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    • Mon Jun 2nd 13:21 PM | Rating: 0 0
      Commented on:
      Seared
      bulrun, you're long just because of the manager. this isn't always a great idea, as people make mistakes. ie buffett made a huge mistake in buying berkshire hathaway. lampert made a pretty big mistake in buying citicorp just recently (amazing considering he worked for an investment bank and wouldve been thought to know how to value one). buffett bought BUD I think 3 or 4 years ago and that stock is now only about 40% higher today, which is like 10% annualized. he has held wmt also for about 3 years at least and that stock has gone almost nowhere. these guys are human and make mistakes.

      lampert hasn't been able to do many, many things at shld. he hasn't been able to expand the store base, as far as I know. he hasn't been able to boost operating margins. the company has $50B of sales, and if you slap an industry average operating margin on that, this is a much more valuable company, but he just hasn't been able to do it.

      can you come up with a reasonable independent valuation of the company far in excess of its current market value? Im obviously no expert, but I sure cant. i think the current valuation reasonable but not extremely cheap, but that's just my opinion
      View article »
    • Sat May 31st 19:28 PM | Rating: 0 0
      Commented on:
      Seared
      this isnt warren and this isnt berkshire
      View article »
    • Sat May 31st 14:51 PM | Rating: 0 0
      Commented on:
      Seared
      I meant the quote from the original article doesn't make sense
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    • Fri May 30th 20:49 PM | Rating: 0 0
      Commented on:
      Seared
      "Sears is losing money, which means that Lampert can't invest its free cash flow"

      This makes no sense at all, unless I missed something here.
      View article »
    • Fri May 23rd 10:29 AM | Rating: 0 0
      Commented on:
      Steak n Shake: No Plans for a Shakeup Despite Dismal Performance
      How do these people still have a job? They don't own a controlling interest in the company.
      View article »
    • Sun May 18th 01:17 AM | Rating: 0 0
      Commented on:
      Upstream MLPs and Canadian Royalty Trusts: High Return, High Risk?
      Can someone explain why these companies (these oil-royalty trusts) are selling stock and debt to finance their dividends? Isn't this, in all likelihood, value destroying (instead of paying the dividends out of FCF)? (Because usually cost of capital for debt and equity are higher than for internally generated capital).

      All of these trusts have been going up, but it seems to me that's because: people like big dividend yields + "oil is good; buy oil." But like I said the financing here makes no sense, at least to me...can someone, who wants to, explain what I'm missing? Additionally, on a FCF basis, also, most of these companies are in the red because their capex exceeds their operating cash flow, and probably will for the foreseeable future. These things are like some kind of twisted version of a "growth stock". After the above, seems like a bubble with these royalty trusts.
      View article »
    • Sat May 17th 12:22 PM | Rating: 0 0
      Commented on:
      Trans World Entertainment: Insider Trading on Busted Buyout?
      Care to comment why you think this company has not yet been liquidated? Seems there are few, maybe none, willing buyers; the company is losing money, can't get a positive return on its assets as an operating business; wonder why no large shareholder has made a push for the company to sell of its inventory, real estate, etc. and pay off shareholders?
      View article »
    • Sun May 11th 11:27 AM | Rating: 0 0
      Commented on:
      Why You Should Short Companies Doing Share Buybacks
      Sajal

      Speaking of Korea, do you know how an average investor can find out more about and invest in South Korean stocks? I don't have access to much more than Yahoo/Google Finance. I've been wanting to maybe invest in Korea but info has been real tough to find. I don't want to buy the ETF bc those companies don't seem too appealing
      View article »
    • Sat May 10th 17:10 PM | Rating: 0 0
      Commented on:
      Why You Should Short Companies Doing Share Buybacks
      I would like to see more of management that sells stock when they think it overvalued, and buy it back when they think it undervalued, and to stick to this consistently.

      I think, with the tech stocks, maybe buybacks have had little effect because they were overvalued before the buyback, now they are slightly less overvalued after the buyback.

      If management is consistent, I fail to see how buybacks aren't an excellent use of capital to retire undervalued stock. Take the retailers right now, for example. You have a lot of retailers selling at 10X or less. Assuming no earnings growth and capital expenditures inline w depreciation, I'd rather management take that 10% cash yield and buyback stock, not pay dividends. Example:

      Market Cap = 1B, FCF = 100M. If they pay that as a straight dividend, that's 10% a year.

      W buybacks, first year, 10% of the co is cut off; 2d year; 100/900=11% of the co is cut off; by the fifth year, the same amount of money is reducing shares outstanding 20%, etc. There is a nice compounding effect that you get with buybacks that you do not get with dividends. The market has to respond to this eventually.

      As to value being "relative" if your hypothetical co has a P/E of 2 that is just not sustainable assuming normal interest rates because it is a so much more attractive investment than any other investments; the price has to go up. I don't know where and under what circumstances you have seen companies regularly trade at 2X earnings?
      View article »
    • Tue May 6th 20:38 PM | Rating: 0 0
      Commented on:
      Arbitrage Opportunity: Western Sizzlin/Steak 'n Shake Pair Trade
      Hey Joe

      I think I sort of see what you're doing and it seems you're assuming that for SNS price=value. I am not disagreeing w your way of looking at it, I'm probably wrong but I'm just assuming, agreeing w Biglari, that it seems sensible that there's a decent amount of value in SNS that could be freed up, ie just by making capex=depreciation for that co, that's about $30M in cash per year, saved. Whether thats a sensible figure I have no idea. So I'm not too concerned with short-term price fluctuations in SNS stock. NI has declined for that co too but I assume (bad to do that, I know) that has something to do w poor expense mgmt by the directors, though that could just be Biglari brainwashing me.

      Again, this is just smoke, but the other thing is...if Biglari wanted to make a push, to oust the directors, etc, he needed a big chunk of stock, hence the dilution etc etc. Why he had to go after SNS and not some smaller cap'd co doesnt really make sense though
      View article »
    • Thu May 1st 22:26 PM | Rating: 0 0
      Commented on:
      Sears' Nifty Purchase: Footstar Footwear
      Does anyone know how people are coming up w 45B valuations for SHLD. Whitney Tilson, for ex, was on CNBC claiming that he is buying dollars for 30c when buying SHLD for $100.

      The retail operation is pretty visible at 1.5B of FCF, but how are people coming up w these real estate/brand valuations, does anyone know? Todd, you have been hyping this stock for a long time, but beyond the Lampert factor what does this company have going for it?

      Also Lampert is the man but as of yet he has not been able to deploy capital to grow the business. If the business is dying and all he can do is buyback stock or payback debt, this is not a very valuable operating business and probably isnt worth more than the 10X FCF its valued at right now. And you either run the business or sell the assets, you can't do both, and Lampert has been reluctant to do the latter, even for underperforming stores it seems.

      Its just a bit frustrating bc all these value guys Pabrai, Tilson, not to mention Lampert love this co but it seems like a crap company.

      You look at Penney for example and it is making about the same amount of money on about 20B of sales. Sears is just a real crap company, horribly run, the stores are in shambles, the merchandise hanging on the racks looks like it's already been worn. You'd be crazy to doubt Lampert but have you been in a Sears store? You would think they could at least pay someone to tidy up the racks and not have it look like a garage sale. I don't know why anyone shops there, the clothes are overpriced and the quality is just terrible. Lampert is reorganizing, etc, etc, but why do you need to reorganize to implement such fundamental changes in the stores?

      SHLD is like a relic, 3000 stores back from the 60s when Americans had no choice at all, and shopped Sears bc there was no alternative. Now you look, almost any store is better than Sears.

      As to the Kraftsman, Kenmore whatever-what is the big deal? A toolset is a toolset, a fridge is a fridge, whether its called Kenmore or Whirlpool or Maytag, I can get one in BBY, I can get one anywhere, I don't have to go to Sears because I need a Kenmore.
      View article »
    • Sat Apr 26th 10:50 AM | Rating: 0 0
      Commented on:
      Arbitrage Opportunity: Western Sizzlin/Steak 'n Shake Pair Trade
      I was looking at your 3/07 numbers

      I agree w your core business valuation of about 2M of CF*10X of 20M

      But as of 12/07 the co has marketable securities booked at $16M and about $4M in real estate, less 2M of debt. The $16M I presume is mostly SNS marked to market.

      So seems to me, correct me if I'm wrong, you're buying an operating business at about 10X, w no capex, so that is 10% pure cash flow yield. Not dirt cheap, not 5X, but cheap enough considering the rest of the mart and the fact that most managers can't allocate capital very well. You're also getting the securities/real estate at about even, 20M (so that's 20M + 20M = 40M market cap, about even). On top of that, you're getting a guy who seems to have a nose for value, i.e. ITEX which is trading at about 8X CF. He bought Mustang and Mustang's boss seemed to speak fondly of Biglari. I like Biglari's style bc it's simple (get CF) and yet he seems to find decent co's out there, i.e. ITEX.

      I am a bit bothered by the stock issuances. But, not really. Like I said, despite the dilution the valuation is reasonable. And if he's going to sell stock to buy ITEX, which is like I said trading at about 8X w no capex to speak of, and growing, and synergistic w WEST as he claims, I'm OK w using stock to buy the co.

      Also, this is a small co w an almost unlimited investment universe for him to invest in.

      Again, correct me if I'm wrong, but if SNS doubles, then the securities double to $32M, which is almost the value of the co right now.

      Big surprise based on this post, I am long WEST.
      View article »
    • Fri Jan 4th 22:05 PM | Rating: 0 0
      Commented on:
      Ash Grove Cement and Seaboard: Obvious Winners
      Hi

      Would you mind commenting where one can find Ash Grove's financials? Or at minimum what the company earned last year? Thanks.
      View article »
    • Thu Dec 27th 17:04 PM | Rating: 0 0
      Commented on:
      10 Stock Picks for 2008
      Hi

      Could you please comment on where you were able to get Ash Grove's recent financials? Thanks in advance.
      View article »
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