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  • Books-A-Million: A Classic Value Play [View article]
    Yes, sorry. I meant EBITDAR. I have written an article about BAMM a few months ago (you can easily find under my profile). BAMM's management is a problem. I also don't like a large number of related-party transactions: they buy magazines from a family-controlled supplier, the yogurt joint venture is with another family-owned fund, etc.

    Having said that, I still think it's a buy based on a very cheap valuation but HAST may be a better value play in a similar business as they have a stronger free cash flow.

    I know that many posters compare it to Borders and Blockbuster but BAMM has no long term debt so it can afford to "shrink" itself to profitability since no Debt/Equity ratio to worry about.
    Aug 3, 2011. 04:22 PM | Likes Like |Link to Comment
  • Books-A-Million: A Classic Value Play [View article]
    This is not entirely correct. You should add Present value of Op Leases to denominator and adjust the numerator since its both an implied asset (stores) and a liability (leases).

    Actually, it's even more complicated than and requites some nifty Excel work:

    books.google.com/books...

    An easier metric to use is EV/EBITRDAR where you add rent back. BAMM is very cheap by this metric vs. peers.
    Aug 3, 2011. 12:19 PM | 1 Like Like |Link to Comment
  • Can Books-A-Million Manage Its Way Out of Bad Economics? [View article]
    I am actually OK with increasing store count. They did not just increase it but they closed some too. So replacing marginal performers with new stores may be reasonable. I agree that share buy-back would be better than paying dividend in this case. The stock certainly looks undervalued.
    May 14, 2011. 02:04 AM | 1 Like Like |Link to Comment
  • Can Books-A-Million Manage Its Way Out of Bad Economics? [View article]
    Thanks for kind words. BAMM fully paid down debt so its balance sheet looks pristine. No capital lease either. It has $10.4M long-term liabilities which is almost netted-out by free-cash of $7.4M.
    May 14, 2011. 02:01 AM | 1 Like Like |Link to Comment
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