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the_value_vulture

the_value_vulture
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  • Short Selling: Cleaning Up After Elephants [View article]
    An extremely entertaining read. Short selling is a rather difficult investment strategy. Even if you had a perfect short in mind, you have to essentially "time" your bet. The cost to borrow can be brutal on any long term short bet and patience can wear thin as your perceived return dwindles away. Puts to me always seemed the most logical for hedging and taking bearish bets.

    Even if you never anticipate using a shorting strategy or using it sparingly there is a wealth of useful information here. At the very least the red flags Guy has provided from his experience can make you think twice about establishing a long position. To be successful you have to know which investments to avoid and this article gives a good template.

    Also lets assume you have a position in a stock that's short interest is increasing every month. Looking for these red flags can also provide an investor with a warning validating the short thesis and perhaps make you realize you may be on the wrong side of a specific trade.

    Again ... what a great weekend read!
    Dec 20, 2014. 10:23 PM | 1 Like Like |Link to Comment
  • Report: Sony Pictures suspends film shoots [View news story]
    "Where have you gone, Dan Loeb??"

    He hit the eject button months ago.

    http://bit.ly/1zR3O91
    Dec 14, 2014. 10:55 AM | 1 Like Like |Link to Comment
  • Oil slumps to new five-year low as Morgan Stanley cuts forecast [View news story]
    For those not in this sector there are plenty of fantastic deals if you look with a 3 year time horizon. What a difference a week can make.
    Dec 8, 2014. 12:21 PM | 7 Likes Like |Link to Comment
  • TheStreet +7.6%; activist discloses stake, takes aim at Cramer [View news story]
    Cramer and John Thain should set up a little get together. This type of behavior is a crime against humanity. The fact that cnbc still airs his show speaks volumes about the "quality investment advice" one receives from their tv network.
    Dec 3, 2014. 02:51 PM | 4 Likes Like |Link to Comment
  • HC2's New College Fund: Implications Of Separation Agreement Between Falcone And Harbinger Group [View article]
    Thanks for your perspective on the separation agreement.

    This whole process will likely get more "exposure" for the company from investors. I believe the share sale will wrap up long before the November deadline. Any interested party would want to get ahead of the uplisting which needs to happen before late August when the interest rate of the preferred shares ratchet up.
    Dec 3, 2014. 08:28 AM | Likes Like |Link to Comment
  • The Early Read On 2014 Holiday Sales Does Not Look Promising [View article]
    To be fair the most likely reason sales were substantially off was the fact that early promotions were occurring as early as the week before thanksgiving and Heavily on Monday - Wednesday before the weekend. Anyone watching should have saw this coming.
    Nov 30, 2014. 06:45 PM | 1 Like Like |Link to Comment
  • Update: Theravance Reveals Interesting Bits Of Information At CS Conference [View article]
    According to a Bloomberg report that came out last evening Glaxo is planning to cut hundreds of jobs in the US. While the Bloomberg article doesn't make clear where the cuts are, my guess is that it relates to the Norvatis deal or just your general corporate "streamlining" related to the restructuring plan announced in their most recent CC. Definitely something to watch.

    http://bloom.bg/1vxKhJ6
    Nov 30, 2014. 08:44 AM | Likes Like |Link to Comment
  • The New Deal: HC2 Thesis And Valuation Update [View article]
    Well ... looks like the separation between Falcone and HRG are ongoing.

    In HC2's latest SEC filing.

    "In connection with Mr. Falcone’s resignation at HGI, on November 25, 2014, HGI and Mr. Falcone entered into a Separation and General Release Agreement (the “Separation Agreement”). The Separation Agreement provides that if certain terms and conditions are satisfied then, from the date on which such terms and conditions are satisfied until November 25, 2015, HGI shall use its commercially reasonable efforts to sell all of its shares of the Issuer."

    I'm surprised the agreement did not involve Falcone buying all the shares and eliminating the ties between the two companies immediately. Perhaps HGI wants to capture more upside? Still with 5.7M coming on the market over the next year, that'd be close to 24,000 shares a day of supply that needs to be absorbed which would provide a significant headwind to the stock. Hopefully most of the transactions can be done in private transactions. Jefferies can definitely aid in finding these shares a home.

    An investment in HRG is certainly tempting as well. I'm pretty sure Leucadia will buy them sometime in the near future, 6 - 12 months. It'd certiainly be a great fit.
    Nov 28, 2014. 06:22 PM | Likes Like |Link to Comment
  • Swatch CEO says he's unfazed by Apple Watch [View news story]
    "Hayek thinks the Apple Watch could spur business, because many customers will opt to buy normal watches instead."

    If that's "the plan" I'd get my resume ready. Seriously.
    Nov 27, 2014. 12:27 PM | 7 Likes Like |Link to Comment
  • Crude now -7.6% on OPEC rollover [View news story]
    Unless you are invested in oil/gas and want $200 barrel oil or in business with the oil/gas industry, lower energy prices are very welcoming to consumers and businesses that have been pinched over the years.

    A sustaining period of lower prices sub $70 or bigger declines should provide some very interesting investment opportunities long term as the market over corrects which seems highly probable. Just have to try to figure out which ones will survive/thrive vs which will have to restructure. IMO the offshore drillers are still not the place to be.
    Nov 27, 2014. 12:20 PM | 5 Likes Like |Link to Comment
  • Seadrill -10% on dividend suspension, plunging Q3 profits [View news story]
    This drastic move will likely allow the company to survive the downturn. Looks like the market for offshore drilling is in serious deterioration. 2015 is indeed looking like a period of turmoil.
    Nov 26, 2014. 08:11 AM | 1 Like Like |Link to Comment
  • The New Deal: HC2 Thesis And Valuation Update [View article]
    Looks like after December 1st Falcone will officially be at HC2 full time. Anyone following this story though knows Falcone has been positioning for this move for quite some time with the flurry of deal making that has taken place in HC2 over the past 3-4 months.
    Nov 25, 2014. 05:52 PM | Likes Like |Link to Comment
  • Report: Leucadia boosts stake in Harbinger as Falcone exits [View news story]
    Alright I’m having issues with something …

    Whopper has made some great calls in the past. ALJJ and USAK to name a few and Whopper will likely continue to pick some serious winners. Still in his pro article on HCHC a significant portion of his analysis of HCHC's worth was seriously flawed. He valued 116M of the NOL base that was supposedly not subject to limitation between 50-85M in three different value scenarios. These NOLs were in fact subject to limitation do to change of control factors that were listed in the company's most recent 10Q at the time. Back out the NOL asset and values come in much lower. SA members in the comment section pointed this out to the author but nothing was ever corrected or admitted by the author.

    The one who should be getting the nod from SA is Brad Kern from Armored Wolf who has been following this company and had his first article out back in March. What I admire most is that in his article Ready to Deal: Deep Value in HC2 when commenters pointed out an error in his share count for the article he corrected it in 4 days with a new article displaying the correction and updated his SOTP analysis. Hats off to Kern!
    Nov 25, 2014. 05:38 PM | 1 Like Like |Link to Comment
  • ALJ Regional Holdings: Building A Solid Holding Company, One Acquisition At A Time [View article]
    Whopper did an article a few months ago on ALJ and I put it in my “homework pile” and forgot about it. Big mistake it seems! Thanks for bringing it up again! This company seems to hold a lot of promise and is similar to another holding I have in many respects.

    Faneuil

    Call centers are a pretty tough cut throat business and usually low margin. 38% of business with one customer carries quite some risk as well. Hopefully they are making some inroads into expanding their customer mix in commercial as well as increasing the automation process in their operations. Not sure if the potential business growth is that robust though. I personally know an owner of a call/contact center business in the area that believes the future is pretty bleak for the industry in this country regardless of tech advances. He’s been at it for 40 years so I pay close attention. Regardless the cash flow from Faneuil should support buybacks and future acquisitions considering the NOL's shield income.

    Carpets n More

    The best way to gauge Carpet’s future business is to look at Vegas’ largest land owner, Howard Hughes Corporation. 3 of CM’s stores look like they are 5 to 15 miles away from Summerlin which is enjoying robust activity and has thousands of acres in store for development. Here is just a small tid bit of what is in store for 2015. There’s going to be a need for plenty of flooring with CM to at least capture some of those orders.

    From HHC’s recent 10-Q

    “Homebuilder demand for land in Summerlin continues to remain strong and Summerlin’s strategy is to manage the development and delivery of residential parcels for sale in order to increase the long-term value of the project. … Homebuilders continue to work toward bringing new neighborhoods online in 2014, which we believe will begin to increase the volume of home sales in the latter part of 2014 continuing into 2015.”

    “During the second quarter 2014, we announced a joint venture with Discovery Land Company, a leading developer of private clubs and luxury communities, to develop an exclusive luxury community on approximately 550 acres of land within the Summerlin MPC. … development is expected to begin in the second quarter of 2015 with the first lot and home sales expected to begin in late 2015.”
    Nov 21, 2014. 09:55 PM | 1 Like Like |Link to Comment
  • The New Deal: HC2 Thesis And Valuation Update [View article]
    Bradd,

    Thanks again for your valuation update. It's greatly appreciated. One bit of news that stood out to me and was truly important in my eyes was the information regarding the bid for Hirschfield. I've always found that observing what management is NOT doing is just as important as what they ARE doing.

    To me, the fact that HC2 wasn't willing to raise their bid to go to the 2nd round was a testament to the deals that they are willing to swing at. Will they miss out on some opportunities? Yes, quite likely. But odds of overpaying for a business diminish significantly if they follow a disciplined approach to acquisition. That's a huge plus in my book and crucial in this stage of the company's development.

    I continue to be very impressed with the potential of HC2 and their savvy deal making.
    Nov 18, 2014. 11:51 PM | 1 Like Like |Link to Comment
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