National Beverage: Upside Potential With Low Risk [View article]
Is the market finally waking up to the extremely favorable risk/reward situation in National Beverage? This low risk, low volatility stock (.43 beta) is up almost 14% since my article, vs a little over 6% for the S&P 500. Still plenty of room to run, as the undervaluation is still extreme and unwarranted. My assessment of fair value is well over $20 per share - I will be looking to add to my position on dips.
The Case For Long-Short VIX Portfolios [View article]
Interesting ideas Mike. I remember we had a dialogue about these products in the comments of my last VXX article. One point I think is highly useful is that there are times when the edge or bias for VIX related products is on the long side. Significant edges on the long side can occur when the market is in backwardation, among other factors.
National Beverage Company: Stealth Value [View article]
I agree Fin, I am not sure either. However, lets think about it logically, if we can.
It is a given that the company has been a large part of his career and has been massively stamped by his personality and talents, so in that sense it would be hard to let go of.
On the other hand, Caporella is now around 77 years old. At some point a premium valuation might be hard to pass up, as I think he has always thought like an investor (which is one reason why he has been a good CEO).
Like any person, he will be considering what the best use of his time will be, etc, given his age. Is it National Beverage or something else? We can't know what else is on his horizon, of course, but for the market to ignore the optionality imbedded in this stock is not logical.
National Beverage Company: Stealth Value [View article]
Great write up.
Nice discussion of this firm's "hidden assets" which are not accurately reflected on the balance sheet.
I recently gave a $20 per share price target, though I think your numbers are very feasible as well. National Beverage's cash flow and earning profile make it very valuable to a potential acquirer.
The company was also ahead of the curve with it's dividend recapitalization - Apple just recently got its act together and did the same thing. I expect we will be seeing more of these for some time to come.
"National Beverage's small size is a function of management's focus on creating shareholder value over empire building"
The above is a very true statement. In fact, National Beverage could in many ways be a model for how to create shareholder value in a highly competitive, constrained operating environment.
With regards to management compensation, there are indeed times when you get what you pay for - this is one of those cases. We are fortunate that this has been a public company though it could easily have been taken private at any time over the last X years.
Does Momentum Investing Actually Work? [View article]
"If it were so easy to beat the market using past returns, everyone would exploit that relationship until it is arbitraged away"
What works moves away from what the public is aware of and interested in in part for this reason - any strategy can only support so much capital.
Surplus capital allocated to a strategy alters the market in a way that creates profit opportunities for others. For example, after momentum gets hot for a while, traders start anticipating momentum buy levels, push the market to that level, then liquidate into the momentum buyers.
By the time a strategy is "hot" and funds are starting to heavily market it, it is time to move on or at least put the approach on a short leash. At some point it becomes a good fade.
Great write up. "Boring is beautiful" as you define it is my favorite type of investment. I love the companies like this that build incremental value every year without much fanfare. The fact is, though, there are just are not enough shares of these companies to go around, so in a way it is good that they stay somewhat under the radar.
I think BCPC followers (including myself) are waiting to see what Mr. Rossi does with the cash. A smart acquisition (as has been made in the past) would be very interesting. There is also the Curemark situation, which is a hidden "free option" within the company that could be worth zero or something very significant.
National Beverage: Upside Potential With Low Risk [View article]
Fair enough Mr. Alerts.
But it would have been more clear and accurate if you had said, "Financed with debt and new preferred shares".
It is hard to judge what the "and" means in your sentence, because issuing preferred shares is itself a form of financing. "Financed" is not the equivalent of saying "financed with debt".
National Beverage: Upside Potential With Low Risk [View article]
Well Mr. Alerts,
We have gone back and forth about the issues you raise once before. Needless to say, I disagree with you on all counts.
To other readers, please check my prior Seeking Alpha article on National Beverage (and the articles I link to from that article and my comments on that article) to get my full viewpoint on the dividend subject.
You did add one incorrect fact that I think needs to be addressed. The "bulk" of the dividend was not paid for with the preferred issuance - unless you can tell me how 20M somehow covered a 118M payment to shareholders. Please check the recent quarterly report to understand how it was funded.
You can also find risk factors in every single quarterly report and annual report. I have no interest in hashing out stuff via a template, I only include perspectives that I think add value.
Regardless of the grudge you harbor against Caporella's politics and style, the fact remains that he has generated one of the best corporate performances over 20 years as measured by total shareholder returns. What you call, "flamboyance" I call passion.
As it stands, I think Investors in FIZZ stand to make a very nice IRR over the coming period - and that you stand to eat a nice, heaping serving of crow.
When the time comes to wash that taste out of your mouth, I recommend a tall glass LaCroix Grapefruit flavor sparkling water. ; )
3 Companies With Innovative Management Teams To Propel Business Forward [View article]
Hi Phil,
Great Job highlighting National Beverage, which is a very high quality company.
I did one to point out one issue with your article, however. you state:
"The stock has yet to rebound from a drop it took in December when the company announced a special dividend of $2.25 per share"
This is not accurate. National Beverage actually went up close to 20% when the dividend was announced. I know, because I anticipated it in this article:
The fall occurred on the ex-dividend date, which is completely normal. the net effect is that owners of the stock were substantially benefited by this action. Regardless, the real story of National Beverage is what the future holds, not the past. Anyone who wants to know more, stay tuned for my next article.
Peter - After reading all of National Beverage's annual and quarterly reports over a 10+ year period, In my opinion investing beside Nick Caporella might be one of the surest bets in the entire stock market.
National Beverage: Upside Potential With Low Risk [View article]
The Case For Long-Short VIX Portfolios [View article]
National Beverage Company: Stealth Value [View article]
It is a given that the company has been a large part of his career and has been massively stamped by his personality and talents, so in that sense it would be hard to let go of.
On the other hand, Caporella is now around 77 years old. At some point a premium valuation might be hard to pass up, as I think he has always thought like an investor (which is one reason why he has been a good CEO).
Like any person, he will be considering what the best use of his time will be, etc, given his age. Is it National Beverage or something else? We can't know what else is on his horizon, of course, but for the market to ignore the optionality imbedded in this stock is not logical.
National Beverage Company: Stealth Value [View article]
Nice discussion of this firm's "hidden assets" which are not accurately reflected on the balance sheet.
I recently gave a $20 per share price target, though I think your numbers are very feasible as well. National Beverage's cash flow and earning profile make it very valuable to a potential acquirer.
The company was also ahead of the curve with it's dividend recapitalization - Apple just recently got its act together and did the same thing. I expect we will be seeing more of these for some time to come.
"National Beverage's small size is a function of management's focus on creating shareholder value over empire building"
The above is a very true statement. In fact, National Beverage could in many ways be a model for how to create shareholder value in a highly competitive, constrained operating environment.
With regards to management compensation, there are indeed times when you get what you pay for - this is one of those cases. We are fortunate that this has been a public company though it could easily have been taken private at any time over the last X years.
Mesa Laboratories: Growth Strategy Is Working [View article]
Mesa Laboratories: Growth Strategy Is Working [View article]
http://1.usa.gov/WiR8CG
Does Momentum Investing Actually Work? [View article]
What works moves away from what the public is aware of and interested in in part for this reason - any strategy can only support so much capital.
Surplus capital allocated to a strategy alters the market in a way that creates profit opportunities for others. For example, after momentum gets hot for a while, traders start anticipating momentum buy levels, push the market to that level, then liquidate into the momentum buyers.
By the time a strategy is "hot" and funds are starting to heavily market it, it is time to move on or at least put the approach on a short leash. At some point it becomes a good fade.
Balchem: Boring But Beautiful [View article]
I think BCPC followers (including myself) are waiting to see what Mr. Rossi does with the cash. A smart acquisition (as has been made in the past) would be very interesting. There is also the Curemark situation, which is a hidden "free option" within the company that could be worth zero or something very significant.
Once again, great write-up.
.
National Beverage: Upside Potential With Low Risk [View article]
National Beverage: Upside Potential With Low Risk [View article]
Texas Hold 'Em Tournaments And Value Investing [View article]
That is a very keen insight which I think applies to most all trading, not just financial market trading.
Heck, it is the premise behind the short-term financing industry such as pawn shops and payday loans.
Time pressure is a big one too.
National Beverage: Upside Potential With Low Risk [View article]
But it would have been more clear and accurate if you had said, "Financed with debt and new preferred shares".
It is hard to judge what the "and" means in your sentence, because issuing preferred shares is itself a form of financing. "Financed" is not the equivalent of saying "financed with debt".
National Beverage: Upside Potential With Low Risk [View article]
We have gone back and forth about the issues you raise once before. Needless to say, I disagree with you on all counts.
To other readers, please check my prior Seeking Alpha article on National Beverage (and the articles I link to from that article and my comments on that article) to get my full viewpoint on the dividend subject.
You did add one incorrect fact that I think needs to be addressed. The "bulk" of the dividend was not paid for with the preferred issuance - unless you can tell me how 20M somehow covered a 118M payment to shareholders. Please check the recent quarterly report to understand how it was funded.
You can also find risk factors in every single quarterly report and annual report. I have no interest in hashing out stuff via a template, I only include perspectives that I think add value.
Regardless of the grudge you harbor against Caporella's politics and style, the fact remains that he has generated one of the best corporate performances over 20 years as measured by total shareholder returns. What you call, "flamboyance" I call passion.
As it stands, I think Investors in FIZZ stand to make a very nice IRR over the coming period - and that you stand to eat a nice, heaping serving of crow.
When the time comes to wash that taste out of your mouth, I recommend a tall glass LaCroix Grapefruit flavor sparkling water. ; )
3 Companies With Innovative Management Teams To Propel Business Forward [View article]
Great Job highlighting National Beverage, which is a very high quality company.
I did one to point out one issue with your article, however. you state:
"The stock has yet to rebound from a drop it took in December when the company announced a special dividend of $2.25 per share"
This is not accurate. National Beverage actually went up close to 20% when the dividend was announced. I know, because I anticipated it in this article:
http://goo.gl/TzLdX
The fall occurred on the ex-dividend date, which is completely normal. the net effect is that owners of the stock were substantially benefited by this action. Regardless, the real story of National Beverage is what the future holds, not the past. Anyone who wants to know more, stay tuned for my next article.
Peter - After reading all of National Beverage's annual and quarterly reports over a 10+ year period, In my opinion investing beside Nick Caporella might be one of the surest bets in the entire stock market.
3 Companies With Innovative Management Teams To Propel Business Forward [View article]