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  • Comments On Lumber Liquidators' First Quarter Business Update [View article]
    Thanks for being so transparent in your analogy - shouting fire (repeatedly) in a crowded theater even after the fire department has arrived. Who does that?
    Apr 3, 2015. 03:23 PM | 9 Likes Like |Link to Comment
  • Tsakos Energy Navigation Is Ready To Set Sail [View article]
    It is now above $8. Good call.

    I like TNP as it is trading at a discount to peers on an EBITDA basis, yet has much stronger operating margins and more momentum than the peer group of FRO, NAT and TNK. TNP's revenues are up 21% for the most recent year and 41% for Q4'14. 2014 EBITDA is up 36% and the strong tail winds of contango, storage and lower bunker costs only really started in Q4. Contango remains strong at $9.49 for the one year May contract down 15% from one month ago but equal to two months ago. This is a 20% return to hold oil for one year with very low cost of capital. TNP benefits from this directly.
    Mar 25, 2015. 07:43 AM | 1 Like Like |Link to Comment
  • Tempur Sealy International: A Highly Leveraged Business In A Commoditized Market Makes For A Compelling Short [View article]
    Select Comfort is revolutionizing bedding, their products adjust for individual temperature, firmness and snoring and they can track your sleep and help you improve your sleep experience. They now have a line for kids. They may not do everything mentioned above but they are not far off and innovating at a fast pace. Plus no debt and nice momentum. Sleep easy as an investor in SCSS.
    Mar 23, 2015. 06:54 AM | Likes Like |Link to Comment
  • How Much Longer Before Lumber Liquidators Gets Bought Out? [View article]
    Nice article, reasoned and balanced. It may take a few months for this issue to gain the proper context and the investor fear to subside. While not likely that one of the big box stores would step in to purchase, it is possible and with market caps that are 150x plus LL why would they start their own stores, far easier to buy LL and gain a business that could contribute to their overall organic growth rate and take a growing competitor out in the process.
    Mar 18, 2015. 06:59 AM | 3 Likes Like |Link to Comment
  • Explaining Lumber Liquidators' Reckless Strategy, And Rebutting Its Claims About Deconstructive Testing [View article]
    Tilson: for a guy who claims you are going to lower your public profile on Thursday, you have a funny way of doing that with this weekend post within two days of the "lower my profile article". Clearly you have flipped on this claim. Are there other claims you will flip on?
    Mar 17, 2015. 07:14 AM | 2 Likes Like |Link to Comment
  • Why I'm Short 60 Minutes And Whitney Tilson And Long Lumber Liquidators [View article]
    My thesis and the conclusion of the CARB in this study is we have levels of formaldehyde that make LL's alleged contribution a small fraction of the situation. If millions of newer CA homes have 60 parts per million of formaldehyde with no product from LL and the homes with LL have 60 or 61 parts per million what is the difference? All the homes have formaldehyde and people are not getting sick. Why does OSHA have a threshold that is 13x what CARB's threshold? People are not seeing the forest for the trees.
    Mar 13, 2015. 03:59 AM | 1 Like Like |Link to Comment
  • Lumber Liquidators files response to 60 Minutes story [View news story]
    Who is Whitney Tilson anyway? Take a look at his past posts on Seeking Alpha. He famously shorted Netflix asserting an outdated business model and the stock rose to $300. He shorted Green Mountain Coffee and is long SODA, both big losers. Yes he has a few good shorts that he has written about but it appears to be one in three and yet he writes some emphatically about the demise of each being so certain. Just look what he wrote about Google per Wikipedia:

    When Google had its IPO in 2004, Tilson famously said in 2004 Motley Fool article, "Google with the same market cap of McDonald's (a stock I own)?! HA! I believe that it is virtually certain that Google's stock will be highly disappointing to investors foolish enough to participate in its overhyped offering -- you can hold me to that."[7] Note: Since then (as of 10/18/13) Google has gone on to give its investors over a 1050% return.
    Mar 2, 2015. 11:54 PM | 3 Likes Like |Link to Comment
  • Lumber Liquidators "clearly oversold," analyst says after today's plunge [View news story]
    Companies fix these things and move on. Remember a much broader issue of hiring illegals at Chipotle, the stock is 150% higher four years later.
    Feb 27, 2015. 05:34 AM | Likes Like |Link to Comment
  • Update: Select Comfort Has Another Huge Day After Q3 Earnings [View article]
    If TPX and MFRM trade at 15 and 17 times EV/EBITDA, why would you set a price target at 10 for SCSS? AAPL trades at an unloved 10x multiple. My view is over time, as SCSS continues to perform and shake off the last two years of performance, it should converge on these multiples.
    Oct 26, 2014. 06:50 AM | Likes Like |Link to Comment
  • 3 Retail And Restaurant Stocks To Feast On [View article]
    May want to address why there is a 40% short interest in RUE as well as their flat same store sales results. The short interest is very high - HLF for example is only at 26%. The lack of organic growth puts pressure on the PE multiple. Plus with their store openings, the pop they get in year two and on as the store matures suggests that SSS on stores of two years or older are slightly negative.
    Jan 6, 2013. 10:31 AM | Likes Like |Link to Comment
  • 2 Mattresses For The Price Of 1? How Tempur-Pedic Gets To $50 [View article]
    One thing to look at is TPX has really ramped up sales and marketing costs. Average TPX sales and marketing costs have increased from 18.1% of revenue in 2010 to 23% for the nine months ended 9/30/12. A 4.9 % increase indicates their offering are not doing nearly as well as SCSS which has actually reduced their sales and marketing expense metric by 3.1% over the same period.
    Dec 18, 2012. 12:51 AM | 1 Like Like |Link to Comment
  • Chipotle: Stock Is Getting Tasty [View article]
    Do your own taste test. I did and I would only buy another Cantina burrito if I was stranded at an airport, had not eaten in 8 hours and the airport had only one place open for food and one thing available.
    Oct 26, 2012. 08:58 AM | 1 Like Like |Link to Comment
  • Four Reasons Not to Short Chipotle [View article]
    I think a good comparison for CMG is SBUX which in 2000 had the same total revenue as CMG, $1.8b. SBUX had SSS of 9% just like CMG today (9% for the year, but Q4 SSS of 12.6%). SBUX was trading in a 60 - 65 trailing PE range compared to CMG's current 47. SBUX went on from its stock price of $9 at the end of 2000 and in six years hit $40 a a PE of 75X.

    SBUX expanded its units by 24% in 2005 and 31% in 2006 overdoing things. CMG is expanding at a much more controlled rate of 13%.

    If the labor issue is systemic it will be a one-off issue, not to repeat. They are not paying workers of Mexican origin less than others. With an underemployed rate (U6) of 16% there is ample supply of workers available.

    Yes food costs are increasing. But one has to look at these factors and put this in context:

    1. CMG increased its restaurant level operating margins by 180 basis points for the year of 2010. Operating leverage is more than covering the cost increases that have been prevalent during 2010.

    2. CMG still retains pricing power that it has not used in two years. Food represents about 25% of the revenue dollar. If these food costs rise by 10% in a year, that increases food costs to 27.5%. If they passed all of this onto the customer, the average ticket of $8 goes to $8.20. If CMG customers were price sensitive, they would not be going to CMG in the first place.

    3. CMG could easily ramp up store expansion to a still manageable upper teens rate. They probably won't buy many shares back over $250 so I could see them using cash to build more stores. Organic growth that has a very high cash on cash return - see the investor presentation on their website.

    I'm long CMG and adding to my position. There are 40,000 Subways out there, I think CMG has a great deal of runway left.
    Feb 13, 2011. 03:54 PM | 2 Likes Like |Link to Comment
  • Consumer Metrics Institute: Consumer Demand Still Contracting [View article]
    I agree with the overall gist of the article but what the CMI seems to miss is the government portion of GDP and the stimulus impact. If the government goes from 10% of GDP spending to 13%, this 3% increment would lessen the predicted GDP drop but it would still be negative for Q3. The CMI appears to overshoot by a few points as well so the current projection for Q3 GDP appears to be down around 2%. Clearly much lower than consensus but not as bad as the raw CMI would indicate.
    Sep 28, 2010. 11:35 PM | Likes Like |Link to Comment
  • WHAT HAPPENS NEXT [View instapost]
    Wow - nice job calling today's outcome. What do you think is in store for next week?
    May 7, 2010. 09:44 PM | Likes Like |Link to Comment
COMMENTS STATS
46 Comments
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