Seeking Alpha


Send Message
View as an RSS Feed
View lorddarley's Comments BY TICKER:
Latest  |  Highest rated
  • My Long-Term Analysis On Shake Shack [View article]
    With wine and beer licenses, and premium locations, this is not a Big Mac. Overpay, and in five years you will be thrilled. The management has a premium vision for the brand. Anyone who has eaten "there" is a fan. In my case, it was at the Saratoga racetrack, for the after-hours celebration for California racing. Place was packed, and no one cared about price. Shack is an affordable luxury, and a step above the competition. Pay for quality.
    Sep 4, 2015. 06:36 PM | Likes Like |Link to Comment
  • NCR CEO Bill Nuti: Where's The Cash? [View article]
    Is it time to buy back?

    Purchasers couldn't raise necessary debt at $36 asking price. That is a ceiling.

    The strong dollar, and tight domestic bank budgets, hem in the cash revenues.

    Company may have to tuck it in and sell for $30, as long as the management (suspect in integrity) can get a parachute.

    $24 to $30 not a bad deal.

    Sep 4, 2015. 06:30 PM | Likes Like |Link to Comment
  • It's Not Rocket Science: STAG Is Now Grossly Mispriced [View article]
    Thanks, Brad
    Aug 24, 2015. 08:04 AM | Likes Like |Link to Comment
  • It's Not Rocket Science: STAG Is Now Grossly Mispriced [View article]

    I agree that if this were real estate acquired many years ago, that book value way understates the underlying value. However, that's not the case with STAG, a new company. I have a tough time thinking they were so clever that their real estate is valued at 75% more than they paid, so my feeling is that investors overpay for REITs like this when the assets are not unique and are replaceable in most areas. The stock price reflects my thinking.

    I haven't dug into this real deeply, but I'll admit I am interested in STAG with this yield. Average lease term of 4 years and only a 70% renewal rate does concern me. Issuing stock for purchases instead of using debt is very dilutive, but reflects the inability to finance based on real cash flows. STAG does not have unlimited pricing power with warehouses, because it's not that hard to compete by putting up a building for $10M or so. Still, it's getting to a price where I might acquire a few shares.
    Aug 24, 2015. 08:02 AM | 2 Likes Like |Link to Comment
  • It's Not Rocket Science: STAG Is Now Grossly Mispriced [View article]
    I could never figure out REIT valuations. It's normal to overpay for management expertise, but 1.75 x book means that you are paying almost twice what these guys paid for rental property. This is not the cure for cancer or the next new tech device or a hotel in a crowded urban area. These are just warehouses, and it's pretty easy to build them and locate them.

    For a small investor, I guess that's OK to buy a REIT, but they have all been hammered because they got sold based on yield and some undeserved mystique.

    Almost 2 x book is a lot of money to pay. You simply get management which does not have the discipline (because they get paid anyway) to buy low like a small investor will. Anyone with reasonable capital should engage a local realtor and property management company. Buy a building only after getting familiar with the market.

    There's too munch premium, based on "yield," built into these prices. Buying closer to book makes this REIT (and others) more sensible as long term investments.
    Aug 23, 2015. 05:24 PM | 2 Likes Like |Link to Comment
  • NCR Moves To Town Out Of Weakness [View article]
    I bought this for the long term. (Repeat that, to keep myself from going crazy, I bought this for the long term.)

    I'm expecting another disappointing call in a few days, with the normal excuses about slow economy, retailers prioritizing purchases for customer security over fast check-out, the dog ate my order book, etc.

    The impact of currency translation will also be significant, and the pension is still an issue because of low interest rates, unless you credit their wishful non-GAAP accounting that disregards it. (I love the back-slapping of management for its swell strategy of pulling the whole fund out of the stock market after the crash.)

    There is also a class action for alleged wage and hour violations going on, and whether it will have a significant impact or not is hard to tell. Not a breath in their reporting so far about that case, but the credibility of the management is suspect after the last year, so who knows?

    Anyway, I'm hoping it works out. This does show, however, that Barrons, which continued to produce pump-up recommendations when the stock had crested 40, is just a rag.
    Feb 8, 2015. 08:35 AM | Likes Like |Link to Comment
  • Danger Zone: NCR Corporation [View article]
    You should take a well-deserved victory lap. Excellent analysis.
    Oct 21, 2014. 07:01 AM | Likes Like |Link to Comment
  • Danger Zone: NCR Corporation [View article]
    The conference call was not pristine. Losing John Bruno to the much larger AON was a loss, no matter how it is glossed over by platitudes like strength on the bench, etc. There is a replacement already announced for some of his functions, and a search for the rest of his job description. If he were the CFO, I'd panic. However, I've rationalized as follows: he knows he will not be CEO, and this is simply a better deal, with a much larger company. In a way, this endorses NCR for having had so much talent. But it is still a downer.

    On the upside is the math. The most important ratio is debt to earnings, and they project the bloated 3.7 (at 1/1/2014 reflecting DI acquisition) to be down in just 12 months at 12/31/2014 to 3.0. That's staggering improvement.

    As for the announcement last week that Target had cancelled the NCR relationship, Nuti was fast out of the blocks and opined that NCR and Target had mutually agreed to say this "announcement" was inaccurate. Who knows. My guess is that they deferred the NCR rollout to be sure Target has the enhanced security features in place due to its huge embarrassment. Nuti volunteered later in the call that he was eager to speak more on this, but was restricted by agreements with Target.

    Otherwise, it was a good call. Nuti is frank to acknowledge his sales team does not fully get it, so that closings are sloppy, causing slippage from one quarter to the next. As a long term investor, I'm not real concerned about short term sentiment.

    Let's see over the next two years. My horizon as a searcher for companies out of favor with good long term prospects NCR is an undervalued gem. Let others quibble about quarterly "results." In one good day, with reversed sentiment, a small company like NCR can make that all up, and then some.
    Aug 4, 2014. 05:34 PM | Likes Like |Link to Comment
  • Danger Zone: NCR Corporation [View article]
    Good discussion, and although we disagree, let's parse this.

    1. You said: The growing trend is less shopping in stores and more shopping online.

    I say: Assuming the US market remains stagnant, and that new arrivals on our shores suddenly become computer-literate, and that the retiring class, with time on their hands, decide to spend less time in banks, agreed. Look past our shores. The world is way behind the US. A lot of the world is still hoping for a car. NCR, with its new commitment to India production and Asian market penetration is a play on billions of consumers, just learning that banks are a better place for savings, and that retail goods can be bought without cash.

    2. You say retail banking is moving on line.

    I say: Agreed, for sophisticated US consumers. But even for them, the whole point of branch transformation is to make those low profit transactions less expensive for banks, and to free up a bank's best employees to promote and close on high profit deals, like mortgages for purchase, reverse mortgages for retirement, mutual fund purchases, and even commercial loans.

    3. You said that the low interest NCR "debt" (in actuality, a combination of preferred and real debt) has a greater present value than the income streams it has purchased. I've made a 7 figure investment which disagrees, so perhaps one or the other of us picks up a bar tab (Boston or NY, your choice) in a few years. I have a hard time thinking NCR's very focused management, heavily invested in NCR stock, can't make a lot more than 6% on these purchased assets to break even, based on what we see so far with DI and Retalix. These are very well integrated acquisitions. DI seems like a home run after only a few months. Retalix seems sleepy only because of the "compare" against last year's WalMart sale.

    4. Free cash flow is not negative. Where does that come from?

    5. I agree that GAAP is hardly a reflection of true earnings. I'm not sure what your point is. For investors, we always look at non-GAAP, which Management reaffirms is at $3 - $3.10 for 2014. That's about 10 x earnings for a company shifting production to a higher margin business.

    Jul 31, 2014. 05:54 PM | 1 Like Like |Link to Comment
  • Danger Zone: NCR Corporation [View article]
    I read nothing in this article that was a new thought or that would not be already discounted in the stock price. A few impressions, because this article was so superficial it does not deserve more than that.

    People will stop shopping in stores? Hardly. Consider that this is a worldwide business. Consider that many businesses (airline check in, hotels, groceries, etc.) are not internet purchases.

    US banking is slow. How long can that last? Not forever.

    Branch transformation is a fad. Watch over the next few years. Totally disagree on this one.

    Debt is bad. Come on. A smart business uses low interest debt to buy higher yielding businesses.

    Not mentioned. Worldwide market and retail penetration by NCR.

    Not acknowledged: cash flow growth

    Not acknowledged: no retreat from 2014 earning estimates.

    Not acknowledged: strong stock performance since 2008. It has retreated from a too high number in the 40s. So what? This is just a pause that refreshes.

    Jul 31, 2014. 09:20 AM | 1 Like Like |Link to Comment
  • Sirius XM: Deal Or No Deal? You Win, But You May Be Waiting [View article]
    This is fabulous analysis of Siri. Were it not for Malone, it's a buy. With Malone in the picture, who wants the intricacy when there are so many less complicated opportunities? I was ready to pull the trigger until reading this extremely well-reasoned article, and thanks to the author. I love my Sirius, but not Siri.
    Mar 5, 2014. 01:12 PM | 1 Like Like |Link to Comment
  • How To Retire At 30! [View article]
    And one other thing about being "self-funded." Let's ignore for a second that they got born in the right place, in a system that others created.

    At the $25,000 income level, this couple gets a subsidy of approximately $4,618 towards a $5,747 silver health plan under the ACA.

    They may not want to be federal parasites, but I doubt they will turn that down.

    The powers in Washington are doing their best, for votes, to create parasites. Self-respecting Americans should fight this, and certainly not admire the ones who are takers.
    Jan 29, 2014. 07:45 PM | 6 Likes Like |Link to Comment
  • How To Retire At 30! [View article]
    This country makes it possible for citizens (with less talent and language skills than the average overseas person) to prosper.

    Anyone blessed with that fortunate circumstance, to be born here, and who does not contribute to make this country more prosperous, has dropped out.

    They should not be condemned, but are hardly role models. A country populated with people like this would not survive very long.

    Bring on the immigrants if this is the best we can produce.
    Jan 29, 2014. 07:35 PM | 8 Likes Like |Link to Comment
  • How To Retire At 30! [View article]
    Anyone with a smattering of history in their belt knows that thousands lived this way in England in the 19th century. As parasites, they benefited from a strong currency and the dominance of the British Empire, paid for with the blood and money of others.

    It was a clean life to be a non-working Brit in the 19th century with a bit of capital. Some just destroyed their livers. Others wrote great books.

    Nothing has changed too much. History repeats. Folks like this current hippy couple in the USA are fortunate enough to live in a country which dominates the world economy, and to have a safety net in case things go wrong.

    It's just the 19th century (Britain) redux, before the collapse. I don't condemn them for dropping out. However, they are not part of the country's future, just sweet parasites.

    Let them be. There's tolerance for indolence in a prosperous country.
    For others of us who believe that you should not devolve to a state of vegetable dependency, abjure this and be part of the future. Fortunately, we have immigrants (and many young people who are not on the media charts) who have huge ambitions.

    This is still the best country for ambitious people. We just need to observe the wisdom of Thomas Jefferson, the "liberal" who understood things: "I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them."
    Jan 29, 2014. 06:29 PM | 8 Likes Like |Link to Comment
  • NCR Management Discusses Q3 2013 Results - Earnings Call Transcript [View article]
    Almost 6 million shares and it's not yet 1 PM. Lots of profit taking. Maybe these sellers thought that NCR would announce the cure for cancer.

    I hate to see some of the short term profits evaporate, but the long term story is so good, and the price seems so reasonable, it makes no sense to sell.
    Oct 25, 2013. 12:53 PM | Likes Like |Link to Comment