Spekulatius

AMA.AX announced horrible results today. Out at a 30% loss today after just a couple of days. Ouch, there goes the compounder. fortunately this was a small position, as I wanted to wait to buy more until they release results. This one is in the penalty box.

I think health related is the most likely possibility. I first thought they the board may have canned him, but I think this is unlikely, but who knows? In any case, Iger has masterfully created a narrative for DIS that has helped it trade at a premium valuation roughly twice as high than peers. I think some of this value premium may deflate. It’s partly justified by having better assets, but I think the narrative created by Iger was a big part of it.

It’s a story stock. Numbers don’t matter unless the narrative changes.

Nice to see Geoff getting his own fund I think they had managed accounts before the fund start, so it’s difficult to give actual returns, as they differ across accounts. Their Podcast series is pretty good and his partner Andrew Kuhn since 2 years ago is a marketing machine. I think it’s an example great team synergy. I've heard a lot about him but don't think I've actually seen his returns. He's been around for a while but does anyone know his performance numbers? +1 I know one of his top ideas (Nekkar ASA) blew up recently. FWIW, Nekkar (an equity stub after a merger) was supposed to be a net net, but then it wasn’t, after liabilities (from the merger) showed up. I also think their investment in PRKA at a significant premium to market is a headscratcher. I also wish them well and enjoy they podcast, which is highly recommended.

Added some ODET.PA today. Stock was down almost 8% while BOL.PA is down 6.5%. I have mo idea why both are getting hit thwt hard today. I managed to buy some at the lowest print of the day, below my ask. Wild market.... Also added some odds and ends (VIAC, CCU and a few others.)

Buffet is waiting for a fat pitch. If the stock trades at 80% of fair value and he buy back 10% of the stock, he moved the fair value by 2% - not a big deal really. If the stock goes to 50% of fair value and he can buy back 20% of the outstanding shares now that’s a different story. I think Buffet regarding buying back his own shares the same way than buying anything else ˋ- a 20% undervaluation is just ‘meh’ and doesn’t really interest him. He wants a fat pitch and is willing to wait.

I enjoyed the Motley Fool Podcast with Ben Hunter (Epsilon theory). They discussed a bunch of topics, including the importance for the CEO to generate narrative, stock buybacks as well as a bunch of other things. https://podcasts.apple.com/us/podcast/industry-focus/id717428711?i=1000466372547 I think especially his observation that narratives seem to be more important than fundamentals nowadays is an interesting factoid that has occasional been touched here.

Hmm, another buyout another problem. Price for FOPE SPA seems a bit low at nary a premium. I own a few shares recently acquired at 8.4 Euros. It seems like aninvestor has acquired shares from the controlling family for 9.25 Euro and now wants to tender for shares from minority shareholder for the same price. I wonder if I should hold out for more. knowing this is Italy, I shouldn’t get my hopes too high I guess. This is a nice business I think - high end artisan jewelers sold in their own stores., worth 9x EV/EBIT? Where is Arnault? width=600http://i.imgur.com/nemNQnJ.png]http://i.imgur.com/nemNQnJ.png[/img]

I am just glad these guys weren’t put in charge of writing the Bible. An investors letter with 128 pages! Gheez.

The annual letter is shorter and less imaginative than former ones. No doubt, both Charlie and Warren are slowing down a bit. While the economy is performing well, manufacturing and railroads are not exactly performing that great right now and all things considered, the performance of their operating business is decent, but it’s clear that both Lubrizol and PCP weren’t great buys. Their Insurance business is performing well. Buying back 1% of their shares is better than nothing. Things could be a whole lot worse.

I saw a VIC report from 2002 that mentions the possibility of a takeover by VNO. You can wait a long time. VNO is very value conscious, and while I am not aware of anything egregious I think they may just pounce when an opportunity represents itself to buy a discounted asset at an opportune time for them. Why not just own VNO, which trades at a discount to NAV as well and align yourself with management? That would be my inclination.

Hi, Spek. Good to see you here. Love the commentary from all the participants, particularly on the SOTP angle. Two thoughts: I recall during the T/TWX deal, there was much commentary about HBO and how much of TWX’s value it purportedly represented. Is/should Showtime be considered a similar prize asset inside VIAC? Doesn’t/shouldn’t it have a similar optionality for VIAC as HBO was thought to have for TWX (eg. sell, spin, partner, etc)? Also, on a different note, recognizing the Redstone control, any thought on opting for voting over non-voting shares? Ugadawg, Good to see you here as well. 1) I do not think think they Showtime is even close to being of similar quality than HBO. Their programming simply doesn’t have the hit shows they HBO has (Game of Thrones). I don’t have a strong opinion whether Showtime could be better off/ worth more with a different company 2) There is in my opinion no point paying more for voting shares, when there is a controlling shareholder (like Redstone in this case ) having majority control. In the end, a proxy contest isn’t really possible as Shari Redstone would call the shots anyways, so we just ride along. That said, I do think that Sharis main motivation is preserving value, not being a media mogul. I don’t think she want to be in the limelight.

House of brands sounds bad, but the idea to cluster by content rather than by distribution channels might work. Instead of Paramount, CBS TV, Nickelodeon, Break the company Into theme cluster like the CBS crime/ cop stuff+Jack Ryan, Star Trek, the Nickelodeon stuff (Spongebob, Paw Patrol) and then enrich with licensing, theme parks (with partners) and who knows what. Or just become a content arms dealer and license everything to the best bidder non exclusively and also offer on CBS +. This company just needs a jolt and creativity. many ways to make this work, given the assets they can work with.

The Problem with ALX is that VNO controls this - they own 33% and I think Roth (VNO’s CEO) owns more indirectly. If they buy this, it’s very likely and opportunistic take under.

I have stayed in their properties from time and time (when relocating) and they are no frills (2*) but OK. pretty much anything else for the same price and in similar locations is pretty much guaranteed to be a dump. they are typically located in suburbs or mid sized towns, near industrial/ multiuse areas cheaper real estate near highways. Cookie cutter building that tend to look the same. It’s a bit like self storage in terms of real estate. Reading back the IPO prospectus, it seems like the rock was overvalued and over leveraged (debt ~6x EBITDA) on the back of strong trends (Revpar, margins etc) when the economy and the hotel business bounced back from the recession. Turn growth stalled and multiples compressed, despite the company reducing leverage (to about 4x EBITDA - still high!) and buying back some stock with proceeds from asset sales. I think per share it’s worth more now than in 2014 post IPO, based on eyeballing the numbers, but the market multiple is significantly lower. Maybe it goes full circle private equity again - it gets bought by WH, I don’t know. It certainly looks very undervalued as is, even discounting current weak operating trends.

Well this happens when management is playing one game (increase NAV) while the analysts expecting another (increase AFFO). VNO is a developer and owner, similar to HHC, so if you own it, you do need to look at both. I’d tend to side with management here, but I do agree that just pointing out the NAV May not help the stock all they much. The only way that may do something is unlock the value via opportunistic sales and stock purchases, which over time will keep compounding both. SLG has done some of this. VNO has Jv’s some retail and billboard assets in a creative Deal, but they haven’t bought back any stock. I like it, but I own already enough undervalued NYC real estate via stock as is.

Q4 results. 11% revenue growth, a lot of Capex, still expanding network and homes passed. YOY comps look a bit better. http://inversionistas.megacable.com.mx/en/reportesEN_pdf/4Q19.pdf I added a few more shares yesterday towards the close.

Clarkstreetvalue had a writeup about this stock a while ago and it has become cheaper - too cheap in mine opinion. I recenroy established a position https://clarkstreetvalue.blogspot.com/2019/08/extended-stay-america-rejects-split-up.html Results have been ho hum recently in terms of ARPU and costs, like with the rest of the hotel industry, but DTAY is cheaper than most. What distinguished STAY is that they are do concentrated on the low end /extended stay Hotel with limited service and that that also own a small but growing franchising business. With the latter they build the hotels, but resell them, but keep them under their franchise umbrella, similar to what pure plays like MAR or IHG are doing. it’s not a major part of the rig business yet, but should be growing over time. Since the stock sells at <9x EBITDA, selling hotel at 15x EBITDA (their average axis was 15-16x) while keeping the franchising should add quite a bit of value over time. A ~7% dividend yield doesn’t hurt either. Anyways, that the idea. Hotel business are inherently sensitive to the economy so a downturn could hurt. That said, a low end Hotel business most likely will hurt less than those at the a high end. I like it good enough for a position and added to my shares today.

Good catch. This was in 2001 or 19 years ago. It is likely that his thinking has evolved since then.

Schrodingers software helps with drug discovery, but I don’t think it has any impact on the time consuming clinical trials Phase I-3 where the real money is spent. CRISP at this point is ay an early stage and we do not know how effective that approach will be. Any treatment likely is at least 5 years off. It is likely that there will be opportunities where the hype cools off and those type of stocks can be acquired way cheaper, but who knows.

Well it’s worthwhile to sign up, even if you can’t ascend into the pantheon of Immortals by having a writeup accepted. For us plebs, the regular membership still gives access to all writeup and comments, albeit with a delay of 60 days or so. I found it to be a good resource.

Buyer today as well. I am surprised it plunged as low as it did, as the issues were well known and expected. I read the CC transcript and CEO Bakish seems like a no nonsense kind of guy. Other players in thisdpace have issues too ( Disney - ESPN) yet trade at vastly higher valuations. This stock is cheap any way I look at it (SOP, EV/EBITDA). I agree it could become a value trap if management doesn’t execute, but then I would Redstone to step in and force some changes. I actually think this would be a company for BRK to acquire a stake. They have been involved in media properties before (Capital Cities).

I listened to a podcast a while ago, but forgot the source. The risk is that if you buy into a dumpy Park, the tenants may just leave and leave dumpy trailers behind that may be costly to remove and discard. Tenant selection is always critical when renting, but the further down in quality and creditworthiness you go, the more important it gets. A good friend of ours also rents lower end and section 8 housing in a town nearby at double digit cap rates. he has done this for a long time and tried lots of different things (pool halls etc) and has good results with south East Asian immigrants (Vietnamese, Cambodia) which have sort of a local community there and while they often have no credit, they have cash. He does put a lot of work into this, so it is really a second job for him and after doing this a long time, he is scaling back. I wanted to pick his brain a bit more, but I think a lot of his ‘excess’ returns just come from hard work and somewhat painfully gained experience.

End of the saga - I sold my shares at 128.5 Euro (exactly the tender price) as they started trading again and there was a huge bid out there, presumable from the broker house administering the tender. Whew - problem solved! Now I need to cancel my transfer request with Fidelity (the shares were still in my IB account) Thanks to everyone who helped out here.

Shorting momentum trash is a good way to get over by a dump truck lately.