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Myles McCabe

 
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  • Short E-Trade Due To Creative Destruction From Robinhood App [View article]
    Can you really count $26 billion in customer deposits as a liability though? Isn't that mostly offset by assets in customer accounts? If you back out that number, debt to equity becomes roughly 3x. Long-term debt is just $3 billion against $4 billion equity. That's not bad for a financial company.
    May 13 01:42 PM | Likes Like |Link to Comment
  • NCR: Disrupting The Teller [View article]
    I still think fair value is around $40. The APTRA teller system had strong growth and that's the core of my thesis. I didn't hear anything on the call that changed the long-term outlook.
    Oct 28 08:36 AM | Likes Like |Link to Comment
  • Now Is The Time To Be Fearful [View article]
    It sounds like your complaint is with the AMA and their caps on medical school admissions. Or the silly requirement that you see an MD for a headcold. Rather than complaining about the demand side of the equation (darn sick people) why not fix the broken supply side? It would be far more productive.
    Sep 28 03:00 PM | 1 Like Like |Link to Comment
  • CH Robinson: The Supply-Shock Catalyst [View article]
    Shane,

    Thanks for the comment. The shift towards rail, especially intermodal, is definitely a factor for CHRW, but in the interest of brevity I wanted to keep the article focused on the immediate catalysts. To your point, if the cost of truck transportation increases, you will naturally see a shift towards intermodal freight which is cheaper and becoming reasonably reliable thanks to infrastructure investments by the railroads. CHRW isn't positioned as well as HUBG or JBHT to capture intermodal traffic, but they do generate about 3% of their net transportation revenue from intermodal services. That's on par with intermodal's share of the trucking market, so CHRW has an opportunity to grow that service along with the industry. Intermodal requires drayage operations (trucks to load and unload the containers from the train), which can be logistically challenging and presents an opportunity for CHRW to act as coordinator, especially if there is a shortage of trucking capacity for drayage. The cost of intermodal are also set by the railroads, so its not a static alternative.
    Jul 3 09:23 AM | 1 Like Like |Link to Comment
  • Is OCZ Making More Money Than You Think? [View article]
    Based on what evidence? I'm not saying its true or false, but if you picked 10 people off the street and made them CEO, 9 of them would know they needed to get their financials current and file, so his actions to that end are not particularly revolutionary. Most of them would know they need to raise money, but even in doing that Mr. Schmidt has closed what's essentially a lend-to-own agreement with Hercules. Having failed to raise $10 million in new capital by June 13, OCZ is now giving away $73,000 in warrants for each calendar day they are delayed. (http://bit.ly/15fGlim). Through the end of June, that was roughly 1% of the company. Not to mention the company's history of dilutive secondary offerings while the present CEO was a director.

    What we do know is the CEO is 1) diluting existing shareholders; 2) a member of the audit committee that failed to detect fraud or quasi-fraud under the previous CEO; 3) still not current in his filings for the last 18 months (2012, first two quarters of 2013) despite having been in charge for 8 months now.

    So I ask again, based on what evidence do you assert the current CEO is either working his butt off or turning things around?
    Jul 3 09:02 AM | Likes Like |Link to Comment
  • Is OCZ Making More Money Than You Think? [View article]
    Based on the CEO's history on OCZ's audit committee I think that's a very open question.
    Jul 2 12:24 PM | Likes Like |Link to Comment
  • Why United Parcel Service Is A Pass [View article]
    Thanks for the analysis and for providing your figures. Most people aren't brave enough to do that as it exposes them to unproductive criticism of subjective assumptions. I appreciate it though.

    In your investment considerations graphic, you say "Financial Leverage = Low." Liabilities are 7.35x equity and long-term liabilities account for 85% of invested capital. In light of those numbers, how did you arrive at a low leverage determination?
    Jun 11 02:00 PM | 1 Like Like |Link to Comment
  • Privatized Prisons: Public Relations Nightmare But A Pretty Great Business [View article]
    Boston Properties has tenants just like CCA, sure. Unlike BPX, CCA's tenant's generate enormous potential liability and literally spend their entire day working to the detriment of their landlord, either physically or in an attempt to generate liability and press lawsuits. Unlike BPX, CCA employs armed guards who could shoot a tenant and generate liability at any moment. Not to mention the risk of the tenants rioting and potentially killing another tenant or REIT employee, generating further liability. I'm fairly confident BPX has no comparable issues, unless the See's Candy woman and the Godiva chocolate man get a bit too competitive.

    That's not even my biggest fear on CCA, since their potential liability is insured to some extent (you can't insure against bad press). What happens to their revenue as states continue to transition from incarceration-based systems to treatment-based systems for drug offenders? What if cash strapped states grant releases to non-violent offenders, as has been done already in California and proposed in numerous other states? This has to be a tail risk for CCA.
    Jun 7 10:56 AM | 1 Like Like |Link to Comment
  • Newell Rubbermaid: Strong Brands Should See The Company Through [View article]
    What growth opportunities do you see specifically? It appears to me the company's sales growth is stuck at GDP (at best). Do you think they can cut enough fat to justify trading at 20x earnings?
    Jun 3 12:05 PM | 2 Likes Like |Link to Comment
  • Reasons To Add Facebook To Your Stock Portfolio [View article]
    The beginning and end of the discussion centers around MySpace. In 2005, News Corp bought MySpace for $556mm. They loaded it with advertising, which caused users to flee to a new service called Facebook. In 2011, News Corp sold MySpace from $50mm.

    Facebook's next generation of teen users absolutely won't use the same site as their parents and grandparents. Who wants that? Learn from history and remember that cool websites have the same shelf life as ice cream on a hot day.
    May 30 09:37 AM | 3 Likes Like |Link to Comment
  • NCR: Disrupting The Teller [View article]
    The pension certainly competes for cash flow that could otherwise be used for a dividend or buybacks. NCR has historically favored buybacks, having allocated $565mm to buy back its own stock since 2008. Its possible that a favorable resolution of the pension could result in initiation of a dividend.

    2012 combined interest and capex was $120mm with EBITA at $390mm, so there is plenty of wiggle room for a dividend or buyback. I don't really see a dividend in the cards at this point though. There are plentiful opportunities for internal reinvestment and revenue growth will drive the stock - no need to goose it artificially.
    May 30 07:37 AM | Likes Like |Link to Comment
  • Tesla At $97: How Many Cars Does It Need To Sell? [View article]
    I suspect you'll see exceptions made by most state legislatures. Texas seems to be the first and largest hurdle. The state has a wealthy and powerful network of distributors with an economic interest in the outcome. I'd watch Texas closely if I was long TSLA - its the Holy Grail.
    May 27 12:02 PM | 1 Like Like |Link to Comment
  • Tesla At $97: How Many Cars Does It Need To Sell? [View article]
    At your behest I looked up Youngstown Sheet & Tube v. Sawyer (343 U.S. 579) which held that neither the President nor the Secretary of Commerce has inherent authority to issue an executive order in the public interest and must act pursuant to an act of Congress or the Constitution when affecting a state law matter (Property rights, in that case). This is a fairly well-known case pertaining to Executive power.

    Where else should I look?
    May 27 11:38 AM | 4 Likes Like |Link to Comment
  • Tesla At $97: How Many Cars Does It Need To Sell? [View article]
    That wouldn't be legal. The President doesn't have a shred of authority to overturn state law by executive order.
    May 27 11:11 AM | Likes Like |Link to Comment
  • Tesla At $97: How Many Cars Does It Need To Sell? [View article]
    GM, F, HON have no substantial difference between their product offerings - traditional gas sedans, trucks, SUVs, etc. Advertising spend by each is an attempt to differentiate products that are not very different. Obviously, TSLA offers a very different product. I've personally never seen one in my city, and I don't know anyone who's ever seen one either. Once Teslas start cruising the streets in places outside NY and CA there will be a self-promotional effect as Julian Cox pointed out. I'm simply proposing the effect will be brief (1-2 years) while he seems to see it playing out over several years. Of course, all this is moot if Tesla can't get past state laws banning direct sales of automobiles.
    May 27 11:03 AM | 2 Likes Like |Link to Comment
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