in analyzing financials companies for over 15 years. When I meant, when I said I thought about SCTY the last few days, it was concerning the value of the leases as per their SEC filings. Anyway, it doesn't take longer than an hour to spot that something is fundamentally overvalued.

    SCTY is a financing company. They are not doing anything new. They didn't invent leasing, nor can they rewrite the rules of finance. It's clear you don't understand lease financing or how to analyze a financial company.

    Good luck with your investment.
    Oct 18 07:27 AM | 1 Like Like |Link to Comment
  • SolarCity: Undervalued In The Face Of Possible Obstacles [View article]
    You are correct, but you are confusing the product with the value of the lease. It really sounds to me like you never leased anything in your life. Have you ever leased a car? Have you seen how they figure out what the lease costs you?

    There is something called the value of a lease. Whenever you lease anything, the price of the lease and what you pay is based on the value of the underlying product. This is lease finance 101 and I think it's self explantory really. If at the end of a lease, the value of the underlying product is 50% lower, and you want to lease the same product again, your cost of the lease will be much lower than the cost of the original lease (maybe not 50% due to other issues, but at least 30% cheaper).

    So, in the case of SCTY, if I lease a panel now for let's say $500/Month (I'm just making up numbers here for illustration purposes) and in 20-years, I want to lease the same exact panels (or better ones for that matter because the technology got better), my lease should probably be at maximum $250/Month, because the value of the panel is much less in 20 years, and the price of competing panels will also be much less in 20 years. If SCTY then tells me in 20 years, sorry sucker, you need to still pay $500/Month to get your panels, well then I and everyone else will tell SCTY to screw off, because it will be obvious at that time that $500/Month cost for the same panels (or better ones) is way too expensive, irregardless of the cost of electricity.

    Because the cost of panels is much less in 20 years, the cost to re-lease these panels will have to be less than it is now. Again this has nothing to do with electricty or power. The panels create the power from the sun. If the panels cost less, leasing them will cost less. That's the whole point of solar energy to begin with. The sun is free.

    SCTY doesn't create the sun or harness the sun's energy, nor do they own the sun (at least for now). What you are buying is the the solar panels. The lease or monthly cost reflects the cost of the solar panels and the installation of those panels.
    Oct 18 07:20 AM | Likes Like |Link to Comment
COMMENTS STATS
413 Comments
341 Likes