Larry

Just finished the transcript. Gleason seems to be very confident with their real estate loans: From SA transcript: https://seekingalpha.com/article/4061815-bank-ozarks-ozrk-ceo-george-gleason-q1-2017-results-earnings-call-transcript?part=single

Q1 results out.

Just jumping in here. I dont know why we are talking so much about their defence business, some shorts are even speculating that this would sink the company. Last time I checked commercial aftermarket still makes almost 40% of their revenue and I bet it's much higher % of their EBITDA. That segment has always been the most important reason for me to be invested in Transdigm and I haven't seen any reason this story would have changed somehow.

Very strong quarter. They've reduced the debt nicely during the year that they took to fund Robertson acquisition a year ago. They will probably do 5/4 split again like they have done before. Wondering why dont they just do 2/1 split so they wouldn't have to do this every couple of years. Also I dont really get it why do they talk about stock dividends, they make it sound like they are returning money to shareholders when they aren't. Other than that a lot to like about this company.

This is an interesting pick, thanks for the write up. I did some research on the company over the weekend and went through some of the recent conference calls and presentations. If they can keep up the cash flow and continue to pay down debt and repurchase some common this could do well. Just couple of points: Whats the difference between EBITDA and Project Adjusted EBITDA, for example I got 30,5M of EBITDA from gurufocus for Q3 but on their call they presented Project Adjusted EBITDA which was 51,3M. Im sorry if the reconciliation is somewhere but I went through their 2015 annual report and couldn't find whats the difference. The CEO seems decent, talks a lot about capital allocation. Also he says that they are operating in a cyclical industry. I guess he specifically refers to power prices being volatile? I think the ultimate demand for electricity is quite stable. We have been experiencing very low spot rates here in Scandinavia for a few years too but I guess that's just a coincidence..

Book value increased 17% to $49,33, so its still trading a little bit below book. They have been quite smart in terms of capital allocation, selling old planes with gains and buying back shares below book value. They bought back ~12% of shares outstanding per their Q4 presentation. Wondering what's the best way to value a business like this. AER has averaged 15% ROE during the past decade. There's been fair amount of discussion related to airline companies as Berkshire bought some lately. Wouldn't you rather own aircraft leasing business which basically has cash flows contracted for next several years with decent returns on equity as demonstrated in past? Just curious. And yes they use fair amount of leverage though.

I currently hold OZRK and it has been a great ride. No doubt that real estate lending has been a great growth driver. Muddy Waters did a short piece on OZRK in last May which pressed the stock price. However insiders bought quite heavily and Dan Thomas who runs their real estate lending group bought about $200k of stock. Those who say that their lending is aggressive, how would you answer to the fact that their net-charge-off ratios are significantly below industry average (http://ir.bankozarks.com/file/1018441/Index?KeyFile=1001219387 take a look at page 9). So it seems like they're still looking heavily after asset quality while no doubt growing their loan book aggressively. I'm not as good as some here with banks so that's why I'm asking. The stock is definitely not cheap especially after the run-up after election. However I'm quite comfortable with my position. CEO and chairman George Gleason who has been running the bank since 1979 still holds significant amount of stock. Btw if anyone is further interested I would recommend reading their earnings transcripts, they give quite good color on their thinking.

They repurchased ~1,2% of the company in just couple of weeks, looks like after the Citron short report. Their track record in repurchasing shares during dips has been great. Listening to the call right now.

I havent paid much attention to this company lately, but took a look at their results. Revenue dropped 307M (from 2,787M to 2480M Y/Y). 227M of that 307M was due to their derm business. B&L seems to be doing alright. EBITDA is dropping more though, I guess derm was really high margin business (Jublia, Philidor..) Interesting to see if they're going to sell Salix soon, or something else.

Yea it seems to me that while we're still having low rates they intend to keep leverage at the levels we've been for the past years by paying more special dividends. There's probably an updated version of that graph in Septembers investor presentation. What I probably meant was that if after paying the dividend they had a billion dollar opportunity (like DDC) in front of them, lets say in December, I'd guess they would have hard time getting it done.

You're right. I probably meant like a few months from now because I recall Nick saying they have a good m&a pipeline back in conference call or analyst day. But thats true they will delever quickly.

Ok thanks so it was there, they just didn't make it public in the press release. @Liberty yes thats the press release I looked back then.

I guess they had a pretty good m&a pipeline but only Young & Franklin closed so now they're (most likely) paying out this dividend (~$20-$27 per share). If my math is not totally off, this would take their net debt/EBITDA quite high, around 6.7x (?) post dividend. I quickly put together some numbers, I just used the midpoint for dividend ($1.3B). Correct me if I'm wrong there. So they are not able to do acquisitions at least for a while after this, probably tells something about the m&a pipeline right now. So management is really keeping leverage high while debt is cheap and rates haven't risen. Stock is up ~25% YTD, wish I didn't sell down some of my position to buy something else while it was trading at 225 earlier this year. So quiet lately here, anyone here still owning this and what do you think about the probable special dividend?

Yea and I just dont get it that he took so much risk with Chesapeake and even took margin loan just to buy more CHK stock.. Reading that part kind of reminded me of Mike Pearson of Valeant who also borrowed against his VRX holdings even though he didn't use the proceeds to buy more stock I guess.

Finished this book today. I'm not familiar with energy sector at all and have never invested in oil/gas companies so reading this book gave me some very good insight. I got the same feeling as well that these guys are pretty much gamblers and there is a significant risk of these companies getting bust. I especially enjoyed the parts about Aubrey McClendon and Tom Ward, as I didn't know anything about them before this book. Although reading this book confirmed me that investing in O&G companies isn't my thing, it will be interesting to see what happens with some of the companies portrayed in this book going forward.