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Brandond

Brandond
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  • Why I Bought Ebix Ahead Of Earnings [View article]
    As usual, longs providing balanced and insightful comments. For those who don't follow Ebix, bear in mind that shorts (Gotham Research, Sam Antar and other anonymous manipulators) often come on here, in stocktwits and in Twitter and make unsubstantiated claims of fraud and massive ongoing government investigations.

    I've been long over the past 2 years and have been fortunate to have traded in and out before any of the big declines. Failed to top tick but avoided big losses like the fall from $20 when Goldman backed out of the deal to buy Ebix. Recently built a large position below $13 because this market is expensive and Ebix is one of the most undervalued companies I can find. They generate a lot of cash and with their new line, have the firepower to buy back stock in the event shorts attack the easily manipulated, low float small cap.

    There is a lot to like here but there is some risk. Objective investors believe the money laundering investigation was initiated through allegations by a former disgruntled employee but if significant wrongdoing is found, lower prices are likely. The royalty disagreement with Microsoft is pretty minor IMO and these types of disagreements happen all the time in the industry (just not usually publicized to the extent you see with Ebix). I'm not particularly concerned about the SEC matters as these matters could easily be 100% resolved-the SEC seldom publicizes the "all clear" signal when a matter is resolved. It is highly unlikely that lenders would be giving Ebix a $200M debt facility if there were material issues-you can be sure that a LOT of diligence was performed.

    I'm sure the shorts will come on here and talk about companies like Enron, Crazy Eddies, and MCI WorldCom fooling their auditors for year. Folks, times have changed and the level of work performed by auditors (especially for higher risk, headline driven companies like Ebix) is massive. I've seen the difference first hand as the CFO of 4 different companies. Recall, Anderson partners lost all of their partner equity when their firm was dissolved. The remaining audit firm partners do not want to lose their majority of their life savings and they have changed to vastly expand the level of work to root out fraud. Think about how few fraud cases have occurred in the US in the past 5 years. So, my suggestion is to ignore the fear mongerers and take faith in the fact that Ebix's auditors and tax preparers have subjected Ebix to an extreme level of scrutiny and reported financial results are likely as clean as any public company out there.

    You can listen to the shorts or you can go against the grain and buy this cash generator trading under 10x current year profits and collect a dividend along the way.
    Aug 9 08:14 AM | 3 Likes Like |Link to Comment
  • PDC Energy misses Q2 numbers but raises full-year production guidance [View news story]
    Great quarter but I don't understand why one of the big guys doesn't step in and buy them. Good acreage and easily digestible market cap. Happy to hold and see 2015 growth.
    Aug 8 09:20 AM | 1 Like Like |Link to Comment
  • Memorial Production Partners Back In The Bargain Bin [View article]
    For those interested, here are the specifics around the IDR structure:

    http://bit.ly/1pBZh4t
    Aug 6 06:47 AM | Likes Like |Link to Comment
  • Memorial Production Partners Back In The Bargain Bin [View article]
    Casey

    I have a mid size position and considering adding this or another upstream if weakness continues. With results now it, it would be nice if you provided a comment to tie your article's point to actual results. Also, more info on the IDRs would be helpful; cannot find specifics and the 25% IDR # seems pretty important to investors' decision to buy/add.
    Aug 6 06:33 AM | Likes Like |Link to Comment
  • Colorado reaches deal to remove anti-fracking initiatives from ballot [View news story]
    Buy PDCE with both hands
    Aug 4 03:27 PM | 1 Like Like |Link to Comment
  • Care.com At A Crossroads [View article]
    If you like it at $8.60, you'll love it at $3. Look at the chart. Worst IPO of 2013. Have seen people discussing a turnaround since $20, then $15m then $10. Far too many other choice in this market to screw around with this loser stock.

    Employees done with lock up do hope fools buy as they need an outlet for those $1 strike options they got pre-ipo.
    Aug 2 06:22 AM | Likes Like |Link to Comment
  • PDC Energy - Is Selling Overdone? [View article]
    Seems like this company is off a lot of radars; I bought a starter position yesterday based partly on this article but also on the fact that the stock was green all day when a lot of stocks were off 2%-4%. Stock ended slight negative but trend looks to have reversed and fresh analyst targets of $70 make risk reward good.
    Aug 1 06:53 AM | 1 Like Like |Link to Comment
  • Upcoming earnings not likely to provide boost for refiners, Barclays says [View news story]
    Spot on. Holding VLO and not paying any attention to Barclays, yet another corrupt organization trying to shake weak long longs. By the way, this would be the same Barclays that, in the past year, has been charged with the Libor Scandal, Gold price fixing and just 2 weeks ago fixing dark pool trading.

    VLO is an inexpensive stock in an expensive market so fine holding right here
    Jul 10 06:05 AM | 2 Likes Like |Link to Comment
  • Care.com: Didn't We See This Movie Already In 1999-2000? [View article]
    One of the more entertaining articles I have read on SA. Hard to disagree with much in the article and cannot see this company getting to cash flow positive any time soon. Will be curious to see the insider selling post lock up; seldom see insiders refrain from taking cash off the table post IPO regardless of the downtrend in stock price.
    Jun 21 05:37 PM | Likes Like |Link to Comment
  • Fusion-io: Undervalued At The Current Buyout Offering [View article]
    There seems to be confusion on process and possible outcomes so figured I'd offer perspective from working on both buy and sell side of M&A through both CFO roles and in public acctg. I'm long and not selling based on what I'm seeing in price action. Low market cap and $11.25 price combined with cheap easy money from other potential acquirers makes me think that someone else could up the Sandisk bid. There is value in FIO's IP & their customer lists and that's potentially underappreciated.

    Since FIO had investment bankers aiding in the negotiation, the usual process is that those bankers approach other financial and strategic buyers and let them know that FIO is looking to sell. Can be done explicitly or in a quiet way without mentioning FIOs name. Likely that Sandisk was one of the only bidders so now we're left with the following:

    1) Fio's bankers failed to reach out to a party that is interested in buying and that buyer comes in with a raised offer.

    2) One of the potential buyers that previously passed, looks at Sandisk's offer, thinks it is low and decides to make an offer more appealing to FIO holders. Potentially these buyers did not think FIO would sell for only $11.25.

    M&A is heating up, companies have a lot of cash and shareholders want that cash used for growth. Hard for me to say who would be a bidder but the fact that FIO traded at $11.60 yesterday tells me that the professional arbitrage firms think a raised offer is possible. If FIO were to take a higher offer, they would need to pay Sandisk $42 million as a termination fee as set forth in the Merger Agreement (Article 7.4 in attached). This has the effect of increasing the cost of acquisition to any new acquirer as FIO would have $42m less cash that would accrue to the buyer on closing.

    http://1.usa.gov/1ynka8i

    One thing that seems apparent and disgusting is the CEO is a complete failure. Shane chased off all the founders and key management and had the board put him in the CEO role. Shane then gets a sweetheart golden parachute deal which takes effect if the firm sells (irrespective of deal price, he still gets a large severance payout). Seems like the CEO has decided to just call his tenure a failure, collect his fat parachute and move on to the next company he can blow up (Don't forget he was lead in HP's botched Autonomy acquisition which was a complete disaster.)

    Jun 19 08:27 AM | 1 Like Like |Link to Comment
  • Auditors Didn't Find Fraud At NQ Mobile, But A Restatement Isn't Ruled Out [View article]
    From the press release:

    http://bit.ly/1olmnMH;highlight=


    "NQ Mobile (NYSE: NQ), a leading global provider of mobile Internet services, today announced the results of the independent investigation conducted by an independent Special Committee of its Board of Directors and carried out by its independent counsel Shearman & Sterling LLP and Deloitte & Touche Financial Advisory Services Limited acting as forensic accountants (together, the "Investigation Team").

    See the term "ACTING AS FORENSIC ACCOUNTANTS"

    Privilege is completely moot. PWC will simply require the full D&T report or they will refuse to sign off. Very simple. I've see this first hand during my 8 years at Price Waterhouse (pre the merger with coopers)
    Jun 6 03:59 PM | 3 Likes Like |Link to Comment
  • Auditors Didn't Find Fraud At NQ Mobile, But A Restatement Isn't Ruled Out [View article]
    Having worked at PWC, I can guarantee you that NO way would PWC sign off on the 20F until they got the results of the forensic audit. With Deloitte's forensic audit done, those results go to PWC who incorporates into their regular audit work (less comprehensive than a forensic audit in a lot of respects) and that entire package goes to multiple partners for final review
    Jun 6 03:34 PM | 5 Likes Like |Link to Comment
  • Auditors Didn't Find Fraud At NQ Mobile, But A Restatement Isn't Ruled Out [View article]
    From someone who worked in the Big 4 and was a CFO of 3 companies, I can tell you that if there were financial irregularities, the forensic accountants (Deloitte) would very likely have uncovered those issues in their review. Since the Deloitte report to the Independent Committee was clean, I suspect the PWC report will be clean or at least devoid of any major issues. PWC would have been unable to release their report knowing that the forensic review was underway; with that done, I suspect PWC is in final partner/concurring partner review and they will sign the 20f soon.

    I care less about the audit; more concerned with the huge revenue guidance boost (100% growth from prior year). Unless costs are out of control, throwing up $83M of revenue in Q2, is going to drop a huge amount to the bottom line. Once the 20f is out, more institutions will be able to buy and this should really run (assuming the 20f is largely consistent with prior reported results)

    http://bit.ly/SgJwDn;highlight=
    Jun 6 03:08 PM | 8 Likes Like |Link to Comment
  • NQ Mobile slides; SA author thinks restatement still possible [View news story]
    Spot on Toronto and you can bet that the headlines in NQ along with the desire to reduce audit risk, PWC has multiple partners reviewing, potentially all the way up to national. Agreed, next week probably filing the report
    Jun 6 02:39 PM | 1 Like Like |Link to Comment
  • NQ Mobile slides; SA author thinks restatement still possible [View news story]
    From someone who worked in the Big 4 and was a CFO of 3 companies, I can tell you that if there were financial irregularities, the forensic accountants (Deloitte) would very likely have uncovered those issues in their review. Since the Deloitte report to the Independent Committee was clean, I suspect the PWC report will be clean or at least devoid of any major issues. PWC would have been unable to release their report knowing that the forensic review was underway; with that done, I suspect PWC is in final partner/concurring partner review and they will sign the 20f soon.

    I care less about the audit; more concerned with the huge revenue guidance boost (100% growth from prior year). Unless costs are out of control, throwing up $83M of revenue in Q2, is going to drop a huge amount to the bottom line. Once the 20f is out, more institutions will be able to buy and this should really run (assuming the 20f is largely consistent with prior reported results)

    http://bit.ly/SgJwDn;highlight=
    Jun 6 02:17 PM | 7 Likes Like |Link to Comment
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