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  • DTS Inc.: A Mundane Business, With Exciting Profits [View article]
    Our comment that DTS' business is mundane is not meant to be a sign that it is a reason for the stock's historical underperformance of that specific time frame. The key driver for DTS' fall is that the company's historical financial performance was not supportive of such a high stock price. When shares of DTS peaked at $50 in January 2011, that represented a multiple of ~34x 2011 forward EPS (, which at the time was not cheap relative to the stock's forward earnings growth. We do not see shares of DTS being worth that much given its present growth rates and where peers are trading at. But on the other hand, the slide below $15 was also excessive.
    Aug 23, 2014. 04:56 PM | 3 Likes Like |Link to Comment
  • DTS Inc.: A Mundane Business, With Exciting Profits [View article]
    The patents within DTS' patent portfolio have a range of expiration dates through 2030. While some do expire in 2015, DTS consistently files new patents on its newest generation technologies to ensure that any one patent expiration does not drive down the company's revenues.
    Aug 23, 2014. 04:46 PM | 5 Likes Like |Link to Comment
  • Flextronics: Solid Free Cash Flow Deployment And Cost Controls To Drive Further Upside [View article]
    Although Motorola was a 10% customer in the quarter, it remains to be seen whether or not this will be the case for fiscal 2014 as a whole.
    May 15, 2014. 10:01 PM | Likes Like |Link to Comment
  • Lifetime Brands: A Mundane Company, With Exciting Profit Potential [View article]
    Like most consumer oriented companies, LCUT's brands and trademarks and customer relationships have a certain value under GAAP, which is carried under the goodwill & intangibles section of its balance sheet. Under GAAP, the value of said assets is then amortized based on the "useful life" of those assets.
    May 5, 2014. 02:44 PM | Likes Like |Link to Comment
  • Lifetime Brands: A Mundane Company, With Exciting Profit Potential [View article]
    LCUT sold off on Q1 earnings that came in below consensus, as the company absorbed its acquisitions into its infrastructure, leading to elevated SG&A costs. But, gross margins expanded once again year-over-year, and the company's previous full-year forecast (as outlines above) was reaffirmed. 2014 will be a year of integration and transition for the company, and we do not believe that the results of a single quarter are telling of the company's full-year potential.
    May 4, 2014. 05:52 PM | Likes Like |Link to Comment
  • American Airlines Group: As The Integration Continues, Solid Upside Ahead [View article]
    As to your question on RASM, here are the Q1 figures for the 4 national airlines (we formatted it as best we could to fit the comments section) (taken from each airlines Q1 2014 earnings release)
    Q1 2014 Q1 2013
    American RASM $0.1577 $0.1524
    Delta RASM $0.1424 $0.1380
    United RASM $0.1520 $0.1520
    Southwest RASM $0.1367 $0.1326

    American holds the highest RASM of the four national airlines, and while the comparison to Southwest may not be fully valid given their mostly domestic focus, American is clearly holdings its own versus Delta and United in terms of RASM. The revenue synergies management forecasted were based on their internal calculations of the incremental opportunities within combining American's network with that of US Airways. For the most part, the two companies operated complementary networks, and as they combine into one network, there will likely be more opportunity for them to sell passengers on connecting within the combined network. Given that there has been only one quarter of full merged operations, we believe that investors will need to wait until Q2 or Q3, when weather is less of a factor, to get a better sense of the merged company's revenue potential. That being said, the results for Q1 were positive, and we think American is on the right track.

    Given that the comp set represents the entire domestic airline industry (aside from Virgin Americana and Frontier, which are private), we think it is a valid comparison. This represents the collective view of the market on what the airline industry is currently worth, and not only does American trade at a discount to the entire industry, it trades at a discount to its own legacy/national peer group, which operate in a similar manner to American, and have similar balance sheets (aside from Southwest. Investors can decide to pair a long position in AAL with a short position in another airline if they wish, but that is not our position at this time.
    Apr 29, 2014. 11:26 AM | Likes Like |Link to Comment
  • Volaris: The Spirit Airlines Of Mexico Is Poised To Soar [View article]
    Several things went wrong, and we are in the process of crafting an update piece on these issues. The core of the issue resides in the Mexican economy and airline environment, as well as volatility in the peso, which has adverse effects on US investors. Volaris' Q1 results, which were released today, showcase these issues. The company posted a loss for the quarter, and while the push out of Easter into the 2nd quarter played a key role (given that Easter week is one of Mexico's busiest travel periods), industry pressures played a role. While VLRS displayed solid cost controls, it was not enough to mitigate the larger issues at play. That being said, Volaris is continuing to execute on its strategy, and we believe that in time, share will recover.
    Apr 29, 2014. 09:18 AM | Likes Like |Link to Comment
  • Lifetime Brands: A Mundane Company, With Exciting Profit Potential [View article]
    Jeff Siegel's son is Lifetime's president, having worked his way through the company, and when the senior Siegel plans on retiring, it is likely that his son will be selected as the next CEO. However, the company has someone else in the COO role, which is another traditional stepping stone to the CEO's office.
    Apr 25, 2014. 12:59 PM | Likes Like |Link to Comment
  • Lifetime Brands: A Mundane Company, With Exciting Profit Potential [View article]
    That was our point in including JCPenney. Lifetime trades at multiples that are below those of JCPenney, despite the fact that the company is not distressed in any way, something that cannot be said for JCP. The inclusion of JCP is meant to illustrate that if JCP can command such multiples in its distressed state, then Lifetime should command higher multiples.
    Apr 17, 2014. 09:33 AM | Likes Like |Link to Comment
  • Lifetime Brands: A Mundane Company, With Exciting Profit Potential [View article]
    Lifetime's trailing 12-month P/E ratio, adjusted for debt, is around 18x, not 25x
    Apr 16, 2014. 11:46 AM | 2 Likes Like |Link to Comment
  • Yahoo: As Alibaba Goes Public, Value Of Underlying Business Will Begin To Shine [View article]
    That is what continues to cause us to remain investors in Yahoo, even after its rally. At this point in time, its hard to argue Yahoo is growing at anywhere near the rate of Google, or other top-tier social/mobile/ad companies. But while Yahoo continues to generate a great deal of cash from its business, its being valued as if the company is burning cash running a worthless search engine and ad business. While Yahoo's business has certainly shrunk from historical levels, it remains very profitable, and sooner or later, we think that this will be realized by the market.
    Mar 31, 2014. 10:53 PM | 2 Likes Like |Link to Comment
  • Yahoo: As Alibaba Goes Public, Value Of Underlying Business Will Begin To Shine [View article]
    Naturally, Alibaba's value to Yahoo carries some inherent uncertainty. Valuation is more an art than a science, and until Alibaba officially files it F-1 papers, we won't have a detailed look at its financials, which is what is really needed to get a more precise valuation of the company.
    Mar 31, 2014. 10:50 PM | Likes Like |Link to Comment
  • Yahoo: As Alibaba Goes Public, Value Of Underlying Business Will Begin To Shine [View article]
    Yes, our calculation includes their long-term investments as well.
    Mar 31, 2014. 10:48 PM | 1 Like Like |Link to Comment
  • Nexstar Broadcasting Group: In 2014, Its Star Will Continue To Shine [View article]
    At a high level, NXST generates sale/profits from a couple sources: first, from the stations it owns outright in various markets, from which it generates advertising sales and retransmission fees. In addition to that, NXST also generates revenue from its digital properties, and from its JSA/SSA agreements. Possible confusion over retransmission fees may stem from the fact that within the TV industry, there are several layers of such fees. NXST's fees are generated by being paid by cable operators for retransmitting its own signals.

    The FCC is arguing that JSA's and SSA's essentially violate the spirit of its ownership restrictions, and as such, the agency has tried to rectify that. However, the authority to do so needs to be reauthorized by Congress, and like essentially every issue, it has devolved along partisan lines.
    Mar 21, 2014. 04:46 PM | Likes Like |Link to Comment
  • Kate Spade & Company: The Crown Jewel Begins To Shine, For Investors And Bidders [View article]
    That's certainly a possibility, but Michael Kors has not demonstrated a proclivity towards M&A, and given the company's fundamental performance (to say nothing of its stock price), management may not see a need to shore up performance via M&A. If Coach makes an offer, perhaps that might drive Michael Kors management to step in with a counter-offer, but until that point, we believe that Michael Kors is lower in the ranking of potential suitors than companies like Coach, LVMH, and VF Corp.
    Mar 5, 2014. 01:22 PM | Likes Like |Link to Comment