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  • Alliance Healthcare Services: Worth At Least $10.60, Probably More [View article]
    Since this article was written, Alliance Healthcare Services is up 300%. At the time I found the company, it was the closest to a "PE of 1" stock I had ever seen. Trading at $75m in market cap with some $65m in FCF suggested serious pessimism about the company due to the trend of MRI pricing and the size of the corporation's debt.

    In the article we suggested that we saw the stock trading about $200m+ if the corporation righted the ship. Today, with a market cap of $242m, we see the stock trading at those valuations. To be sure, the underlying trend at the company had changed and the market had simply failed to notice.

    Today, we view the stock as fairly valued. There remains some room for appreciation, however, if management continues to improve its capital structure. The company appointed a new CEO, Tom Tomlinson, and the company has grown its oncology business, pruned unprofitable imaging business and paid down $100m in debt. On November 10th, for instance, Alliance received regulatory approval for its joint venture with Charleston Area Medical Center to manage the their department of radiation therapy.

    We believe future debt payments are indicative of Alliance Healthcare's earning power. Forward guidance suggests that the company will be able to pay down $27m to $37m of debt and therefore trades at 8.8x to 6.4x its earning power. We think these multiples will creep upward as the company rationalizes its capital structure but, until then, we view today's valuations as roughly fair.

    On another note, I have retired Intangible Valuation to work on a new project under the name Time & Model. Please follow my new account and please try out my Filings Reader software. Thanks for reading.
    Nov 23, 2014. 03:09 PM | Likes Like |Link to Comment
  • An End To Our Relationship With Yahoo, A New Era For Equity Research [View article]
    Brian,

    Yahoo is strategically separating itself from SeekingAlpha because, for one thing, they are lunching their own platform. But yahoo is a representative of establishment media -- they are hoping through sheer force of will to establish a platform which can compete with SeekingAlpha.

    Trying to do that, of course, completely ignores the competitive dynamics of social crowd-sourced communities.

    If you look at Yahoo's new "contributor driven" blogging platform it is basically a tumblr-like thing. This means, of course, that Yahoo's contributor blogs cannot be commented on, as basically every other website in the world can. (They can be "reblogged," analogous to retwitting, but that doesn't really fulfill the function.)

    Tumblr is great for certain things... like picture blogs (did you know much of Tumblr is porn? 50% is "not safe for work") and such things. But for intellectual discussion? Nope definitely not. In fact, putting investment ideas in a tumblr like medium is pretty insulting to the general intelligence of the investing public. Using tumblr will force them to sit a tier below the Montly Fool, imo.

    SA already has the commentator base -- which is probably more valuable than its contributor base if you ask me. We have people like Moon Kil Woong or JasonC. Tumblr doesn't have that.

    Anyways, the point is Yahoo thinks they can build something similar to SA. I am deeply doubtful of that. Their current version is laughable.
    Jul 27, 2014. 05:38 PM | 16 Likes Like |Link to Comment
  • The Fresh Market: A GARP No-Brainer In A Fabulous Market [View article]
    @ PackerFan77 and Michael

    On page 27 of the FY 2013 10-K, it reads:

    "We currently lease 150 stores as well as our corporate headquarters and own one store location."
    Jul 27, 2014. 05:09 PM | Likes Like |Link to Comment
  • An End To Our Relationship With Yahoo, A New Era For Equity Research [View article]
    Bull markets will always drive down quality and bear markets will always drive it up. Over many cycles, I don't see how SA can avoid this to be honest.
    Jul 25, 2014. 01:38 PM | 6 Likes Like |Link to Comment
  • An End To Our Relationship With Yahoo, A New Era For Equity Research [View article]
    Personally, I think there is a HUGE bullish sentiment on SA. We need way more bears here. Besides, anyone who is long and has someone write a negative piece about their stock thinks the author is vile and misleading. It is extremely uncomfortable as an author -- especially when you view yourself as doing a service to the longs whom, you think, are making a big mistake with their money.

    But, let's be honest, the same is true in the other direction as well. Stocks go both up and down.
    Jul 25, 2014. 01:26 PM | 18 Likes Like |Link to Comment
  • Polaris Industries: An 'Anything But Cars' Manufacturing Gem [View article]
    6034700, I find your comment humorous. No one knows what stock prices will do. But if you know what companies to watch -- and you should be watching PII -- then one has made the first step towards riches. "Luck is what happens when preparation meets opportunity."
    Jul 25, 2014. 01:20 PM | Likes Like |Link to Comment
  • Polaris Industries: An 'Anything But Cars' Manufacturing Gem [View article]
    Smart words fendermon: "Wait for a sweet price at your own risk."
    Jul 25, 2014. 01:15 PM | Likes Like |Link to Comment
  • Polaris Industries: An 'Anything But Cars' Manufacturing Gem [View article]
    Was just checking out the 10-Q -- really impressive stuff. This company is really great. Cash from operations grew 30% y/o/y, net income 14% y/o/y, revenue 20% y/o/y. Shares outstanding were down over 4%.

    One sentence I wrote is a bit silly: "Our view is that we want to purchase at a lower valuation (specifically in terms of earnings yield), although we wouldn't be surprised if that lower valuation occurred when the stock was trading at a higher share price."

    It seems one would have been wiser just to ignore me.
    Jul 25, 2014. 01:14 PM | Likes Like |Link to Comment
  • An End To Our Relationship With Yahoo, A New Era For Equity Research [View article]
    "Now, only 19% of our daily visitors come from Yahoo Finance."

    Great work Eli!

    Personally, I get all my alerts via SeekingAlpha's android app. On my laptop, I have "account/my-feed" bookmarked.
    Jul 25, 2014. 12:17 PM | 2 Likes Like |Link to Comment
  • More on Zillow/Trulia [View news story]
    Comparing GOOG to FB or Z or TRLA is ridiculous. And aow, Google was profitable from the day of the IPO -- FB, Z, and TRLA not so.

    That said, shorting Z after it has used its own expensive stock to buy TRLA sounds attractive.
    Jul 24, 2014. 05:33 PM | 2 Likes Like |Link to Comment
  • The Fresh Market: A GARP No-Brainer In A Fabulous Market [View article]
    "Generally speaking, hedge fund analyst are smartest investors in the world. It's such an elite club and they need to be right 70% - 80% of the time."

    That is not really the case. They need to be right only about 50% of the time if they cut there losses short and let their winners ride. Furthermore, why should the people whom work in hedge funds be any smarter than the rest of us. That is like saying people who went to an ivy league school are smarter than the rest of us simply because they had the "right stuff" on a piece of paper at age 18 (or, of course, because they are the children of wealth donors).

    Hedge funds and Ivy League schools are just brands. Furthermore, I could put a couple thousand in the fight legal structure and then I could say I have a hedge fund. Anyone can do that. Literally it is very easy... in many states, if you keep it small enough, your reporting requirements are minimal.

    So I have exactly no reason to think that hedge fund analysts are better than other analysts. The proportion of dumb-to-population is the nearly same everywhere -- to my continuing surprise. Furthermore, it seems most analysts work in office conditions and are thereby subject -- not only to frequent distractions from salaried office work and emails -- but also to group think.

    Also Whole Foods is the market share leader but they don't have best in class metrics across the board. A bit of an exaggeration there.

    "The best way to make money is to buy the best in class name."

    Best in class = popularity = frequently overpriced

    In this case, WFM is not really so expensive given its prospects but that is because of the rumored gross margin threat noted below by Mr. Greene.

    Also short interest hardly bothers me. And in the case of TFM, I really like it.

    Remember that the 11 million shares sold short (at 6/30) means the *float* of the company increased by 11 million shares. That is, if person 1 borrows a stock from person 2 and then sells it to person 3, both person 2 and person 3 "have" the stock -- the float outstanding increases by one share. (This is like when your deposits get lent out to someone, you still "have" them but so does someone else -- i.e., credit expands.)

    With BlackRock Inc. filing a SC 13G (on 7/10/2014) with an ownership interest of 5 million shares, some of that "new float" might be in the hands of more passive (and long-term) owners than the shorts. That makes it a bit harder for the shorts.

    If the shorts need to cover, not only will that contract the float (the inverse of what was described above) but the very fact that BlackRock might be a longer term passive owner suggests that BlackRock's 10.5% stake could also not be counted in the float. Therefore, a small need to cover could create a truly beautiful short squeeze. The BlackRock SC 13G filing makes this much more probable, in my opinion.
    Jul 24, 2014. 01:12 PM | Likes Like |Link to Comment
  • The Fresh Market: A GARP No-Brainer In A Fabulous Market [View article]
    Let's just wait til results are out. I think you missed the point of my comment.
    Jul 23, 2014. 01:24 PM | Likes Like |Link to Comment
  • The Fresh Market: A GARP No-Brainer In A Fabulous Market [View article]
    I just wanted to comment on the notion of "conviction."

    I form an opinion based on the facts. If I worry that I have made a mistake, I just go back and review the facts. Basically, given my theoretical net, my opinion should basically be the same as it was before. My memory, unfortunately for me, is not as good as Buffett's. I have to refresh myself with the facts frequently and I typically "refresh" my memory after I have a bout of worry.

    If I find something new based on which I ought to change my mind, I strive to change my mind. But there are cognitive bias' which make this occasionally difficult.

    One must worry that, in their responses to someone testing their conviction, they may be impairing their ability to be rational due to the phenomenon of the "escalating commitment bias." Each time I defend my thesis, I am more likely to become more committed to its original design.

    I don't want that. I want to be able to say: "Friends, I have made a mistake. Here it is. Forgive me and I promise it won't happen again."

    So please understand that this article -- by which, I might add, I mean also the comments -- are "historical." They took place at a specific time when specific facts were on the table. If I am wrong, so be it. If I am right, so be it. The future, after all, is very difficult to pierce with the mind.

    I am not here to convince anyone -- most importantly not myself.

    I am here to discuss what I view as interesting opportunities in the stock market. It should have nothing to do with conviction. If your curious whether the *thesis* has changed, by all means ask. But don't worry about whether I am personally long or short. After all, it really shouldn't matter should it? You will ultimately have to make up your own mind, preferably after you do your own due diligence.

    One has to try and stay rational. Whether we are tying ourselves to a mast or not checking stock prices at the turn of every hour, our goal is to remain independent, emotionless and, therefore, aloof.

    By testing my conviction, you may impair my ability to change my mind if I need to. We should all take serious heed of the lessons proffered by the behavioral economics.

    Note: Still Long TFM and I hope it gets cheaper. I also am starting to like WFM at these levels, but it would be nice if it were cheaper. I did see WMT's food section a few days ago and its attempt to look natural and clean is quite agreeable. I don't think WFM people will want to shop at WMT, of course -- the stigma is too great. One must applaud WFM's for pushing its competition into spending money on presentation and quality. Of course, WMT's move in conjunction with KR and SWY represent the gross margin threat everyone is worried about. It should provide us with an education if KR, SWY and WMT can effect WFM's gross margins. (Buffett is apparently weary of companies with good gross margins -- they tend to be attacked via competition.)

    SFM's stock, on the other hand, is priced outrageously.
    Jul 21, 2014. 08:54 PM | 1 Like Like |Link to Comment
  • athenahealth reaffirms 2014 guidance after Q2 results [View news story]
    Really think the word prefect is appropriate? They have no earnings and only $8.5 million in free cash flow for the most recent six month period -- and yet they sell at $4.835 billion or a P/S of 7.3.
    Jul 17, 2014. 06:57 PM | Likes Like |Link to Comment
  • Weight Watchers: Excellent Business At A Fire Sale Price [View article]
    Mr. Market is being his usual self Michael. Judging from market cap we're at a 12 year low. I hope it gets cheaper.
    Jul 17, 2014. 12:16 PM | Likes Like |Link to Comment
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