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  • China Green Agriculture Chairman's Fulmination, Accusations Of Terrorism, And Another 'Sell' Rating [View article]
    >>If this is a fraud, the insider buying of the CEO makes no sense.<<

    That is extremely naive.

    A) How do you know he even cut the check? Per the Form 4:

    "On October 1, 2014, the reporting person subscribed 496,445 shares of common stock through a private placement from China Green Agriculture, Inc., at a purchase price of $2.25 per share, for an aggregate purchase price of $1,117,000."

    Why wouldn't he purchase shares in the open market through a registered broker?

    Why dilute fellow shareholder/victims with a buy from treasury at "low" prices?

    They have a June Fiscal Year so the earliest an auditor would even look at this is late 2015.


    B) Even if he did cut the check:

    He owns 8.7M shares worth nearly $20M. Who knows where other shares are.

    What is a million or two if a fraudster thinks he can unload the rest from actual or other accounts.


    C) Even if he did cut the check, how do you know where the funds came from? Were they borrowed against shares the counterparty shorted, and so on.


    The key point is, when it comes to fraud, you can't just accept something on face value just because it appears on your screen or on a piece of paper.

    Defrauding westerners is a national sport in China.

    The reality is this company has done little to nothing to even address the allegations raised by the author.

    Caveat emptor.
    Oct 22 04:04 PM | 4 Likes Like |Link to Comment
  • China Green Agriculture Chairman's Fulmination, Accusations Of Terrorism, And Another 'Sell' Rating [View article]
    Yes, that 10 cent payout on a $2.32 stock that will have 10 cents per share left on the balance sheet, and curiously isn't payable until 2015, will surely scare away "desperate shorts" that think this is a zero.
    Oct 22 10:24 AM | 6 Likes Like |Link to Comment
  • Intel And Microsoft Relatively Cheap On EV/EBITDA Basis [View article]
    They do, unfortunately. Their capex is roughly $11 Billion this year, or roughly half of their EBITDA. The reason they need to keep building them is they need to keep buying and building new equipment so they can make the newest chips - eg transistor density, smaller nanometers etc. Little of the fab cost is in the land, building, etc.

    IMHO Intel is in a tough spot. Nowhere in mobile and still losing $1B per quarter or so on it. Core PC business is flat at best (despite recent bump from Windows XP support falling off).

    Diisclosure: long MU, short INTC (previously long QCOM and short AMD).

    I am not hugely negative on INTC but think it's a good funding short as I dont see a lot of upside in the medium term.
    Oct 19 03:45 PM | Likes Like |Link to Comment
  • Intel And Microsoft Relatively Cheap On EV/EBITDA Basis [View article]
    The EBITDA / Free Cash Flow conversion for these companies is very different. E.g. Intel has huge capital expenditure as it has to keep building fabs which sucks up a ton of the EBITDA, vs. QCOM which is largely an IP licensing model. If you run a DCF on these companies you'll get very different results as to what is cheap.
    Oct 19 10:25 AM | Likes Like |Link to Comment
  • HCI Group: The Wizards Of Tampa, Part V [View article]
    Great work. Keep'em coming.
    Oct 17 09:15 AM | Likes Like |Link to Comment
  • Lamar Advertising - Get Paid Handsomely To Wait For Multiple Expansion [View article]
    Sorry I can't seem to link the investor presentation on their website. Here is the content:

    "Expected 2014 dividends of $2.50 per share¹
    –$0.83 dividend declared, payable June 30, 2014 to shareholders of record on June 1, 2014
    –Additional distributions expected at end of September and end of December 2014
    –Reflects annualized 2014 dividend of $0.625 per quarter"
    Oct 16 04:00 PM | Likes Like |Link to Comment
  • Lamar Advertising - Get Paid Handsomely To Wait For Multiple Expansion [View article]
    Lamar's dividend yield is 5%. They pay $2.50 annually but for 2014 post REIT conversion they crammed 4 payments into 3:

    http://www.lamar.com~/media/31357A3FEA3F42...

    See page 28.

    So instead of 4 payments of $0.625 they have 3 payments of $0.83 for 2014.

    It's still a buy though.
    Oct 16 03:56 PM | Likes Like |Link to Comment
  • Time To Buy Long-Term U.S. Government Bonds [View article]
    This is still applicable today. The ZROZ has returned +20% since I wrote this article, with 12% of that return in the past 4 weeks, just when a portfolio needs it with markets collapsing.
    Oct 16 12:09 PM | Likes Like |Link to Comment
  • Destiny Media's Problem Child [View article]
    Oct 15 Update. It seems the CFO started dumping stock a few days after I wrote this article but never filed insider trading reports.

    A Form 5 was just filed (annual statement of change in beneficial ownership):

    http://1.usa.gov/ZDSA9F

    Showing sales on Feb 24. The transaction code is S4 which means it was a sale that "Should have been reported previously on Form 4" Per SEC instructions:

    http://1.usa.gov/ZDSApT

    I find this rather curious, he seemed to be on the ball regarding his SEC requirements when he filed his Form 144 (notice of intention to sell) on February 7, per my article and the link here:

    http://1.usa.gov/ZDSCy6

    But seemed to "forget" the filing of the actual Form 4 sales.

    He sold at $1.20 and $1.23 and was only able to get off of 6,500 shares as the next day the stock collapsed down to $1.03. One has to wonder if he "forgot" the Form 4 because of the optics.
    Oct 15 12:12 PM | Likes Like |Link to Comment
  • Owens-Illinois: An Underfollowed And Misunderstood Glass Blower? [View article]
    >>You act as if interest rates a year two or three years from now will remain at these ridiculously low levels.<<

    Yes, that is my belief, and has been for some time. The market is also pricing this in. OI has a meaningful amount of Euro debt for example. The German 7-year bonds yield 0.36%, the 10 yr 0.84%. Heck even the French 15-year has a 1.79% on it. If you think short and long term rates are going to spike higher and then yes, any company with debt will suffer.

    You can read some of my (largely unchanged) views on interest rates here:

    http://seekingalpha.co...
    http://seekingalpha.co...

    >>with an ev of over $7 billion it is not as attractive with only about 350 mil in fcf.<<

    You are mixing apples and oranges here - the free cash flow only applies to the equity (i.e. it is after interest expense). So that would be 350 (more like $375 to $400 next year) on $4B of market cap (hence the 9-10% FCF yield).

    IMHO a 2.5x debt/ebitda level of gearing is totally appropriate, if not conservative in a low interest rate environment. At BB+ now they are only a tick away from investment grade.
    Oct 14 01:31 PM | Likes Like |Link to Comment
  • Owens-Illinois: An Underfollowed And Misunderstood Glass Blower? [View article]
    "interest expense is running about 54 mil a qtr or about 6% at 3.5 bil in debt"

    Yes, however as their debt rolls over that will come down substantially, and there are refinancing opportunities. For example their 2020 bonds have a coupon/cost of 6.75%, but their yield-to-worst in the market is only 3.6% (those are Euro pay).

    They have $600 million in USD bonds maturing in May 2016 with a coupon of 7.38%, but a yield-to-worst of 2.7%. The refi of that bond alone should shave $10s of millions off in interest.

    >>the cos capital allocation strategy is just not working for shareholders as the share price has done nada for a very long time<<

    I won't argue about the share price, and have just bought in recently so don't really care, but the capital allocation strategy has been exactly as you prescribed - they have paid down about $2B in debt from peak levels in 2006, and started buying in stock in 2010 ($200M) and $30-$35M in each of the last few years, and anticipate "at least" $100M next year, which at these low prices should be nicely accretive.

    Free cash flow was $200M in 2011 is now running in the $375M range, offering a FCF yield in the 9-10% range.

    IMHO basically we are at an inflection point with deleveraging largely run its course, interest costs going down from here as debt rolls over, and free cash flow exploding, with a stated objective of using a large part of it buying back stock at low prices.

    Anything can happen but this is a rare fat pitch on a risk-adjusted basis, especially with a 2-3 year horizon which is my view.

    GLTA
    Oct 14 12:11 PM | 1 Like Like |Link to Comment
  • Owens-Illinois: An Underfollowed And Misunderstood Glass Blower? [View article]
    The company has deleveraged and debt is not longer excessive. not by a long shot. Net debt is around $3.45 Billion, against EBITDA of about $1.3 Billion for about 2.65x, close to their LT target of 2.5x.

    The weighted cost of their debt is about 1.7% per Bloomberg.

    With the deleveraging largely over, buybacks will be increased and I wouldn't be surprised to see dividend increases as well.

    I don't view OI as a permanent holding neccessarily. It's basically one to buy at 6X EBITDA and sell at 8x. We are near the lower bound now.
    Oct 14 10:00 AM | Likes Like |Link to Comment
  • Sphere 3D and Overland Merger Update [View article]
    Puff puff pass, eer! eer!
    Oct 14 09:37 AM | Likes Like |Link to Comment
  • Owens-Illinois: An Underfollowed And Misunderstood Glass Blower? [View article]
    Great summary. Now one of my largest holdings.
    Oct 14 08:54 AM | Likes Like |Link to Comment
  • Is Citizens Life Insurance A House Of Cards? Strong Sell [View article]
    Wow.

    Another good one PumpStopper.
    Oct 13 12:19 PM | 4 Likes Like |Link to Comment
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