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Howie Man

 
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  • Continental Building Products: A Multi-Year Bull Run Story [View article]
    If it does CBPX will generate over $150M in FCF even if vols are flat. That's a 13% forward FCF yield.
    Sep 12 09:38 AM | 2 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
  • 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
  • SCHS: Impaired Business With Bleak Prospects [View article]
    I agree. It seem apparent that they are running out of options.

    I see little interest from larger strategics given SCHS's lack of product differentiation. What ultimately would someone be buying? A fragmented distribution network that lacks scale and any competitive advantages? I see even less interest from a financial buyer given the poor cash flow profile. Regardless, SCHS is still trading at over 10x EBITDA, well above where even stronger companies have sold in the space.
    Dec 21 02:40 PM | 2 Likes Like |Link to Comment
  • Hastings Entertainment: Potential 5 Bagger, Deep Value Stock With A Special Situation [View article]
    I think it is more than obvious who the losers are going to be here.
    Oct 17 10:53 AM | 2 Likes Like |Link to Comment
  • Continental Building Products: A Multi-Year Bull Run Story [View article]
    Looks like National Gypsum announced a 20% price increase for 2015. If even half this price sticks across the industry and vol growth is modest, then 2015 will be very strong for CBPX given its high pass-through rate.

    http://bit.ly/1lXQI5Y
    Sep 11 09:35 AM | 1 Like Like |Link to Comment
  • Continental Building Products: A Multi-Year Bull Run Story [View article]
    Fair point but isn't Lone Star ultimately driving the process and likely seeking liquidity in the not too distant future? I think we can rule out USG for anti-trust reasons, but GP and National certainly have the capacity to pay-up and presumably should be willing to do so given the attractive qualities you thoughtfully outlined.
    Sep 9 11:23 AM | 1 Like Like |Link to Comment
  • Continental Building Products: A Multi-Year Bull Run Story [View article]
    The wallboard industry is still quite fragmented despite the consolidation you noted. CBPX seems like it would be a logical target for National, GP, USG or Sait Gobain. Do you have any thoughts on that?
    Sep 8 02:35 PM | 1 Like 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
  • 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]
    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
  • 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
  • The Brick Offers A Unique Deep Value Opportunity [View article]
    The Brick reported a strong quarter earlier today with 17% EBITDA growth and 1.3% comps sales increase with over 1% EBITDA margin expansion. Still trading in the below 5x EBITDA with a mid-20s FCF yield despite the performance and following catalysts:

    -Announced plan to repurchase high cost 12% notes w $175M in excess cash
    -Adding 10-11 franchise stores and likely new corporate stores in 2012
    -Repurchase program for 5% of shares out, only 10% complete so far
    -HSBC credit card program expansion to capture $50M-80M in additional sales in 2012
    -Former CEO of Walmart Canada taking over CEO role Jan 1 (been COO since Feb 2010)
    -New IT/ distribution platform to reduce SG&A and potentially increase op margins by 1-1.5%
    Nov 10 02:42 PM | 1 Like Like |Link to Comment
  • Hastings Entertainment: Potential 5 Bagger, Deep Value Stock With A Special Situation [View article]
    You accuse of me of lying, yet you are unable to refute the facts presented. All the numbers provided are coming directly from SEC filings. I have provided links to the various From 4s and Proxy statements on the other page, you still blindly ignore them.
    Oct 10 09:34 AM | 1 Like Like |Link to Comment
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47 Comments
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