5 Stocks For Playing The January Effect [View article]
No, I ultimately bought TPX and APAGF and I already owned FNB. Thus far they are all ahead of the S&P 500 for the year except DECK which is off 7%. Though January is not over yet so things could change for better or worse.
City Telecom's Dividend Yield Deeply Misleading [View article]
Thanks for the comment. That's certainly the upside case, but at the moment it's basically an idea rather than a business. There are plenty of cases of smart people with good ideas not generating the results they anticipate. For example, the lack of a TV license right now is a fundamental concern. You're right though, this is really a pitch to warn though buying into the seemingly juicy yield, since every couple of months I see an under researched article plugging the company based on stock screener results.
City Telecom - Dramatic Change Increases Risk [View article]
The source links are in the article, but if you just want one source read the SEC document here: http://1.usa.gov/StJMbd. I was long CTEL before they did the disposal, then they did the special dividend and I sold. My short position is small, and I don't typically short, but this whole situation is so bizarre and the logic of a short made sense to me as I've outlined above. I think more detail (in terms of balance sheet and income statement run rate) will come to light when the company next reports which I think is November. I was slow to publish, simply because it took me a while to research and write this relative to other priorities, frankly, I'd assumed someone else would comment on it, but they never did.
City Telecom - Dramatic Change Increases Risk [View article]
If you disagree with the negative investment thesis, then it's probably more helpful to other readers (and me) to explain why, as others have done in the comments. Thanks.
City Telecom - Dramatic Change Increases Risk [View article]
Giampy,
Yes, the potential cash balance is the bull case on the stock, though we'll have to wait for an updated balance sheet to be sure given potential taxation on the disposal, and the cash burn management anticipates for the media business is aggressive.
City Telecom - Dramatic Change Increases Risk [View article]
I was surprised by that article too, although the company hasn't actually stated its dividend policy going forward, so conceivably they may maintain it, but not sure it would get board approval given the high level of investment going into the media business.
Orchard Supply Hardware: An Attractive Small-Cap Replacement For Lowe's Or Home Depot [View article]
Thanks for the comments, they have a bearish tone, but make sense. silence_twain - thanks for the detailed comment, fundamentally I believe the difference is you're doing an EV/EBITDA forecast, whereas the numbers I've pulled from Yahoo are historics. On the +$3M for stores, that's because with only 88 stores, +3 is still 3.4% growth for a full year on revenue, I then half that for 6 months of operation in the year take incremental gross margin of 34%, less tax of 30% assuming some operational leverage will come through from those stores on the fixed costs of the business (corporate, procurement, advertising, distribution etc.). On the extra week, I make a similar assumption of 1/52th contribution, though that one is more vague given underlying earnings are unknown. The net net on all that, is that even on my relatively bullish assumptions, positive earnings still don't come through. SunsetKid - that's a helpful perspective, albeit a bearish one. However, I suspect the key question is OSH doing better than last year, rather than better than LOW and HD. The stock price isn't assuming best in class, just the potential for some forward progress, though even that may be a challenge.
A Small Cap Alternative Not Quite On The Level Of Lowe's And Home Depot [View article]
Good to see the positive sales momentum, and on the face of it the REIT deal looks promising, plus as Trae says its looking cheap. I haven't redone the analysis in full, but will likely buy a few shares, it's still a fairly risky play, but as part of a broader portfolio I think it's worth it.
E-Trade: 17% Upside, It All Hinges On The Loans [View article]
I do mean to write something more detailed, but the bottom line is I remain bullish on the company, though in recent quarters, the core business is performing a little worse than I had hoped and the home loan portfolio a little better. Net ETFC still appears a cheap, contrarian play to me and I continue to hold the stock.
WPX Energy - A Natural Gas E&P Spin-Off At A Discount [View article]
I suspect it could go either way, but there are four reasons Argentina may hold back: 1. The reaction to the YPF seizure was strongly negative from the US and EU. Predictable yes, but perhaps harsher criticism than Argentina expected. 2. Apco is a much smaller company than YPF in terms of both size and awareness, it may not be worth the additional hassle fo further seizure for a much smaller gain 3. The government could have seized Apco in April 2012 and they did not do so.4. Apco appears to have taken actions to pre-empt seizure such as cutting the dividend to fund investment (the apparent reason YPF was seized) Now, none of the above are overwhelming arguments and I have very little knowledge of Argentinian politics, but I'm not sure the Apco seizure is the foregone conclusion the market may be discounting.
Assessing The Relative Value Of Hillshire Brands [View article]
I haven't seen the official numbers yet, just this:
Q: HOW WILL THE CONVERSION OF MY OLD SLE SHARES TO NEW HILLSHIRE BRANDS AND MY RECEIPT OF DEMB SHARES AFFECT MY CURRENT TAX BASIS? A: U.S. shareholders will recognize tax on gains (but not loss) attributable to the DEMB shares they receive in the spin-off. You will need to allocate your respective basis in the shares based on the opening prices of the SLE shares and the DEMB shares post-spin. Using these prices, an allocation will be made between the DEMB and Hillshire Brands shares to determine the basis of the respective shares. The fair market value for determining any post-spin gain is the average price on the first day of regular-way trading, July 9 and June 29, respectively. We will post more information on how you may allocate your tax basis on our websites http://bit.ly/ODKRgz and http://bit.ly/Otmx3o. However, you should consult your personal tax advisor to discuss your particular situation.
Why Natural Gas Will Outperform Oil [View article]
Quick update, in the month since I wrote this the ratio has normalized a little with oil moving from 6x to 5x the energy equivalent natural gas price, mainly because of a rebound in natural gas prices. Of course, a single month of data doesn't move the argument as I would stress this is very much a long term phenomena, but things are apparently moving in the right direction, at least temporarily.
Indeed, I agree RRD has something of an image problem, but I'm also tempted to believe management when they say they can leverage their customer relationships to grow a more digital centric business. The stock is up slightly with the broader market, since I wrote this article, but I wouldn't want to trivialize the risks inherent in repositioning the business.
On SWY I totally agree with you, the leverage looks risky when growth seems fundamentally absent. I'd avoid that one.
The Surprising 'Growthy-Ness' Of A Breakthrough ETF [View article]
5 Stocks For Playing The January Effect [View article]
City Telecom's Dividend Yield Deeply Misleading [View article]
City Telecom - Dramatic Change Increases Risk [View article]
I was long CTEL before they did the disposal, then they did the special dividend and I sold. My short position is small, and I don't typically short, but this whole situation is so bizarre and the logic of a short made sense to me as I've outlined above. I think more detail (in terms of balance sheet and income statement run rate) will come to light when the company next reports which I think is November. I was slow to publish, simply because it took me a while to research and write this relative to other priorities, frankly, I'd assumed someone else would comment on it, but they never did.
City Telecom - Dramatic Change Increases Risk [View article]
City Telecom - Dramatic Change Increases Risk [View article]
Yes, the potential cash balance is the bull case on the stock, though we'll have to wait for an updated balance sheet to be sure given potential taxation on the disposal, and the cash burn management anticipates for the media business is aggressive.
City Telecom - Dramatic Change Increases Risk [View article]
City Telecom - Dramatic Change Increases Risk [View article]
Orchard Supply Hardware: An Attractive Small-Cap Replacement For Lowe's Or Home Depot [View article]
silence_twain - thanks for the detailed comment, fundamentally I believe the difference is you're doing an EV/EBITDA forecast, whereas the numbers I've pulled from Yahoo are historics.
On the +$3M for stores, that's because with only 88 stores, +3 is still 3.4% growth for a full year on revenue, I then half that for 6 months of operation in the year take incremental gross margin of 34%, less tax of 30% assuming some operational leverage will come through from those stores on the fixed costs of the business (corporate, procurement, advertising, distribution etc.). On the extra week, I make a similar assumption of 1/52th contribution, though that one is more vague given underlying earnings are unknown. The net net on all that, is that even on my relatively bullish assumptions, positive earnings still don't come through.
SunsetKid - that's a helpful perspective, albeit a bearish one. However, I suspect the key question is OSH doing better than last year, rather than better than LOW and HD. The stock price isn't assuming best in class, just the potential for some forward progress, though even that may be a challenge.
A Small Cap Alternative Not Quite On The Level Of Lowe's And Home Depot [View article]
E-Trade: 17% Upside, It All Hinges On The Loans [View article]
WPX Energy - A Natural Gas E&P Spin-Off At A Discount [View article]
1. The reaction to the YPF seizure was strongly negative from the US and EU. Predictable yes, but perhaps harsher criticism than Argentina expected.
2. Apco is a much smaller company than YPF in terms of both size and awareness, it may not be worth the additional hassle fo further seizure for a much smaller gain
3. The government could have seized Apco in April 2012 and they did not do so.4. Apco appears to have taken actions to pre-empt seizure such as cutting the dividend to fund investment (the apparent reason YPF was seized)
Now, none of the above are overwhelming arguments and I have very little knowledge of Argentinian politics, but I'm not sure the Apco seizure is the foregone conclusion the market may be discounting.
Assessing The Relative Value Of Hillshire Brands [View article]
Q: HOW WILL THE CONVERSION OF MY OLD SLE SHARES TO NEW HILLSHIRE BRANDS AND MY RECEIPT OF DEMB SHARES AFFECT MY CURRENT TAX BASIS?
A: U.S. shareholders will recognize tax on gains (but not loss) attributable to the DEMB shares they receive in the spin-off. You will need to allocate your respective basis in the shares based on the opening prices of the SLE shares and the DEMB shares post-spin. Using these prices, an allocation will be made between the DEMB and Hillshire Brands shares to determine the basis of the respective shares. The fair market value for determining any post-spin gain is the average price on the first day of regular-way trading, July 9 and June 29, respectively. We will post more information on how you may allocate your tax basis on our websites http://bit.ly/ODKRgz and http://bit.ly/Otmx3o. However, you should consult your personal tax advisor to discuss your particular situation.
Why Natural Gas Will Outperform Oil [View article]
Of course, a single month of data doesn't move the argument as I would stress this is very much a long term phenomena, but things are apparently moving in the right direction, at least temporarily.
Analyzing The Stock Buyback Kings [View article]
On SWY I totally agree with you, the leverage looks risky when growth seems fundamentally absent. I'd avoid that one.