Jeffrey Moore

Value, long only, small-cap
Jeffrey Moore
Value, long only, small-cap
Contributor since: 2008
Exactly! In fact, if Barklett increases their stake much more (in too quick of a manner), then the NOLs would be gone.
This could really push some people against the wall (in either direction) and make some people do some interesting things (note, I don't mean interesting in a positive or negative way, but is Saraf is in a spot where he feels he might lose his company- even though anyone would be hard pressed to fire him, would he be willing to invalidate ~$14mm in NOLs to preserve control and his salary?)
This is what makes me think it could invalidate the losses. There was some discussion of this at Level 3 and at Modus Link as well.
(1) In general
There is an ownership change if, immediately after any owner shift involving a 5-percent shareholder or any equity structure shift—
(A) the percentage of the stock of the loss corporation owned by 1 or more 5-percent shareholders has increased by more than 50 percentage points, over
(B) the lowest percentage of stock of the loss corporation (or any predecessor corporation) owned by such shareholders at any time during the testing period.
If he exercises his options, he will invalidate the NOLs of the company... Check the rules for what constitutes a "change of control".
This deal reminds me of the difference between Graham and Buffett... Graham would have played the arb (which is what most everyone I know did) and Buffett would have kept the stock.
I tendered all I could for the arb, and was left with (in retrospect) far too few. :(
fair point, however, this was written before there was any talk of gun legislation coming about... Plus, it ain't PC to say you own a coal company at the moment, though, I wouldn't wan't to own one of them either.
I don't disagree with you, there are people out there that will own a ton of guns. I don't think that they make up the majority of sales though.
Ammo on the other hand...
Happy holidays.
There may well be upside in the near term, however, I don't see a compelling case as to why RGR should trade at 13x earnings. A temporary pop in the price could happen, and their near term earnings will be stellar- there seems little doubt about that.
However, when I look out 10 or 20 years, I just don't know what exactly I see the company doing in terms of products, but more specifically, volume of sales. The US has more guns per capita than any other nation, if sales continue as they are, then people will start having to do additions to their houses just to store these things.
Here are some back of the envelope stats, that are over simplifying things, but give you an idea... 35% of households have a gun in the house, and there are ~276mm guns in the US, and there are ~115mm households (~40mm owning gun(s))
Thus, to give you an idea, if these numbers were averaged out, the average gun owning home has about 7 guns in it... At some point, it becomes hard to justify another purchase for something that you already have a few of. Sure, maybe you want to have different varieties, but again, at some point, it does become hard to continue purchasing these things that have a whole lot of shelf life built into them.
I would want to find a company that made gun safes if I was convinced that firearms were going to sell at this rate in any sort of perpetuity.
http://wapo.st/W2f0ID
http://bit.ly/12B3JW6
http://1.usa.gov/SufLxY
Good point on the dividend. I forgot to mention that, as well the fact that I own shares of ALJJ- it's a newer position, as well as the dividend being a newer development, and this is an older piece. Sorry for any confusion.
There is some debate as to this. The only restriction mentioned in their 10K is that of declaring a dividend. Either way a share buyback should probably be done at the soonest possible time, provided that the share price remains suppressed.
That's why I suggested the dutch tender...
http://bit.ly/LnRu60
ITEXBROKER: I'll make you a deal. Instead of commenting on every ITEX related article I write with some comments that are obviously meant to get under people's skin, and seemingly to further management's agenda, how about you email me some of the public court documents about the matter (such as the "English paper that everyone else read from the court")? I will be happy to post them and give your side of the story a fair shake.
I am curious as to where you get that at least 85% of the brokers would leave the company. It seems like a stretch to think that people would be so loyal to Steven White that they would be willing to risk their livelihood. Additionally, your comment on the income reduction of the company isn't right, as, if you lose 85% of brokers and they each contributed an equal amount to the company, revenue would be reduced by that amount. There are corporate expenses that are not totally down-scalable with every step down in revenue.
If you are looking for a genuine discussion, then I am willing to have it.
He raises some good points, but, if they are good points, it shouldnt' matter what his background it- only that he is right.
In regard to comparing the bonds and maturity, again, I said it was an overly simplistic view to illustrate a point. I would never invest just because bonds were above par. My point was simply that if in a bond holder's mind, there was any real chance of default and bond holders not getting their money back, they probably wouldn't be lending SVU money.
In regard to shorting the stock, I agree with the point, and don't see how my article said anything different.
Based on how little volume there has been, it doesn't seem that there will be a ton of newly purchased shares repurchased. As I said in the article, I doubt that the activists will tender, but, have never talked with them about it. So, your guess is as good as mine.
Personally, I would be shocked if Itex buys back a million dollars worth lot of stock.
No, it's not the same as before the tender offer. With 25% fewer shares outstanding, every person that was activist can not band together without having a higher ownership percentage than before, therefore, making it easier to trigger the poison pill than before. Considering that the group which fell apart had more than 2 investors in it, my point is quite relevant.
Mainly, if activists decide to collectively 13D the company (there were some previous 13Ds that fell apart).
You are correct that there are certain card rooms that preform better (in terms of revenue) than the ones owned by UWN. However, one needs to look at where the rooms are located, compare the footprints of the locations, and a lot of other items. In many cases, revenues are improving for UWN's locations- a lot of them were bought as distressed properties that needed to be turned around. Turnarounds take time, especially in the service industry; operations that have historically been run badly can leave a bad taste in people's mouths and take time to recover. If you look at their numbers from a year ago, the card rooms from UWN actually generate more revenue as a percent of total card room revenue, than their 10 operations have as a percent of total card rooms in the state. While the hold percent didn't meet expectations, fluctuations of hold do happen. A single quarter of a bad hold is too soon to make a judgement.
In regard to the Fortress note, it was coming due anyway, and the company needed to roll it over; that is a pretty standard practice when you purchase something with seller's paper. Had they waited longer, it would have been irresponsible. Addressing the property issue, you are correct. They own 2 of the card rooms that they run. But, a lot of their operations have restaurants in them as well, so, I am not concerned about the PP&E valuation. If they overpaid for anything, that would show up as goodwill, which, I personally place little value on when looking at the balance sheet.
Additionally, I am surprised to hear your complaints about marketing. They recently gave away 20 Carnival Caribbean Cruises AND a new Toyota Camry. Are there any other card rooms that can do these sorts of promotions? Certainly not many can operate with the scale that UWN can.
As such is the case, I am not worried about their WA ops. Looking at Cripple Creek, they sold it for a nice price given what it is producing. They will be generating interest on the sale and save a bit of money by paying off debt as well. Furthermore, not having the property will let them focus on the areas in which they are (and will be) located. Having a single property in Colorado, which current management didn't purchase, got to the point that it didn't make much sense.
Plus, Cripple Creek is a brutal market... without going it into very much, the city has something like 14 casinos in it. That number is almost 1/4 of all of the card rooms in Washington state. The Colorado Grande was one of the smaller operators in the city. The situation in CO is almost completely the opposite of that in Deadwood and Washington.
I don't know your personal experience, but, they do have multiple lines of coffee, and have made a private label brand for Target (which most probably don't know is a FARM product). Personally, I am not the biggest fan of burgers made by Burger King and Wendy's, but that doesn't mean that if their stock traded at an acceptable price that I would pass them up, just because I don't purchase their product and others do.
I think that you are missing the understated coffee bean inventory, that really does a lot to bump up the assets of the company. While the balance sheet has shrunk, it is largely due to an acquisition that will likely help out the company over the long term (but, I am not going to say that it was the best use of capital)... Presently, it doesn't seem that I am paying much for the expanded footprint. Just because they overpaid for something in the past doesn't mean that the cash flows the acquisition will provide the company are undervalued in the market place.
Additionally, the company is restructuring and is working to find a new CEO. As I said in the article, even if the turnaround doesn't work, I have downside protection.
Capital allocation and share issuance is something that all companies generally have in common. Figuring out where some go wrong, and others do well is something that will help out your investment knowledge. I am pretty familiar with UWN, don't follow any companies that have recently raised capital, and, their most recent S-3 has been the subject of controversy, much like NFLX. Hence, I mentioned it in the article.
I will be writing about this soon... For a host of reasons, I don't view it as a bad transaction at all. You may want to subscribe to my blog (http://bit.ly/tEihXy) as some of the articles slip through the cracks and miss seeking alpha.
For some reason my disclosure/disclaimer didn't show up in the article...
Disclosure: Long Syms. This is not advice of any kind. Always do a ton of your own research in regard to anything that I say, do, write, or so much as think about. I may buy or sell shares of this security at any time.
They have been in an appraisal process for sometime, to make sure that there were not any mineral rights that they were missing. This write down is not a shock to me, and frankly, I am glad that they are doing it, as taking the write down now shields them from income taxes in the near term, rather than a few years out. The carrying cost is low, so, it isn't that big of a deal, and shouldn't change anybody's view of the intrinsic value of the company, provided that they had done their research.
These guys are really good operators, but, when it comes to valuing land in Colorado, things get a little more tricky. Regardless, this is such a small chunk of the overall pie; they are likely going to generate significantly over $80 million in revenue in the coming year...
Besides, present management didn't buy this land, they inherited it from previous executives, who almost bankrupted the company. Of the assets that the company had when Sturges came in, this is one of the 3.
Here is a link to the notes (as SA has yet to pick them up...)
ragnarisapirate.blogsp...
My notes are up.
I will be posting notes soon.
Yes! Here are my thoughts:
ragnarisapirate.blogsp...
In a nutshell, yes.
Union or not, the stock is cheap relative to the prospects for the company...
The tax assessment value of the North Randall Store is about $4 million... Are you sure that the comps are for less than $1 million? While government assessments can be off, I highly doubt that it would be off by THAT much.
This is probably small part of the market aversion to the stock. I don't think that this will be a huge deal that the company can't work through.
The stockholders meeting will likely be in early/mid July, at 1 Syms Way, Secaucus, NJ (which you can take public transit to from any airport servicing NYC). However, we won't know when exactly until the final proxy is released.
It seems that other people are taking notice... Has anyone else seen the crazy jump in volume of SYMS shares being traded?
www.gurufocus.com/news...
www.gurufocus.com/news...