Seeking Alpha
View as an RSS Feed

Shaun Currie, CFA  

View Shaun Currie, CFA's Comments BY TICKER:
Latest  |  Highest rated
  • Top 12 Ideas For Your Portfolio In 2014 [View article]
    Cardioid, Thank for the comment. Yes, I wish the year would have gone better, but I did want to note that I think your down 23% estimates might be a bit off. I have tracked the portfolio of the 12 equally weighted ideas/themes (themes were the baskets, in which I equally weighted each stock as part of that 1/12). My numbers show that the portfolio was down only 3.9% vs up 12.5% for the S&P 500 and up 4.3% for the Russell 2000. Also 6 of the 12 ideas/themes were profitable. I just wanted to quickly make that clarification.

    That is the tough part about putting out stock ideas for the full year on this type of forum with no way to change based on company and market developments. Just take some of the names for instance - QTTW (down 66% YTD) was actually up 50% at one point before it lost its biggest customer, obvisouly changing the fundamental story and what would be an investment recommendation. UQM (down 60%) was up 50% at one point, HYGS (down 28%) was up 100% at one point this year (past our price target), and LXU (down 3%) was up over 30% at one point. But that's what happens.

    I appreciate the criticism, as it was deserved for the performance of the stock, but well see how 2015 goes. I would highly suggest you share your ideas with the Seeking Alpha community!
    Dec 30, 2014. 06:38 PM | Likes Like |Link to Comment
  • Bally Technologies: Macro Headwinds Create Attractive, Best-In-Class Buying Opportunity [View article]
    On Friday, it was announced that SGMS had decided to acquire BYI in an all-cash deal for ~$83 per share. Though I believe the price leaves some of BYI's long-term value on the table, in a very weak environment for slot replacements, it seems reasonable. For SGMS, I think its a great deal that gives them the best-class slot company, the best systems platform, and returns the SHFL platform back into Gavin Isaacs hands. For the industry, when we include the recent IGT deal, we are seeing drastic consolidation that should help pricing and margins going forward. There aren't too many slot companies to follow anymore.

    The stock currently trades at about a $5 discount to the offer price, which is due to 1) questions around whether or not the deal will get approved by the FTC (anti-trust) considering the consolidation occurring in the industry and 2) some concerns around SGMS closing on the debt transaction needed for the deal considering the company's already over-levered balance sheet.

    The company has the financing in place, so the bigger issue is the FTC. Management does not considering this a big risk since the combined company has less market share that IGT and there is a growing pool of small competitions, but it is a risk. I'm going to hold onto the shares here in hopes of picking up the spread over the next 6 months (deal should close early next year), but that's also a function of me being OK with holding onto the name longer-term if the deal doesn't close. I don't expect a higher offer (lack of other companies to buy it and SGMS probably can't afford a higher offer). The other thing that would make me sell is more compelling investment opportunities which would be better use of the cash.

    I wouldn't fault anyone for selling BYI here and taking a +25% return over a 4 month period. I have no opinion as to whether or not the FTC will actually approve the deal.
    Aug 3, 2014. 11:06 AM | Likes Like |Link to Comment
  • Pier 1 Imports: E-Commerce Push + Increased Share Buybacks = Outsized Returns [View article]
    Yes, They can continue to leverage the balance sheet if they so choose to. +$200MM in EBITDA with current interest expense at $11MM. This is actually why the company could be very attractive for PE - ability to leverage up the balance sheet and operational levers to pull with store rationalization. The company could just put the leverage on the company themselves.
    Jun 20, 2014. 08:35 AM | Likes Like |Link to Comment
  • Lands' End: Growth Strategies, Free Cash Flow, And Short Interest Driving Shares Higher [View article]
    Thanks for the very detailed comment. I did notice the insider purchases, a positive for the company for sure. I think you laid out a great case for the company and great backup with this comment - a positive for all SA users. I will continue to follow your work, which I think is great. Thanks again!
    Jun 20, 2014. 08:31 AM | 1 Like Like |Link to Comment
  • Lands' End: Growth Strategies, Free Cash Flow, And Short Interest Driving Shares Higher [View article]
    Great article showing the bull case on an investment in LE. Though I have a different opinion, I think its great to see both sides of the argument. A couple quick questions:

    1. In you DCF analysis, isn't your EV $1.8B, not your equity value? Taking out the $450MM in net debt, isn't your price target actually in the $40-$42 range?

    2. Considering the company is calling for $25MM in capex this year, all of which is going to IT, and considering the fact the company does not have its own retail infrastructure and instead relies on Sears for this, would you think that they will need to spend more than $25MM annually on capex if they are to build out a retail business, which is essentially a new business segment. Or at least have increased SG&A? I would say no if the assumption was that the in-store Sears concept continues to run off and you cut costs, but declining revenues would also weigh of the company in that scenario. Also, $10MM a year during the Sears years pretty low, do you think there will need to be additional catch-up maintenance capex?

    3. Do you think is possible for the company to grow free cash flow this year as compared to last year with the additional public company expenses, interest costs and Shop Your Way fees? When I adjust Q1 results for a full quarter of the public company expense guidance and interest expense, I come basically in-line with Q1 of last year (I'm at $.25 EPS for the quarter).

    I guess what I'm getting at is (and part of the reason I have a bearish view) is that assuming cash flows grow from here (or at least after this year), and if capex is say $10MM a year higher than you are projecting, and we adjust for the debt on the balance sheet, it seems like the price target would be within say 10% of the current price. And you could say that this price target is on a bullish forecast for what the company will actually decide to do since we haven't received any formal indication of management's strategy (I wish they did conference calls) besides what we are able to read-through in the filings. What happens if they don't take this route? I will say though, I think your point on short interest is spot on and is something that investors should notice because it could easily drive the stock much higher.

    Thanks again for the article!
    Jun 19, 2014. 02:32 PM | 1 Like Like |Link to Comment
  • Lands' End: An Overvalued Retailer With More Downside Ahead [View article]
    Tough to have much commentary as all we get is a press release. I'll note, I think the headline number is a little misleading. only $1MM of public company expense and $1.9MM of interest int he quarter (vs run rate of $2.0-$2.5MM and $4-5MM respectively). Adjusting, numbers look in line with last year. Would love to get a sense of the go-forward strategy from mangement
    Jun 19, 2014. 02:14 PM | Likes Like |Link to Comment
  • Pier 1 Imports: E-Commerce Push + Increased Share Buybacks = Outsized Returns [View article]
    The GM did deteriorate in Q1, and the commentary leads me to believe that this will continue into next quarter, and possibly beyond (even next year as SG&A increases to grow e-com). Because of this, I see risk as to the downside when looking at mgmt's current guidance for the year. But, I do expect EPS growth as I expect the company to use the sell-off to repurchase more shares (could repurchase another 5MM shares this year, taking share count down to 88.5MM).

    Weak quarter from a performance standpoint, and could be weak for the whole year, but nothing to change the fundamental thesis or price ranges. I actually think for the longer-term thesis, it was a very bullish quarter. E-com growth 260% year over year and +50% sequentially. Company increased guidance for e-come to $200MM for the year and $400MM for next year (20% of total sales at that point). 25% of e-com sales are going through store traffic, highlighting the positives of "show-rooming." Management acknowledged the flexibility they have with lease expiration. I see the opportunity to optimize the store base through rationalization and greater e-com push. Everything on this call confirms this.

    Long-term price target of $30. Large share repurchases + margin levers in the out years due to business model shift. I think $15 is about the downside. Under that, it becomes attractive for PE.
    Jun 19, 2014. 02:10 PM | Likes Like |Link to Comment
  • Lands' End: An Overvalued Retailer With More Downside Ahead [View article]
    Thanks for the message. I am not double-counting the expenses, I just broke them out for readers in the article. Total SG&A (including SEars payments) in 2013 was about $560MM. Now for 2014, the model aboove shows $579MM. So if we add $11 to $13MM annually for Shop Your Way, and another $8 to $10MM for public company expenses, and account for declines in rent numbers, the numbers between the two years line up.

    So it would actually be almost 13x EBIT.
    Jun 5, 2014. 02:29 PM | Likes Like |Link to Comment
  • Ignite Restaurant Group: Priced For Perfection But Far From Perfect [View article]
    I think that this a great article that clearly lays out the risks associated with the company, and would suggest anyone thinking of an investment read through both the bull and bears cases before making their own individual decision. Though I am more bullish on the opportunity, I appreciate this article.

    I'll also note that I share the belief that the company should consider a secondary offering at this price, and would consider it a bullish event. I also believe that the company should seriously consider the idea of selling the JCS concept. a sale of the concept in the $600MM range would allow for a complete debt paydown and the liquidity necessary to get out of the Mac Grill mess by converting the units to brick house.
    May 12, 2014. 10:37 PM | Likes Like |Link to Comment
  • 2014 Ira Sohn Contest Finalist: Long Chemtura Corp [View article]
    Thanks Todd. I will keep on the lookout.
    May 12, 2014. 09:11 AM | Likes Like |Link to Comment
  • 2014 Ira Sohn Contest Finalist: Long Chemtura Corp [View article]
    Thanks Glyndon, I appreciate the comment!
    May 12, 2014. 09:10 AM | 1 Like Like |Link to Comment
  • 2014 Ira Sohn Contest Finalist: Long Chemtura Corp [View article]

    Thanks for the message.

    1) I don't have a feeling either way on this topic, I think the valuations are basically in-line. Looking at transaction comps, IPP probably brings down the valuation a bit because we are using a 2008 transaction along with Buffett getting a good deal (like he usually does) on Lubrizol. Transaction values are usually at premium also so that has an impact (more on IEP), but in reality they are pretty close. Whether the valuation is somewhere between $35-$40, we still have good upside on a risk-adjusted basis. I try not to be "precisely wrong" when it comes to valuation and it seems like everything lines up to a realistic range.

    2) I think this is mostly the same thing - for your analysis you can add a couple hundred MM to your valuation if you think that's best, but it really keeps you in the same range. I'm using today's figures because 1) I think its good to be conservative and 2) the more we project out the variability that occurs as to how the company uses their cash (I expect more share repurchase/debt paydown, but if an attractive deal comes along they could use the cash for those purposes).
    May 12, 2014. 09:09 AM | Likes Like |Link to Comment
  • 2014 Ira Sohn Contest Finalist: Long Chemtura Corp [View article]

    Thanks for the message. MOCM is currently an active firm, which I am employed by and currently holds a position in CHMT. I also have my own business, and personally hold a position in CHMT.

    Good luck with your investment endeavors.
    May 9, 2014. 01:34 PM | Likes Like |Link to Comment
  • Monster Worldwide: Past The Bottom, With Inflection Point In Sight [View article]
    I didn't think the call was bad - increased costs lowered earnings this quarter and caused lower guidance. You have to believe that the increased investment is ramping up for something bigger (see May strategy meeting). I added to my position yesterday and think this is a buying opportunity for myself personally. I hope all investors take the time to make that personal decision on what they choose to do.
    May 2, 2014. 09:57 AM | Likes Like |Link to Comment
  • Ignite Restaurant Group: Hidden Value In The Company's Attractive Assets [View article]
    I think overall that it was the solid quarter we were looking for. The ad thing isn't just an IRG event - NDLS had similar commentary. The two biggest pieces to note were 1) Brick House (the real growth jewel of the business) comped 10%, which is very impressive when looking at other results 2)ex-weather, Mac Grill almost comped positive and is expected to comp positive in the back half (reducing risk associated with this concept) and 3) the company will begin to monetize some of the extra real estate from Mac Grill, again reducing this risk of this segment.
    May 1, 2014. 10:55 AM | 1 Like Like |Link to Comment