Seeking Alpha


Send Message
View as an RSS Feed
View coffeenote's Comments BY TICKER:
Latest  |  Highest rated
  • Update: Coffee Holding Earnings [View article]
    It could if they lose sales to European-based competitors. There are a ton of big coffee traders in Switzerland. The next generation of GMCR coffee buyers are likely to come from that world. I don't think jva can sustain their market share from an ocean away and particularly as GMCR evolves to a European culture.
    Feb 20, 2015. 12:13 PM | Likes Like |Link to Comment
  • Update: Coffee Holding Earnings [View article]
    I personally wouldn't trade on a change in personality attributes, they are rare things. You are implying that their opaqueness is concealing 25% of true value. That just doesn't make sense to me, why would they conceal good news? My suspicious nature is that people are opaque when they have something to hide.
    Feb 20, 2015. 12:08 PM | Likes Like |Link to Comment
  • Update: Coffee Holding Earnings [View article]
    A good result indeed for JVA but hard to really know what is happening there. Plus the coffee market has continued its volatile ways since Oct 31 (which seems so long ago) and any long futures position could be further in the hole.

    Long hedges tend to support their roasting business I should think and ending the period above market is a potentially dangerous situation (depending on what competitors are doing) as there is risk to margins if industry prices by roasters are rolled back.

    Their wholesale (green trading) business tends to have short hedges which really are true hedges and tends to lock in wholesale margins. (This is the business that sells to Keurig Green Mountain.)

    We can't tell what those 60 long futures contracts are (roasting biz longs net of trading biz short hedges?) and whether or not they are good, bad or indifferent. (Just because they are off the market, could be offset by high priced sales to say lGreen Mountain.) But lacking that kind of visibility into the performance of those two vastly different businesses, I tend to steer clear of JVA stock recognizing that I could be missing an opportunity.

    Comparison to Kraft PE is not really in my view valid because so much of JVA's business is in green trading which is very low margin/low return in comparison to CPG....Kraft net income for 2014 was 15% of revenue, while JVA was about 4.5%. Again we don't know how big is green trading as a percent of the total because they don't tell us but it's at least 60% because that's how big Green Mountain is as a percent of their total sales.

    By the way Green Mountain recently moved their coffee buying operation to Switzerland. I think it will be a challenge for JVA to maintain as much business into them as the European coffee traders will be lining up to sell them coffee. Call it a risk, anyway.
    Jan 28, 2015. 05:24 PM | 3 Likes Like |Link to Comment
  • For The First Time, I Bought A Stock That Doesn't Pay A Dividend - Here's Why [View article]
    Nice job.

    One thing you have to watch is the consumption of 1/3 of their cash flow into capital investment. Presumably this is to open new stores. Of course if they continue astronomical same store sales growth...i never heard of 24%...then you're good.

    Revenue growth from existing stores = good. Revenue growth from opening new stores = expensive way to grow revenue!

    When Starbucks lost their way, and opened too many stores too close together, they way overspent on capital and lost the same store sales growth due to maturation of local markets and cannibalization of existing stores. The stock crashed before it later roared back on a much more disciplined investment strategy.
    Oct 9, 2014. 09:53 AM | Likes Like |Link to Comment
  • Tim Hortons And Burger King Deal [View article]
    THI success has always been due to a carefully controlled appetite for growth, not getting ahead of their operations' capability. Putting the franchisees ahead of anything else. Tapping into National pride in this great business success story; iconic brand name after the late Tim Horton, former NHL star. Gives back generously to the local communities.

    Very hard to replicate this abroad and for investors who paid a premium. Company did not fare well even in northern US to my knowledge. I think I would be reluctant to invest at these levels.
    Aug 26, 2014. 07:49 AM | Likes Like |Link to Comment
  • Post Holdings: Great 'Cereal' Acquirer Meaningfully Undervalued [View article]
    Those acquisitions may yet work out but the stock just looks expensive given today's cash flow...i make economic value 3.3 bill assuming 2.3 bill debt less .8 bill cash; and trailing 12 month operating cash flow 71 million. 46x. And that cereal equipment doesn't run forever without some reinvestment, at least in my experience. Stiritz has a good track record but at age 79 there is some doubt. If he had left yesterday would you still be recommending Post at these levels? Good luck to you longs; i will pass.
    Jul 24, 2014. 08:03 AM | Likes Like |Link to Comment
  • Premarket Gainers / Losers [View news story]
    Careful. I had to learn the hard way taking same attitude years ago on pphm. "Losers average losers."
    Mar 28, 2014. 07:14 AM | Likes Like |Link to Comment
  • Democrats push forward with call for higher minimum wage [View news story]
    The view on this tends like all else along ideological lines. The right sees it as counterproductive govt interference. Same view about mandatory health care. The left sees it as corporate welfare where unwillingness of some employers to pay a living wage (or health care for that matter) is funded by others in terms of our various safety net programs. But it must be said that relatively few workers in the grand scheme of things are making min wage so that the glorious or devastating impact of increasing the min wage is probably overstated by both sides. This will neither kill us nor solve all of our problems.
    Mar 5, 2014. 10:39 AM | 2 Likes Like |Link to Comment
  • Kraft Yields 3.92% And I'm Buying It [View article]
    Hard to argue with 4% dividend vs .1% risk free rate! But why is it i get the feeling that the top of the stock market will occur when the last guy shrugs his shoulders and finally throws his remaining cash into the blue chip dividend payers like KFT, PG, JNJ etc.

    I like your ROE assessment but i think to be fair you have to consider the leverage in the equation if comparing to others.

    With $10 B in long term debt, I make the economic value to free cash flow ratio (trailing) to be 26x....quite high considering analysts (per yahoo) project 6-7% growth. So love the dividend but beware the price risk which can eat up that dividend in a hurry.
    Dec 10, 2013. 12:58 PM | Likes Like |Link to Comment
  • Coffee prices at 5-year low [View news story]
    Not good news. Prices tend to get more competitive at retail and the finding top qualities will become more difficult. In short run yes a minor plus. This category was built on quality. I don't know anybody in the industry happy with 1.03 market.
    Nov 8, 2013. 08:12 PM | Likes Like |Link to Comment
  • 2007 Revisited: Where To Invest In A Late-Stage Bull Market? [View article]
    Thanks Value Doc for some reason didn't see notification of your thoughtful response. Not sure I totally agree with your distinction between maintenance and growth capex, I guess in the end it comes down to how good is that growth capex, what is the return. This in fact was the early warning signal on Starbucks some years ago, their "growth" capex (to build a 4th store on a corner where they only had 3 other stores) proved to be anything but growth. But later on they came roaring back with a more disciplined approach. So its all about nuance, and management capability as well as the numbers.
    Oct 23, 2013. 12:17 PM | Likes Like |Link to Comment
  • Another Reason Why Dividend Growth Investors Like Price Pullbacks [View article]
    Had the exact same reaction as you Bruce. Better yet would be if the stock crawled along at no change for 9-11/12 years then shot up to the end price end the last month. How bout them returns?

    Seriously this article illustrates dollar cost averaging, a very useful concept for folks not familiar with it.

    The problem is always that if a stock you buy goes down (more than normal noise) why would you believe it will end up higher in the long turn? The market is saying that your assumptions may have been wrong. To quote Paul Tudor Jones, "Losers Average Losers." After the fact is easy to see, but in the heat of battle, do you dump your losers or double down. PTJ suggests that only losers do the latter.....
    Oct 23, 2013. 11:59 AM | Likes Like |Link to Comment
  • Barrett Business Services: California Supports Growth [View article]
    Would be curious to know how it is that cash flow (driven by working capital) way outstrips earnings most quarters and wonder if it has to do with collection of WC insurance or such that will continue to outstrip outflows as long as revenue continues to grow. Incredible Economic Value to Free Cash Flow multiple is one reason I'm in this stock but I might exit on signs that cash flow relative to earnings is about to reverse (such as flattening revenue if old liabilities come home to roost and there's not enough new cash flowing in to offset)
    Sep 13, 2013. 04:10 PM | Likes Like |Link to Comment
  • 2007 Revisited: Where To Invest In A Late-Stage Bull Market? [View article]
    I'd like to think these are good investments but I don't get it. EPD has market cap $54 B plus another $16B long term debt and free cash flow after capital investment is basically zero. Seems like a lot to pay for no return, doesn't it? KMP has $36B market cap plus 19B long term debt (not to mention negative working capital) and does have some positive free cash flow about $1.4 B past 12 months but that's an extremely pricey enterprise value to FCF ratio of close to 40x. It looks like they finance the dividend by selling stock and borrowing money. Oil prices are already high, this must impact how affordable their products are for their customers (and if your view is global slowdown, which way will that send oil?). What am I missing here?
    Aug 21, 2013. 10:33 PM | Likes Like |Link to Comment
  • Green Mountain Coffee: Answers To All Investors' Questions [View article]
    A wise man once told me never to trade another person's trading scam as you are dependent on that person's (unknowable) actions. In this case, we don't even know who's scam it is...either Einhorn's or the company's. So I will not even consider GMCR until the SEC finishes its work. Yes I could be missing the opportunity of a lifetime.

    BTW did you know that you can buy an insert into the Keurig machine and fill it with any ground coffee you like? K-Cups not needed at all...$14.66 at last I looked. No that's not me selling it!!
    Nov 28, 2011. 02:31 PM | 1 Like Like |Link to Comment