Thomas Renna

Long/short equity, special situations, contrarian, deep value
Thomas Renna
Long/short equity, special situations, contrarian, deep value
Contributor since: 2012
Company: Equities Research, LLC
The 8K on January 28th disclosed 221 million shares.
During the 4th Quarter the company authorized the issuance of 30 million Class C shares (convertible into A shares 1 for 1)
At what point will analyst include these additional shares in their Earning Per Share Calculations
More on the C shares can be found in these notes.
The Cash Flow Analysis table in the report does not include FY2015.
Operational Cash Flow
FY2010: $50 million
FY2011: $15 million
Fy2012: $200million
FY2013: $120 million
FY2014: $219 million
FY2015: NEGATIVE ($44 Million)
Under Armour authorized the issuance of 30 million Class C shares during the fourth quarter (after the consolidated class action lawsuit was settled.)
Each Class C share can be converted into a Class A share.
According to the 8K filed on Jan 28,2016, the financial statement recorded 221 million shares outstanding.
The Class C shares can be converted on any given day (immediately). I believe that all EPS and PE forecasts should take into account the Class C shares. (especially for FWD forecasts into 2016 and beyond).
DO you have any thoughts on the Return on Investment of the $560 million that Under Armour invested during Q1 into the 2 Apps? (neither of which makes money).
The CFO sudden resignation in October after the class action settlement makes me wonder if him quitting had anything to do with the Class C being authorized. Since Dickerson doesn't own any common stock directly, he would not be entitled to the dividend type Class C share.
I have other notes I took from the 8K that I included in this post here
it might be true. because if i remember correctly , the jan 11th Price target was $64 and the Jan 30th news source says new price objective of $62
I agree, good company but I think there is low short term upside and higher downside risk above $80.
I took some notes out of the SEC filings.
1/28/16 8K weak cash flow statement.
Nov. 2015. 13D CEO insider sale of $450 million worth of stock. $91.
August 2015 DEFA 14A class action lawsuit surrounding the issuance of Class C shares .
Here is a link to the news source that says Morgan Stanley downgraded the Stock to $62 on Saturday January 30th.
my research notes can be found here
i agree with your article.
To see all notes not mentioned in the headlines visit:
Morgan Stanley downgraded Under Armour on Saturday in a report to clients and investors and lowered price objective to $62.
more take aways:
*Negative Cash Flow
*Class Action Lawsuit
*CEO New Stock Trading Plan
*Series Class C Shares (how many shares are really outstanding?)
Is anyone concerned about the cash flow statement? FY2015 Operational Cash Flow was negative $44 million. FY2014 Operational Cash flow was positive $219 million.
Since Aug 25th SP500 flat but $FB +13% $GOOG +19% $AMZN +22% $LNKD +13% $DIS -1% $NFLX +1%
Since Aug 25th SP500 flat but $FB +13% $GOOG +19% $AMZN +22% $LNKD +13% $DIS -1% $NFLX +1%
agreed. good piece
i only have about 2 dozen followers on SA, but I warned back in April 2015 @ $48.
CNHI may be the weakest of the sector. The CNHI USA retailer Titan Machinery has been closing stores over last 2 years and has been surviving purely on debt. Titan's founder resigned from the board in June and stepped down as President too. 3 of 8 directors have resigned since May.
I agree with the insider (short case). I have done research with insiders in the field too.
My favorite short pick is titan machinery, a retailer of CNHI equipment.
There are statistics out this morning in a motley fool report regarding the agriculture sector and specifically titan, chi and deere with a mention of cat too.
here is another weekend post too.
I have no idea what this statement means, please explain, thanks.
"They don't sell they distributors anywhere in the world."
So you are saying you are sure that CAT has NO distributors that are feeling the effects that Titan is experiencing. I disagree with you. I am sure that Cat has distributors like Titan that are experiencing the weaknesses of the global agriculture and construction equipment slow down.
As a matter of fact, Titan also distributes CAT machinery and equipment in addition to CNHI.
For you to think otherwise tells me you're not measuring the risk side to the long case.
Bearish $CAT
$CNHI distributor $TITN a retailer in the mid west USA, reported yesterday.
sales for 9 months are down from $1.4 billion to $1billion.
Titan reported $1.2 million net income for 9 months on $1 billion in sales.
Why the market capitalization is $225 million is confusing.
Titan spends about $1.60/per share a year just in interest expenses and $10.00 a share a year in SG & A.
I don't even know how the company keeps their lights on , let alone be valued at $225 million market cap.
Titan is loaded with debt and their cash position fell from Jan to Oct 2015 from $127million to $78million
I'm sure CAT has distributors like this CNHI distributor that can't be doing much better. It appears that the house of cards is collapsing quickly on the small distributors which will lead to the Giants CNHI and CAT buckling
titan TITN biggest loser of day so far
Deere recently reported their Q and EPS declined from comparable quarter year ago.
I'm confused from the retailer Titan Machinery (TITN) is projected to do such a great profitable turn around. (especially since their founder suddenly resigned as president and stepped down from board.
Last week the titan bonds traded under $64 w 18.56% yield
the company reports pre market tomorrow and the stock is trading at a PE 125 for current year FY2016 ending Jan. 31,2016.
so confusing.
As of July 31,2015 Titan Machinery had current liabilities of $692 million. The company's cash position declined from January 31,2015 to July 31,2015 from $127 million to $95 million.
what i am expecting from $TITN not pretty
pre market
$TITN reports in morning premarket . What to expect :
excellent investigating , as usual
Thank you for recognizing my work in your report. I appreciate it.
i have some cliff notes regarding my work here "
and a link to the suspicious trading on March 9th can be found here. March 9th was the day the overall market went up and Titan traded down 6%. Then after the close that day the company pre announced Year end numbers (missing) and also announced the closure of company stores.
the price target in the report was $4
A link to my work on Titan was mentioned in the piece.
thestreetsweeper mentioned my work regarding the retailer titan machinery today in their report sending titan down nearly 10% this morning
I also feel the same way about the CNH retailer Titan Machinery (TITN). Earnings have fell from $42 million net income in FY2013 to negative ($31 million) in FY2015 and although the shares have decline from $30 to under $13 , I still don't think "it has not cheapened sufficiently to warrant a "buy" rating."
Titan PE ratio is 170 and the Debt to EBITDA ratio is 25.2
I have no idea how that stock is trading near a $250 million mkt cap.
not sure what u mean by "investors are giving it da business" ?
My opinion for the stock is that it heads down below the $5 range.
The underlying business is shrinking dramatically. IN FY2013 they earned $42 million in net income and FY2015 they reported a loss of $31.5 million.
For the 1st 6 most of FY2016 they have loss ($.029) , over $ 6 million loss.
Their credit lines were reduced by over $100 million and the covenants of their $150 million Indenture with Wells Fargo has had 6 amendment, the last being made earlier this year "After the company" was non compliant with the terms of the note.
The company faces tighter restrictions on the $WFC note and may be in jeopardy of violating the net income covenant for FY2016 Q3 when they report in December.
Aside from the weak fundamentals crippling the stock , the management has some very suspicious dealings.
Management entered into a long term $100 million contract with an outside entity that Management has an equity interest in.
A year ago the company filed a 10Q and inflated their assets and understated their losses and never deemed it necessary to re file that 10Q.
(by over 50%)
In May of this year the company filed a DEF 14A disclosing that the Founder would continue as President and asked the shareholders for the president to vote their shares via a proxy. After the DEF 14A filing, 4 days later, the founder resigned as President. No DEF 14A was re filed.
Of the 8 directors of the company in May 2015 , 3 have now resigned, including the CEO of CONN who resigned a week ago , effective immediately.
There has been suspicious trading in the stock, specifically around the resignation of the company's original auditor resigned over the 4th of July weekend in 2013.
The company has also had some personal selling (insider selling) after some hyped guidance that pumped up the stock price significantly up at the $29 level. (including an appearance on Jim Cramer's Mad Money.)
In June 2014, after the company reported FY2015Q2 , gave guidance that for the FY2015 ending in less than 6 months, that they would earn close to $1.00 a share in net income for the year ending Jan. 31,2015. Well less than 6 months later they reported a LOSS ($1.51) eps. A huge miss,
The company is not a growth company any longer and is not profitable any more and should not be trading with a fwd PE 160.
Another casualty in the equipment/machinery space is the small-mid cap stock that is not a manufacturer but a reseller (retailer) of CNHI/Case/New Holland , Titan Machinery.
Titan Net income in FY2013 was $42 million and for FY2015 (ending Jan 31,2015) full year net income was a negative (-$31.5 million).
The company has a Debt to EBITDA ratio of a sky high 25.2 and shares are trading at a whopping PE 160 with a market cap of $250 million.
Yesterday TITAN filed an 8K . Director resigned effective immediately.
3rd director to resign in 5 months.
3 of the 8 directors from May have now quit, including the Co Founder.
you're welcome.
According to news released by Zacks on Sept 22,2015 , Titan has a debt to EBITDA ratio of 25. The highest ranking in all of Trading Companies & distributor Industry.
Zacks also records the current PE @ 178
"Swing Death Cross Alert: The short-term 10 day MA is now below the 50 day MA."
from CMLViz
I haven't heard of any whistleblower when it comes to this company.
Here are specific details from SEC filings.
Also a story from a newspaper article (that was not mentioned in a filing) regarding how Dealer Sites LLC purchased 12 acres of land for $1 (one dollar) and leases that land to Titan. Why in the world didn't Titan just purchase it directly is _______ ???
gotcha. thanks.
I am afraid to short such a stock with such super growth fundamentals.
I see you use Morningstar, have you ever tried this tool, I love
Here's more about Ophir who created that tool.
I found a stock trading at a PE near 200 but it is difficult to short and puts are expensive.
Your title is "A Short opportunity" and you conclude with your opinion stating:
"...the current moment is not good for holding this stock short,..."
Is that a typo?
I'm long term oriented so short term swings lower may present buying opportunities if fundamentals stay strong.
Today's Wall Street Journal article about Nike mention Sketchers