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Tyler McKendry

 
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  • 5 Things You Could Buy for $4B Instead of LinkedIn [View article]
    Bet on pop culture

    Short Trump, Long Gaga.
    May 22, 2011. 07:37 AM | Likes Like |Link to Comment
  • With Canadian shares outperforming U.S. stocks for 8 years running, the relative undervaluation of the S&P500 has asset managers up north pouring money into American equities. One example: Canadian energy major Encana (ECA) trades at a PE of 37 vs. 14 for Exxon (XOM).  [View news story]
    What is this? This news update is ridiculous.

    First off, this must be based on fwd P/E, which is a less reliable valuation metric because we cant predict the future. If we take a look at trailing P/E Encana's trailing P/E is 16.63 and exxons is 13.68.. very similar.

    Also, the fwd p/e has very little to do with differences in the Canadian and American market and much more to do with the fact that these companies are in different industries. Encana's earnings are based entirely on natural gas production while exxon is heavily diversified in the energy market.

    The "pouring" money from Canadian markets to American markets since '02 is due to a strengthen dollar. The dollar reached a massive low in 2002 right after 9/11 and has been steadily strengthening since then. This is why more money is going from Canadian equities to American equities.

    This news update is ridiculous
    Apr 12, 2011. 09:31 AM | 2 Likes Like |Link to Comment
  • Paragon Shipping: A Substantial Special Dividend Soon [View article]
    Thoughts on DSX? It seems very similar to Paragon except no dividend, less leveraged, better management.
    Apr 11, 2011. 05:40 PM | 2 Likes Like |Link to Comment
  • RIM: Undervalued Company in Need of a Reboot [View article]
    All the comments seem to be surrounding RIMs corporate strategy. As an investor, we have little control over this. We should concern ourselves about other factors.

    RIM's share price implies ~0% growth looking forward. As the author stated, RIM has a piece of the pie in all emerging smartphone markets. Even if it isn't the biggest grower, it is still going to grow.
    Mar 30, 2011. 08:35 AM | 2 Likes Like |Link to Comment
  • The One Sector You Must Own for the Next 10 Years [View article]
    Don't agree that deep pockets are a reason for investing in an oil company. I don't understand the logic. Small oil companies can hedge price risk easily. I don't see the added value of "deep pockets".
    Mar 4, 2011. 07:50 AM | Likes Like |Link to Comment
  • Hewlett Packard: A Good Buying Opportunity [View article]
    Hey Jimmy,

    I use a model that I would prefer not to share entirely with the community. I outlined the basic assumptions in the article and $119.56 is the price that came out.

    It can take months or years for a firms stock price to coincide with its intrinsic value. It is not something that happens in a matter of 6 weeks. Also, it is a model, it is not 100% accurate.

    On another note, this article focused around buying HPQ as a long-term buy and hold investment. If you are concerned about returns in the short to mid-term perhaps you should use options to protect your downside.
    Mar 4, 2011. 04:45 AM | Likes Like |Link to Comment
  • Diana Shipping: Industry's Best in Class Poised for Success [View article]
    I don't think its possible to time the market. The next 6 months could easily already be priced into the stock.

    DSX at current prices provides a good opportunity today.

    Yes, there are short-term issues that may last for 6months-2years longer. Eventually people will need to ship materials and the author and I agree that DSX is the best in the industry.

    On an off note, yes vessels are on the rise but this is being partially counter-balanced by scrapping;
    www.hellenicshippingne...
    Feb 27, 2011. 05:31 AM | 2 Likes Like |Link to Comment
  • VSE Corporation: A Contrarian Investment Opportunity [View article]
    Hey Tom,

    As usual the comments have brought more things to my attention that I was aware existed. This is a good thing.

    I don't think I have enough knowledge to make a comment on these issues. All I know is there is going to be more issues in the next 3-5 years. This is certainly a great company in a below average industry.

    If your going to buy an equity stake in VSEC you are buying the management team. An equity stake in a business is assets - liabilities. In this business the assets are the people that work for VSEC. There are no widgets, buildings, patents, ect. It is the contracts and the nature of the contracts that management acquires.

    VSECs management have shown ability to act in shareholders best interests on a repeated basis in the past. VSECs management are huge shareholders themselves.

    What is really attractive is the price tag. VSE is trading at 6 times its earnings! Even if NI stays flat for a decade they are generating a ridiculous amount of cash per share that can be used for acquisitions/special dividends.
    Feb 26, 2011. 11:47 AM | Likes Like |Link to Comment
  • 15 Cash Flow Kings in Healthcare [View article]
    Hey Nicolas,

    My favorite of your picks is JNJ.

    It's a great play on the macro global medicare. Fundamentals are great, business is very well managed, and its cheap!!!

    It's also got backing from some of today's greatest investors. Warren and Watsa both own it. Warren was increasing his stake over the summer. Since then, JNJ has moved up 5% and the market has moved up 20%... Is Warren just stupid, or is there alot of upside potential?
    Feb 9, 2011. 05:03 AM | 2 Likes Like |Link to Comment
  • VSE Corporation: A Contrarian Investment Opportunity [View article]
    Hello Ray,

    I think you are missing something.

    This is not a blue chip stock-- you should not expect large dividends. This is why; The firm doesn't payout dividends because it thinks it can achieve better returns by investing in its own company. This is true. The average 5-year ROE is 27.0%. Would you rather the business reinvest your earnings at 27.0%, or give it to you to try and find a better investment? I'd take the 27.0%.

    The earnings are being used for a few things. Cap-ex is about 1/3 of earnings, the firm has also recently made an acquisition, and is paying down AP.

    Why would you want the firm to have a meaningful cash balance? This firm has no need for cash. Liquidity is not an issue in the subcontracting industry. I would much rather them to use the cash to re-invest in the business.

    I think you have a risk profile that is better suited for large-cap blue chip stocks.

    Tyler
    Feb 9, 2011. 04:31 AM | 4 Likes Like |Link to Comment
  • VSE Corporation: A Contrarian Investment Opportunity [View article]
    I think we have a fairly similar consensus, although it seems you have a more detailed understanding of the firms operations.

    Our thesis;
    The expected and probable slowdown in 2011 has driven down the stock price. There is good reason to believe things will pick up for VSE in the long run, and its a good long-term buy and hold.
    Feb 9, 2011. 04:18 AM | Likes Like |Link to Comment
  • OpenTable: A Rocket Stock or Dud? [View article]
    First off, I'm in the bear camp on OPEN.

    Agreed with other comments that 5% discount is absurd. Even 8-10% is low IMO. This is a relatively small company with a BV of $100M and a market cap of $2 Billion. The company is financed almost entirely by Equity. According to CAPM; Ke = Rf + Beta(MRP) If 10-yr Treasury is 3.4% and average expected return from market is ~10.4% then we get a market risk premium of 7%. I cant calculate Beta at the moment (or find it on the internet), but it is certainly greater than 1, probably closer to 2-3. Even if we assume 1.5 then the cost of equity is 3.4% + 1.5(7%) = 13.9%.
    Feb 8, 2011. 06:52 AM | Likes Like |Link to Comment
  • Diana: Shipping for Dollars [View article]
    I agree with the risks outlined in your article. Also, I believe management has proved its skills. I recently wrote an article on DSX that touches on some recent management decisions to enhance shareholder value.

    The way you put it... The price your getting for a bet on management seems like a good deal to me.

    seekingalpha.com/artic...
    Feb 5, 2011. 06:19 PM | Likes Like |Link to Comment
  • China Education Alliance: A Fantastic Investment Opportunity Courtesy of Short Sellers [View article]
    Sean,

    I'm in the same boat as you on small cap chinese firms in general.

    I am going to take a closer look at CEU myself. Have you taken a look at NIVS? Similar story, different sector.
    Jan 20, 2011. 04:59 PM | 1 Like Like |Link to Comment
  • NIVS Intellimedia: A Good Entry Price for Chinese Electronics Company [View article]
    I was unaware, thanks for the distinction. While your right, it doesn't have any impact on my investment thesis.

    I still believe the general investor sentiment is that;
    small cap Chinese companies = potentially fraudulent.
    I don't think it matters whether they are an RTO or not. It seems to me an unlikely coincidence that NIVS stock dropped in sync with the Chinese small caps during the fraud scare. Especially when you consider they also announced a cell phone contract in late November..

    The whole idea was "guilt by association". Your distinction combined with the price action of NIVS shows this is the case.
    Jan 20, 2011. 03:22 PM | 1 Like Like |Link to Comment
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