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Howie Man

 
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  • John B. Sanfilippo: Transformed CPG Company With Large Upside [View article]
    All inventory is procured at harvest from a base of fragmented growers. Raw nuts prices are only determined annually at that time. There isn't a secondary market where prices fluctuate during the rest of the year like some ag products. JBSS sets prices based on cost and sells that inventory at those levels over the course of the ensuing year.
    Aug 20 03:29 PM | Likes Like |Link to Comment
  • John B. Sanfilippo: Transformed CPG Company With Large Upside [View article]
    JBSS actually has a higher ROIC and ROE than all the peers mentioned other than BGS and is growing earnings at about 10%. The value of its supply chain shouldn't be understated. JBSS has contracts and developed relationships with hundreds of nut growers over the past 50 years -- providing a barrier against new competition that does not exist in most other CPG categories (eg. chips, crackers, etc.). A +10x multiple would work in an LBO particularly given the excess management overhead expenses that could be cut.
    Aug 19 09:38 AM | Likes Like |Link to Comment
  • Even With A Pullback, Amira Nature Foods Not A Value Story [View article]
    What are your thoughts on the other ANFI note that was just posted? Seems tough to refute.
    http://seekingalpha.co...
    May 14 09:57 AM | Likes Like |Link to Comment
  • Chegg Sell-Off Creates Opportunity [View article]
    GMs are getting decimated by AMZN and SPLS price cuts. Q1 management guidance shows a 50% drop y/y and this is includes a larger y/y contribution of the higher margin non-print segment. CHGG is also hemorrhaging cash at an accelerated rate. Since the November IPO to December 31 alone they have have burned through $36M. Honestly this looks like a 2015 bankruptcy (see Nebraska Books as a precedent).
    Feb 19 11:05 AM | 2 Likes Like |Link to Comment
  • Amira Nature Foods: Several Misconceptions And One Large Mis-pricing [View article]
    The likely need for an equity raise in CY’Q1 is the catalyst that makes this timely.

    ANFI says the new $64M rice processing facility will be completed in 2015 yet total capex amounts to less than $3M since the IPO. At the same time it has been unable to refinance its 10% debt, a process management stated began over a year ago. (It appears as if the local Indian banks know something the US shareholders do not.) Without a capital raise ANFI simply does not have enough cash to both purchase basmati inventory this season and spend on the new facility.

    Look, the appearance of a few red flags can usually be explained or may just be coincidence, but the extent of the issues here defies credible explanation. Quite a few more flags have not even been mentioned (revenue recognition practices, implausible margins relative to industry, non-Basmati rice sales, operating and ownership structure, etc.). Hopefully my track record on here speaks for itself. If you feel the need to respond, address these specific issues rather than just saying “revenue and stock price are up so you are wrong.”
    Dec 19 09:26 AM | 2 Likes Like |Link to Comment
  • Amira Nature Foods: Only In America (Under The JOBS Act) [View article]
    Thank you Don.

    Here are some more troubling facts: Amira only launched its branded rice product outside India in 2011 and in India in 2009. Less than $4M has been spent on advertising and promotion since 2009. This equates to less than 0.5% of sales. This is next to nothing for a company that is seeking to build an international brand. Annie’s (BNNY) spent 4.3% of sales or $6M in 2012 alone. If Amira were to be in-line with other branded consumer products companies, it would have needed to spend $16M, wiping out almost all of the LTM earnings.

    Amira states it current has capacity of 24 MIT/ hour, a fraction of that of the peers as represented in the table above. In order to grow, management has stated they are planning to build at a new facility and bring capacity to 60 MIT/ hour by 2015. This will cost $50-75M. Meanwhile Amira only has $33M of cash on the balance sheet and is consuming cash. Despite all this required future capex, Amira has reported less than $5M of D&A over the last three years. Yet another reason why historical earnings significantly understate the future economic earnings of the business. Management states they will not need to raise additional equity (they are likely tapped out on debt which is already running at a 12% interest rate), but don’t provide a reconciliation of the numbers.
    Jun 5 02:13 PM | 1 Like Like |Link to Comment
  • Professional Diversity Network: Time To Find A New Career [View article]
    What is even more troubling is the lack of active job postings on its sites, particularly its main site, http://www.ihispano.com. When I tried to view a posting it said "Job posting no longer exists!" I literally couldn't find a single active posting. No wonder page views are down so much. They don't have a marketplace or network at all.
    May 22 10:59 AM | Likes Like |Link to Comment
  • For Value Investing, Look To Small-Cap Food Stocks [View article]
    Footnote Finder did a nice job running through some of the risks and concerns with ANFI. Lots of hair on this one.

    http://seekingalpha.co...
    May 14 11:04 AM | 1 Like Like |Link to Comment
  • Conmed Presents Appealing Risk-Reward Opportunity [View article]
    Good catch, thank you. Below is the proper link:
    http://bit.ly/Hu2XMv
    Mar 31 02:48 PM | Likes Like |Link to Comment
  • Conmed Presents Appealing Risk-Reward Opportunity [View article]
    Management has stated publicly several times that they see little benefit to being public and would prefer to be private for financial and competitive reasons (largely having to disclose margins/ pricing). They have hired a new banker in Cantor Fitzgerald after Gleacher somewhat mismanaged the process last year.

    The most logical buyers are Corizon (formed from the Vilatas - ASGR merger), Correct Care Solutions and Wexford. All are larger private operators that could buy CONM and slash SG&A. CXW should be included with GEO. Healthcare service providers MD, PRSC and LHCG are potential suitors as well. Obviously will be quite appealing to private equity given the revenue visibility, cash flow profile and growth prospects.

    Budget constraints at the municipal and state level is actually a positive for CONM since it serves as an impetus for facilities that are internally managed to seek lower cost external providers. There are some political hurdles here, but CONM can offer inmate hc at approximately half the cost of an internal medical group. With 30-40% of local governments handling care themselves, there is a significant opportunity for CONM.

    Mar 30 10:32 AM | 1 Like Like |Link to Comment
  • Hastings: Worth More Than It's Selling For [View article]
    Rental depreciation is the cost of rental sales, otherwise a rental business would have nearly 100% gross margins. Check Rent-a-Center's financials as an example. Regardless, if you add it back as you are, then you need to also include it in your capex number. These DVDs they rent out are not free for HAST.
    Feb 3 12:57 PM | Likes Like |Link to Comment
  • Hastings: Worth More Than It's Selling For [View article]
    Got you, but D&A is $17.1M, you are including $12.1M of rental asset depreciation which is an operating expense (thus not captured in capex). FCF based on your method is actually -$1.1M.
    Feb 3 11:43 AM | Likes Like |Link to Comment
  • Hastings: Worth More Than It's Selling For [View article]
    Net income has actually turned negative (-$5.3M LTM) as has FCF (-$4.8M). You also have to consider the large lease obligations ($170M).

    LTM EBITDA: $11.1M
    less cash taxes: $2.9M
    less capex: $15.5M
    LTM Unlevered FCF = -$4.8M

    Basically the company has crossed a level where sales no longer cover fixed costs. Rental is effectively gone and Amazon is taking CD, books and games at an accelerating rate. Now HAST is saddled with large footprint stores. Sales and gross margins would have to recover for the the equity to have any value, very unlikely given the secular trends.
    Feb 3 09:08 AM | Likes Like |Link to Comment
  • CPI's Bleak Q3 Points To Dark Days Ahead [View article]
    I am not talking about timers, but the fact that anyone can produce higher quality images with current digital camera technology. These cameras now cost less $150. One can become a CPI tech/ photographers after just a few hours of training, demonstrating this point. The contrived portraits with fake backgrounds reminiscent of elementary school picture-day that these studios provide are comical. Add the fact that the product is highly discretionary and you have a business in rapid decline.

    Even if sales somehow stabilize, CPI is still EBITDA and cash flow negative. I encourage you to look more closely at the numbers and less at the stock chart.
    Dec 30 07:05 PM | 2 Likes Like |Link to Comment
  • CPI's Bleak Q3 Points To Dark Days Ahead [View article]
    New camera technology has without a doubt eroded CPYs position. You should listen to the Q&A from their call from last week, they are in a very challenging spot and have few options.
    Dec 30 08:45 AM | 1 Like Like |Link to Comment
COMMENTS STATS
39 Comments
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