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  • The Most Consistent Risk/Reward Speculation That I Have Ever Found [View article]
    Dkostek, this is unnecessary harsh and not entirely accurate. The borrow rate now for EDC and EDZ is about 4.5% on IB. IB and other professional brokers charge around 2% on margin balance. So this is not such a high watermark to beat.

    The real life strategy would have to take into account the factors you mentioned but it can be successful in principal if you spend the time to conduct daily analysis. It's just not as cut and dry as one might believe.
    Dec 20, 2014. 07:52 PM | 1 Like Like |Link to Comment
  • Understanding How Amazon's Use Of Capital Leases Overstates Its Cash Flow Metrics [View article]
    Very nice article. Amazon bonds are already approaching "junk" territory...
    Dec 10, 2014. 04:44 PM | 4 Likes Like |Link to Comment
  • Joe's Jeans: No Need To Go Bankrupt, Just Throw The Bums Out [View article]
    You are not quite correct about PIK. Don't forget that Dahan and convertible notes aren't getting paid now (it still accrues) which actually offset about $5-6 million a year:

    "as a result of the events of default under the Term Loan Agreement and the revolving credit agreement, the Company is prohibited from making any (i) payments under the subordinated convertible notes issued to the former equity owners of Hudson Clothing Holdings, Inc. and (ii) earnout payments to Joe Dahan. "
    Dec 3, 2014. 02:30 PM | Likes Like |Link to Comment
  • Joe's Jeans: No Need To Go Bankrupt, Just Throw The Bums Out [View article]
    Companies don't voluntarily file if they can pay because it means two things: 1) zero to shareholders and 2) management is replaced. Now, the management are the biggest shareholders or junior creditors who will likely get next to nothing in Chapter 11 (Grossman, Dahan, Kim) so obviously they will do their utmost not to file.

    Involuntary bankruptcy is a possibility, but probably only if it's clear this quarter is bad and the lenders want out any cost (possible but probably too early for that).
    Dec 3, 2014. 01:51 PM | Likes Like |Link to Comment
  • Joe's Jeans: No Need To Go Bankrupt, Just Throw The Bums Out [View article]
    Thank you for reading. I still see no rational basis for putting JOEZ into bankruptcy. Everyone would lose. This Q would be critical - if the cash flow is bad then who knows - BK may be an option, but if they show improvements, the return could be huge.

    I think the stock plunged: a) someone knows something (obviously BK) or 2) some bin investor needs to offset capital gains or 3) Joe Dahan really needs money after his 63K allowance was put on hold by technical default

    Next couple of days will be critical in terms of the news. Watch for Sec 4 forms.
    Dec 2, 2014. 11:23 PM | Likes Like |Link to Comment
  • The Cloud Is A Long-Term Negative For The Server Market [View article]
    I don't think the demand will decline at all. The margin pressure though will be relentless. With Wintels becoming cheaper and cheaper, CPU is the last component which is maintaining gross margins in excess of 60%. IBM, SUN, and HP got out of chip business seeing that that customers will not pay a premium, it's just a matter of time before some Chinese no margin operator will come in (or maybe buy AMD) and will put a sticker on every computer "Who cares what's inside?"
    Nov 26, 2014. 04:23 PM | Likes Like |Link to Comment
  • The Cloud Is A Long-Term Negative For The Server Market [View article]
    Are you saying that Intel reported that according to its own research it's a great choice? :)
    Nov 26, 2014. 02:50 PM | Likes Like |Link to Comment
  • The Cloud Is A Long-Term Negative For The Server Market [View article]
    Not at all. Intel has no choice but to invest in cloud or be another "Blockbuster" (not the movie, the company). I am afraid Intel today is where Compaq and Sun were in 2000. The PCs and servers didn't go away, they just became low margin commodities, the same will happen to chips.
    Nov 26, 2014. 02:48 PM | Likes Like |Link to Comment
  • The Cloud Is A Long-Term Negative For The Server Market [View article]
    Paulo, overall I think your thesis is good but I disagree with a couple of points:

    "Although less servers are needed, this trend does not affect storage".

    Cloud will eventually be very bad for storage (hard drives, SSD, etc.). If you are a consumer, you don't buy digital music, you stream it from Spotify. If you are a business user, you don't have to buy Microsoft Office and install it on your hard drive, you buy Office 360 streamed to you from the cloud. If you are a company, you don't back up your server data to offline storage, you rely on your cloud provider back-up which is much more efficient.

    I also think even a bigger problem for Intel and other "brand names" is commoditization of servers in the cloud due to virtualization and "big data" technologies such as hadoop moving calculations to a grid. If you are a cloud provider, you want to buy a million cheap no-name easy-to-replace boxes with modest CPUs, not a high-end 64 core server. The servers are racing to the bottom where the cheapest producer takes all, just like PCs did a few years ago.
    Nov 26, 2014. 02:07 PM | Likes Like |Link to Comment
  • No Alpha In Omega Protein [View article]
    I would have complemented your article if it came out a couple of days earlier but now it's old news with a 20/20 hindsight. Many investors don't understand an extremely volatile nature of OME main business with many moving parts and get overenthusiastic over a good earning report and bearish with a bad one. In reality, this is a very mean-reverting business where buying cheap and selling high, while paying less attention to last Q earnings, is the best strategy.

    I actually think that now OME presents a decently value after a huge sell-off. I am with you that one shouldn't be very comfortable with their last purchase of Bioriginal for that high a multiple (that's why I am not an owner of the stock at this moment). But overall one should start looking into getting back as the stock price will probably mean-revert just like it has always done.
    Nov 19, 2014. 01:17 PM | 5 Likes Like |Link to Comment
  • Joe's Jeans: No Need To Go Bankrupt, Just Throw The Bums Out [View article]
    Robin, EBITDA is likely to significantly improve as they cut post merger costs. Also, their CapEx is very small as they mostly do wholesale. So, given lower interest costs, most of it would flow to the bottom line (after tax).

    Joe's and Hudson are decent brands and do have brand equity. Just look how much they charge for their jeans.
    Nov 19, 2014. 10:12 AM | 1 Like Like |Link to Comment
  • RCI Hospitality: The Exotic Dancers Must Be Paid [View article]
    Alex, I'm not sure why you think Rick's didn't treat its employees well. The court decision made mockery of minimum wage laws. Do you really believe that any of the dancers were making less than $7 an hour? It's possible that the judge was handcuffed by idiotic labor laws and had no choice so I am also not exactly optimistic that Rick's prevail on appeal. Yet, the pay out is far away and you should take the present value of the payout which is much less than $10 million. In addition, the case wasn't going well for a while so a lot of it was already priced in.

    On an energy drink, all I can say Eric never learns his lessons from Ricky Bobby debacle. I agree that the company should stick to its core business where plenty of money can be made.
    Nov 19, 2014. 10:06 AM | 1 Like Like |Link to Comment
  • Broker-dealers: New SEC plan a Trojan Horse against dark pools [View news story]
    Just another horrible idea no doubt lobbied by market makers and exchanges so they can line up their pockets at the investors expense who will be forced to pay high spreads. Where HFC shop was stealing a penny, now a market maker will steal a nickel. Well done!

    Maybe we should go back to phone brokers with $400 for a simple trade so they can provide "objective research" for their clients.
    Nov 11, 2014. 05:40 PM | 4 Likes Like |Link to Comment
  • RCI Holdings: Destroying Shareholder Value One Deal At A Time [View article]
    Agree with Keubiko. The deal with the energy drink company is a head-scratcher but the amount invested is too trivial to qualify as the "destruction of shareholders' value". I wouldn't be shocked if some details will come out in 10Q/10K in "related party transactions". I would much prefer that the company put all its energy in cash reducing its high cost of mortgage debt by transferring to REIT or refinancing instead of stock buy-backs or acquisitions. RICk's is still paying over 10% on some its secured debt which is obscene in our ZIRP environment.
    Nov 5, 2014. 11:34 AM | 2 Likes Like |Link to Comment
  • Female Health Company: A Missing Stock In Ebola Mania? [View article]
    IV, thanks for reading. I agree that Dilma's election is helpful as she does favor social spending.

    My point on Ebola is that that the attention will eventually shift from controlling outbreak to its prevention. In the perfect rational world, Ebola would make the last page of a newspaper if at all as it will kill a much smaller number of people than flu, malaria, polluted drinking water, etc. There is yet a single person to die of Ebola in the Western World (in almost a year), apart from the patient who came already sick.

    In the stupid world we live in, driven by sound bites, talk show listeners who can't even locate Africa on the map, the focus will stay on Ebola for a while which will probably lead to opportunities for WHO and other NGOs to get bigger budgets. It will help Female Health to position itself as Ebola prevention company.
    Oct 30, 2014. 12:32 PM | Likes Like |Link to Comment