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  • Rainmaker Entertainment - Undiscovered Animation Studio With Large Value Dislocation [View article]
    Ac011, with the following: high conviction, patience and limit orders.
    Apr 23, 2015. 06:03 AM | Likes Like |Link to Comment
  • Rainmaker Entertainment - Undiscovered Animation Studio With Large Value Dislocation [View article]
    Jason, good question. They haven't broken out the investment in Sly Cooper yet but my guess is the main reason for RNK investing only 35% in the film is due to the timing of the cash flow and being conservative without needing to do another raise. The Chinese animation partner is likely investing more in direct costs of animation of Sly. A $7MM investment on the film ($20*.35) will probably be only $5MM in cash, the rest in tax credits. RNK will probably also tap their service credits with Deluxe (post production services) which still remain after the sale of their post production biz to Encore years ago.
    Apr 22, 2015. 10:41 PM | Likes Like |Link to Comment
  • Rainmaker Entertainment - Undiscovered Animation Studio With Large Value Dislocation [View article]
    Jason,

    According to Sedar filings "The Company continues to work towards the completion, distribution and release of the feature film, Ratchet & Clank, announced in 2013. The Company entered into an arrangement with Blockade Entertainment LLC (“Blockade”), and CNHK Media China and
    Beijing Ruiqixingqiu Movie and Culture Limited (“CNHK”) to co-invest and co-produce the film Ratchet & Clank. Under the terms of the arrangement, the Company has agreed to invest approximately $11.6 million in cash and direct costs incurred in the development of the film, of which Rainmaker expected to finance $3.4 million through tax credits. This investment entitles Rainmaker to a majority interest in the film, subject to future potential negotiations of participation from additional parties. In order to facilitate enhancements and final deliverables of the film, the Company is increasing its investment in the film, subject to negotiation with its production partners. The Company currently estimates a final investment of $14.5 million, of which $4.7 million is expected to be financed through tax credits."

    From a conversation with CEO Craig Graham in October last year he stated that their ownership was 65% which would then indicate that if they do not invest anymore then their expected $14.5MM investment, then the total cost of the film would be $22MM.
    Apr 22, 2015. 03:26 PM | Likes Like |Link to Comment
  • Rainmaker Entertainment - Undiscovered Animation Studio With Large Value Dislocation [View article]
    Roger, thanks for the comment.

    While Strange Magic is an animated film that flopped this year, it is a poor comparable for a few reasons. One, Strange Magic is not based on an established franchise with a built in fan base. The film was built from scratch. Sony/Rainmaker/Insomniac have to do very minimal marketing to reach the Ratchet & Clank fan base. Marketing will mainly be the driver of expanding the awareness with a wider audience. Second, Strange Magic's story was hugely lacking and execution was poor. If Insomniac was not heavily behind the creative direction of the film and story, then I would expect a greater probability the film would not be authentic to the franchise and turn off the fan base like what has happened in the past. If Ratchet & Clank is authentic to the game, which is extremely likely, and well told, then fans will go multiple times to see the film and word of mouth should spread that it is the first well done video game movie adaptation.
    Even with all that said, I'm still cautiously optimistic.
    Apr 21, 2015. 10:13 PM | Likes Like |Link to Comment
  • Update: Efficiency Driving PostNL [View article]
    As many have seen today TNT Express is being purchased by FedEx.
    http://seekingalpha.co...

    The TNT Express asset was a significant part of our initial thesis in PostNL which, upon approval and completion, will finally be fully divested. The extra ~680 Euros (14.7% stake in TNT) from the sale of the asset will allow PostNL to further de-risk their balance sheet. If I remember correctly the messy balance sheet was the reason why they had to cut the dividend in the first place. A cleaner balance sheet will allow PostNL to get back into good standing with the credit rating agencies and put them another step closer to re-instituting a dividend. If a dividend were to be re-instated, I would expect a larger audience of investors to be interested in the company again as many investors continue to seek for yield.
    Apr 7, 2015. 06:21 PM | Likes Like |Link to Comment
  • Female Health Company: Putting The Brazil Tender In Perspective [View article]
    Agree, the market still does not see the impact of the Brazilian tender or upcoming SA tender. I noticed PATH wrote this http://bit.ly/1xeUePc and looks like they are trying to gain some share of the tender through their advocacy efforts. They still do not have the capacity capabilities as FHCO has. I too think that FHCO is likely to get a large portion of the tender, although doubt they will get the whole thing.
    Mar 18, 2015. 12:32 PM | Likes Like |Link to Comment
  • Xpel Technologies: Parasol Canada Acquisition Case Study In Execution [View article]
    I think an uplist is on management's to-do list. An uplisting to larger exchange from the grey market listing and TSX Venture listing would be quite a large step up in getting investors' attention.
    Feb 11, 2015. 10:22 AM | Likes Like |Link to Comment
  • Parkit Enterprise Inc.: Pay Discount On Parking Assets, Get Asset Management With Significant Multi-Bagger Potential For Free [View article]
    Mj,

    Great questions.

    For the ~$10MM pre-tax in year 5, I was also including the potential upside in the LP interest. Management forsees a total of $50-85MM pre-tax from the incentive and LP interest alone, so my $10MM pre-tax including recurring fees is much lower. Using management's numbers, subtracting corp costs and taxes would equal ~$10MM in earnings, so I'm comfortable using $10MM pre-tax. Even if they don't reach my figures and are modestly successful, the company is still real cheap.

    I do not know the hurdle fee, but I think the combination of both asset optimization and cap rate compression gives management a nice recipe for beating average market rates - likely their hurdle. Propark has a very good track record with optimizing parking assets while Patrick Bonney and a few other directors have significant experience in real estate PE.

    Investment period - Acquire assets over 3-4 year period and likely divest by year 5 for each portfolio.

    Blackstone is very large at what $40billion in assets and quite mature in their growth prospects, so it wouldn't be an apples to apples to compare to PKT which is an atom in comparison and will be a growth stock for a while. PE multiples for fast growing companies are 20x and higher so a pre-tax multiple of 10 is quite conservative. If the first fund is successful, then all is needed is to raise another fund which can sustain larger growth than a Blackstone even past year 5.

    All is yet to be seen, but hope those answers were helpful.
    Jan 8, 2015. 09:38 AM | Likes Like |Link to Comment
  • Parkit Enterprise Inc.: Pay Discount On Parking Assets, Get Asset Management With Significant Multi-Bagger Potential For Free [View article]
    tw,

    12+1.5+1+"working capital of both parking assets" = $15.5MM

    Refer to my comment above for explanation on your second question.
    Jan 4, 2015. 09:32 AM | Likes Like |Link to Comment
  • Parkit Enterprise Inc.: Pay Discount On Parking Assets, Get Asset Management With Significant Multi-Bagger Potential For Free [View article]
    Off-airport garages are not fully recession resistant but again PKT is not looking to acquire only off-airport parking lots. University lots, hospital lots and other types of lots that are recession resistant will diversify the total portfolio's income streams toward stability through full market cycles.

    Also agree that CAD will likely be weak against the dollar, but I don't see how that negatively effects PKT as it owns, and plans on acquiring, US assets while reporting in CAD. The fund will throw off USD. Any weakness in CAD will just mean lower corporate level costs in CAD relative to their US income stream.
    Jan 1, 2015. 08:28 AM | Likes Like |Link to Comment
  • Parkit Enterprise Inc.: Pay Discount On Parking Assets, Get Asset Management With Significant Multi-Bagger Potential For Free [View article]
    Joshua,

    The competitive advantage is debatable, but the fund has first mover advantage. I've tried finding a fund with a GP that has both PE experience, parking management experience and already a history executing such a similar model and haven't found anything. If you know of any, I'd like to know. Otherwise without a track record of some sort, it would be hard for another top 10 parking manager to prove to investors that they, and whoever they partner with who has private equity experience, can execute. Raising capital then becomes a barrier to entry. The Canopy asset is an example of the Parkit/Propark's (albeit it wasn't optimized but built by the two) track record that institutional investors can see. I'm not guaranteeing that they can raise the funds, but they have the pieces in place to have a good chance of raising funds which is the biggest barrier to this model.

    I would agree that it would be difficult to sell one parking lot at 5-6% yields, unless in a high quality location in say NYC, but a portfolio of diversified parking lots in attractive locations (they are looking at off-airport, university, hospitals, etc,.) after being optimized have a better chance of getting those type of yields than just one asset by itself.
    Dec 31, 2014. 11:32 AM | Likes Like |Link to Comment
  • Parkit Enterprise Inc.: Pay Discount On Parking Assets, Get Asset Management With Significant Multi-Bagger Potential For Free [View article]
    That is correct, the NAV is based off of the appraised value of the equity. Since Canopy will be vended into the fund and all other assets will be in the fund, I think this is the best way to look at the valuation of Parkit. Management also calculates NAV the same way.

    I think for those to really understand the opportunity they have to really understand how scalable an asset management firm is. There only needs to be a small office to manage billions of dollars in assets. Looking at the list of richest individuals there are many dozen billionaires and many many more millionaires who founded an asset management firm (hedge fund/PE) or invested early in one. The reason being scalability.

    I encourage readers to contact management, ask questions and do a thorough check on them. Many might think it's crazy that a $10MM mkt cap company could raise and manage $500MM in assets but it isn't. All funds start somewhere and as long as you can raise the cash and invest wisely $500MM is just the start. Keep in mind Parkit was only looking to raise $25MM in equity initially (to acquire $150MM in total assets) but has upped it to $150MM in equity AFTER meeting prospective investors. Add in Baxter buying significant amounts of shares and I think management would be off their rocker to raise fund raising expectations that high without any serious interest.

    Regardless, $25MM raised would be very meaningful at today's valuation and it's free. Not many no brainers like this today.
    Dec 30, 2014. 08:15 PM | Likes Like |Link to Comment
  • Auxilio - Fundamentally Sound With Growth Catalysts Now In Place [View article]
    Dallas, great article.

    To highlight a little more on insider share purchases, around $170k worth of shares were purchased by three directors soaking up practically all volume the past week or so. Usually only one reason for such insider purchases, shares are undervalued.
    Dec 30, 2014. 01:57 PM | 1 Like Like |Link to Comment
  • Female Health Company: Clearing Up Q4 And Beyond [View article]
    Westfool,

    You must have overlooked the following paragraph from the article:

    "The other part of the increase in operating expenses is a result of ramping up operations to meet the demand of the Brazilian tender for 2014 as well as the programming in 2012. ~$0.932 million were related to this and we would expect this and the other operating expenses to continue as the company both executes on its new strategy and pays for costs associated with the Brazilian tender."
    Dec 8, 2014. 03:20 PM | Likes Like |Link to Comment
  • Female Health Company: Putting The Brazil Tender In Perspective [View article]
    You're definitely right. They could have been a little clearer with communication in relation to normalized operations and highlighting the backlog. Then again, they don't really have a need to get the share price up. A higher share price could be currency for acquisitions but it'd have to be a lot higher than today for them to use all stock as the only currency.

    The market is taking the wait and see approach, at the moment, and with the Brazil tender already in the cards, next year is likely to be better than their previous best year. That plus LD Micro should give some exposure to some really good micro cap investors. It helps that the other three companies presenting at the same time as FHCO are not profitable.
    Dec 3, 2014. 07:41 PM | Likes Like |Link to Comment
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