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  • They Lie! Pros Make Successful Stock Price Forecasts, Every Day, With Double-Digit Simple-Percentage Payoffs [View article]
    I am commenting so I can give this a more thorough reading later on, thanks for the intriguing article.
    Apr 20, 2015. 11:56 AM | Likes Like |Link to Comment
  • Brokerage pair trade from Citi [View news story]
    It's odd, I like RCAP quite a bit, but LPLA has the exact same upside in a rising rate environment... And as the commenter before me mentions, the regulatory risk is the same.

    I did not see the Citigroup update, but I don't know why it didn't argue more along the lines of my recent article, that RCAP's margin expansion and recovery to more reasonable multiples would allow it to outperform LPLA. It is operational and market-sentiment improvements that drive RCAP, as the external factors (regulation changes) and business norms (cash account margin expansion) are common to both.

    I don't mind the long-RCAP, short-LPLA, but not for the reasons cited.
    Mar 31, 2015. 06:44 PM | Likes Like |Link to Comment
  • CEFL Still Attractive With 17.6% Yield [View article]
    Thanks for that comment, very interesting.
    Mar 26, 2015. 05:47 PM | 1 Like Like |Link to Comment
  • Rampant Mispricing Makes Specialty REITs An Interesting Space [View article]
    Points some of us REIT investors toward the less followed companies. This is why I frequent this site, I'll have to dig deeper into some of these companies.
    Mar 26, 2015. 05:31 PM | 2 Likes Like |Link to Comment
  • While Apple Swings For Fences, Microsoft Hits For Average [View article]
    I also don't like Apple or it's business model, but in my experience betting against the worlds population of "nits" is a losing bet more often than not.
    Mar 10, 2015. 02:13 PM | 6 Likes Like |Link to Comment
  • Lightstream Appears On Track To Nearly Wipe Out Its Shareholders [View article]
    Lightstream and Long Run Exploration are in a rough way. I used to believe that Crescent Point would purchase them outright, but I now feel that CPG doesn't need to.

    They can purchase the land at either a fantastic price (and a terrible price for Lightstream) or they can wait and purchase all of the properties post-bankruptcy.

    Crescent Point is an aggressive acquirer, and can integrate Lightstream's and Long Run explorations oil properties better than any other player in the patch, but they don't over-pay for assets if they can help it, and have no need to rush into a deal if they can just wait for it to go under.

    On the other hand, relatively favorable deals might be beneficial to both parties, so there are opportunities for win-win transactions. It's hard to know, but I think out-right purchase of the companies are unlikely due to the unfavorable debt loads. Refinancing at CPG's rate's would help, but its a lot of added expense and hassle to do that rather than just purchase the fields separately.

    Since the properties they hold are relatively high net-back fields in great locations, I imagine if they did go under the assets would fetch a really great price from the many bidders that own assets in the region. There may even be quite a bit of value post-bankruptcy, depending on the amount of interest from acquirers.
    Mar 10, 2015. 02:06 PM | 2 Likes Like |Link to Comment
  • RCS Capital: Misunderstood With Tremendous Upside [View article]
    I missed a currently ongoing catalyst for RCAP... ARCP.

    I tried to avoid speaking to it as there is little reason to mention the two together anymore, ARCP will be releasing their financial numbers and giving an investor update on Monday March 2nd. These companies business models share little in common, yet they are shown as related companies in Google Finance due to the number of investors moving between the two.

    These two companies have been inexorably linked since the ARCP scandal due to the two companies previously sharing Nicholas Schorsch in their senior leadership. If they post decent numbers and can address the scandal effectively, it will probably eliminate an overhang in ARCP, and by extension RCAP.

    Its left me in the position of hoping ARCP posts good numbers and the street likes their Conference call, even though there is literally no reason to believe a boost for ARCP would have any bearing on RCAP (or vice versa).... Though I have no doubt there will be another buying opportunity if ARCP announces bad results as it will likely take more time before these two companies to be considered separate entities in the hearts and minds of investors.
    Feb 27, 2015. 01:48 PM | 3 Likes Like |Link to Comment
  • RCS Capital: Misunderstood With Tremendous Upside [View article]
    With the market so fully-priced, it's becoming difficult to find these types of opportunities. Best to make the most of it when they come along.
    Feb 27, 2015. 01:10 PM | 3 Likes Like |Link to Comment
  • RCS Capital: Misunderstood With Tremendous Upside [View article]
    Pont 1) Touché, but it doesn't make it untrue.

    Point 2) If you focus on stocks with a market cap of $70 Billion+ like GS and MS I don't imagine you would have. Cetera has 5 operating divisions in 4 states and RCAP has 9700 brokers in the cumulative network, hence the tremendous growth potential in this company (and limited exposure outside of those states it operates in). Cetera was formed in 2010 and has become a large, award winning brokerage network in that short time, with many proponents here on SA that speak highly of it as an asset for RCAP.

    Point 3) Amalgamating companies with decent margins to use synergies to attempt to capitalize on their potential - There is a strategy in there somewhere. It's important to keep in mind that these businesses are profit-generating, with strong industry professionals and growing books of business we're talking about, not just "telemarketers". Cetera, due to it's many business lines and back office support, is the linchpin that solidifies the advantages RCAP has in amalgamating it's current and future brokers using Cetera's technology and support infrastructure. The opportunity to highlight products through their brokerage network is an added bonus of their business model, that can help drive profits in each division without undo pressure, and no requirement for brokers to sell the product.

    Point 4) It definitely is cut throat, finding businesses that continue to succeed in the independent financial advisory sector is difficult, but not impossible. In fact, I wrote an article about one...
    Feb 27, 2015. 01:07 PM | 3 Likes Like |Link to Comment
  • RCS Capital: Misunderstood With Tremendous Upside [View article]
    I am hoping to see some too. They did the initial insider purchases when the turmoil began, but we have not seen more since.
    Feb 26, 2015. 05:55 PM | Likes Like |Link to Comment
  • RCS Capital: Misunderstood With Tremendous Upside [View article]
    With each operating unit contributing this company is worth several times what it trades for today. In my analysis I wanted to prove that this company was worth a multiple of where it traded today simply based on the Retail Advisory Segment, I didn't delve into the other segments as strongly as a person could (and potential investors should).

    With margin's of 6.1% for Retail Advice (normalized of ~7.4% and potentially 9.5%) the other segments come in at:

    Investment Banking: 65.4%
    Wholesale Distribution: 0.6% - 2%
    Investment Management: 19.8%

    The Retail Advise makes up 67.2% of revenue during 2014, but have made up as little as 50%. Normalized earnings within these other operating segments, coupled with relatively mild growth, would justify a price closer to $40, as their other segments are less consistent they have huge operating margins. It does not take much potential business within each of it's underlying businesses to suddenly change the investing case for this parent company.
    Feb 26, 2015. 02:02 PM | 2 Likes Like |Link to Comment
  • RCS Capital: Misunderstood With Tremendous Upside [View article]
    Those ties definitely have damaged RCAP's reputation, but as an umbrella parent company it's foolhardy to write off an entire multi-faceted business due to previous managerial ties, or the dislike of a singular product line.

    Non-traded REIT's are not great products, but like all financial products it depends on your goals as to your individual suitability. Some are willing to pay extra for consistent income that doesn't depend on the market.

    As an aside, Nicholas Schorsch became a major player in the REIT market due to his elimination of unnecessary fees, and his uncanny ability to bring non-traded REIT's to market to provide an opportunity to "cash out" existing investors. This can be hinted at during purchase, but hardly materializes to the extent it has with his affiliated companies through AR Capital.

    The number of companies is due to the large amount of acquisitions they continue to make to scale itself into a large enough business to compete adequately with larger players. Cetera Financial has a sterling reputation, and represents a large portion of the companies future prospects. RCAP has many amalgamating/ synergy opportunities ahead of it. To disregard a company as too obfuscated while looking at a singular moment in time before the company has a chance to proceed with it's strategic vision is not the way I chose to invest.

    RCAP's other business segments do rely heavily on marketing and selling non-traded and traded REIT's alike, but there is little reason to believe the largely independent and very recently acquired Retail Advice brokerages are reliant on that business model to succeed, a key lock-pin in the valuation of the company in this article.

    I also sincerely doubt the popularity of these products would diminish greatly from current and past amounts, as they have always been fee-laden and improper for many types of investors, nothing has changed in that regard. A return to previous growth (return to the mean) would indicate much stronger upside for this company, though I don't require or expect non-traded REIT popularity to drive this company... Those profits would just be icing on the cake.
    Feb 26, 2015. 11:24 AM | 6 Likes Like |Link to Comment
  • The New York Times Fails Biology 101 [View article]
    I didn't get a chance to read the article you referenced before I read this article about it, and I must say I would've probably felt the need to do a write up as well. The misinformation being thrown into these discussions really hurt the intelligent dialogue needed for these programs to succeed.

    I'm very glad that you were able to post such a well-written and clear article regarding this process and clear up some of the biased "facts" presented in the article.

    This is also one of the better articles in that it references an important central topic, but actually spends some much needed time discussing investment options. It's especially difficult in an industry where pure-play's are having a heck of a time being successful, but its encouraging that larger companies are successfully growing this type of production.

    Thanks again, I think they should start making Environmental Chemistry a required course in High School (or first year university). I had to study Chemical Engineering (environmental focus) for a couple years, then I realized how much I didn't want to work for an oil company I moved into Commerce (entrepreneurship focus), and it took exposure to both to get a taste of the knowledge basis that I think everyone really needs.

    Then again an Arts major might say the same thing, we're all biased by our education ha-ha.
    Feb 19, 2015. 12:58 PM | 3 Likes Like |Link to Comment
  • No, Apple Won't Acquire Tesla - And Here Is Why [View article]
    Most failed car companies ran into a cash crunch. Elon Musk nearly annihilated his personal fortune to bring Tesla off the ground, and is many years away from actually succeeding.

    Apple's cash pile is large enough to force a successful company if they so desired. I doubt they will get involved that way, designing something proprietary and forcing car makers to carry the cost and sell it to consumers is much more their style.

    Their business model is to take something that already exists, refine it for the masses, sell it at a massive premium to it's fair value, market it to the masses who shouldn't be exploring such a high priced option, and re-selling the same product with minor modifications over time.

    It's the principle that drove their computer sales for a long time and was reasonably successful, they just happened to be on the cusp of a trend of interconnectivity that helped lift all of their sales when the iphone took off (a perfect business case on selling over priced items to wholesalers and forcing them to recover their costs through monthly contract pricing, allowing the poor to afford something they should by all rights not be purchasing... Genius business model that only exists because of our imperfect nature). They profit during the lag between better competitors at more reasonable prices and the consumer's imperfect knowledge of those options. Their margins should normalize with approximately 30% of the premium market share, once normal people stop buying (this trend broke down for iphones obviously, but will likely still occur eventually).

    Cars is a much more difficult to exploit in this way. A much more reasonable option for Apple is to provide a novel operating system for running the car's systems and the driver's interface with said vehicle, and driving consumer demand for it. It's a largely unnecessary product, where the costs to the consumer can be hidden, where there are similar (but less expensive or superior) versions available elsewhere, where relatively low market share would still be immensely profitable, scale would drive profit margins should the product take off, and it's a long-term trend in the industry.

    Building a car company from scratch would be possible, but there are more profitable ways to exploit vehicle sales without selling the damn things.
    Feb 19, 2015. 12:39 PM | 2 Likes Like |Link to Comment
  • Equity CEFs: How To Play Sector Rotations By Investing In CEFs [View article]
    I'm a big fan of CEF's, though I invest more heavily in the Canadian market (especially since the now uncomfortable exchange rates).
    Feb 17, 2015. 12:59 PM | Likes Like |Link to Comment