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idaustin

idaustin
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  • Why Whole Foods Is A Sell Going Into Earnings [View article]
    I was being facetious. I have no idea if he/she gets paid for page views or not.
    Aug 8, 2014. 08:02 AM | Likes Like |Link to Comment
  • Why Whole Foods Is A Sell Going Into Earnings [View article]
    Amal. Notwithstanding the 50% decline from 2013 highs:

    Compound sales growth since 2004 = 17%
    Compound EBIT growth since 2004 = 16%
    Compound EBITDA growth since 2004 = 15%
    Close to zero debt (they could borrow to buy back shares or increase the dividend in order to return capital to shareholders)
    Avg EV/EBITDA at 2013 peak = 20x
    Current EV/EBITDA at $37.40 = 11.3x (which is less than Avg EV/EBITDA b/ween 2004 and 2012 of 13x)
    At current market price, ratio of avg compound share growth since 2004 to net income growth = .96 to 1, so the market is basically paying 1:1 for past growth.
    Compare this ratio to Kroger or Safeway.

    I'm not sure this a sell. I think WFM is ridiculously oversold, especially relative to KR which continues to make 52 week highs and is double WFM's market cap. Is it riskier to chase KR at 52 week highs or riskier to buy WFM at 52 week lows with some margin of safety in terms of relative valuation?
    Jul 24, 2014. 02:45 PM | 2 Likes Like |Link to Comment
  • Why Whole Foods Is A Sell Going Into Earnings [View article]
    He gets paid for blogging, why would he bother doing any DD? It's easier to state the obvious and get paid for page views rather than do any analysis.
    Jul 24, 2014. 02:19 PM | 2 Likes Like |Link to Comment
  • Icahn's stake in Talisman Energy is greeted with skepticism [View news story]
    @patent news, which is why they write...steady paying gig, no risk, no accountability. Sold.
    Oct 9, 2013. 08:15 AM | Likes Like |Link to Comment
  • Icahn's stake in Talisman Energy is greeted with skepticism [View news story]
    Skepticism how? Rallied from 10.5 to 12.8 pre-Icahn announcement. Anyone who bought the news either in the ah's or in the am got sold stock by the early movers from 10.5.

    #MSM interpretation of a lower close means nothing. Think Icahn built a 6% stake to flip his shares for a $2 profit? Whatever.
    Oct 8, 2013. 09:38 PM | Likes Like |Link to Comment
  • BlackBerry's 'Strategic Alternatives': There Is More Than Hope [View article]
    Excellent analysis. I doubt the DCF analysis has much merit though - too many unknowns. For sheer argument's sake, what about an analysis that attempts to value the company on a per BBM user basis? See attached article.

    http://bit.ly/1ehyXtx

    I personally think his "estimated" per BBM user value on a successful x-platform roll out is overly optimistic. If you take current # of BBM users at 60M, and use the low end of the range of published comparables of say $26 per user, you get $1.6B / 515 M shares o/s, or $3 per share.

    Assume patents are impaired by 50%, add your patents of $2.25B / 515 M shares o/s, or $4.37 per share.

    Add redundant assets of $6 per share (cash & securities)

    So at a minimum, you get $13.37 per share on this basis.

    Now, redundant assets may decrease in the event of activities relating to ongoing cash burn, a going private transaction (severance, termination of purchase commitments, etc.), etc.

    Chop the redundant assets in 1/2, my minimum value drops to $10.37.
    Sep 11, 2013. 11:08 AM | 1 Like Like |Link to Comment
  • Don't Be Afraid Of This Monster [View article]
    John, respectfully, the #s you've provided are inherently backwards looking, and I'd argue are irrelevant. None of the growth rates factor in the potential impact of a "potential" decline resulting from consumer gravitation away from the company's products due to health concerns. They report on the 18th I think, the report should be telling in terms of potential impact. The problem with a strict fundamental reliance on past growth rates is that they only show what happened in the past.

    Don't ignore price. Price is telling us that there is inherent uncertainty going forward by virtue of trading sideways to lower. If this were not the case, price would have rallied along with the rest of the market - there's no argument here, as price is truth.

    Perhaps the catalyst for a move up will be the next report? A strong push above $50 in advance of the report could signal uncertainty waning. Continued sideways to lower price in advance of the report could be a warning. Price will tell us all we need to know.
    Feb 6, 2013. 08:59 AM | Likes Like |Link to Comment
  • Don't Be Afraid Of This Monster [View article]
    $40 = butter once it gets there; bearish technicals negated on a push thru $50 obviously
    Feb 5, 2013. 10:34 AM | Likes Like |Link to Comment
  • Don't Be Afraid Of This Monster [View article]
    No analysis of technicals accompanying any argument here? Guys and gals, c'mon. What if $MNST is under distribution, not accumulation. Every bounce sold, lower highs, lower lows. http://scharts.co/WYbcvY
    If $45 breaks, next target $35 and fast...
    Feb 5, 2013. 09:10 AM | Likes Like |Link to Comment
  • 3 Stocks To Short In 2013 [View article]
    np - good luck!
    Jan 23, 2013. 04:40 PM | Likes Like |Link to Comment
  • 3 Stocks To Short In 2013 [View article]
    Have a look @ daily $RIMM - not sure if this link will work, but it's a quick chart showing longer term gaps. http://scharts.co/SD69AD

    Gap at $25/$30 never filled on the way down, gap @ $35 never filled, and gap @ $55/$50

    Now, let me clarify, just because gaps exist doesn't mean they'll get filled, but "if" $RIMM continues up (and it needs a short term breather to do some backing and filling here which would be healthy), then these are possible targets. It could drift lower here and fill some of the gaps @ $13 / $15 / $16, which would play nicely into a larger cup/handle pattern.

    By binomial bet, I'm referring to Chris' comment re: the fortunes of the company hinging on BB10. "If" participants en masse (including anal-ysts) share the same psychology that $RIMM's future is contingent mostly on the success of BB10, then participants are evaluating the company's fortunes on a purely binomial basis - heads BB10 succeeds, tails BB10 fails, and this in my opinion, may result in further strength "if" en masse psychology is wrong (which it usually is). There is some truth to the perception though - it's not all wrong, but the question is, is the BB10 launch a straight 50/50 bet for the company, or some other ratio not yet considered or discounted by the market?
    Jan 23, 2013. 04:06 PM | Likes Like |Link to Comment
  • 3 Stocks To Short In 2013 [View article]
    My thoughts on all three based on prelim analysis of technicals:

    PNRA - consolidating sideways since Sep/Oct 2011 after breakout to new highs. of $175 in early Oct. Risk range currently defined by $155 at the low to $168/$170 high. A move above $168/$170 will start the next move higher above $175. I'd be a buyer on a breakout above $170.

    RIMM - likely overbought going into BB10, but why short? Unfilled gaps at $28, then $35, then $50? Too many follow the binomial bet logic on this, but what if it's not a binomial bet?

    HGG - possible base being built between $6 and $8 since July (6 months now). 44% of float is short. Huge gap at $11.50. April $9's are $.35, April $10's are $.20. I'd be a seller of the April 8/7 put spread on this to finance the calls, for a net credit of -$.60, turn around and buy 3 April $10 calls @ $.20 for each put spread sold. My risk is that HGG breaks below $7 and I'm out -$.40. Risk = -$40. Reward on a gap fill up to say $10 = $1 per contract - $.20 premium = $.80 x 3 = $240. $240 : $40 = 6 :1

    A higher payoff trade? Sell the April 8/7 p's, buy the Feb $9 c's for .15. Can buy 4 Feb $9's for each put spread sold.

    Out of the 3, I see 3 bullish scenarios.

    Not without risk obviously across all 3 scenarios.
    Jan 21, 2013. 01:20 PM | Likes Like |Link to Comment
  • Diamond Foods Set To Rip Higher [View article]
    Ok all, forget ego and pride here. This is about making $.

    I actually disagree that it's a great risk reward set up. Why? Because you haven't defined risk. The risk if they get delisted is probably $20. You can't just discount the debt on the balance sheet in your analysis without taking into account the risk of things not turning out rosy. There's a reason the funds were loaned at 12%. Sales used to be $x so valuing an uncertain sales channel proves nothing, especially considering the procurement issues they've had.

    The reward I agree is probably $40 on a clean filing on time.

    Now, no individual participant (i.e. us shmucks) who is not an insider can ascribe a probability to either absolute scenario, but this is an exercise in mental masturbation really. Let's use a simple expectation model:

    E(X) that f/s are not filed and delisting occurs = 50%, or A

    E(X) that f/s are filed and no delisting occurs = 50%, or B

    Risk in dollars of A = -$20
    Risk in dollars of B = +$20

    E(X) of long or short here = -$20 x 50% + $20 x 50% = $0

    Therefore, not a great risk reward set up, it's got equal expectancy in either direction. Better opportunities in the market imvho.
    Sep 14, 2012. 05:23 PM | 1 Like Like |Link to Comment
  • The $100,000 Portfolio: A 65% Gain Year-to-Date [View article]
    Nothing wrong with a risky trade at all. By definition, all trades are risky. What's critical (to me) is 1) having a system, and 2) managing risk. Allocating $100K to AAPL in a $10m portfolio is a lot different than allocating $100K to AAPL in a $100K portfolio. Not sure what you mean by the rolling the dice comment, or the getting a rush comment. A viable trading system with a non-exponential equity curve is all about making $ on an ongoing basis. Whether the system resuls are achieved via trading in options, going long or going short, swing trading, day trading, etc., as long as the risk management is there, the systematized participant will always come out ahead of the participant without a system trading based on emotions (or instinct or whatever). Why? Simple, the systematized trader will be in the game longer. By nature, I'm risk averse. What you're suggesting - buying AAPL and forgetting about it - is tantamount to skydiving sans parachute. Good luck to you sir. You're going to need it.
    Sep 12, 2012. 04:46 PM | Likes Like |Link to Comment
  • The $100,000 Portfolio: A 65% Gain Year-to-Date [View article]
    Honestly, this experiment is an accident waiting to happen purely based on risk management. No trader in their right mind would allocate $100K to just three names the way you've suggested. All you need is one hiccup and you've blown yourself up.

    I've got no idea when in May you initiated the hypothetical AAPL positions, but let's give you the benefit of the doubt that you initiated all three trades after AAPL bottomed on May 18.

    So, you're basically long 100 AAPL, 300 synthetic AAPL via means of itm Oct $530 calls, and 7 otm $700 calls with one month to expiry.

    Total % of portfolio leveraged to AAPL based on market values published is 76%! You're actually controlling $267K of AAPL with your portfolio allocation.

    With LULU, assuming you initiated in May, you're long 500 shares somewhere between $80 and $67.50 (the range for May). Let's assume you're long from the average of the range, so $73.75. LULU went into a tailspin between early June and early August. On Aug 2, you were actually down $10,775 on your LULU trade and you've ridden it all the way back up. You were lucky. Post earnings beat, % of portfolio leveraged to LULU based on market values published is 23%!

    Your NFLX Jan 13 $47.50 puts, may not end up being a bad call, and from a risk management perspective, probably the trade with the most prudence exercised. You only allocated $800 or 1% of risk capital to this trade, and on a break of support at $55 it's likely going to breach $50, and continue through $47.50. The $800 has a good chance of doubling or tripling on a break of support.

    The trades put on in the article in no way appear to have the characteristics a sustainable trading system. If you graphed the equity curve attributable to these trades you'd have an exponential curve on the way up, but as I mentioned, due to the concentration of risk, all you need is for one hiccup in one of the names and you'll take a huge hit to the portfolio.
    Sep 11, 2012. 09:09 AM | 1 Like Like |Link to Comment
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