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Saj Karsan  

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  • Data Group's Debt Doesn't Reflect Improved Performance [View article]
    Hi Safety,

    I have considered the equity as well but so far I am staying on the sidelines. I think the upside is there, I just prefer the safety of the debt. There are also some hidden pension liabilities that could be an issue for the equity but probably aren't for the debt.

    It's possible Data Group comes to us for an extension, but my hope is that they refinance properly and just pay us back. I suspect they can get good terms on a real refinancing if they execute as planned.
    Mar 9, 2015. 07:45 PM | Likes Like |Link to Comment
  • Why Payment Data Systems Still Has Triple Digit Upside [View article]
    Nickle or two?

    These were not options, but rather stock that was handed out (see an example here:

    For 2014, management received about $5 million worth of these shares, the cost of which will be amortized over the next ten years. This $5 million is several times the net income for the year!

    But this is not an isolated incident either. Check out how the share count has steadily and dramatically grown over the years; see the "Shares Outstanding" row on this page:

    You are right that the company is doing well. It just seems that the benefits will accrue to management and not to shareholders the way things are set up.
    Feb 24, 2015. 03:14 PM | 2 Likes Like |Link to Comment
  • Why Payment Data Systems Still Has Triple Digit Upside [View article]
    Thanks for the article. What are your thoughts on the recent share handouts to management? It appears the handouts that took place in 2014 represent several years worth of the company's earnings.
    Feb 23, 2015. 03:03 PM | 1 Like Like |Link to Comment
  • Aberdeen Is Cheap, With A Catalyst [View article]
    Everybody has both past failures and past successes. Unfortunately, in campaigns like this each each side looks to bring up as much dirt on the other as possible in order to influence voters on the outside like us.

    For me, it's not so important as to who is better at drudging up dirt on the other. I'm interested in my investment in Aberdeen, and how each of these parties plans to look after my investment.

    From management's actions, it is clear there are misaligned incentives here. The pay they have received dwarfs their ownership stakes, and the way they have issued shares (perhaps illegally, with their private placements effectively used to increase their votes) when the stock is trading at a massive discount to book value is a clear indication that they care nothing for the shareholder.

    On the other hand, the dissident group are outside shareholders just like the rest of us. They want the company to return capital, and this is what I want too, and is what any independent shareholder would want considering the huge discount to book value.
    Jan 21, 2015. 03:14 PM | 2 Likes Like |Link to Comment
  • GameStop Really Is Blockbuster [View article]
    I don't understand how you can claim similarities ("not simply similarities...but that GameStop really is Blockbuster"!) with Blockbuster without any financial comparison between the two. Blockbuster vs GameStop margins, debt levels etc might be something you should look into.
    Dec 29, 2014. 04:57 PM | 2 Likes Like |Link to Comment
  • Dover Downs Is An Asymmetric Wager [View article]
    I expect them to continue to pay debt off, not issue more debt. I probably wouldn't be interested in the company if it was growing its debt and spending it at a time like this.

    You can add the $3.5 million pension shortfall to EV (I assume that's what you're referring to?), but it doesn't make a huge difference. The pension is also frozen, so I expect it's impact to mitigate over time. Furthermore, as rates rise we could see that number shrink even further.

    I'm not sure why you would expect a combination with DVD at this time, and if one takes place, why it wouldn't be on favorable terms to DDE. Can you elaborate on this?
    Dec 8, 2014. 02:09 PM | Likes Like |Link to Comment
  • Dover Downs Is An Asymmetric Wager [View article]
    I understand where you are coming from regarding EV/FCF, but I did not discuss this number because FCF already includes some interest payments made towards the debt part of the EV.

    Instead of FCF, I looked at EBITDA less taxes and capex where I got a denominator of $9 million rather than the ttm $6 million you mention. The main reason for this difference is that the latest quarter included the $1 million benefit from the latest legislation, whereas the prior 3 quarters had no such benefit. If you use this number, you do get much closer to the multiple you wanted to see.
    Dec 3, 2014. 03:44 PM | Likes Like |Link to Comment
  • Dover Downs Is An Asymmetric Wager [View article]
    Dec 3, 2014. 03:42 PM | Likes Like |Link to Comment
  • Dover Downs Is An Asymmetric Wager [View article]
    I agree that the revenue decline looks scary, however, it appears to be stabilizing. The latest quarterly y-o-y numbers show a decline closer to 4%. More recently, October y-o-y revenues would appear to be closer to flat. These are not part of the latest financials, but rather can be taken from the Delaware lottery website:

    I suspect the lower gas prices may have contributed to this. If so, I'm hoping for more benefits in the coming months.

    I think you are right about capex as well. It is likely that management has postponed certain projects because there just isn't a good return on them right now. I think this does speak to the cash flow flexibility of the company, however. To me, management looks to be behaving very rationally, which is all I ask for when a company is this cheap.
    Dec 3, 2014. 03:33 PM | Likes Like |Link to Comment
  • Tesco Regrets [View article]
    Hi Hugo,

    Thanks for your comment.

    I am interested in knowing the new plan going forward as well. I wouldn't rule out re-investing at current prices if the plan is to cut costs, shrink, sell assets etc.
    Oct 8, 2014. 12:52 PM | Likes Like |Link to Comment
  • Alloy Steel International: Weak Hands Sell The Headline To Their Detriment [View article]
    Great update, Nat. Thanks!
    Sep 8, 2014. 12:37 PM | Likes Like |Link to Comment
  • Keck Seng: 4-Star Real Estate Play Offers 5-Star Return With 149% Upside To NAV [View article]
    Hi Oliver,

    Thanks for the great article.

    In your NAV calculation, do you take into account that there are likely significant tax liabilities since the difference between carried value and fair value is so large in many cases?
    Sep 5, 2014. 03:40 PM | Likes Like |Link to Comment
  • hhgregg's Sell-Off Is Overdone [View article]
    Just to provide an update, I continue to hold the shares despite the run-up. I am encouraged by management's recent moves to slow store expansion and use its cash flow to instead buy its own shares. Hopefully the problems in the recent quarter really were weather related. We should find out more in the coming quarter...
    Jul 1, 2014. 03:17 PM | Likes Like |Link to Comment
  • IBI Group: Now That's More Like It [View article]
    That's a nice article, thanks Penny. I'm linking it here for those interested:

    Looks like someone wants to speak out in the paper in order to get better terms by getting more investors to vote no one more time, and wants to stay anonymous in the process.

    It's an interesting strategy. The source is right that it's a divide and conquer strategy on the part of the company, but for some reason such consent fees are legal and it may work. If the source is telling the truth about having "a committee formed that owns close to 30% of the bonds", it's unlikely the company can get anything through without the co-operation of that group. As such, it wouldn't really matter what other investors vote. *However*, if he's wrong and those investors don't end up voting the way he thinks, investors who are not part of that committee will get screwed out of the large consent fee if they don't vote yes.

    As such, I might say small investors would be better off voting yes. If it's blocked, great, they don't lose anything and may get slightly better terms. But if it's not blocked, they will lose out in a big way by not getting the consent fee.
    Jun 1, 2014. 12:02 AM | 1 Like Like |Link to Comment
  • Sum Of Parts Analysis Indicates Amrep Is Substantially Undervalued [View article]
    Why do you say that? Isn't it *more* attractive now that the price is lower? They seem to have enough cash to pay off the leaving customer, and most of the debt isn't due for a while.
    May 23, 2014. 04:35 PM | Likes Like |Link to Comment