Nat Stewart's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/1117597/comments http://seekingalpha.com/article/1309211/comments?source=feed#comment-18903141 18903141 Thu, 16 May 2013 12:41:51 -0400 http://seekingalpha.com/article/1434131/comments?source=feed#comment-18830741 18830741 Tue, 14 May 2013 21:12:18 -0400 http://seekingalpha.com/article/1424511/comments?source=feed#comment-18770461 18770461
It is a given that the company has been a large part of his career and has been massively stamped by his personality and talents, so in that sense it would be hard to let go of.

On the other hand, Caporella is now around 77 years old. At some point a premium valuation might be hard to pass up, as I think he has always thought like an investor (which is one reason why he has been a good CEO).

Like any person, he will be considering what the best use of his time will be, etc, given his age. Is it National Beverage or something else? We can't know what else is on his horizon, of course, but for the market to ignore the optionality imbedded in this stock is not logical. ]]> Mon, 13 May 2013 13:24:21 -0400
It is a given that the company has been a large part of his career and has been massively stamped by his personality and talents, so in that sense it would be hard to let go of.

On the other hand, Caporella is now around 77 years old. At some point a premium valuation might be hard to pass up, as I think he has always thought like an investor (which is one reason why he has been a good CEO).

Like any person, he will be considering what the best use of his time will be, etc, given his age. Is it National Beverage or something else? We can't know what else is on his horizon, of course, but for the market to ignore the optionality imbedded in this stock is not logical. ]]> http://seekingalpha.com/article/1424511/comments?source=feed#comment-18768321 18768321
Nice discussion of this firm's "hidden assets" which are not accurately reflected on the balance sheet.

I recently gave a $20 per share price target, though I think your numbers are very feasible as well. National Beverage's cash flow and earning profile make it very valuable to a potential acquirer.

The company was also ahead of the curve with it's dividend recapitalization - Apple just recently got its act together and did the same thing. I expect we will be seeing more of these for some time to come.

"National Beverage's small size is a function of management's focus on creating shareholder value over empire building"

The above is a very true statement. In fact, National Beverage could in many ways be a model for how to create shareholder value in a highly competitive, constrained operating environment.

With regards to management compensation, there are indeed times when you get what you pay for - this is one of those cases. We are fortunate that this has been a public company though it could easily have been taken private at any time over the last X years. ]]> Mon, 13 May 2013 12:38:53 -0400
Nice discussion of this firm's "hidden assets" which are not accurately reflected on the balance sheet.

I recently gave a $20 per share price target, though I think your numbers are very feasible as well. National Beverage's cash flow and earning profile make it very valuable to a potential acquirer.

The company was also ahead of the curve with it's dividend recapitalization - Apple just recently got its act together and did the same thing. I expect we will be seeing more of these for some time to come.

"National Beverage's small size is a function of management's focus on creating shareholder value over empire building"

The above is a very true statement. In fact, National Beverage could in many ways be a model for how to create shareholder value in a highly competitive, constrained operating environment.

With regards to management compensation, there are indeed times when you get what you pay for - this is one of those cases. We are fortunate that this has been a public company though it could easily have been taken private at any time over the last X years. ]]> http://seekingalpha.com/article/1180941/comments?source=feed#comment-17589471 17589471 Sat, 13 Apr 2013 19:11:52 -0400 http://seekingalpha.com/article/1180941/comments?source=feed#comment-17584801 17584801
http://1.usa.gov/WiR8CG]]> Sat, 13 Apr 2013 14:37:43 -0400
http://1.usa.gov/WiR8CG]]> http://seekingalpha.com/article/1336291/comments?source=feed#comment-17548571 17548571
What works moves away from what the public is aware of and interested in in part for this reason - any strategy can only support so much capital.

Surplus capital allocated to a strategy alters the market in a way that creates profit opportunities for others. For example, after momentum gets hot for a while, traders start anticipating momentum buy levels, push the market to that level, then liquidate into the momentum buyers.

By the time a strategy is "hot" and funds are starting to heavily market it, it is time to move on or at least put the approach on a short leash. At some point it becomes a good fade. ]]> Fri, 12 Apr 2013 13:03:22 -0400
What works moves away from what the public is aware of and interested in in part for this reason - any strategy can only support so much capital.

Surplus capital allocated to a strategy alters the market in a way that creates profit opportunities for others. For example, after momentum gets hot for a while, traders start anticipating momentum buy levels, push the market to that level, then liquidate into the momentum buyers.

By the time a strategy is "hot" and funds are starting to heavily market it, it is time to move on or at least put the approach on a short leash. At some point it becomes a good fade. ]]> http://seekingalpha.com/article/1331671/comments?source=feed#comment-17442641 17442641
I think BCPC followers (including myself) are waiting to see what Mr. Rossi does with the cash. A smart acquisition (as has been made in the past) would be very interesting. There is also the Curemark situation, which is a hidden "free option" within the company that could be worth zero or something very significant.

Once again, great write-up.
. ]]> Wed, 10 Apr 2013 08:57:25 -0400
I think BCPC followers (including myself) are waiting to see what Mr. Rossi does with the cash. A smart acquisition (as has been made in the past) would be very interesting. There is also the Curemark situation, which is a hidden "free option" within the company that could be worth zero or something very significant.

Once again, great write-up.
. ]]> http://seekingalpha.com/article/1309211/comments?source=feed#comment-17417031 17417031 http://goo.gl/b5Qh5]]> Tue, 09 Apr 2013 16:18:54 -0400 http://goo.gl/b5Qh5]]> http://seekingalpha.com/article/1309211/comments?source=feed#comment-17370841 17370841 Mon, 08 Apr 2013 16:08:58 -0400 http://seekingalpha.com/article/1313331/comments?source=feed#comment-17129611 17129611
That is a very keen insight which I think applies to most all trading, not just financial market trading.

Heck, it is the premise behind the short-term financing industry such as pawn shops and payday loans.

Time pressure is a big one too. ]]> Tue, 02 Apr 2013 16:42:22 -0400
That is a very keen insight which I think applies to most all trading, not just financial market trading.

Heck, it is the premise behind the short-term financing industry such as pawn shops and payday loans.

Time pressure is a big one too. ]]> http://seekingalpha.com/article/1309211/comments?source=feed#comment-17044311 17044311
But it would have been more clear and accurate if you had said, "Financed with debt and new preferred shares".

It is hard to judge what the "and" means in your sentence, because issuing preferred shares is itself a form of financing. "Financed" is not the equivalent of saying "financed with debt". ]]> Sun, 31 Mar 2013 19:20:22 -0400
But it would have been more clear and accurate if you had said, "Financed with debt and new preferred shares".

It is hard to judge what the "and" means in your sentence, because issuing preferred shares is itself a form of financing. "Financed" is not the equivalent of saying "financed with debt". ]]> http://seekingalpha.com/article/1309211/comments?source=feed#comment-17037901 17037901
We have gone back and forth about the issues you raise once before. Needless to say, I disagree with you on all counts.

To other readers, please check my prior Seeking Alpha article on National Beverage (and the articles I link to from that article and my comments on that article) to get my full viewpoint on the dividend subject.

You did add one incorrect fact that I think needs to be addressed. The "bulk" of the dividend was not paid for with the preferred issuance - unless you can tell me how 20M somehow covered a 118M payment to shareholders. Please check the recent quarterly report to understand how it was funded.

You can also find risk factors in every single quarterly report and annual report. I have no interest in hashing out stuff via a template, I only include perspectives that I think add value.

Regardless of the grudge you harbor against Caporella's politics and style, the fact remains that he has generated one of the best corporate performances over 20 years as measured by total shareholder returns. What you call, "flamboyance" I call passion.

As it stands, I think Investors in FIZZ stand to make a very nice IRR over the coming period - and that you stand to eat a nice, heaping serving of crow.

When the time comes to wash that taste out of your mouth, I recommend a tall glass LaCroix Grapefruit flavor sparkling water. ; ) ]]> Sun, 31 Mar 2013 13:54:45 -0400
We have gone back and forth about the issues you raise once before. Needless to say, I disagree with you on all counts.

To other readers, please check my prior Seeking Alpha article on National Beverage (and the articles I link to from that article and my comments on that article) to get my full viewpoint on the dividend subject.

You did add one incorrect fact that I think needs to be addressed. The "bulk" of the dividend was not paid for with the preferred issuance - unless you can tell me how 20M somehow covered a 118M payment to shareholders. Please check the recent quarterly report to understand how it was funded.

You can also find risk factors in every single quarterly report and annual report. I have no interest in hashing out stuff via a template, I only include perspectives that I think add value.

Regardless of the grudge you harbor against Caporella's politics and style, the fact remains that he has generated one of the best corporate performances over 20 years as measured by total shareholder returns. What you call, "flamboyance" I call passion.

As it stands, I think Investors in FIZZ stand to make a very nice IRR over the coming period - and that you stand to eat a nice, heaping serving of crow.

When the time comes to wash that taste out of your mouth, I recommend a tall glass LaCroix Grapefruit flavor sparkling water. ; ) ]]> http://seekingalpha.com/article/1298471/comments?source=feed#comment-16898011 16898011
Great Job highlighting National Beverage, which is a very high quality company.

I did one to point out one issue with your article, however. you state:

"The stock has yet to rebound from a drop it took in December when the company announced a special dividend of $2.25 per share"

This is not accurate. National Beverage actually went up close to 20% when the dividend was announced. I know, because I anticipated it in this article:

http://goo.gl/TzLdX

The fall occurred on the ex-dividend date, which is completely normal. the net effect is that owners of the stock were substantially benefited by this action. Regardless, the real story of National Beverage is what the future holds, not the past. Anyone who wants to know more, stay tuned for my next article.

Peter - After reading all of National Beverage's annual and quarterly reports over a 10+ year period, In my opinion investing beside Nick Caporella might be one of the surest bets in the entire stock market. ]]> Wed, 27 Mar 2013 16:25:03 -0400
Great Job highlighting National Beverage, which is a very high quality company.

I did one to point out one issue with your article, however. you state:

"The stock has yet to rebound from a drop it took in December when the company announced a special dividend of $2.25 per share"

This is not accurate. National Beverage actually went up close to 20% when the dividend was announced. I know, because I anticipated it in this article:

http://goo.gl/TzLdX

The fall occurred on the ex-dividend date, which is completely normal. the net effect is that owners of the stock were substantially benefited by this action. Regardless, the real story of National Beverage is what the future holds, not the past. Anyone who wants to know more, stay tuned for my next article.

Peter - After reading all of National Beverage's annual and quarterly reports over a 10+ year period, In my opinion investing beside Nick Caporella might be one of the surest bets in the entire stock market. ]]> http://seekingalpha.com/article/1298471/comments?source=feed#comment-16888711 16888711 Wed, 27 Mar 2013 13:07:42 -0400 http://seekingalpha.com/article/1292591/comments?source=feed#comment-16669431 16669431
I have always found this argument to be flawed. Why exactly does the US government have the most powerful military?

It is because we have the largest, most powerful economy. Why do we have the most powerful economy? Because our large, developed businesses and corporations are highly productive and do a great job creating and managing valuable property interests - and this includes the military industrial complex.

The reality is that in the absence of a democratic government or even direct individual taxation, Our key industries (Finance, Energy, Drugs, manufacturing, insurance, agriculture, etc) could fund the military industrial complex and enforce their property rights quite effectively - perhaps even at a significant profit relative to current relationships.

Bottom line, i don't think it is is "Government" that subsidizes oil companies or heavy industry, it is industry that subsidizes government and the world's most powerful military.

Regardless, military and economic power are intertwined by necessity, and no where is this more true than in the global economy.
]]> Fri, 22 Mar 2013 15:03:47 -0400
I have always found this argument to be flawed. Why exactly does the US government have the most powerful military?

It is because we have the largest, most powerful economy. Why do we have the most powerful economy? Because our large, developed businesses and corporations are highly productive and do a great job creating and managing valuable property interests - and this includes the military industrial complex.

The reality is that in the absence of a democratic government or even direct individual taxation, Our key industries (Finance, Energy, Drugs, manufacturing, insurance, agriculture, etc) could fund the military industrial complex and enforce their property rights quite effectively - perhaps even at a significant profit relative to current relationships.

Bottom line, i don't think it is is "Government" that subsidizes oil companies or heavy industry, it is industry that subsidizes government and the world's most powerful military.

Regardless, military and economic power are intertwined by necessity, and no where is this more true than in the global economy.
]]> http://seekingalpha.com/article/1292591/comments?source=feed#comment-16632721 16632721 Thu, 21 Mar 2013 20:28:55 -0400 http://seekingalpha.com/article/1291551/comments?source=feed#comment-16594651 16594651
I have always felt the real secret to their success (similar to all other coffee shops) is the relatively large size of their coffee cups. When regular customers crave caffeine, their minds associate that symptom with "needing to go to Starbucks" or whatever their favorite coffee shop happens to be.

Go find a coffee mug that is 25 years old (For example at parents or grandparents house) and you will be shocked at how small it is - A visual representation of how individual coffee consumption has gone way up for many people over the past 25 years - i think largely do to the coffee shop mega-cup size trend.]]> Thu, 21 Mar 2013 08:25:17 -0400
I have always felt the real secret to their success (similar to all other coffee shops) is the relatively large size of their coffee cups. When regular customers crave caffeine, their minds associate that symptom with "needing to go to Starbucks" or whatever their favorite coffee shop happens to be.

Go find a coffee mug that is 25 years old (For example at parents or grandparents house) and you will be shocked at how small it is - A visual representation of how individual coffee consumption has gone way up for many people over the past 25 years - i think largely do to the coffee shop mega-cup size trend.]]> http://seekingalpha.com/article/1263461/comments?source=feed#comment-16291241 16291241
And I do commend you on linking to the companies actual responses, which I relinked to above.

My biggest criticism with this article was the negative slant (created primarily by artful word choice) relative to your actual findings. Indeed, your most pertinent criticisms could almost without exception be equally applied to any large:

1. Asset management relationship or company
2. REIT/real estate investment
3. GP/LP relationship
4. Global conglomerate
5. holding company

You suggest that Brookfields heavy use of finance makes it vulnerable to a financial crisis, yet fail to credit the company for (relatively speaking) sailing through the 2008 debacle.

Amazingly, you manage to put a negative spin on aspects of the company that make it very valuable - specifically, the unique capital raising and investment platform they have created with their separate public securities.

You also manage to put a negative spin on the high level of insider ownership, which in my mind does align management's interest with shareholders.

With regards to the concentrated voting power, quite frankly I am all for it. It will ensure that the asset management structure stays in place and that management does not face distractions while executing on what I think is a brilliant strategy.

When the underlying strategy is as sound as it is with this company and the future path for growth is so clear, a CEO and top executives would have to literally be insane (sure, it is possible) to mess it up by being underhanded in their dealings.

I am not going to go into greater detail here. Instead, I hope to find the time to do a write-up on this company that gives it the credit that it fairly deserves.

My current estimate for BAM's share price is 140 -160 per share in about 10 years.]]> Thu, 14 Mar 2013 15:30:58 -0400
And I do commend you on linking to the companies actual responses, which I relinked to above.

My biggest criticism with this article was the negative slant (created primarily by artful word choice) relative to your actual findings. Indeed, your most pertinent criticisms could almost without exception be equally applied to any large:

1. Asset management relationship or company
2. REIT/real estate investment
3. GP/LP relationship
4. Global conglomerate
5. holding company

You suggest that Brookfields heavy use of finance makes it vulnerable to a financial crisis, yet fail to credit the company for (relatively speaking) sailing through the 2008 debacle.

Amazingly, you manage to put a negative spin on aspects of the company that make it very valuable - specifically, the unique capital raising and investment platform they have created with their separate public securities.

You also manage to put a negative spin on the high level of insider ownership, which in my mind does align management's interest with shareholders.

With regards to the concentrated voting power, quite frankly I am all for it. It will ensure that the asset management structure stays in place and that management does not face distractions while executing on what I think is a brilliant strategy.

When the underlying strategy is as sound as it is with this company and the future path for growth is so clear, a CEO and top executives would have to literally be insane (sure, it is possible) to mess it up by being underhanded in their dealings.

I am not going to go into greater detail here. Instead, I hope to find the time to do a write-up on this company that gives it the credit that it fairly deserves.

My current estimate for BAM's share price is 140 -160 per share in about 10 years.]]> http://seekingalpha.com/article/1263461/comments?source=feed#comment-16209701 16209701
I doubt Marty Whitman's highly regarded Third Avenue Value fund or the legendary value investor Lou Simpson, who each have more than 5% of their portfolio (as of 12/31) in the BAM, relied on the advice of Canadian brokerage firms. Same goes for star value investor Tom Gayner of Markel, who (as of 12/31) had just under 5% of the portfolio in BAM.

I personally would rate the credibility of such investors as quite a bit higher than Canadian brokerage firms, who for reasons you mentioned might be biased.]]> Tue, 12 Mar 2013 23:19:12 -0400
I doubt Marty Whitman's highly regarded Third Avenue Value fund or the legendary value investor Lou Simpson, who each have more than 5% of their portfolio (as of 12/31) in the BAM, relied on the advice of Canadian brokerage firms. Same goes for star value investor Tom Gayner of Markel, who (as of 12/31) had just under 5% of the portfolio in BAM.

I personally would rate the credibility of such investors as quite a bit higher than Canadian brokerage firms, who for reasons you mentioned might be biased.]]> http://seekingalpha.com/article/1263461/comments?source=feed#comment-16171361 16171361 Tue, 12 Mar 2013 09:09:02 -0400 http://seekingalpha.com/article/1264271/comments?source=feed#comment-16155321 16155321
Private equity firms manage risk at the portfolio level, not the individual position level. It is completely logical for a private equity type of investor to forsake a small gain in effort to secure the possibility of a "home run" type of return - that is frequently how they operate.

As such, the investment or risk logic of such a fund is completely different from an individual who buys shares and wants a high probability of a successful outcome on a single, particular investment.

You can't "be on the same side" with another investor if you do not understand their objectives and circumstances. ]]> Mon, 11 Mar 2013 19:53:52 -0400
Private equity firms manage risk at the portfolio level, not the individual position level. It is completely logical for a private equity type of investor to forsake a small gain in effort to secure the possibility of a "home run" type of return - that is frequently how they operate.

As such, the investment or risk logic of such a fund is completely different from an individual who buys shares and wants a high probability of a successful outcome on a single, particular investment.

You can't "be on the same side" with another investor if you do not understand their objectives and circumstances. ]]> http://seekingalpha.com/article/1263461/comments?source=feed#comment-16153321 16153321
http://bit.ly/16n5pED

The company spent a great deal of time replying, as can be seen in the above author provided link.

This article is in fact a textbook or classic smear job: It raises a bunch of questions and suggests something nefarious or underhanded is going on, while not offering a shred of documentation or proof. Clearly, the author has an axe to grind.]]> Mon, 11 Mar 2013 18:59:15 -0400
http://bit.ly/16n5pED

The company spent a great deal of time replying, as can be seen in the above author provided link.

This article is in fact a textbook or classic smear job: It raises a bunch of questions and suggests something nefarious or underhanded is going on, while not offering a shred of documentation or proof. Clearly, the author has an axe to grind.]]> http://seekingalpha.com/article/1180941/comments?source=feed#comment-16007771 16007771 Thu, 07 Mar 2013 18:56:14 -0500 http://seekingalpha.com/article/1222121/comments?source=feed#comment-15771981 15771981 Sun, 03 Mar 2013 15:23:49 -0500 http://seekingalpha.com/article/1224491/comments?source=feed#comment-15548221 15548221 Tue, 26 Feb 2013 18:03:14 -0500 http://seekingalpha.com/article/1205941/comments?source=feed#comment-15285631 15285631 Wed, 20 Feb 2013 20:23:33 -0500 http://seekingalpha.com/article/1183581/comments?source=feed#comment-15001721 15001721
Buffett can redeploy the cash flow, influence policy, and has a very low cost of capital. Just keep track of how much cash he takes out of this company over the next five years and redeploys - It is what he does. Rinse and repeat. ]]> Thu, 14 Feb 2013 15:57:31 -0500
Buffett can redeploy the cash flow, influence policy, and has a very low cost of capital. Just keep track of how much cash he takes out of this company over the next five years and redeploys - It is what he does. Rinse and repeat. ]]> http://seekingalpha.com/article/1169001/comments?source=feed#comment-14805761 14805761 Sun, 10 Feb 2013 09:30:16 -0500 http://seekingalpha.com/article/1169001/comments?source=feed#comment-14805681 14805681 I am not an expert on the cheapest or most effective ways to hedge long positions. However, I think monitoring the forward curve can help those who want to use VIX as a hedge know when the costs of doing so are not prohibitively high (or even have a positive edge). I find that when I want to hedge I tend to us S&P Futures and/or sell some of what I consider my more risky positions. Yet this approach is also not foolproof. ]]> Sun, 10 Feb 2013 09:27:53 -0500 I am not an expert on the cheapest or most effective ways to hedge long positions. However, I think monitoring the forward curve can help those who want to use VIX as a hedge know when the costs of doing so are not prohibitively high (or even have a positive edge). I find that when I want to hedge I tend to us S&P Futures and/or sell some of what I consider my more risky positions. Yet this approach is also not foolproof. ]]>