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  • J.G. Wentworth: One Of The Last True Bargains In This Market [View article]
    They still had more than 500k shares as of December 31, 2014, down from the 700k level at the end of Q3 2014. I would say Kerrisdale purchased more than they are supposed during Q2 to double down. They simply dispose some shares during Q4 to go back to the normal holding level.

    Their original costs were too high. They have to use the "double down and dispose" strategy to lower cost. In fact, Kerrisdale's initial bull thesis is too bullish. I am not surprised that they are very disappointed.
    Apr 14, 2015. 08:50 AM | Likes Like |Link to Comment
  • Express: A Turnaround Story? [View article]
    Dallas, good job to identify a potential turnaround opportunity at Express. The previous CEO, Michael A. Weiss, has destroyed the company in the last five years. I said to myself not to buy a single share of EXPR as long as he is still the CEO.

    Still, EXPR has several major obstacles for a turnaround.

    1. It has a over leveraged balance sheet, which is a major problem for all struggling retailers.
    2. It has a very awkward position in the intensively competitive fashion apparel segment. For me, EXPR is offering products that are inferior to H&M's but selling them at higher price. If EXPR's homeland is Europe, it may not be even able to survive.
    3. Its stores are way too big for an efficient sales/sq footage. It is a very big capex project to modify the stores. I don't think Expr has that cash flows. The problem ensures EXPR's ROA will almost always stay below average.
    Apr 13, 2015. 09:13 AM | Likes Like |Link to Comment
  • 'Smart Money' Keeps Buying Cheap Shares Of J.G. Wentworth [View article]
    JGW is only counter-cyclical in some degree. The worst nightmare for JGW would be a 2008 situation. When the credit market freezes, JGW will have to pay a huge price for securitization. It may have solvency issues. However, I don't think it is a problem now. The Fed pay attention to credit market liquidity more than anything else.
    Apr 13, 2015. 08:51 AM | Likes Like |Link to Comment
  • J.G. Wentworth: One Of The Last True Bargains In This Market [View article]
    Undervalue is itself is seldom a good reason to buy a stock. Many undervalued stocks go bankrupt every year.

    You should not rely on what management said about the profit boost. In fact, if the market does not even react favorably to the profit boost comment, management has little creditability here.
    Apr 10, 2015. 11:05 AM | 1 Like Like |Link to Comment
  • J.G. Wentworth: One Of The Last True Bargains In This Market [View article]
    What bothers me about JGW is the purchase of the mortgage company. It makes little strategic sense. For me, the company acted too desperately to diversify itself.
    Apr 10, 2015. 09:31 AM | Likes Like |Link to Comment
  • TubeMogul: It's All About The Numbers [View article]
    347242, thanks for your kind words.

    I personally believe the market is not expecting growth rate near as high as 60%. Rather, it has some doubt about TUBE's the ability to sustain 30% for many years. So, the key is whether TUBE is able to beat and raise. If TUBE is able to raise, the market will have more confidence the growth's sustainability.

    Again, the doubt is really due to the unpredictable nature of the business. The adtech business is not a moat adding business given the current competition landscape. TUBE has the chance to become the biggest adtech company in the world, but the probability is just very small.

    If I were you, I will take a quick 30% return now. The chance for it to go up to $17 or drop to $10 is 50/50. Also, most high beta stocks like TUBE could easily enjoy 30% rebound during the down turns. However, they seldom get more than 40% rebounds.
    Apr 9, 2015. 04:34 PM | Likes Like |Link to Comment
  • TubeMogul: It's All About The Numbers [View article]
    Jeff, I am not a Ben Graham investor. I actually have more growth stocks in my portfolio than value plays. The reason why you are confused is due to your lack of understanding of the difference among different growth stocks.

    You may see two growth stocks. Both enjoy P/E of 100, but one grows 30% a year while the other grows 100% a year. Naturally, many investors prefer the latter due to the higher growth. However, they don't know that the former actually has high visibility to continue grow at 30% for 10 years while the latter will see its growth declines to 10% in 3 years. At the end, it is the former company that should enjoy a higher valuation.

    If you could not differentiate growth companies, your success of growth stock investing will solely depend on your luck.
    Apr 9, 2015. 02:32 PM | Likes Like |Link to Comment
  • Diplomat Pharmacy's Secondary Offering A Gift Wrapped Chance To Buy [View article]
    Dallas, thank you for your kind words. You have quite a lot of fantastic ideas. We, as readers, just have to find the ones matching our own styles.

    I often only go with stocks with businesses that make sense in my world. I have to give up or question a few because I could not understand their sustainability. I will surely miss a few good stocks, but I can live without them.
    Mar 30, 2015. 09:14 AM | Likes Like |Link to Comment
  • Diplomat Pharmacy's Secondary Offering A Gift Wrapped Chance To Buy [View article]
    The high SGA/Sales is exactly the reason the stock enjoys P/E over 1000. First, the company has aggressively invested itself in the past. Also, in the future, the company will be able to leverage existing cost structure. M&A will also help further cost leverage. Once its sales grow more in the future, its net profit margin can easily go up 100 times. The market is no fool. P/E of 1000 means future P/E of 10 here.
    Mar 28, 2015. 10:46 PM | Likes Like |Link to Comment
  • Why Shake Shack Has A High Valuation #InstaShack [View article]
    88472, welcome to the investment world. I wish your three simple reasons are able to make you rich. But the truth is lots of people will be very rich if such three reasons really work.
    Mar 27, 2015. 01:09 PM | Likes Like |Link to Comment
  • Does GoPro Have A Moat? [View article]
    I am not saying your short calls are wrong. As you said, many times, you are right. But you only right for a few months. As a short, which I was too, simply you cannot bet against this type of company too long. You were spot on last November to call a GPRO short. I would do the same thing. But keeping negative on the stock when it is only $40 is not very smart.

    The same thing, if you keep shorting the stocks you had short ideas, most of the original good calls would turn bad.
    Mar 27, 2015. 08:48 AM | Likes Like |Link to Comment
  • Does GoPro Have A Moat? [View article]
    Ron, I don't think we should waste time to convince Redrut. I looked at his articles. He is basically against most high quality growth companies. Also, most growth companies that he wrote negative articles eventually perform well. He can be right for a certain time when the growth stocks temporarily jump too high. Eventually, these growth companies reach new high.
    Mar 26, 2015. 01:27 PM | Likes Like |Link to Comment
  • Diplomat Pharmacy's Secondary Offering A Gift Wrapped Chance To Buy [View article]
    Indy, welcome to the DPLO family. You have to be ready to see DPLO drops up to 20% in the next a few months. If that happens, you should take the chance to buy more. These new IPOs are very volatile. Keep you hands tight.
    Mar 26, 2015. 10:49 AM | Likes Like |Link to Comment
  • Diplomat Pharmacy's Secondary Offering A Gift Wrapped Chance To Buy [View article]
    Thanks, Dallas. I don't know how many people benefit from my comment. The stock just jumped 12% in a hour. I typically care about timing a lot. DPLO is one of the few I don't care as much.
    Mar 26, 2015. 10:34 AM | Likes Like |Link to Comment
  • Does GoPro Have A Moat? [View article]
    I think some institutions may have finished majority of accumulation, but many have not. Remember, those analysts only support their own clients. I really don't think a major real accumulation period will be finished in just 2 weeks. That's why the past two analyst' upgrades are unable to lift the share more than 2% at close. Those institution money will stop or dramatically slow down accumulation in a given day when the price goes up more than 3%. That's why most likely we will not see GPRO goes up more than 3% today. But this is really a good thing. Once a major accumulation period like this completes, we won't see any big negative sentiment in at least 1 year.
    Mar 26, 2015. 10:33 AM | 1 Like Like |Link to Comment
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