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  • Coach Is Still In A Lot Of Trouble [View article]
    I agree, DCF is the proper way to value a business, if you have perfect data. The problem is it relies on future data, thus it's imperfect (by a mile for most companies). Forecasting FCF for Coach is very difficult, but you might be able to come up with a floor for FCF. I visited COH and KORS stores w/i the past week. COH was much busier than KORS. I believe mgmt has made it clear that improvement in SSS is the immediate goal, even at the cost of margins, and that is clearly what they are doing now. KORS is going to "join the club" and see pressure on top-line growth. For COH, the turnaround will require better designs, stabilization of revenues and severe cost-cutting w/i the organization. I agree that the mid $20s is the point to own the company and am patiently waiting.
    Sep 10 11:18 AM | Likes Like |Link to Comment
  • Market Rarity: Great Company At Very Good Price [View article]
    Good points you make. But I wouldn't buy it at 20x EBIT. 3B EBIT/ 60B EV = 5% owner yield. Too expensive even with 15% growth going forward. The key is to get a 10%+ yield, know the business and see that 15% forward growth is probable.
    Jul 28 11:30 PM | Likes Like |Link to Comment
  • Coach: Trading Range Could Fall To $21 - $25 After Earnings Report [View article]
    At $21 per share you're getting a low risk investment with great upside. Looking at EPS is a waste of time. Look at EBIT, FCF and EV.
    Jul 28 12:48 PM | Likes Like |Link to Comment
  • Update: Wells Fargo Earnings [View article]
    I'd like to see it go back to $40 and just sit there for a year or two. I'll add to my position and continue reinvesting dividends. WFC represents 5% of my net worth and i've owned since Nov 2012. I wish I owned more.
    Jul 11 11:54 AM | 1 Like Like |Link to Comment
  • Coach: An 'Accidental High Yielder' [View article]
    I believe the future is somewhere between 0% to 5% FCF growth, and definitely lower growth than the past 13% FCF growth. Based on lower growth, COH is conservatively worth $28-35 per share. Buying at $35 and you are effectively voting that they'll grow FCF at 10% a year. This may happen but the odds are stacked against you. Only play win the risk/reward is in your favor.

    At $29 (roughly 20% lower than now), you get an EBIT/EV yield of 20% and a dividend yield of 4%. Under $25 is probably a no-brainer investment.
    Jul 4 01:54 PM | 4 Likes Like |Link to Comment
  • Coach: An 'Accidental High Yielder' [View article]
    the highest price target was $82 in May 2012 and have come down with the stock price. price targets provide NEGATIVE value to investors.
    Jul 4 01:37 PM | 2 Likes Like |Link to Comment
  • ZAGG: DCF Based On No Growth Shows A Net Present Value 2x Current Price [View article]
    I think it's worth at least $8/sh and own it at $4.40.
    Jun 30 07:44 PM | Likes Like |Link to Comment
  • Retired? How To Create A Strong Foundation Of Valuation Under Your Portfolio: Part 2 [View article]
    Without looking at EV (Enterprise Value) you cannot value a stock based on earnings alone.
    Jun 18 01:37 AM | Likes Like |Link to Comment
  • Weight Watchers: Customer Defections Accelerate [View article]
    WTW is a value trap. They have too much debt and any future earnings will be used to pay off the debt. They also have a poor track record of capital allocation and did stock buybacks when the company was overvalued and used DEBT to do it. Assuming a large amount of debt to buy stock (at any price) is a high risk gamble and not something I would want mgmt to do if I owned the whole company. It shows incompetence and I believe the CEO and most of the board need to exit and I imagine they will over the next year. Goodwill write-downs could be next. The debt burden could be game over. There are no assets backing WTW and cash flow is doubtful going forward, especially given future debt and interest payments. If you own this company you better be good at forecasting future cash flow and earnings. I put in a price alert to revisit WTW at $10/sh.
    May 15 11:28 AM | 1 Like Like |Link to Comment
  • How Do You Manage Your 'Low Conviction' Positions? [View article]
    Good topic you bring up here. Think about it this way; would you buy an entire private business without conviction in the business model, management, employees, your experience in operating it, and your level of comfort knowing the business won't fail? You certainly would not. Stocks are the same except you own a tiny share and are a passive investor. I personally will not buy anything without a good level of conviction and will just keep funds in cash (for 5 years if need be) until I find something that is a no-brainer. Without conviction you will find it very difficult to hold with market volatility and you'll trade out of it. Trading (activity) is the ultimate enemy of wealth and you should do everything possible to minimize it.
    May 6 11:28 PM | 1 Like Like |Link to Comment
  • Baidu: A Wide-Moat Business With 40% Upside Potential [View article]
    Correct. buy at the bottom when the pessimism is higher.
    May 5 09:36 AM | Likes Like |Link to Comment
  • EZCorp: No Longer Among My Holdings [View article]
    You are SO right about management. I've been following the stock for well over a year and thought it was worth at least $20, so I was waiting for $10 to revisit it. It went to $10 and I then revisited the thesis. The CEO's lack of transparency as well as his seemingly disregard for shareholders convinced me to stay away. At this point I think the next stop is for EZPW to become a "net net" trading for way less than tangible book ($6 liquidation value or less). Revenues could get cut in half to around $500M from $1B as the payday lending business is under attack from regulators and banks are closing payday lenders' accounts. So the question then becomes: "what would I pay for a plain vanilla pawn lender"? The mgmt has proven no reason to believe in them. You are wise to exit, as at best, this is dead money over the next several years.
    May 5 09:05 AM | 1 Like Like |Link to Comment
  • Baidu: A Wide-Moat Business With 40% Upside Potential [View article]
    It's already run up 100% in the past year, why buy now? The time to buy was last year.
    May 4 02:31 PM | Likes Like |Link to Comment
  • Retired? How To Create A Strong Foundation Of Valuation Under Your Portfolio: Part 2 [View article]
    Before buying earnings power you must ensure the company you are considering has a durable competitive advantage and they are growing above their weighted avg cost of capital (if they have debt).
    May 4 02:16 PM | Likes Like |Link to Comment
  • EZPW: The Best Way To Rob A Pawn Shop Is To Own One [View instapost]
    This is a great article. There is a lot of opportunity for someone to really research this company and expose the truth. The quarterly calls are a complete joke with complete disregard for shareholder concerns and an absence of real talk. You know, basic things any owner would want from management (what is happening in the business, how we failed, what we're doing to change it, what we see on the horizon, etc). Total BS from this company. It's the obviousness of their actions that makes me think there is real fire behind your smoke.
    Apr 30 11:14 PM | Likes Like |Link to Comment