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Sammy Pollack  

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  • Why It's Time For Department Store Consolidation [View article]
    I do not think a deal would need to be financed entirely by debt as you suggest. Could be a mostly stock deal. Both KSS and M are trading at similar valuations at around 10x earnings.

    Not suggesting that they should close down all 1,000+ stores that KSS or JCP operates just the weakest ones. Perhaps 100-200 locations where there is overlap.

    Synergies are stronger buying power and also SG&A reduction. Consolidation would also mean better pricing power. Note that each quarter KSS incurs over $1billion in SG&A expense while M incurs over $2billion per quarter. Total SG&A between the two companies of at least $12 billion per year. There are huge opportunities to cut expense here if the companies merge. While a lot of this is likely due to things such as rent, I think it is fair to say a combined entity could reduce SG&A by ~1-2billion per year.

    Another potential benefit from a deal would be increased leverage when negotiating will mall operators. The shrinking number of big box retail outlets means that it is harder for malls to find tenants. If M combined with KSS, I think they would be able to negotiate better rent rates which would help boost profits. 

    Right now KSS, M, and JCP all have to make significant investments in their online platforms. If consolidation occurs the total amount spend here would decrease. Instead of KSS and M maintaining separate online divisions each with all the same expenses it would become one.
    Nov 17, 2015. 01:56 PM | Likes Like |Link to Comment
  • Why It's Time For Department Store Consolidation [View article]
    By buying more stores, M could increase the percentage of stores it is closing from the combined entity.

    This is particularly true in malls where M and its potential buyout target both operate stores. The end result would be consumers with less department store options and a greater revenue per store figure for M.

    M would also realize significant operational synergies from a deal. ALSO, all of these retailers will need to make significant investments into their online channel. M has already started doing this but JCP and KSS are behind. Significant synergies can be realized by having to invest into only 1 online platform where as currently the department stores all have thier own online platforms.  

    If business continues to be tough and they "let other chains go out of business" as you suggest, then price competition will increase and margins will compress. Struggling chains such as JCP have little they can do other than reduce prices and thus put pressure on others to do the same. Perhaps JCP is not attractive because they will go out of business. However, I do think KSS is more attractive given the fact that it continues to remain very profitable despite the challenges.
    Nov 17, 2015. 08:25 AM | Likes Like |Link to Comment
  • Blackstone: Reiterating My Strong Buy Rating [View article]
    Yes, it is true that BX has negative income during the crisis. Certainly, BX is much more leveraged to the markets than TROW or BLK. That being said, over the long-term this is a positive as BX will benefit from the rising tide of the markets. BLK and TROW benefit to a lesser degree from rising markets.
    Dec 14, 2014. 07:25 PM | 2 Likes Like |Link to Comment
  • Time To Close Pairs Trade After Alibaba IPO [View article]
    taxes that would have to be paid upon sale of these assets reduces the value
    Sep 20, 2014. 01:36 AM | Likes Like |Link to Comment
  • Visa And MasterCard Should Issue Debt To Fund Massive Stock Buybacks [View article]
    I agree in general that companies should not issue debt to finance large dividend payments. However, while V and MA both pay dividends the amounts are so small that it is not an issue.
    Aug 28, 2014. 05:41 PM | Likes Like |Link to Comment
  • Vodafone: A Buy Based On Merger And Acquisition Speculation [View article]
    I think any offer would have to value VOD at at least $42 per share
    Aug 25, 2014. 11:35 AM | 2 Likes Like |Link to Comment
  • SeaWorld: Buy The Dip [View article]
    SEAS is already in a "tailspin"..... thats why the stock is attractive
    Aug 18, 2014. 05:53 PM | 1 Like Like |Link to Comment
  • Update: Dollar General Tops Dollar Tree Bid For Family Dollar [View article]
    Thanks for pointing this out will have it changed now
    Aug 18, 2014. 10:02 AM | Likes Like |Link to Comment
  • Paulson Buys DirecTV As Buffett Sells: Why I'm Bullish [View article]
    I think that is a good way to play DTV
    Aug 17, 2014. 12:33 PM | Likes Like |Link to Comment
  • Paulson Buys DirecTV As Buffett Sells: Why I'm Bullish [View article]
    If the deal does not go through I would expect DTV to trade down to the mid 70's. The deal should close sometime during the beginning of 2015
    Aug 17, 2014. 11:36 AM | 1 Like Like |Link to Comment
  • MGM Resorts: Why The Odds Are Against This Casino [View article]
    Debt cost are falling now but if interest rates rise then MGM will really be in trouble. With interest rates hovering close to all time lows it seems likely that rates will move higher over the next few years which could increase MGM debt cost.
    Aug 7, 2014. 08:49 PM | Likes Like |Link to Comment
  • KKR Set To Report Earnings: Why I'm Bullish [View article]
    investment realizations are happening slower than anticipated
    Jul 21, 2014. 03:05 PM | Likes Like |Link to Comment
  • Murdoch Likely To Succeed In Effort To Buy Time Warner [View article]
    Murdoch could simply go hostile and take his offer directly to shareholders
    Jul 17, 2014. 11:13 AM | Likes Like |Link to Comment
  • How Rupert Murdoch Could Acquire Time Warner [View article]
    thank you
    Jul 16, 2014. 11:32 AM | Likes Like |Link to Comment
  • Sirius XM: A Strong Sell [View article]
    Firstly, given the number of stock ideas I discuss on SA it would be very difficult to have skin in the game on every call. I sometimes take a position in stocks I discuss. See one of recent articles below.

    While I firmly believe SIRI is a sell, I am also not a big fan of short selling because losses are unlimited while gains are limited.
    Jul 14, 2014. 05:24 PM | Likes Like |Link to Comment