rock boy's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/23639/comments http://seekingalpha.com/article/107925-cautiously-optimistic-about-vulcan-materials?source=feed#comment-315535 315535
The stimulus will be a positive but I'm not sure how much it will really help the industry. First, states are slashing their road budgets across the board. UT and NC in the past week announced significant cuts which haven't been baked into expectations. As a result, the stimulus will most likely only fill in these state spending holes. Second, I've been following this industry long enough that stimulus never seems to actually show up. A few years ago CA passed the huge infrastructure bond initiative - 3 years later those dollars haven't made a dent in CA demand. Third, even if the stimulus is additive, the money they are talking about is a 5 year budget amount so the incremental benefit will be much less than expected. UBS had a note this morning that said that to justify the moves in the stocks over the last 3 weeks the stimulus spend would need to be $100 bn in 2009 alone which is highly unlikely.]]> Wed, 26 Nov 2008 11:15:49 -0500
The stimulus will be a positive but I'm not sure how much it will really help the industry. First, states are slashing their road budgets across the board. UT and NC in the past week announced significant cuts which haven't been baked into expectations. As a result, the stimulus will most likely only fill in these state spending holes. Second, I've been following this industry long enough that stimulus never seems to actually show up. A few years ago CA passed the huge infrastructure bond initiative - 3 years later those dollars haven't made a dent in CA demand. Third, even if the stimulus is additive, the money they are talking about is a 5 year budget amount so the incremental benefit will be much less than expected. UBS had a note this morning that said that to justify the moves in the stocks over the last 3 weeks the stimulus spend would need to be $100 bn in 2009 alone which is highly unlikely.]]> http://seekingalpha.com/article/60229-bullish-on-mexican-chicken?source=feed#comment-110500 110500
What does it look like for IBA?]]> Tue, 15 Jan 2008 11:43:50 -0500
What does it look like for IBA?]]> http://seekingalpha.com/article/53367-blue-nile-a-classic-underpromise-overdeliver-company?source=feed#comment-101300 101300 ASP) increased 11% in the quarter (and Gross Profit per order followed suit) not due to price increases but simply due to mix. The last time the company posted a double digit ASP increase was Q2 06 - 13.6%. The next quarter it was 6.3%, the quarter after that it was 2.3%. So assume that ASP growth will revert to the mean (it has averaged 5% over the last 8 quarters) and order growth remains mid teens, you have revenue growth of ~20%. Not too shabby. Assuming they earn the $1.00 they are guiding to this year and can get operating leverage they can grow earnings 30% next year (on 20% revenue growth), they'll do $1.30 next year. Also not too shabby. But you have a stock that is trading at (hope you are sitting down) 63x that 2008 number.

When they asked the CEO about the slowing order growth his response was he doesn't even think about orders just traffic. I don't think I've heard a CEO of a public Internet company utter those words since February 2000.

Net net, good company? Yes. Very good business model? Yes. Worth 63x next year's earnings? Not a chance.]]> Thu, 08 Nov 2007 09:18:39 -0500 ASP) increased 11% in the quarter (and Gross Profit per order followed suit) not due to price increases but simply due to mix. The last time the company posted a double digit ASP increase was Q2 06 - 13.6%. The next quarter it was 6.3%, the quarter after that it was 2.3%. So assume that ASP growth will revert to the mean (it has averaged 5% over the last 8 quarters) and order growth remains mid teens, you have revenue growth of ~20%. Not too shabby. Assuming they earn the $1.00 they are guiding to this year and can get operating leverage they can grow earnings 30% next year (on 20% revenue growth), they'll do $1.30 next year. Also not too shabby. But you have a stock that is trading at (hope you are sitting down) 63x that 2008 number.

When they asked the CEO about the slowing order growth his response was he doesn't even think about orders just traffic. I don't think I've heard a CEO of a public Internet company utter those words since February 2000.

Net net, good company? Yes. Very good business model? Yes. Worth 63x next year's earnings? Not a chance.]]> http://seekingalpha.com/article/43780-here-s-hoping-for-a-u-s-concrete-inc-buyout?source=feed#comment-99778 99778 Thu, 25 Oct 2007 12:44:47 -0400 http://seekingalpha.com/article/51315-loopnet-s-3q-results-sizzle-past-estimates?source=feed#comment-99743 99743 Thu, 25 Oct 2007 08:19:33 -0400 http://seekingalpha.com/article/51315-loopnet-s-3q-results-sizzle-past-estimates?source=feed#comment-99742 99742 Thu, 25 Oct 2007 08:19:18 -0400 http://seekingalpha.com/article/43780-here-s-hoping-for-a-u-s-concrete-inc-buyout?source=feed#comment-93259 93259 Thu, 09 Aug 2007 12:19:01 -0400 http://seekingalpha.com/article/43780-here-s-hoping-for-a-u-s-concrete-inc-buyout?source=feed#comment-93236 93236 Thu, 09 Aug 2007 10:38:31 -0400 http://seekingalpha.com/article/43780-here-s-hoping-for-a-u-s-concrete-inc-buyout?source=feed#comment-93187 93187
All that said, the stock was up 16% today so I might be wrong (though I suspect that the other shoe is about to drop that a major hedge fund is in liquidation and was liquidating a number of long and short positions today regardless of price). Earnings will be interesting tomorrow.

Good luck.]]> Wed, 08 Aug 2007 19:31:10 -0400
All that said, the stock was up 16% today so I might be wrong (though I suspect that the other shoe is about to drop that a major hedge fund is in liquidation and was liquidating a number of long and short positions today regardless of price). Earnings will be interesting tomorrow.

Good luck.]]> http://seekingalpha.com/article/43780-here-s-hoping-for-a-u-s-concrete-inc-buyout?source=feed#comment-93107 93107
Besides, not sure how a buyout of this business would happen. Though it trades at only 7.5x EBITDA, RMIX is buying concrete producers for 4-5x EBITDA. There are not much in the way of synergies (by mgmt's own admission) so outside of arbitrage it is not clear what value they are creating.

Finally, to your point that a cement producer would want to buy a concrete mfr - I'm not really sure that is the case. Domestic cement mfrs enjoy very good pricing power given the shortage of domestic cement (and high cost of imports) in the US. Generally, cemenet mfrs do not have issue finding customers for their product so they have little need to forward integrate. Concrete producers are much more of a commodity who quite frankly are getting squeezed between the pricing power of the cement (+8% pricing) and aggregate (+12-14% pricing) makers (the combined cost of which which represent about 50% of revenues) and the the housing slump (about 50% of concrete is used for residential).]]> Tue, 07 Aug 2007 20:23:04 -0400
Besides, not sure how a buyout of this business would happen. Though it trades at only 7.5x EBITDA, RMIX is buying concrete producers for 4-5x EBITDA. There are not much in the way of synergies (by mgmt's own admission) so outside of arbitrage it is not clear what value they are creating.

Finally, to your point that a cement producer would want to buy a concrete mfr - I'm not really sure that is the case. Domestic cement mfrs enjoy very good pricing power given the shortage of domestic cement (and high cost of imports) in the US. Generally, cemenet mfrs do not have issue finding customers for their product so they have little need to forward integrate. Concrete producers are much more of a commodity who quite frankly are getting squeezed between the pricing power of the cement (+8% pricing) and aggregate (+12-14% pricing) makers (the combined cost of which which represent about 50% of revenues) and the the housing slump (about 50% of concrete is used for residential).]]> http://seekingalpha.com/article/35104-deltek-ipo-arriving-a-decade-late-to-the-erp-debutante-ball?source=feed#comment-85881 85881
I owned shares in the company back then. The company has a near monopoly among any project based supplier to the US gov't. Any service provider needs to do their billing in a very specific manner which bears little resemblance to private companies which creates a profitble little niche for Deltek. The market is too small for mainstream PSA guys that you mentioned to go after. Sounds like it may be trying to break out of that niche by going mainstream which is obviously a far more crowded market.]]> Thu, 10 May 2007 13:03:45 -0400
I owned shares in the company back then. The company has a near monopoly among any project based supplier to the US gov't. Any service provider needs to do their billing in a very specific manner which bears little resemblance to private companies which creates a profitble little niche for Deltek. The market is too small for mainstream PSA guys that you mentioned to go after. Sounds like it may be trying to break out of that niche by going mainstream which is obviously a far more crowded market.]]>