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Greg Porter

Greg Porter
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  • Clear Channel Outdoor Holdings: Time To Sell [View article]
    I think you have mixed up Clear Channel Outdoors Holdings (CCO) with its parent company. The parent company used to be called CC Media Holdings (CCMO), and it was CCMO that changed its name to iHeartMedia, not CCO. It was also iHeartMedia that sold $400 million of assets, not CCO.
    Jan 27, 2015. 01:53 PM | 1 Like Like |Link to Comment
  • Sabre Corp.: No Growth, Debt, And Possible Impairments [View article]
    I have no love for the Travelocity business. My point was that your contention that Sabre's revenue was falling was flawed because you did not take into account the change in the Travelocity business model. Travelocity has outsourced its operations to Expedia. They are no longer the merchant in the customer transaction, they just get a fee from Expedia. So, the revenue line drops, but all the expenses go away as well. Revenue for all of the other parts of the business are growing, albeit slowly.

    I still don't see how you conclude that Sabre is losing money. While I agree that Sabre adds back some charges that may not really be one-time, many of the charges clearly are either one-time or don't reflect real economic cost. At a minimum, for Q2 2014, I would add back:

    2.2MM of preferred stock dividends (since the preferred no longer exists) 23.9MM of amortization of intangibles (which related to the 2007 take private deal)
    30.6MM of costs associated with the debt refi
    21.6MM of management fees (the management fee goes away post IPO)

    Add all of the these back to the -13.1MM GAAP net loss, and Sabre is solidly profitable.

    I am not a fan of the business and I have no position. I use to work in the industry and I have seen Sabre up close. Your short position may work out for you, as the stock still seems expensive. But your thesis that the business is declining and unprofitable is just incorrect.
    Oct 25, 2014. 05:31 PM | Likes Like |Link to Comment
  • Sabre Corp.: No Growth, Debt, And Possible Impairments [View article]
    I am surprised that you didn't discuss the change in the Travelocity business model that explains all of the drop in revenues. Absent the change, revenues actually grew, albeit very slowly.

    In addition, it is surprising that you didn't discuss the many one time cost associated with the IPO which happened in the quarter (such as management fees that go away post IPO) or the big non-cash charges (such as intangible amortization and charges associated with refinancing the debt). Without these, the company is solidly profitable.
    Oct 24, 2014. 10:45 AM | Likes Like |Link to Comment
  • Molycorp: Anticipate S&P Upgrade Any Week Now, Will Shorts Get Cooked? [View article]
    Let's assume you are right, and S&P does upgrade. So what. Why would the shorts be cooked?

    MCP will still be massively cash flow negative. The most likely effect of the financing is to buy MCP time to work with its unsecured lenders to restructure its huge debt load. There would likely be little to nothing left for the current equity holders in a restructuring.

    A financing deal is generally a vote of confidence by the lender. Not here. Oaktree's debt is secured, they are at the front of the line, and the financing amount is relatively small in relation to MCP's enterprise value.

    Full disclosure - long OAK, no position in MCP.
    Oct 7, 2014. 09:37 AM | 2 Likes Like |Link to Comment
  • HCI Group: The Wizards Of Tampa, Part IV [View article]
    Does the recent announcement of another takeout of 69,000 additional policies affect your thesis?
    Oct 3, 2014. 10:09 AM | 2 Likes Like |Link to Comment
  • Quartet Merger Rights: 40% Upside For A Short-Term Event Driven Investment [View article]
    QTETR converts automatically, so technically the rights have already converted into the common even though the rights continue trading today.

    QTET common will start trading under the symbol PANL as soon as tomorrow.

    My experience in these sort of reorgs is that it often takes the back offices of the brokers as much as a week or more to catch up and realize that you own PANL now rather than QTETR

    I don't think you can read much of anything into the current spread between QTETR and QTET as there is almost no trading in QTET today. It is anyone's guess at what price PANL opens. At the current price, PANL looks pretty reasonably priced
    Oct 2, 2014. 01:13 PM | 2 Likes Like |Link to Comment
  • Cherokee Group: Brand Management ATM [View article]
    Nice writeup. A couple questions for you.

    You state that you expect double digit organic growth. What gives you confidence that they can grow at this rate? It appears that over the last couple of years, they have had almost no organic growth. They have grown internationally, but it has only offset declines in the US.

    You say you expect EBITDA margin expansion over time. However, Cherokee's recent investor presentation shows a very consistent EBITDA margin in the 50% range over time, even with the Tony Hawk and Liz Lange brand acquisitions. It appears to me that each new brand acquisition requires additional personnel to manage the brand and additional marketing spending. How did you arrive at the 60+% EBITDA margin target?

    In addition, from the most recent 10-Q, the Tony Hawk brand looks to be generating run-rate annual royalties of about $5 million. It looks to me like Cherokee paid closer to 4X royalties and closer to 7.5X EBITDA. It also appears to me that they paid an even higher multiple for the Liz Lange brand. If my numbers are right, then it looks like their returns on incremental capital invested back in the business is probably in the 10-15% range rather than 20-30%. Comments?
    Sep 23, 2014. 12:47 PM | Likes Like |Link to Comment
  • Turnaround At Hallmark Financial Services Could Drive 60% Upside [View article]
    I am surprised you didn't mention that HALL just brought in a new CEO from outside the company. Do you know anything about him or his prior underwriting record. It appears that all of the insider buying has been from the new CEO.
    Sep 17, 2014. 12:44 PM | Likes Like |Link to Comment
  • Glacier Bancorp: Pullback Not Justified After Impressive Results [View article]
    Another nice writeup. FWIW I agree with your conclusions. Glacier is a great bank. The stock price isn't outrageous, but it is hard to call it a bargain.
    Aug 25, 2014. 04:45 PM | Likes Like |Link to Comment
  • Northrim BanCorp: Making All The Right Moves That The Market Won't Be Able To Ignore For Much Longer [View article]
    Thanks for the update. NRIM is a terrific little bank. By my math, the latest acquisition could boost ROA by 15 bps. I am not sure there is another bank in the US with a similar ROA that is trading at less than 1.5X book.
    Aug 21, 2014. 12:37 PM | 1 Like Like |Link to Comment
  • It's Getting Harder To Pass On Popular [View article]
    I am sure there is a lot of potential upside with BPOP, but I can't get past the fact that the guy driving the bus is the same one who drove them into the ditch in the first place.

    Under Carrion, book value dropped 70%, and the stock price dropped 90%. That is a lot of value destroyed. How is this guy still CEO?
    Aug 14, 2014. 10:56 AM | Likes Like |Link to Comment
  • Heritage Insurance Holdings: It's Time To Ride The Risk Train Until It Falls Off The Tracks [View article]
    How would you compare Heritage with HCI Group?
    Jun 4, 2014. 03:21 PM | Likes Like |Link to Comment
  • J2 Global: Legacy Fax Business Obscures Growth Potential Of A Strategically Acquired Portfolio Of Businesses [View article]
    Your chart on sales growth is highly misleading. ALL revenue growth, both for the so-called "cloud services" and digital media is coming from acquisitions. JCOM made numerous acquisitions in the last 3 quarters of 2013 and in Q1 2014, all of which contributed revenues in Q1 2014 but which did not contribute to Q1 2013.

    I don't believe that the digital media segment has any organic growth at all. All revenue growth in Q1 appears to have come from the IGN, NetShelter and TechBargains acquisitions completed in 2013.
    May 22, 2014. 03:58 PM | Likes Like |Link to Comment
  • Catalysts Present For Northeast Community Bancorp's 2nd-Step Conversion Offering Attractive Risk-Adjusted Returns [View article]
    Is it really likely that the bank could do a second step transaction now with equity to assets well over 20%? If they completed a 2nd step now, equity to assets would be well over 30%.
    Apr 17, 2014. 07:32 PM | Likes Like |Link to Comment
  • Cambridge Bancorp: This 3.7% Yielder Demands Your Attention! [View article]
    Really nice writeup and a damn fine bank.

    I suspect that part of the reason for the low valuation is that fact that the bank doesn't file with the SEC and stock is traded OTC. I wonder if that might change as the bank continues to grow.
    Apr 17, 2014. 12:16 PM | 2 Likes Like |Link to Comment