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  • Buy Lee Enterprises, Sell New Media Investment [View article]
    "Your figures should be pro forma for that acquisition if your going to do a pair trade. "

    They were, you must have missed where we said "NEWM's pro forma or its pro forma". We only mentioned it about seven times in the report. If we didn't incorporate it into our model, Lee would have been even more undervalued relative to New Media.
    Feb 15, 2015. 10:34 AM | 1 Like Like |Link to Comment
  • Trinity Industries: Price Collapse In Q4 2014 Creates Comfortable Margin Of Safety [View article]
    Our analysis was made using annual figures, and Trinity has yet to grace the investing community with the latest data for FY 2014. With that said, yes, the valuation "totally misses" the law case judgment, but it also provides additional clarity as to why Stagnation is less than Net Assets (the root cause of the lawsuit was faulty design, which can be traced to poor management decisions) and acts as a harsh lesson for investors to pursue margins of safety appropriate with the risks being undertaken, even with stocks that look very good from the onset.

    This Oct 2014 article on NY Times (http://nyti.ms/1CQQxjO) caps the potential damages at $525 million.

    If this follows through, this is equivalent to $3.37 per share assuming it is all paid out in one lump-sum and within the next year or so (where the present value would be very large).

    Our growth estimate accordingly drops from $38.87 to $35.50. All else held equal, this eliminates 28% of the margin of safety we estimated. reducing it down 7 percentage points to 18.5%.

    However, we are not living in a vacuum. For Q3 2014, TTM sales have gone up to $5.76 billion compared to $4.12 billion in Q3 2013 (up 40%) and operating margins improved to 19% compared to 16.6% in Q3 2013. The valuation could have changed and the margin of safety net of the potential damages could be better than 18.5%.

    Thank you for the comment.
    Feb 10, 2015. 01:11 PM | 1 Like Like |Link to Comment
  • Eastman Chemical: Good Company But Margin Of Safety Not Enough Given Its Risks [View article]
    The valuation model made by the person who writes this sort of article follows the "Greenwaldian method", which compares net asset value, a steady state value, and a growth value against each other to learn what the valuation differences say about the company and the market, and also how the fundamentals are factored into the potential value beyond the assumptions driving the model.

    Stagnation value here is basically estimating the sustainable level of sales and degree of profitability at the current point in time, capitalizing the profits, and finally subtracting all the other valuation adjustments, which includes debt as it currently stands.

    If EMN even cuts their financial leverage by half in Q4 2014, stagnation value would have been something around $46 a share, or 7.85× TTM free cash flows.
    Feb 9, 2015. 05:38 PM | Likes Like |Link to Comment
  • Eastman Chemical: Good Company But Margin Of Safety Not Enough Given Its Risks [View article]
    We did acknowledge that it is a good company, it's done very well with its top-line growth in recent years, and that it has a fair chance of surprising us. For some people, of course it will be considered a buy, and even if we were proven too conservative with our expected growth rates, margins of safety of 13% ($86 mean price target) to 22% ($96 price target by Jefferies) would be completely acceptable, as those translate to a potential upside, ranging from 15% to 28% upside.

    As far as this company's concerned, we like what we've seen as far as the fundamentals go, but we thought the margins of safety should be higher. One of our concerns was that EMN lost $979 million in impairment losses and restructuring charges (from wasted or ineffectively executed acquisitions and such) since 2004, including the $84 million spent in the three quarters of 2014. That is about $6.59 per share or 9% the current market price. That 15% to 28% upside Wall Street expects? Down to the 6% to 19% range if history is repeated with EMN's Taminco acquisition and any more M&A transactions in the decade ahead.
    Feb 9, 2015. 04:32 PM | 1 Like Like |Link to Comment
  • Lee Enterprises Offers 35% Free Cash Flow Yield And Continued Balance Sheet Deleveraging [View article]
    Thank you very much Lee Watcher.
    Feb 6, 2015. 09:23 PM | Likes Like |Link to Comment
  • Lee Enterprises Offers 35% Free Cash Flow Yield And Continued Balance Sheet Deleveraging [View article]
    We got in a few months after it emerged from the prepackaged bankruptcy.
    Feb 6, 2015. 02:58 PM | Likes Like |Link to Comment
  • Lee Enterprises Offers 35% Free Cash Flow Yield And Continued Balance Sheet Deleveraging [View article]
    Lee actually had more operating income in the last 12 months than NYT even though NYT has 150% more revenue.
    Feb 6, 2015. 02:57 PM | Likes Like |Link to Comment
  • Lee Enterprises Offers 35% Free Cash Flow Yield And Continued Balance Sheet Deleveraging [View article]
    Lee refinanced its debt in March of last year.

    Lee extended its debt maturities from December 2015 & March 2017 to March 2022 and December 2022 respectively.

    I don't expect Lee to have to refinance any of its debt in order to extend its maturity going forward, unless Lee can obtain a favorable interest rate.
    Feb 6, 2015. 02:50 PM | Likes Like |Link to Comment
  • Brookfield Infrastructure Offers Investors A 5% Dividend Yield And 13% Discount To Intrinsic Value [View article]
    Your welcome!
    Feb 4, 2015. 12:04 PM | Likes Like |Link to Comment
  • Energen - E&P Pure Play Comes With High Expectations And Little, If Any, Margins Of Safety [View article]
    Thank you for the comment.

    The analysis above was made on annual financial data. EGN has not yet released the financial figures for FY2014, so it didn't take into account the M&A transaction you referenced.

    A future update on the stock's valuation will address this.
    Feb 4, 2015. 11:56 AM | Likes Like |Link to Comment
  • Brookfield Infrastructure Offers Investors A 5% Dividend Yield And 13% Discount To Intrinsic Value [View article]
    Thanks for the reply.

    BIP's targeted payout ratio is between 60% and 70%. Even in 2021, its projected payout ratio is still 61.5% based on our estimates.
    Feb 4, 2015. 10:40 AM | Likes Like |Link to Comment
  • Update: Alliance Resource Partners Announces Q4 2014 Results And Gives Guidance For 2015 [View article]
    today is your chance
    Feb 2, 2015. 01:48 PM | Likes Like |Link to Comment
  • Tupperware Brands: Undue Emphasis On The Past 5 Quarters Creates An Attractive, Low-Risk Opportunity [View article]
    Considering the FX environment after the "Swiss shocker", there's no doubt TUP faces headwinds, but we believe this is for the short run and TUP's geographic reach provides a natural hedge on FX volatility.

    The "pop" you mentioned is a consequence of the company overcoming excessively pessimistic expectations, and certainly the sell-side analysts at Wall Street will adjust their price targets for Q1 2015 upward, probably to the low or mid $70s.

    Regardless, for any long idea, looking out just one year ahead is too short a time frame.
    Jan 30, 2015. 10:13 AM | Likes Like |Link to Comment
  • Tupperware Brands: Undue Emphasis On The Past 5 Quarters Creates An Attractive, Low-Risk Opportunity [View article]
    If every CB is intentionally depreciating their currency, the status quo would be maintained until political strife or some unexpected economic consequence occurs among the countries engaging in currency wars.

    I like stocks with an international orientation, or at least stocks domiciled outside the US, due to the diversification they provide.

    TUP just knocked your bet today, btw. Earnings surprise was 10%.
    Jan 28, 2015. 01:23 PM | Likes Like |Link to Comment
  • Is Seagate's Dividend Sustainable? [View article]
    Consensus EPS estimates for 2015 and 2016 slipped this week.
    Jan 28, 2015. 11:50 AM | Likes Like |Link to Comment
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