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Vince Martin  

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  • Tuesday Morning: The Story Has Changed Post Q4 [View article]
    Thanks for linking to that - Jeremy is a phenomenal analyst, I'm disappointed I missed that and will read it momentarily.

    How bad it is for malls depends a bit on how you define 'mall'. Outlet malls are doing well. High-end properties (think Macerich and Simon) appear to be holding their own as well.

    But in terms of the classic American mall - the two-story, 100-150-store indoor setup with a food court, off a three-lane road in a suburb somewhere - they're in big trouble. Sbarro didn't go bankrupt just bc their pizza is terrible. The trend in teen traffic is down, (see ARO, AEO, ANF of course), traffic as a whole is down, and there's a vicious cycle/negative network effect that comes with that lower traffic. Malls are closing, occupancy rates are down, sales are down, and there's a long list of bankruptcies (Cache, Body Central, Delia's, Wet Seal, in the last 18 months). Even profitable major retailers (GPS, AEO, and others) are decreasing their footprint.

    There's a mall reasonably west of Chicago that is almost completely closed and it's really kind of a bizarre place to walk through. But once you hit the 'tipping point' of lower occupancy, traffic slows, then sales drop, then occupancy drops and there's a point of no return from which occupancy accelerates to zero.

    I'm a big believer that it's a symptom of the broader bifurcation of retail (and life, if you want to get political) in the US, and the pressure on the middle class. And I also think there's a pendulum swing toward 'uniqueness' and against what's seen as conformist or 'chain', and malls are certainly on the wrong side of that swing. To me, it's the same reason that PG and MCD are struggling - small, organic, unique is what's cool now. And I think that's going to accelerate. So short answer - which I never give - I think they're in decline all over, and I think it's only the beginning.
    Sep 2, 2015. 04:26 AM | Likes Like |Link to Comment
  • Interface: A Pullback Offers Another Buying Opportunity [View article]
    Sequential growth was ~8% a year ago, no? The CEO is saying the back half will be better both seasonally and year-over-year - does that really imply 3% YOY growth and a ~flat Q4?

    That said, you raise a fair point and Q4 in my model may be overaggressive - I think there's conservatism in the gross margin figure that could mitigate that a bit if I'm wrong. But it's not the "key element" to the bull case - this isn't a trading call, it's an article on the long-term value and I don't think that materially changes at 19x or 20x CY15 EPS.
    Sep 1, 2015. 04:45 PM | Likes Like |Link to Comment
  • Interface: A Pullback Offers Another Buying Opportunity [View article]
    Yes, it's a tougher comp, but there was some currency impact to Q4 last year so that should help the as-reported numbers. Consensus figures, if you take the midpoint of Q3 guidance, are for zero reported growth in Q4. That seems too low to me.
    Sep 1, 2015. 04:35 PM | Likes Like |Link to Comment
  • Bebe Has The Balance Sheet To Support Turnaround Efforts [View article]
    They're not necessarily putting in "their" stores - they're licensing the brand and not contributing much in the way of capital. So I don't think China is the issue here - the issue was forward guidance for a big comp decline.
    Sep 1, 2015. 02:56 PM | Likes Like |Link to Comment
  • Aeropostale: A Glimmer Of Hope, But I'm Not Turning Bullish [View article]
    @ Bram Some people agreed today!
    Aug 31, 2015. 05:28 PM | Likes Like |Link to Comment
  • GameStop: Backing Away After Q2 [View article]
    Haha well done. In my defense, she'll love them, and they will match the other assorted Star Wars paraphernalia around the house.
    Aug 31, 2015. 01:31 PM | Likes Like |Link to Comment
  • OmniVision Technologies: Despite A 21% Spread, The Deal Isn't Dead [View article]
    Thank you for pointing that out - I missed the refiling.
    Aug 31, 2015. 08:20 AM | Likes Like |Link to Comment
  • Aeropostale: A Glimmer Of Hope, But I'm Not Turning Bullish [View article]
    Fair points all - it's why I covered below $2 and why I'm surprised it's below $1. There's still a chance here - this isn't (to use a different type of retailer, but one off the top of my head) RadioShack, where it was pretty obvious for at least 4 quarters that there was no escape. I still think it's most likely ARO ends at 0, or close to it in some sort of pre-packaged deal with Sycamore that gives equity holders a pittance and allows Sycamore to take the operating business, break leases, and start anew. But I can see how someone could create a bull case that even if there's only a 25% chance it survives, it could be worth $5 a share in that scenario, and below $1 that's a high-risk, super-high-reward play.
    Aug 30, 2015. 06:31 PM | Likes Like |Link to Comment
  • Aeropostale: A Glimmer Of Hope, But I'm Not Turning Bullish [View article]
    I don't think it's a matter of manipulation - if you post the numbers they have posted, (a $100M+ trailing net loss) you're going to have huge short interest.

    Liquidity is not an immediate concern, I agree, which is why even I'm surprised it crashed below $1. But it is looming post-Q4: they need cash to get through Q1 and Q2 '16 both from an inventory and loss standpoint. And I think the worry is some sort of debt-for-equity exchange that severely dilutes or wipes out the equity here, even if this doesn't get to Chapter 11.
    Aug 30, 2015. 06:22 PM | Likes Like |Link to Comment
  • Aeropostale: A Glimmer Of Hope, But I'm Not Turning Bullish [View article]
    I'm really lost by the reaction here, in a lot of ways. First, I thought the bull case earlier this year at $3-4 implied some optimism that didn't make sense - and now the stock really hasn't missed estimates by much, and everyone has bailed? Which is it here?

    I just don't see how the story changed here: Geiger staked his claim on Q3 being THE quarter, but did the market really think they were going to post positive comps or near profitability? I thought the stock was a short at $3.50 but I didn't think the market would come around as quick as it did.

    As far as the analysts go, I think the 'congrats' were for what seems to be improvement - the problem is that improvement is off a really, really poor base. But I do think sometimes - if you read enough transcripts - analysts tend to get a little connected to the companies they cover, and there may have been a bit of politness on the call. From the post-earnings notes that I see, those analysts were pretty negative in their reports, if not on the call itself.
    Aug 29, 2015. 04:02 PM | Likes Like |Link to Comment
  • Coming Around On AVG Technologies [View article]
    Thanks for the kind words, they are much appreciated. Of course, I've also completely missed on the stock so far - I was bearish when it went up, and it went down after I turned bullish. Perhaps going forward you should enjoy the article and then simply do the opposite of whatever I recommend :)
    Aug 28, 2015. 01:39 PM | Likes Like |Link to Comment
  • Aeropostale: A Glimmer Of Hope, But I'm Not Turning Bullish [View article]
    This is why I don't trade off earnings reports - I am surprised there wasn't some strength in the stock today. ARO is down 15% 30 minutes in.
    The point to me is: how could the stock be at 4 in March and barely 1 now? From a results/guidance standpoint not all that much has changed.
    Aug 28, 2015. 09:57 AM | Likes Like |Link to Comment
  • Activision Blizzard Still Looks Like A Short (But I've Been Wrong So Far) [View article]
    I did not get short ahead of the SPY news, and somewhat thankfully so. It has been a bit of a teflon stock from the short side.
    Aug 27, 2015. 09:38 PM | Likes Like |Link to Comment
  • Cray: Another Odd Post-Earnings Selloff Creates Another Buying Opportunity [View article]
    I don't think it's an unfair comment, though I appreciate the compliment. The market move is indeed troubling, and I probably should have highlighted that a bit more in the piece.

    That said, I think the buyback reluctance has a bit more to do with Cray's working capital needs - their larger projects require huge upfront cash outlays and though they have $2+ per share in cash I don't know that they have excess cash. And I think storage fears are a possible catalyst for at least some of the selling, and I think those fears are off-base. We are at least seeing some stabilization this week so we shall see if that continues.
    Aug 27, 2015. 02:57 PM | Likes Like |Link to Comment
  • Eldorado Resorts: Waiting On A Short-Side Catalyst [View article]
    I said in previous article(s) - (though remember if it was ERI or MCRI) - I like Reno a lot. I spent quite a bit of time there when I was on the road (I stayed at Silver Legacy once, and the Sands several times bc it was ridiculously cheap in 2008-11. I still remember the corned beef hash at one of the diners above the Silver Legacy or Circus - man, was it good.). Believe it or not, when we were discussing a possible family reunion a few years ago, I mentioned Reno as a possibility. So I'm not knocking the city as a whole (I lived in Oklahoma City for four-plus years and loved it, so I'm aware of reputation and lifestyle not always matching) - my concern is more whether Reno is going to drive tourism with all that stuff, because as I understood it (and experienced it) there were not a lot of locals in the downtown casinos (except for some poker players trying to pick off the drunken tourists).

    So it seems to me you really need a drive in tourism, not just Tesla, to drive above-national-level growth at the complex. Are those attributes you cite really driving tourism - are they going to make gamblers drive past Indian casinos or Tahoe? It's generally been the rule in the casino business as it's been built out nationally that it's all about location - it has proven to be exceedingly difficult to get customers to drive past casinos to get to yours. Beyond CA, are they going to make people look more seriously at Reno, or help the city compete with Vegas? I'm still skeptical.

    Finally, even if I grant you Reno as a newfound growth market, ERI is still left with Shreveport/PA/WV, none of which I particularly like. So that's my response.
    Aug 26, 2015. 05:25 PM | Likes Like |Link to Comment
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