Blucora Should Still Have Room To Run [View article]
The NOLs are a huge hurdle to any type of acquisition; under section 382 it looks like an LBO could use up much of the NOL asset, but its usage would be delayed. (Assuming I'm understanding it right, sec 382 limits the new company from using up more than a small percentage of the carryforwards each year.) And LBO firms don't much care for delays -- the point is to get in and get out.
Mercantilia was a disaster, but just a $13MM disaster and, it's worth pointing out, that purchase was made by the former management team. Ruckelshaus was a board member but not an executive at the time.
Buy VOXX International - If You Can Stomach It [View article]
It doesn't seem like there's an appetite for another major acquisition; they have mentioned "bolt-on" pickups here and there but it sounds like they're not expecting another nine-figure play any time soon. That doesn't mean one won't be found, but I don't think it's the plan.
As far as insiders...I rarely follow that stuff. I just don't see much evidence that they're any better at timing stock trades than the rest of us. I understand the reservations you cite, I just tend not to put much weight in insider behavior. Thanks for reading.
No News Is Good News For Thompson Creek [View article]
"First let me say that I disagree with that statement totally. Even at today's prices Mt Milligan will be throwing off enough cash to move the PPS to somewhere between $4.50 and $6.50 (the wide range due to the number of other variables making up the PPS). Most analysts are taking a very conservative view and are looking at about $4 -$5 for projections."
At $5.50 PPS TC's EV/EBITDA is over 10. There's not too many miners of any mineral, anywhere, getting that multiple right now. I'm not sure what evidence you have that analysts are being "very conservative" either. If most analysts have "conservative" price targets of $4-$5, why are its analyst ratings horrendous (http://reut.rs/11Cbe1P)?
If moly is at $10-$12, then TC is going to be treated like a junior gold miner. I realize that the copper stream is just as -- if not more -- valuable, but the risks facing junior miners are going to be considered by investors looking at TC. TC is going to see a compressed multiple for the near term because nobody trusts any of the miners right now, for a lot of very good reasons. You're going to need EPS (or projected CY14/CY15 EPS) of 50 cents-plus per share to move this stock upward. Counting the tMEDs dilution, that's $110MM or more in net income. You're not getting $110MM net on the TC bottom line from $240MM gross at Mt. Milligan once you factor in SG&A, depreciation/depletion, and taxes. So you need something else. I think you'll see that something else, but it's not a slam dunk by any means.
No News Is Good News For Thompson Creek [View article]
I'm not sure what you mean by "raw reserves" -- according to the presentation total moly reserves are about 515 million pounds; the problem is whether or not TC can get those reserves out of the ground for less than they can sell them.
If you mean the inventory -- the produced moly that the company hasn't sold of late -- TC produced 4M more lbs in 2012 than it sold. At current levels, that's worth $40-$50MM, which could provide a short-term earnings boost when it's sold but doesn't really move the needle much from an asset standpoint.
If the Thompson Creek mine is shut down, the company will still get a lot of ore over the next two years, very cheap. The guidance is for 20-22M lbs at $4.75-$5.75 in 2013, and 17-19M lbs at $5-$6 cost in 2014. That guidance assumes -- according to the CC -- stripping is not resumed. But the catch is that the much of the profits from the lower-cost moly over the next two years will have to be re-invested to re-start the stripping and/or the mine. The mine is going to make roughly $200MM gross profit over the next two years -- but it'll cost at least $100MM to re-start the stripping process. So half, or more, of that short-term profit boost will head right back out the door once stripping at Thompson Creek commences.
No News Is Good News For Thompson Creek [View article]
I agree -- and I've written in the past -- that it's not as if what happened at Mt. Milligan is just because TC management is a bunch of humps. You're right, it happened everywhere; but it still clearly hurt trust in the company, and clearly has hurt the share price. That's an industry-wide problem, to be sure -- it's one reason that GDXJ is down by two-thirds over the last two years, as I mentioned in the piece.
No News Is Good News For Thompson Creek [View article]
Part of the problem with moly is that much of it is mined as a by-product from properties focused on other metals, so you don't get mines closing when prices drop, because there are so few moly-focused mines (and one opened late last year, I believe, adding to supply).
And yes, Loughrey did say the longer-term price outlook is part of the decision, but from what he has said over the last few quarters I think it's very likely they will mothball TC unless something materially changes over the next few months.
No News Is Good News For Thompson Creek [View article]
Very interesting idea...I'd have to run the numbers but I think that trade over 2 years would be profitable below a 70-80 percent gain on the common. Very interesting idea, thank you.
I was going to kind of compare the brand to the stock, but my consumer knowledge of it (or much chain shopping, to be honest) is too limited to be of value to a reader. But I agree with you in the sense that there is an intuitive reason not to buy here; neither the store nor the brand is all that exciting, so why should the stock be?
Thank you for that, I proof-read the piece twice and somehow went right by that. Yes, 6 of 8. In my defense, it's not like mathematical accuracy is important when you're writing about the stock market...
The Versona concept has been around for a while, and for the last two years they've promised to open a bunch of them and so far they haven't really delivered. I'm loath to put a lot of faith in that concept because if it were really a game-changer I just think the company would have accelerated its development. They have the cash to do so -- it's not like they need to finance modest location growth for that concept. (sorry for the delay in answering.)
No position, as disclosed above. But I also don't think my article or the algos are driving the stock down today -- I think it's a natural reaction to a 90% no-news rally. But I'm a notoriously bad trader, so take my opinion for what it's worth.
They are very cautious/cheap about the real estate -- it's pretty much all strip malls, many of them anchored by Wal-Mart. I think the online issue is less the problem than two key issues:
1) Their target consumers are working to middle class Southerners, who remain among the hardest hit from the recession/weak recovery of the last 5-6 years.
2) It would appear that they're struggling to connect with those customers on fashions; again, sales have been flat for years now. They managed costs very well but there just appears to be nothing left to cut.
Procter & Gamble Earnings Show Significant Challenges Ahead [View article]
If you don't mind my asking, why is it a great long-term stock? My argument is precisely the argument: single-digit top-line growth plus a cost-cutting program does not, in my mind, make PG a long-term play, particularly at 19x earnings.
Blucora Should Still Have Room To Run [View article]
Mercantilia was a disaster, but just a $13MM disaster and, it's worth pointing out, that purchase was made by the former management team. Ruckelshaus was a board member but not an executive at the time.
Buy VOXX International - If You Can Stomach It [View article]
As far as insiders...I rarely follow that stuff. I just don't see much evidence that they're any better at timing stock trades than the rest of us. I understand the reservations you cite, I just tend not to put much weight in insider behavior. Thanks for reading.
No News Is Good News For Thompson Creek [View article]
At $5.50 PPS TC's EV/EBITDA is over 10. There's not too many miners of any mineral, anywhere, getting that multiple right now. I'm not sure what evidence you have that analysts are being "very conservative" either. If most analysts have "conservative" price targets of $4-$5, why are its analyst ratings horrendous (http://reut.rs/11Cbe1P)?
If moly is at $10-$12, then TC is going to be treated like a junior gold miner. I realize that the copper stream is just as -- if not more -- valuable, but the risks facing junior miners are going to be considered by investors looking at TC. TC is going to see a compressed multiple for the near term because nobody trusts any of the miners right now, for a lot of very good reasons. You're going to need EPS (or projected CY14/CY15 EPS) of 50 cents-plus per share to move this stock upward. Counting the tMEDs dilution, that's $110MM or more in net income. You're not getting $110MM net on the TC bottom line from $240MM gross at Mt. Milligan once you factor in SG&A, depreciation/depletion, and taxes. So you need something else. I think you'll see that something else, but it's not a slam dunk by any means.
No News Is Good News For Thompson Creek [View article]
If you mean the inventory -- the produced moly that the company hasn't sold of late -- TC produced 4M more lbs in 2012 than it sold. At current levels, that's worth $40-$50MM, which could provide a short-term earnings boost when it's sold but doesn't really move the needle much from an asset standpoint.
If the Thompson Creek mine is shut down, the company will still get a lot of ore over the next two years, very cheap. The guidance is for 20-22M lbs at $4.75-$5.75 in 2013, and 17-19M lbs at $5-$6 cost in 2014. That guidance assumes -- according to the CC -- stripping is not resumed. But the catch is that the much of the profits from the lower-cost moly over the next two years will have to be re-invested to re-start the stripping and/or the mine. The mine is going to make roughly $200MM gross profit over the next two years -- but it'll cost at least $100MM to re-start the stripping process. So half, or more, of that short-term profit boost will head right back out the door once stripping at Thompson Creek commences.
No News Is Good News For Thompson Creek [View article]
No News Is Good News For Thompson Creek [View article]
No News Is Good News For Thompson Creek [View article]
And yes, Loughrey did say the longer-term price outlook is part of the decision, but from what he has said over the last few quarters I think it's very likely they will mothball TC unless something materially changes over the next few months.
No News Is Good News For Thompson Creek [View article]
Sell The News On Stein Mart [View article]
Sell The News On Stein Mart [View article]
Cato Has Become A Value Trap [View article]
Fade SemiLEDs' Stunning, Irrational Rally [View article]
Cato Has Become A Value Trap [View article]
1) Their target consumers are working to middle class Southerners, who remain among the hardest hit from the recession/weak recovery of the last 5-6 years.
2) It would appear that they're struggling to connect with those customers on fashions; again, sales have been flat for years now. They managed costs very well but there just appears to be nothing left to cut.
Procter & Gamble Earnings Show Significant Challenges Ahead [View article]
Procter & Gamble Earnings Show Significant Challenges Ahead [View article]