Matt Schuering

6 Comments

    • A Low-Risk Cracker Barrel [CBRL Group] Options Play [view article]
      You end up with 2000 shares because 1) you will own 1000 shares outright if you follow this trading strategy, and 2) if the stock closes below $30 on the expiration day of the put options you sold, and you have not closed out that put position, then the put options purchaser will "put" the stock to you at $30, he/sh will be short at $30. You are then obligated to buy CBRL at $30. Each option contract is for 100 shares of stock, so 10 options contracts * 100 = 1000 shares of stock. You do get to keep the premium you sold the options at. Jun 08 05:53 PM
    • The Long Case for EMS Technologies [view article]
      News out today on EMS Technologies LXE division. They have entered into an agreement with Hutchinson Port.


      biz.yahoo.com/pz/08052...
       May 22 11:30 PM
    • Frontline's a Buy Heading into Earnings [view article]
      Interesting article on an interesting company. I have owned this stock in the past and was happy with its overall performance over the time I owned it, although it was quite depressed for some time. But I must agree with the previous comment that I think this stock has had its day in the sun. When the stock was $30 cheaper would have been a great time to have recommended it. The fundamentals of the company were no different then. Also, this company has no long-term contracts for shipping so they are truly at the mercy of the daily shipping rates, and once these drop, which could happen for a number of reasons, there is nothing FRO can do but see their stock price drop along with it. And although they have paid great dividends and the current tax treatment makes this a great play, I am concerned about dividend taxes in the future, this will definitely hurt the after-tax yield of this high paying stocks. And if they declare the special dividend, and the stock "pops" like you say, the market will take the special dividend right out of the stock price once it goes ex div. This is not the right reason to purchase this stock. Also, they have enjoyed nice operating income, but look at quarter over quarter numbers and see how much of this operating income came from a gain on the sale of assets. I liked it at $31 but at $65 it is too high for me to get back in. If I were long I would be thinking about taking some money off the table. May 20 07:57 AM
    • Treat Yourself to Tootsie Roll Industries [view article]
      Biggus, thank you for your comments. I agree with the timing of International expansion, i.e., direct investment. However, a joint venture with a firm might not be a bad idea at this time to at least grow the brand name. Next, WACC is much higher than its 2 competitors I discussed in the article. Obviously, the debt load of the other 2 companies is the reason for this. HSY debt/value is .783 and equity/value is .217. This gives the debt/equity ratio of 3.603 (End of year 2007). Also, I just plugged Rue of 13% into my model and this gives a stock price of $24.07, pretty much where it is trading right now. Great observation on your part. May 19 07:18 PM
    • The Long Case for PolyOne Corporation [view article]
      Chandler, thank you for the comments. Sorry it took a few days to respond. First, I am not worried about the inventory that you point out, which is a good observation. My model, which is not shown, shows that Inventory Turns have been increasing over time. This is a sign to me of better inventory management. Also, year ended 2007 Inventory was only about 14% of Total Assets. Also, I always check the 10-K for Inventory write downs which will always hit the Balance Sheet. Next, please read the above analysis one more time if you can, and see if your question about Competitive Advantage is answered. In my original write-up, which I have since then updated several times, I thought I laid out the competitive advantage pretty well. If you have any further questions about this then please visit my blog site listed above and feel free to e-mail me with your questions. Also, the company is not diversifying away from the housing sector because GEON (vinyl) is their biggest segment. However, they have shown fabulous growth in the non-vinyl segments and they are looking to grow these smaller segments. If the housing industry turns around, then this just adds a nice little kicker to the revenue stream and their Net Income. I hope this helps. May 15 09:19 PM
    • The Long Case for PolyOne Corporation [view article]
      In response to Dan Jacome, Ceviche Fund Partners. Let me say that I do have a family member at this company and I absolutely should have disclosed this information ASAP, and my apologies for not doing so sooner. I would also like to say that I have been looking at this company since around the same time this individual started with PolyOne and I did my research and liked what I saw. I personally own the stock, as I disclosed, and I have no intention of selling it anytime soon. As far as the valuation, I did use the CAPM to determine the Levered Cost of Equity, of course, however, being an astute MBA student yourself, you should know that when using APV, you do not use the levered cost of equity, and therefore, you must unlever the beta and then use CAPM with the unlevered beta to derive your Unlevered Cost of Equity. So, yes CAPM is used, but in the unlevered sense. We can also argue about CAPM all you want (I received my MBA from the University of Chicago). I do NOT use WACC because I am assuming a changing capital structure. And, yes, in APV you take the PV of the Tax shields and add them to the PV Future Free Cash Flows. I did discount at the firms Cost of debt because the debt, I believe, is not as risky as the firms underlying assets. Also, Dan, thank you for the good comments. If you would like to contact me, please visit my blog that is mention above and then contact me. I don't see any reason why I cannot send you my DCF model. Also, I have a few other valuations on that site that you may, or may not, find interesting, and might want to comment on. I am always looking for intelligent people to speak with. May 14 09:07 PM
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