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markb

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  • Coca-Cola Should Make A Keurig Decision [View article]
    I agree that KO is should think about buying GMCR now. But your article doesn't address what I think is the most important question: What could KO do with GMCRs coffee business?
    Jul 7, 2015. 03:36 PM | 1 Like Like |Link to Comment
  • Keurig Green Mountain Looking To Bottom [View article]
    Ok, thanks. I agree KO acquisition rumors should pick up, for good reason. Back of napkin combo analysis, KO buys the 84% of GMCR it doesn't own at $100/share in all stock deal. Numbers rough but don't need to be perfect:

    KO gets GMCR $600 NI, less dividends on the 16% they currently own (-$30) plus lets say a 10% cut to SGA (+$60).

    KO pays $100/share ($15B for 100%), but only needs 84% ($12.6B) and can redeploy excess GMCR cash ($.6B). 300mm KO shares.

    Put those together and deal is accretive to KO EPS by $.03. Assuming no future growth ever.

    And KO gets synergy effects related to distribution and manufacturing on the coffee side of the business. Deal benefits are not dependent on Kold.

    KO has got to be looking hard at GMCR deal right now.
    Jun 30, 2015. 01:25 PM | 1 Like Like |Link to Comment
  • Keurig Green Mountain Looking To Bottom [View article]
    Is your statement on star rating trends correct? I thought Amazon 1-2 stars were bad. Please explain.
    Jun 30, 2015. 12:58 PM | Likes Like |Link to Comment
  • WhiteWave's Overseas Sales Look Poised To Explode [View article]
    Water-intensive almonds being grown in drought-stricken California for export to China. Hmmm.
    Jun 16, 2015. 07:58 PM | 2 Likes Like |Link to Comment
  • Keurig Green Mountain Continues To Emit Poor Sentiment From Analysts And Investors [View article]
    nostores,

    Thanks for being a voice of reason in this Alice in Wonderland rabbit hole of a thread. I've given up on Seth. Regarding GMCR the question shouldn't be whether they can achieve their stated objectives, it should be will they exceed the incredibly negative sentiment already built into the current stock price. I wouldn't short here.
    Jun 16, 2015. 05:20 PM | 2 Likes Like |Link to Comment
  • Keurig Green Mountain Continues To Emit Poor Sentiment From Analysts And Investors [View article]
    Again, please try and stay focused. So there isn't any misunderstanding, I copied the following from your text above:

    "Since 2003, Keurig Green Mountain has sold over 40 million brewers. To date, the company boasts a user base of around 20 million active users. One of two things is happening given these factual representations: Keurig Green Mountain is failing to track its user base appropriately or half of all Keurig users rarely purchase K-cups."

    Both nostores and gearhead below, agree with me that your last sentence appears to be dead wrong. The difference between brewers sold over time and current active user count can be explained by active users replacing brewers (which is why average life is relevant) and users with multiple brewers.

    The sad thing is your unwillingness to team up with readers to uncover the truth in the collegial spirit of SA and instead regressing to your defensive insults. Seth, this might come as a shock to you, but most readers are only interested in divining insight and making money, not you. They do not have ego invested in their opinions. The ability to accept a mistake is a sign of emotional maturity, not weakness.
    Jun 16, 2015. 01:17 PM | 3 Likes Like |Link to Comment
  • Keurig Green Mountain Continues To Emit Poor Sentiment From Analysts And Investors [View article]
    I'm not going to sink to your level and respond to your insults. Let's stick with your "one simple fact" since you position it as the cornerstone of your article. Please try to focus.

    You state its a problem that since 2003 40mm brewers were sold and now 20mm users are active. Then you say "a five year life cycle is no excuse for non-repurchase of system".

    There is no evidence any users left the system. I bought a K60 in 2008 or so, it got kind of old so I threw it away and bought a 2.0. I bought two brewers and I am active. Keurig sold 40mm brewers and 20mm users are active. From this fact alone, it is not possible to prove a single user ever went inactive. My old B60 "brewer" is inactive, I threw it away, so what? I still buy K cups each week, and have since 2008.

    Please enlighten me.
    Jun 16, 2015. 11:45 AM | 1 Like Like |Link to Comment
  • Keurig Green Mountain Continues To Emit Poor Sentiment From Analysts And Investors [View article]
    Surprised by the lack of objectivity in this disappointing hit piece. Couple thoughts:

    Author shocked 40mm brewers sold since 2003 and 20mm active today. Company explained average life is 5 years. I think 20mm active from 40mm sold simply indicates brewers are lasting longer than expected before being replaced.

    Author slanders Company products as "breeding ground for mold" but fails to attribute "quote" to source.

    Author highlights UBS downgrade but fails to mention positive reports from Morgan Stanley and Susquehanna in same month.

    Author ignores significant insider buying around current price.

    Entire article is negative then oddly the author predicts a 30%+ near term gain for the stock.

    No attempt is made at valuation...is GMCR a "bad" investment at $150? Obviously. At $80?

    Sentiment on GMCR is low as ever. Negativity is built into its stock price. That is fertile hunting ground for value, and historically GMCR has rebounded strongly (remember "accounting irregularities" and "Einhorn thesis").

    The one thing we agree on is I too believe KO is taking a hard look at GMCR. My back of the napkin combo analysis suggests a deal at $110 or even $120 would be accretive to KO EPS, even if GMCR earnings stay flat. Investors are so focused on Kold they are missing that KO has lots of reasons to want to get into the coffee business.

    I think the most important question now is what could KO do with the coffee business if they bought GMCR. The coffee business. If the answer is a lot, I believe the possibility of a deal should be taken seriously.
    Jun 16, 2015. 09:21 AM | 2 Likes Like |Link to Comment
  • Lululemon slips in front of earnings [View news story]
    No new info though. If LULU reports weak, today's trading will smell fishy.
    Jun 8, 2015. 04:18 PM | Likes Like |Link to Comment
  • Alcoa Remains Overpriced [View article]
    It appears to me that your unconventional decision criteria (return on total book capital) is flawed. Lets say total book capital is 1000 and return is 50. You would say 5% is "too low". But if 900 is debt at 3% and the market value of the equity is 50, the relevant return is a whopping 46%. Debt doesn't need to be "paid back" if its part of a normal sustainable capital structure (Petrobas just issued 100 year bonds). My point is your story would have more credibility if you did a traditional valuation...how much is AA worth and what were your assumptions?
    Jun 3, 2015. 09:21 AM | 2 Likes Like |Link to Comment
  • Alcoa Remains Overpriced [View article]
    "When we do this, we see that management has managed to generate a return of ~5.3% on the capital invested in the company. This may be a reasonable return for some investors. We consider it an inadequate return for clients and ourselves."

    How can you make this statement without considering the market price of your investment?

    Plus why the goofy tax rate? And why do equity investors care about return on debt?

    To me AA looks like they are generating some pretty good operating cash flow but its not flowing through due to the capital spending required to fund their transition. Plus the capital structure seems pretty conservative suggesting there could be room for more debt/buybacks once the transition comes to fruition.

    I like AA here.
    Jun 2, 2015. 10:48 AM | 1 Like Like |Link to Comment
  • Could Costco Be In Big Trouble? [View article]
    I agree with the article. First, for everybody who says AXP is inferior and everybody will simply use V or MC, how do you explain that AXP's success and the fact they are the world's largest issuer? I'm very loyal to AXP: great service, great rewards program and I have a simple green card that makes me pay it off each month rather than carry cc debt which is one of the stupidest things to do in personal finance.

    Plus AXP is about choice. Costco is the opposite. First I need to pay for their card to get in there. Then I need to fight some crowd to load some big box junk. Then I need to whip out my Costco card when I pay for it where they raise an alarm if its not up to date. Then I need to buy a new special card to pay for my crap so Costco can dig deeper into my wallet. Then, on the way out, as a final indignity, I need to dig out my receipt so some senior can rifle through my cart like I'm a would be shoplifter. Then after I get home I waste half the crap I bought...who uses a twelve pack of romaine lettuce?

    Really? I like my AXP card and I'm no longer drinking the Costco Kool-Aid! There's "Plenti" of other places to get deals without the Soviet style Costco hassle. Enjoy your cult...I'm done.
    Jun 1, 2015. 11:00 AM | 3 Likes Like |Link to Comment
  • Lululemon's Turnaround Strategy Is Showing Results But Some Concerns Remain [View article]
    "Average sales per sq ft slipped...as customers spent less money on LULU's products amid falling traffic."

    Your statement above seems like a somewhat lazy explanation for change in sales/sq ft. LULU revenue was actually up 31% from year ending 2/13 to year ending 2/15. Decline in sales/sq ft could be explained by more sq ft or robust on- line sales.
    May 8, 2015. 02:49 PM | 1 Like Like |Link to Comment
  • Ahead Of Keurig Green Mountain's Q2 2015 Results Turmoil Surfaces [View article]
    I don't blame KO for not anticipating the behavior of other investors. I do believe KO knows more than others, has significant dollars involved and has high quality rational management. I'm reading your article with an open mind. A point of concern is that KO's behavior seems inconsistent with your thesis. A possible explanation would be that insider KO has a more positive view than recent sellers for some reason. Not being an insider I don't know the reason.

    A similar situation occurred with LULU not long ago when the outlook for the company looked bleak and PE Advent came in at the then market price in the low 40's. I argued at the time that getting in at the PE price would prove to be a bargain even though there was limited visibility at the time. LULU is now at 65.

    I think your article is sound, given the information available. But the inconsistency between your perspective and KO's action could indicate they are acting on information not available to you and I.
    May 5, 2015. 12:00 PM | Likes Like |Link to Comment
  • McDonald's: Too Little, Too Late? [View article]
    This plan will milk the company of value for a few years and delay the financial impact of the fundamental issues until just after Easterbrook cashes out.
    May 5, 2015. 11:33 AM | 1 Like Like |Link to Comment
COMMENTS STATS
506 Comments
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