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Jonathan Verenger  

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  • Investing Opportunities In India, Part 2: Eros International [View article]
    If only this game was so easy as to pick winners every time. In order to stay in the game long enough you need to cut your losses quickly. I took a hit on this and just moved on. I'm sorry again if you followed me.
    Nov 15, 2015. 10:25 PM | Likes Like |Link to Comment
  • Investing Opportunities In India, Part 2: Eros International [View article]
    Crazy how much this dropped. I ended up taking a 30% hit on this stock. I typically draw the line at 15% but this dropped so fast I didn't get out in time. I'm sorry to have picked this one. You have to draw the line somewhere on your losses and recognize that the market knows more than you do. Clearly some fraud was going on here.
    Nov 15, 2015. 10:23 PM | Likes Like |Link to Comment
  • Investing Opportunities In India, Part 2: Eros International [View article]
    Unbelievable huh? This market is lethal. The only advice I can give is to cut losses quickly. I've found so many times that the first sale I make is the best one.
    Oct 27, 2015. 12:49 PM | Likes Like |Link to Comment
  • Eros: Bullish Thoughts Post Management Meeting [View article]
    My take:

    *this had some momentum traders behind it who bailed
    *the market is so jumpy right now
    *sell the news
    *stops got cleaned out
    *shorts pressed
    *then some people spread the news about the writer that brought a lawsuit on 10/8 against the writers of Bajrangi Bhaijaan which is due to go on trial and the judge ordered that the revenues be held until the trial in 2 weeks and people panicked.

    The lawsuit, by the way, is a claim that the story was stolen from another writer who is seeking $7.7 Million in damages and that he have his name added to the script. EROS was not the writer or producer, just the distributor, so if that was the reason for a majority of the selloff then a $400 to $500 Million market cap hit for a $7.7 million suit which EROS most likely has no liability for is a bit of an over reaction.
    Oct 15, 2015. 07:23 PM | 3 Likes Like |Link to Comment
  • Investing Opportunities In India, Part 2: Eros International [View article]
    The selloff yesterday could have been exacerbated by fears about a lawsuit that was filed claiming the biggest hit of the year in India was copied. The writer filing the suit is asking for $7.7 Million and for his name to be added to the film.

    The courts are holding up releasing the revenues from it until the trial is done which i think is in 2 weeks. I don’t believe EROS is at fault either way because they didn't write or produce the film - they just signed a deal with the producer to distribute it. Probably reason people panic sold.

    Either way its amazing that a $7.7 Million lawsuit could potentially be the reason behind a $450 Million market cap drop.

    If you're not long yet I think this is a good opportunity to buy.
    Oct 15, 2015. 12:38 PM | Likes Like |Link to Comment
  • Investing Opportunities In India, Part 2: Eros International [View article]
    Abu - Thanks for the reply. Today was a horrendous day for the stock, clearly. People have to be very honest with themselves on how long they want to hold it and how much pain they can take. This is no doubt a risky company given that it is based out of India and rules and regulations are different there than the US. But the upside is potentially quite large.

    I've heard the pirating thing a lot and it reminds me of the US 15-20 years ago. Napster and all of the other sites that were set up to pirate content have more or less been squashed. New ones come up but they get squashed again and people have to deal with pop ups and potential viruses from the new sites. Some people may be ok with it but a lot of people will come to realize the value you get with streaming type services is worth the small investment.

    EROS allows free viewing with ads and I think this platform alone could generate significant ad revenues. If they can grow it into a critical mass type app then I could see it becoming something like a social networking app as well, a la Tencent (TCEHY). Movies / tv shows are "sticky".

    Again, best to keep the position small and be honest with yourself about how much risk you can tolerate.
    Oct 14, 2015. 04:50 PM | Likes Like |Link to Comment
  • Oil: $20 Or $70 [View article]
    Can it be somewhere in between?
    Oct 13, 2015. 03:23 PM | 3 Likes Like |Link to Comment
  • Investing Opportunities In India, Part 2: Eros International [View article]
    I think it's wise to view these Indian plays with a very long term view. When you have less than 90 million people out of 1.2 billion using broadband, there's just tremendous opportunity for growth
    Oct 12, 2015. 10:18 AM | 1 Like Like |Link to Comment
  • Zillow posts big gains [View news story]
    I've been long this for the good majority of 3 years now and have seen so many short sellers complain about silly things like the dual class structure over that time. It's a wonderful business. Stay long
    Oct 9, 2015. 10:41 AM | 1 Like Like |Link to Comment
  • Low P/E Stock Of The Day No. 23: TravelCenters Of America [View article]
    Balanced comment Valu Buyer. I agree with both sides.

    I have been buying back into TA since I wrote my last article and sold after it ran up to $16. I like the valuation a lot down here.
    Sep 11, 2015. 12:31 PM | Likes Like |Link to Comment
  • Brazil: 2015 69% Debt-To-GDP Could Trigger Ratings Downgrade [View article]
    Good call. Just saw a downgrade note from S&P
    Sep 9, 2015. 06:30 PM | 3 Likes Like |Link to Comment
  • YRC Worldwide: The Recovery Appears Real This Time [View article]
    I agree on YRCW. I think this is a good speculation. I do expect lower prices in the market over the fall so might make sense to leg into this one.
    Sep 2, 2015. 01:33 PM | 1 Like Like |Link to Comment
  • Autohome: Garage Sale [View article]
    Good article. If I compare BITA and ATHM, I come up with a few things clearly in favor of BITA:

    1.) Valuation:
    EV to TTM Sales is almost absurdly skewed in BITAs favor. $1.8 Billion market cap less $825 Million cash = $975 Million market cap. TTM Sales of $531M means a multiple of 1.8. ATHM is at about 7.6.

    While I agree with the issues you raised about non-GAAP earnings with regards to amort, it does make sense to normalize BITA's earnings as the amort issue will go away down the road and they are clearly currently overspending relative to recent history as they get their partnership with JD/TCEHY off the ground. I don't think it's smart to use current year EPS / free cash flow because of this.

    2.) Entrepreneurial founder with 15% stake vs somewhat flailing corp holder with 50%+ stake. In this scenario I will choose the one with the entrepreneurial founder with a substantial stake every single day of the week. At any moment's notice Telstra may feel compelled to take money off the table and create a major psychological overhang for the company. And the entrepreneur founder is almost always willing to take more risk to see through to his vision. Great example of this is FB vs TWTR.

    On the flip side, ATHM has much higher net margins and has had much steadier income growth. But this also might be a case of them not spending a lot on the used car market and transactions segment, which may indeed become huge parts of their business model going forward. This may again come back to them being run by a corporation looking to maximize near term profits at the expense of longer term survival.

    So perhaps ATHM's investment cycle hasn't kicked into gear and the opposite may be true with them vs BITA: it might make more sense to "normalize" ATHM's earnings downward to reflect increased spending for these two segments.

    In general, with internet businesses, I always am more willing to buy companies whose management team / largest shareholders consist of entrepreneurial founders vs corporations. They tend to have longer term visions of where the future of the business is heading and are willing to sacrifice profits now for potential domination of their segment down the road.

    I'm still researching these two companies, but on paper it also seems to me that ATHM should take advantage of BITA's recent 70% haircut and just buy them out. That would eliminate a helluva lot of duplicate spending in marketing / advertising their current business models as well as duplicate spending in rolling out their used car and transaction based businesses.
    Aug 17, 2015. 01:41 AM | Likes Like |Link to Comment
  • A Closer Look At [View article]
    Thanks for the idea Yeti. I typically stay away from the energy markets because I have never been able to figure out how to value oil.
    Aug 8, 2015. 12:44 AM | Likes Like |Link to Comment
  • A Closer Look At [View article]
    "because it could go either way from here. " You said it perfectly. How could I possibly know? What if the Indian economy continues to strengthen and oil stays low...would that not inevitably be good for the rupee?

    Also, consider the flipside to a strong dollar: extra demand for international travel to locations other than the US. What if a low currency is good for travel to Europe? The company mentioned this in the conference call:

    "On the packages business side, our push on the long-haul travel resulted in high growth of Europe outbound bookings."

    And if you look at international travel, the CAGR is actually higher (44% vs 27% for domestic) and accelerating recently (maybe b/c of the strong dollar?). See below:

    YEAR International Transactions Growth
    2008 - 35,644
    2009 - 45,497 +27.64%
    2010 - 93,757 +106.07%
    2011 - 146,033 +55.76%
    2012 - 185,623 +27.11%
    2013 - 241,388 +30.04%
    2014 - 327,392 +35.63%
    2015 - 463,375 +41.54%

    International transactions have grown from 3% of total air travel to 9%. Within a few years this could be a huge boost to their average ticket price, which I didn't include in my projections because international travel means much higher ticket values and higher revenues for MMYT, helping offset currency effects. You can't just look at the currency moves in a vacuum which is why I left it out.
    Aug 7, 2015. 10:43 AM | 1 Like Like |Link to Comment