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Nat Stewart

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  • Roundy's: Making A Leveraged Bet (And It's Working) [View article]
    I am very happy about the decision to cancel the dividend as well. I am a big fan of Mariano's (We have one 2 blocks from our apartment in Chicago) and am thrilled to see it expanding in 11 new Chicago locations. Good value and a great shopping experience.
    Dec 5 09:27 AM | 1 Like Like |Link to Comment
  • eBay's Dividend Will Be Huge [View article]
    I am not a cheerleader or a detractor. Only someone seeking information that is relevant to making an investment decision.

    So it sounds like your primary complaint is that Ebay no longer wants to be a venue for many small sellers. This might have been bad from a small seller perspective, but from a company perspective it might be a rational choice. There is a thing called the 80-20 rule. It might be that 20% of sellers generate all the profit, and 80% generate all of the headaches and overhead costs. So from an investor perspective I am not so sure this is a sign that "something is wrong inside of ebay" - and after all this is an investment focused site.
    Dec 5 08:23 AM | 2 Likes Like |Link to Comment
  • eBay's Dividend Will Be Huge [View article]
    Well, since you seem to believe that "something is going on inside of ebay" that is more than meets the eye, perhaps you should write the article - or at a minimum provide some clue as to what you are talking about.
    Dec 4 11:39 AM | 8 Likes Like |Link to Comment
  • Roundy's: Making A Leveraged Bet (And It's Working) [View article]
    "Our PE majority owner... is sucking cash out of the business until it runs dry. The capital allocation strategy is clearly not designed for the long haul"

    After bleeding the company with an excessive dividend recap and payout level, the next trick in the pe playbook is to buy the debt as the company is forced into bankruptcy at a steep discount, and in that way re-establishing their equity position while wiping out other equity owners. Then they try to play the game all over again. Not that that will happen here, but something to be wary of when co-investing in a pe controlled firm.
    Nov 23 04:00 PM | Likes Like |Link to Comment
  • America's Car-Mart Is 23% Overvalued [View article]
    Props to Mr. Vellucci - His article picked the recent turn perfectly. CRMT has not closed higher than the day of his article and is down near 17%.
    Nov 21 09:42 AM | Likes Like |Link to Comment
  • FTD Companies - An Undervalued Spin-Off [View article]
    Good find. It appears that some non-cash expenses will be rolling off over the next year or so, which will improve the earnings visibility to quant screens.

    In my view the longer-term risk to this business model is disintermediation by Google - I have had zero issues doing a Google search and picking a local flower shop. Perhaps this method is too difficult/risky for most shoppers who prefer a known brand. Kind of like how many prefer Amazon over lower cost online retailers.
    Nov 13 12:23 PM | Likes Like |Link to Comment
  • America's Car-Mart Is 23% Overvalued [View article]
    You are evaluating numbers as a finance guy without considering how this company grows and what the requirements for growth are. Since 2006 they have grown the dealer network by 50% (+43 dealers). Given this, consider the following from the latest annual report:

    "New dealerships are generally provided with approximately $1.5 million to $2.5 million in capital from the corporate office during the first few years of operation. These funds are used principally to fund receivables growth. After this start-up period, new dealerships can typically begin generating positive cash flow, allowing for some continuing growth in receivables without additional capital from the corporate office. As these dealerships become cash flow positive, a decision is made by senior management to either increase the investment due to favorable return rates on the invested capital, or to deploy capital elsewhere. This limitation of capital to new, as well as existing, dealerships serves as an important operating discipline. Dealerships must be profitable in order to grow and typically new dealerships are profitable within the first year of opening."
    Nov 8 08:50 PM | Likes Like |Link to Comment
  • America's Car-Mart Is 23% Overvalued [View article]
    "Paying an enormous amount of interest for a beaten up, old car."

    What a misleading statement.

    America's Car Mart does not sell "beaten up" cars. They sell reasonably cared for vehicles at a fair price.

    The notion that 6-12 year old car vehicles are necessarily "beaten up" is a fallacy. In fact, cars in this age range are an extremely good value given how well cars are made today. 200K plus miles is no problem for a non-abused car in this age range. If I was poor I would happily (and reliably) drive a 12 year old Toyota, Honda or a Ford truck pickup truck.

    "Enormous amount of interest" relative to what? Interest rates are meaningless without the context of default rates and credit quality - and as such this qualifies as another misleading statement.

    Mentioning a bunch of regulatory "potential" issues that that are in no way specific to this company is just a silly scare tactic. A short seller could raise such issues for any company in a highly regulated sector.

    Throwing "stuff" against a wall to see if anything sticks is not a great analytical framework.
    Nov 8 08:25 PM | Likes Like |Link to Comment
  • National Research Corp.'s Class B Shares: The Low-Risk Double [View article]
    That is not a universal truth. It depends upon how good you are at understanding the motivations of another individual (the CEO) relative to the valuation of the company.

    Companies where everything is 100% clear are rarely significantly undervalued. And one does not have to be 100% certain to get an edge.
    Nov 4 08:43 PM | Likes Like |Link to Comment
  • A Few Reasons To Buy Stericycle [View article]
    Great company, solid article
    Nov 3 10:22 AM | Likes Like |Link to Comment
  • Reality Check For Peter Schiff [View article]
    Why would we ever sell all those valuable, real assets to pay back debts in a currency we can print? Talk about a seriously bad trade.
    Oct 31 03:53 PM | 4 Likes Like |Link to Comment
  • Reality Check For Peter Schiff [View article]
    We have had asset price inflation.

    In the real word, Inflation is not a generalized phenomenon, at least not early on. One must track were money is entering the system and what it is being spent on. Subsidized cost of capital courtesy of the "easing" have allowed companies to (for example) buy back massive amounts of stock with low interest loans. This is a symptom of our present inflation and present policy - nicely funneling wealth into shareholder pockets. At present there is no effective mechanism for getting fresh "stimulus" into consumers hands, so we don't have a generalized inflation where consumers are bidding up the prices of regular goods. Consumer inflation is localized in those areas where consumers can get easy money government supported loans to make purchases, for example higher education.
    Oct 31 02:27 PM | 1 Like Like |Link to Comment
  • National Research Corp.'s Class B Shares: The Low-Risk Double [View article]
    Great follow up article.

    "This would make it nearly impossible for a potential acquirer to offer a take-out premium substantial enough to compensate NRCIB holders, who would control 89% of the vote, to sell NRC"

    I generally agree with your thesis, however I have located what I think is one weakness to the above logic - It assumes that the CEO's logic or ultimate ends relate only to his own personal wealth.

    Many wealthy people look to maximize what they pass on to heirs. One way to do this is to transfer stock to a trust that at some point will appreciate significantly. While I have no real clue (and am just looking for weaknesses in the thesis) One motive for the CEO to eventually "screw himself" and B shareholders is that it would be a way to surreptitiously transfer wealth from himself and to his heirs, who I believe via the trust hold A shares.

    I am not saying this is likely, only a thought experiment to consider how we might end up being wrong or have misread the situation.
    Oct 31 12:51 PM | 1 Like Like |Link to Comment
  • Mesabi Trust: Cliffs Natural Resources' Q3 Conference Call Has Big Implications [View article]
    Great article. It is the authors like James who dig into these lesser known situations and continue coverage over time who create the most real $$ potential value for readers.
    Oct 29 12:04 PM | 1 Like Like |Link to Comment
  • Is Cadillac's ELR A Tesla Competitor? Maybe [View article]
    "..the ELR has LED light-blade tail lights with the word Cadillac precision etched into the plastic. Tesla doesn't have those. The ELR offers optional 20" aluminum wheels with "precision painted pockets"

    I have realized what the fundamental problem is for the Cadillac:

    If Tesla came out with their own LED blade tail lights with precision etching and the paint pocket wheels, and then upped the ante with finely detailed Corinthian leather seats and a Landau vinyl roof with laser detailed chrome accents....

    It would be game, set, and match for Tesla. Game over.
    Oct 18 06:59 PM | 1 Like Like |Link to Comment
COMMENTS STATS
288 Comments
284 Likes