The Wall Street Flaneur

Contrarian, value, long/short equity
The Wall Street Flaneur
Contrarian, value, long/short equity
Contributor since: 2012
Company: Sabre Capital Group
Thanks for the read and comments. In general, we think its fair to say that we like SAVE because they are best suited to mitigate alot of the exact risks your mention: no union to fight with, actively seeking to lower fares as part of the business model (so while the Delta's of the world complain about their inability to raise rates, SAVE is able to thrive, compete, and win business), and they fly smaller, newer jets with considerably better fuel economy.
We think growth comes from two places--1. By winning market share away from the competition via better rates and a better executed strategy--the growth in revenue and earnings speaks for itself here for SAVE, and 2. SAVE is positioned to take advantage of middle class growth in South America (not just tourists flying from North American and back, but transporting locals within countries and the continent).
No doubt airlines is a tough business--but we think a smart play in the industry can appreciate nicely in the medium term.
Fast food, soft drinks, etc. absolutely one play and definitely where the 'big money' We're observers, intention wasn't to convey what we want to happen, but rather where we see biggest growth opportunity, best value.
Thanks, Tim. For the reasons you mentioned, the higher-priced healthy choices certainly face headwinds. But we tend to think that the coming "sticker shock" associated with the massive societal costs of obesity will keep this trend moving onward, upward.
Not aware of any public names in the "fitness experience" space at this time. One of the biggest names is World Triathlon Corp, who has been buying up a lot of similar regional players and really strengthening their brand and presence. They're owned by a PE shop today but wouldn't be surprised to see them public in a few years unless they go through one more PE iteration before then.
Thanks for the comments. The television stats are for the average American household. Nielsen data found here:
Very limited Euro exposure. Large majority of transactions USD denominated.
Thanks, WestEnd.
We see the biggest risks to be fuel costs and the demand side globally. NMM may be a Greek company, but they diversified enough to avoid a lot of the problems the competition is having on Europe/Asia routes.

We anticipate the company will continue to be successful with their contract negotiations, provided of course there is at least some level of demand (we're not doomsdayists so we think there will be). They've been pretty successful so far in 2012 and are solidly structured with long term contracts - so much so that the full cost of the fleet is covered from their existing long term contracts for the rest of 2012 and all of 2013. Pretty solid management right there.

And you're correct about the dividend. Rounding error on our part ($0.44 versus $0.4425).
Thanks for the comments. Oil/gas, no doubt, are the value drivers behind any Bakken play. And there are certainly many O&G plays out there - a mix of under-, accurately-, and over-valued.
But regardless of which company they're coming from, oil and gas dollars are creating other-sector investment opportunities that should prove more insulated than some of the O&G swings we've seen. Certainly, if more productive shale plays are discovered or unconventional yields decline as some have predicted, then the whole region is in hot water - but O&G will serve as a leading indicator for these other-sector investments.