Turner Novak

Value, long only, growth at reasonable price, contrarian
Turner Novak
Value, long only, growth at reasonable price, contrarian
Contributor since: 2012
What's the deal with not recognizing revenue related to Star Wats consumer products until Q1? I understand they can't recognize revenue related to ticket sales since consumers haven't seen the movie yet, but shouldn't they be able to recognize revenue related to toys, costumes, etc. since those tangible products have already been delivered? Is this some weird "film industry" accounting?
I read he wanted to be a respected game developer, and other developers were criticizing him for stealing sprites from the Mario games. That may have gone into his decision to pull the game.
If you look at their largest shareholders (http://yhoo.it/19EPRRm) NEW ZEALAND WAYNE'S INVESTMENT HOLDINGS CO., LTD. is the biggest by far.
The company also used to be named SHUAIYI INTERNATIONAL NEW RESOURCES DEVELOPMENT INC. and changed its name back in 2011. http://1.usa.gov/19EPUN0
The guy, Jinbo Cao, owned about the same amount of shares as he does now, looks like a little less than he used to because he has been selling.
According to his LinkedIn, he's a VP of Wealth Management at CitiGroup. http://linkd.in/19EPUN2
I am still not sure if I would ever buy a Chinese company, but definitely looks like an interesting situation.
Wow, CBDS is up from $1 to $11 in the last week.
Website: http://bit.ly/1ekaEqJ
Address according to Bloomberg is a suburban house in Utah. http://bit.ly/1ekaEGY
They had an article about the patent they acquired in the WSJ which probbaly helped with the price http://bit.ly/1ekaEH1
Also had some publicity in a local Colorado news paper. http://bit.ly/1ekaEH3
Wow, CBDS is up from $1 to $11 in the last week.
Website: http://bit.ly/1ekaEqJ
Address according to Bloomberg is a suburban house in Utah. http://bit.ly/1ekaEGY
They had an article about the patent they acquired in the WSJ which probbaly helped with the price http://on.wsj.com/1ekaEH1
Also had some publicity in a local Colorado news paper. http://bit.ly/1ekaEH3
That is ridiculous...
Great article. You had a lot of good points in this one and in your YRC articles.
Thanks for the article. I have been following PLAB since November and am planning on buying some shares in the near future.
Great article, I bought it for these exact reasons when it dropped.
mchiou I agree with your comment, as well as some of the points in the article. Yahoo will probably never be "a better overall company" than Google, but I am long Yahoo because its stock will outperform Google's over the next 5 years... which is exactly what I am looking for as an investor.
Their financials are hilarious, especially the "loans payable" to the executives. Thanks for the article.
Great article, thank you for pointing these two out.
BPC - Got you, I read that as just operating cash flow. I agree, they must generate cash in order to remain in business. I think that they will be able to do so, and others do not. That is what makes a market.
BPC, I am seeing 25.8 million in operating cash flow for the first two quarters of 2013 (according to the number in the financials, it is negative if you back out the "other liabilities").
I agree, any purchase of Tesla for the long-term is essentially betting on EV's. I may be skewed by being a member of the younger generation that wants to help save our planet, but I firmly believe that my generation will look for ways to curb our oil addiction. I have not met a single person yet that does not think the Model S is an awesome car, which is essentially where your business model should start: with the tangible products you sell, not the financial models built off of your previous financial performance.
With Tesla, you have to think of where they will be in 10 years. They are building a charging infrastructure across the entire continent, and will start doing the same in China and Europe. No other automakers are doing this that I know of, and even if they stop making cars completely, they will have first dibs on all of the real estate available for charging stations. Tesla has said they will not charge Tesla owners to use the stations, but it would make great business sense to charge owners of cars manufactured by other companies to use the stations. Musk himself has stated he invites competition in the EV market among other the other automakers, and the more electric cars there are on the road, the more Tesla will benefit in the long run because of their head start in building charging infrastructure.
They may not have, in your opinion, "viable products" right now, however they have been investing heavily in human capital, the most important asset a business can have. As a tech company, all of their innovations will come from the people who work there. Google has done a great job building a people oriented culture over the past 15 years, and we have started to see Yahoo do the same.
Mayer also understands that mobile is the future. Yahoo's entire focus as a company has transitioned to mobile. Very few large corporations have done so. It still may be 2 or 3 years before it starts to hit the bottom line (which will be shortly after Alibaba IPO's), and I think it will catch most investors off guard.
I disagree that the company will be at the mercy of its creditors. YRC's operations continue to improve, which is what the creditors want to see. The company has a huge competitive advantage with its terminal network, and it will be crucial 5 years down the road.
Regarding the Credit Suisse rating: "I found the July 26 report, which said that Allison Landry, a research analyst at Credit Suisse, was taking over coverage of YRC. I emailed Landry, and she told me she did not make any changes to the rating, target price or the earnings estimates."
http://bit.ly/19Tm9qx
John and LT, those are good points. I have enjoyed reading both of your articles the past few months because you look at it from a different point of view than the majority of SA.
The company has continued to make improvements, and they cut their loss in half since last year's second quarter.
The Model S and the Gen 3 are intended for two completely different target markets.
Wasn't it trading at $36?
I actually like the bullet points, it helps to read it a little faster.
Great points, thanks for sharing!
Converting $140,000,000 in Series A notes for $32 per share gives you a total of 4.375 million shares. There are just over 9 million shares outstanding right now according to the 10-K, and we know that Owl Creek has already converted some of their debt to shares. The fully diluted share count is about 22 million according to CFO Jamie Pierson in one of their recent conference calls. Where are you finding the 42 million shares that will be added through dilution?
The dilution is something to keep in mind for the short-term, however I believe the company's return to profitability in the next few quarters offers much more upside than the downside brought by share dilution. There will definitely be dilution, however I do not think it will be catastrophic. Would be in the debt holders best interest to both convert and sell all of their stock at once?
Long-term YRC is on the path to profitability. Shorts or puts may work over the next few months, however long-term YRC looks like it has made the right moves to position itself well as the economy recovers.
Keyserint, you definitely make a valid observation.
Do you think it would be smart for those bondholders to convert and sell all of their shares at once though? What if they slowly convert and sell them over the next few years as the price continues to go up?
Owl Creek already converted (http://bit.ly/15b3ErH) $2 million of its $15 million in convertible debt, and sold (http://bit.ly/15b3ErJ) some of their shares, and will probably continue to do so slowly over the next few months. If you look at the trading volume for the past three days, it looks like someone sold (or shorted) 100k shares around 12pm on Friday, and dumped 46k and 43k respectively Monday and Tuesday (yesterday and today).
I think slowly converting shares is a smarter move by these large bondholders, so I do not think a sudden dillution of shares is likely to occur.
Interesting article, thanks.
Thanks, glad you enjoyed it.
Haha, very true. It will be interesting to see what happens in the next month.
Based on the SEC filings, only Owl Creek Asset Management has converted (http://bit.ly/15b3ErH) and sold (http://bit.ly/15b3ErJ) so far, it was about 131,000 shares. It looks like their sale happened before they converted, so they sold some they already held and then converted some more.
I saw this too, I investors may be jumping on the "it's run up too high too quick, time to short" bandwagon. The big drop yesterday from $34.52 to $33.06 (4.23%) came on volume of 56,060.
A lot of YRC's peers were down yesterday due to the lowered profit warning issued by UPS, it would make sense if a large investor pulled their money from the transportation industry. UPS said the lowered profit guidance was due to customers switching to lower cost and slower alternatives. LTL is slower than many of the services provided by UPS/FedEx, so it could be a good sign for YRC.