Gregmal

I'm somewhat new to this company, but can anyone provide a valid reason why the company will not repurchase shares? I've always found that managers love talking about how great the company is, and how cheap it is, but unless they are repurchasing shares and actively buying stock themselves, it's typically all salesman bullshit. Is there any metric they've provided that can demonstrate significantly better risk adjusted returns via their current capital allocation strategy?

It is my understanding that MSG intends to spin off part of the company which includes it's Esports franchise.

This is true for a lot of companies. Unfortunately management interests carry massive dividends in the form of salary and if there are time vested stock options/grants, they get paid to drag things out and lower your ROI. I have spent the past several years watching one of my best "on paper" investments underperform greatly because management rather invest in retail and office properties at 5-6% cap rates than repurchase stock at 30-50% below the conservative estimates of NAV. When they do buyback stock it's negligible amounts never exceeding maybe 2-2.5% of shares outstanding(on an annualized basis!) and then they trumpet how aggressive the buyback program is. Bottom line, with most management teams, they get paid to tell stories and make you wait.

This will just cause people to read way too much into the info when they do get it. Would imagine much more significant price moves. I would most likely never invest in a turn around story or smallerish company with large customer concentration again either. Bad idea.

While I'm certainly rooting for this to work out due to it's connection to many of the folks here, I have a hard time seeing how this isn't going to end up a 0 or pretty darn close to one.

I still like the auto's, with a preference towards GM, but at some point(like with FCAU) you either see the brilliance break through, or the incompetence rise to the surface. Bottom line, when you are trading at 5x for several years and your share price has gone nowhere, you are doing something wrong, most likely on the capital allocation front. Everyone highlights all of GM's investing in the future, and that's great, but there's also been a solid argument made that they are spending like crazy on all this during the good times, without much reward for shareholders, and should the cycle turn, there is a good chance we'll see that they've just pissed their money away. Hopefully this does not end up the way it has for many other companies who follow this path. IE Do it their way and piss away money on what they want to do, finally get enough pushback from investors to change their ways but unfortunately this is typically after SOOO much underperformance that the "cycle" is near a turning point, and then to appease neglected investors the company starts buying back stock at exactly the wrong time. Hopefully this isn't the case.

Ford = Dumpsterfire FCAU=Jesus just died GM= Barra and the board are still convinced they've done a great job TM=Tariffs In all seriousness, I agree they are undervalued. That said, automakers just naturally seem to have terrible capital allocators running them(the exception being Machionne). I'm convinced Buffett's next whale will be an automaker.

Thanks for sharing this interesting and relatively low liquidity idea. After the first dive, there is a lot to like about this opportunity. The positives: -growing market with solid "fundamentals" -well positioned as a Tier 2 player to grow profitably (cross-selling and new products) -structure and size of company makes it relatively neglected -with the new CEO, operating and financial "story" has been on the spot -remarkably, even if quite early in the growth phase, the company is profitable and significantly cashflow positive -high level of NOLs The negatives: -operative moat is only moderate especially for the consumables and services -moat that is projected has a lot to do with the management capacity to carry out their financial strategy -acquisition mistake or surprise (selection and/or integration) may really hurt especially in an unfavorable debt/cash position Valuation: -challenging -first assume low acquisition activity and continued operational success -I try to project revenues in 5 years (double from now) and take a 25% EBITDA margin. Using both targets (multiple as an acquisition candidate and on ongoing operations) and discounting at 15%, I get close to present market value. -when adding the risk and reward associated with the planned acquisition strategy, the outcome could be MUCH better and also MUCH worse. -need to do more work on this to assess competitive landscape (Cooper Surgical, which I looked at years ago and Vitrolife) Note: Right now, a leap of faith is required as it is conceptually difficult to justify the ability to buy entities at 1,5 to 2x revenues, turn around and sell the same entities at 5x revenues or more. For instance, I understand that recently (2016) Vitrolife bought two German operations who had growing and profitable laser equipment units at 1,5x revenues. For interest, here are some references for the customer and industry perspectives: https://www.reproductivefacts.org/globalassets/rf/news-and-publications/bookletsfact-sheets/english-fact-sheets-and-info-booklets/art.pdf http://healthland.time.com/2013/05/30/frontiers-of-fertility/ https://www.harriswilliams.com/sites/default/files/content/fertility_industry_overview_-_2015.05.19_v10.pdf Good stuff. I will point out that the two laser businesses purchased by Vitrolife are typically considered low quality businesses. In fact, this is essentially what Hamilton Thorne was, prior to David Wolf, and how they generated NOL's. The high margin recurring consumable and service revenue, that is the 5-7x stuff. From what I've seen, laser biz goes from 1-2x.

I think this is obvious BS. They think they can get higher rent? These guys are incompetent IMO Huh? They aren't even running the building, SL Green and RXR are. It's not a higher rent it's repurposing it and splitting it up amongst different tenants. And this tennant and their price/sf was known when the building was sold last year. You don't think SL Green and RXR Reality did their due diligence first? I'm sure it was known when they sold. I'd imagine it at least played a part in why this didn't get a great deal of interest and had to be put on hold for 4 years. These guys have not earned their paychecks, and IMO NYRT is basically just a gamble on the NY RE market at this point. Saying it was their "goal" to renegotiate this is like Trump pulling WH invitations after teams say they won't go. I guess you misunderstood me. Not a goal, but it was in the business plan many many months ago. Indeed I did. My bad. Just don't think too highly of these guys. They've screwed this thing up so bad its unbelievable. Basically air balled a layup attempt. The best investment decision I made last year was passing on this.

I think this is obvious BS. They think they can get higher rent? These guys are incompetent IMO Huh? They aren't even running the building, SL Green and RXR are. It's not a higher rent it's repurposing it and splitting it up amongst different tenants. And this tennant and their price/sf was known when the building was sold last year. You don't think SL Green and RXR Reality did their due diligence first? I'm sure it was known when they sold. I'd imagine it at least played a part in why this didn't get a great deal of interest and had to be put on hold for 4 years. These guys have not earned their paychecks, and IMO NYRT is basically just a gamble on the NY RE market at this point. Saying it was their "goal" to renegotiate this is like Trump pulling WH invitations after teams say they won't go.

I think this is obvious BS. They think they can get higher rent? These guys are incompetent IMO

I think this kind of discussion is actually quite helpful. Investing is a continuous live and learn experiment with no definitive answer either way. One thing I'd add is that things did look very good. Which just further made the active selling a red flag to me. I will admit, if anything learned/reinforced, it is that adding the element of untrustworthy characters to any equation adds a huge and burdensome wrinkle to things.

Perhaps my knowledge of the company worked against me. I'm not averse to price swings. Stocks like CAB, BRCD, heck even NXP were God's gift to guys like us. I'm fine going to dirty places to get returns others just don't bother with. But one of my rules for self preservation in doing so is to move quick when something doesn't feel right. Feel right is obviously debatable and different to everyone; part of what's hard to put into words. I wouldnt expect a straight line up but given the discount I also wouldn't expect 10% down swings. Pattern recognition is an indicator I use often and this one fit a pattern that raised red flags for me. I mean you could blindly just hold through everything, but then you essentially force yourself to become a bag holder if you play the game enough. I think GNW is a good example. Look at all the crap that went on there and how long it dragged out. Anyone holding from near $5 down to the 2's wasn't doing so because they were smart. They were hoping for a hail Mary. They got it. But it would have been easier just to pull the plug early on and put the capital to better use elsewhere. Generally the things you describe are the avenues you take to get the extra returns in stuff like this. Maybe just personal preference but typically when I'm no longer comfortable with an investment I get rid of it. Just not worth the headache. Look at RMGN. It's not even entirely about a deal break, but all sorts of holds up and going down some rabbit hole where you needs to dedicate an unproportionate amount of time and resources. I save that stuff for the core, higher quality parts of the portfolio. Here I could just be the contrarian indicator. Always possible. Rather live to fight another day than hold on and potentially end up with a company I believe to be near worthless on a standalone basis. Given I started the thread I felt compelled to let everyone know I'm no longer in it and the reasoning why as best I could.

How do you arrive at immediately 'at least' $1.85? I see 116m diluted shares, a small net debt position so that's around $215m EV for a EV/sales valuation of ~7x? Seems rich. It's more or less the bull case for a 2020 acquisition price in the Alta Fox presentation from a few months ago. Interesting idea. Insiders own a decent amount of shares, business seems decent and I'd guess in a good sector. Air purification systems was only a small transaction and might make sense if you want to offer a 'complete' solution. But I wouldn't exactly call it cheap. Your are right. As I mentioned I'd been working on this for a while and as it's gone up had to make adjustments so the exact figures are just quick, kind of lazy "in the ballpark" figures. I think a lot of the report you mentioned is good, but I don't think it gives enough credit. I've looked at a lot of the comp M&A deals and the Lifeglobal IMO is easily the most appropriate in terms of asset mix and business composition. I would definitely think closer to the 7x number than the lower end of 4-5x other not as comparable deals have taken place. My main focus as an investor is and would be this, You have two layers of undervaluation here. There is the "what it is worth now" scenario which should become apparent once all the masking agents dissipate. That number IMO is easily double the current share price and just needs time to correct. That should be your base figure. Then, on top of that, you have the high teens annual growth rate and significant margin expansion to be excited about, IMO for the next 5-10 years. The reasons some of these businesses are tricky is because its in many cases about management, execution, and scale. I look at it like this. Say you are looking at a gigantic 15,000 sq ft, state of the art mansion in the middle of an Oklahoma farm district. Its worth $5m. Say you had the ability to buy it for that and then drop in on the shoreline in South Beach Miami. Value creation just by bringing the product to a different location. With some of these smaller businesses, provided you have robust execution and grade A management, that is what you can do through acquisitions. David Wolf is a champ and I have no reason to believe he can't keep ding this.

Kind of a self fulfilling prophecy, no? You may very well be correct... people are legitimately selling based on the rumor of a deal not going through. Or... as the spread widens, more and more people continue to sell based on the fear that the deal won't go though... whether that fear is justified or not... time will tell. I really don't have much money invested in this... was prepared to lose a substantial amount from the start. Just going to hold on and see what happens in the near future! I mean, it's complicated and best summed up just as gut feeling which I've always found to be fairly accurate for no distinguishable reason other than maybe luck or things I can't put into words. For instance, I'm not totally cool with the players involved in this on either side. But that by itself, I can live with because we have a binding agreement. The spread, as detailed before, I can justify. If this just sits there at a discount and acts like other pending deals, just with a wider spread, no biggie. But I have spoke to several with backgrounds on this and particularly this time last year management is said to have royally screwed sharehholders by completely mishandling and misrepresenting the loss of a major, major contract. Leading up to this there was rumor or such being leaked, and rampant selling or shorting without any real news. It took about 6 months before everything was fully cleared up and the stock lost over 75% of it's value. I'm not waiting for the same to happen here. The is a business I want no part of as a stand alone company. Additionally, as a sub 1% position, if I find myself devoting more time to it than it is proportionally worth, I usually find that an indication I should just get rid of it. So it's not all those things individually that bother me, but as they all come together and the price action indicates deliberate selling by somebody, that's enough for me. If it's just noise surely the price action would be a little more stable or there would be someone ready on the other side to step in at such a spread.

I think at this point HTL should be valued with a weighting reflecting it's value as an M&A target. Last couple deals I've seen for similar companies have taken place in the 5-7x revenue range. For instance, the recent acquisition of Lifeglobal, took place at 7x. http://investor.coopercos.com/news-releases/news-release-details/cooper-companies-acquires-lifeglobal-group-expanding-fertility "LifeGlobal had annual revenues of approximately $24 million in calendar 2017, and is forecasted to grow in the mid to upper single digits over the coming years. " Whereas HTL will eclipse $30M easily this year and is growing at more than twice what Lifeglobal is. Management is very well aligned here. Insiders own more than 25% of the company and many have put their life work into this. The current management team IMO has a tremendous mix of scientific/R&D and capital markets/public company experience. The board has a similar composition.

My first thoughts were a little similar. But then I realized that this acquisition is pretty symbolic of the company as a whole. On the surface some kind of fuzzy looking stuff and some question marks. But after diving in deeper you kind of see more of what there is to like about this company. This is a sub $1m deal at a reasonable multiple. They already have a significant global network where they can plug in this product and instantly ramp sales. It's not like these are Home Depot air filters. They are a leading brand for clinics and research labs.

Hamilton Thorne represents what is possibly one of the most compelling investment opportunities I have ever come across and at a minimum expect a 5 bagger but would not be shocked to see 10-15x your money from today's prices over the next decade. This is a company that I believe has a very strong possibility to grow organically at a mid-high teens rate, grow further through savvy acquisitions, and also see further benefits from margin expansion. I believe HTL is immediately worth at least $200M USD or $1.85 a share for the OTC listed HTLZF currently trading around .72 cents. The TSX trading HTL in this case currently trading around .95 cents should trade for about $2.45. Now that I have made that clear, I’ll explain the many facets of this company that are so interesting. First. Why does this exist? This is the type of company that at first glance deserves to be on the TSX. Myriad red flags and things one normally looks for in a short will easily defend the castle from less sophisticated and lazy shareholders. Examples include Red Flag #1 -Company went public as reverse merger Why it doesn’t matter- Nobody was going public, in any way during H1 2009, let alone a nano cap IVF company in early stage development Red Flag #2 -Trades on TSX Why it doesn’t matter-This was simply the bi-product of the company it merged with. Hamilton Thorne, from what I understand, expects to uplist a major US exchange in the next 12-18 months. Red Flag #3 The company is a roll up Why it doesn’t matter- HTL has a very selective and disciplined acquisition strategy and only swings big when it is a no brainer. Typical acquisitions involve paying between 4-5x EBITA for private businesses that trade at 6-8x multiples as public companies. Private to public arbitrage. They also seek to retain top talent of the acquired company and often have gotten unique deals because of this. For instance, Gynamed, they were not even the highest bidder however where chosen because two Gynamed partners wanted out and the third wanted to keep running the business. HTL provided an attractive option that accommodated all 3 and thus got the business IMO 25-35% cheaper than it should have sold for. Red Flag #4 Shares trade under $5 Why it doesn’t matter-I typically avoid single digit stocks and I know most institutions do as well. However this is simply the result of how the company went public it upon an uplisting a reverse split is likely occurring. Red Flag #5 Company recently hired an investor awareness firm aka a “stock promoter” Why it doesn’t matter- I have been following this for a while and this was all part of management’s plan to raise awareness leading into an eventual up listing. The “awareness” company was also instructed to promote HTL to only institutional business, not retail as is typically the case with stock promotion. My understanding is that it was only a two month campaign and was less than $8,000 a month cost, not anywhere near the levels or costs of dirty promotion activity. Additional Confusion Causing Flag Because HTL is an American company trading on the TSX, many times revenue figures that are USD get reported in CAD and thus mask how cheap the company is. Now, why is it attractive? First, I’ve always thought IVF had a massive runway. People are getting married and having children(not always occurring in lockstep) at older and older ages. Additionally fertility issues and health problems continue to increase on a percentage of population basis which will provide a long a fertile runway for Assisted Reproductive Technologies. If there is one area of healthcare where there isn’t a massive rain cloud of political animus and price gauging fury, it is IVF. Because, well, poor people with fertility issues should be able to have babies too… We are seeing increased coverage for these things and many employers(for example SBUX offers full coverage for even part time employees) are now promoting pro IVF healthcare plans. David Wolf and management are lights out. The returns since Wolf took over in 2011 are outstanding. I’d be hard pressed to find a better performing equity. He is highly experienced in the M&A field, and highly discipled. He is not likely to acquire money losing business, make acquisitions just to grow the size of the company, or do anything out of boredom like many management teams do. HTL is incredibly well diversified with next to no large customer concentration risk. Additionally from the clinical end, business tends to be sticky with lots of selling synergies as HTL continues it’s bolt on acquisition strategy. For the end user, IVF is also very sticky. Initial runs can cost between $15,000-$30,000 and subsequent ones $5,000-$10,000. Further, the success rate is also increasing(currently in the ballpark of 40% but this varies based on age), but it is not uncommon for significant repeat business simply because the pregnancy fails, or the parents want to have another child, or both. Also, over 60% of current revenue is now higher quality and recurring. Regulatory wise, there are utterly massive barriers to entry here. This is a company with essentially no listed competition in the US and globally the only peer is Vitrolife which trades at over 3x the multiple HTL does. HTL will likely grow minimum low teens organically for the next decade and margin expansion should continue in the same manner it did for Vitrolife as they grew there business line and benefited from acquisition synergies. Continued acquisitions of profitable, tuck in businesses at outstanding multiples will only further fuel the rocket ship. But until then it is still substantially undervalued on a “today’s valuation” basis largely because of all the red flags mentioned above and once removed and the US uplisting occurs, I believe the party just starts. My apologies for the poor format. I’ve been meaning to write this up for months but have been tied up with other stuff and possibly spending too much time in the Politics section… FD: I am obviously long this stock

Sold out today. Gut instinct move. Still feel there is no reason it shouldn't close. But my price action feeling is causing skepticism, which matches my skepticism of the characters involved on both sides, and heeding those things in the past has saved me a lot of money. I've also seen this type of price action associated with rumored leaks involving this company before, so better safe than sorry.

Bought a starter here tonight at 42. I think it's starting to make sense to pivot outside the US a little bit. China related stuff has been beat down a bit, and unless you are part of the liberal doomsday group, we all know the trade wars will eventually end.

Funny you should mention that. I've been keeping an eye on BYD, but just rolled out of Kowloon Development and into Tencent last night. Still waiting on BYD. For what, I don't know exactly.

Anyone still watching this? After all the euphoria about a year ago, right now seems to be a bit more appealing from a value perspective. Especially after a lot of noise and misinformation drove down the stock.

With shorts, getting clipped with a take-out is clearly always a possibility. For that and many other reasons, I believe these short-sellers know that they will not make money on each investment. That makes this a tough game and one I do not really play for that reason and others, but they know there is always a possibility their reasoning could be sound, but they will not profit from it for a variety of reasons. While a profit on a given investment is clearly very important. But whether the investment logic is sound actually matters quite a lot in the long run, apart from the profits or losses from one particular investment. If an investor makes one sound judgment after another, they will do well as an investor over the long-run. Each particular investment may not yield a profit, but it is actually extremely important whether one's reasoning was sound. That is a strong indication of how they will do in the future. This is not my own insight or anything, I'm not that smart to articulate it like this, this reasoning is straight from Charlie Munger at a Berkshire meeting about 10 years ago. I hear you. And agree. And would admit I'm also not communicating what I mean as clearly as I'd like to. Best example I can give is this: Say you do your work. You are 100% convinced penny stock turned hot stock is a fraud. You call in a borrow and it's -85%. Not crazy if you're familiar with such trades, but definitely high risk. You plan on pitching your thesis on an investing website and think this may be a catalyst for the trade to work. Prior to the pitch going public the stock runs another 50% higher. Before you pitch it, the stock gets halted by the SEC and doesn't resume trading for over a year while they investigate the fraud. Well, you were right. But you're shit out of luck and paying 8% a month on an amount 50% higher than your basis for a period of time totally out of your control. Was your logic sound? You could say it was. You were right about the outcome. But you could also make the case that any experienced short seller would know you were blind to some very obvious risks which IMO doesn't make what you are doing logically sound. Being right about the investment fundamentals but wrong about tangential matters that have just as much if not more influence on the investment results is I guess what I'm talking about. And it seems to be something these guys I mentioned just can't figure. Because they make the same mistake over, and over, and over again. From my experience, nailing a short feels 10x better than nailing a long. It's a rush, and it's true, you need to be way smarter and better informed to short than to go long. It feeds one's ego. But over the long run I equate it much more to gambling than investing because the odds are so stacked against you. Many things, including but not limited to the market naturally moving higher over time, borrow rates, regulatory incompetence, and market euphoria all work against you and when the greatest short seller in recent memory(Chanos), has posted negative returns over the long haul, I mean, I don't think a rational person would argue against shorting being a bad idea.

I don't have a dog in this and I see what you are saying - at some point you are wrong because of opportunity costs, etc. But people were saying this for a the last few years about Valeant and a few other noteworthy examples (short-sellers has losses for a few years and were told that the market had proven them wrong) - people shorted it for multiple years while the stock in question did nothing but soar. But, with either a long or a short, if your reasoning and value are correct, then you will ultimately be correct but it can take more than two years for your investment to pay off. If you are a value investor, even on the short-side, you are not wrong simply because the market has moved further away from what you consider the intrinsic value of your investment. Shorting, however, it is harder to see it through, and the unlimited downside means that when you are wrong, but think you're right and ride it out for many years, the losses can be extreme - so from that perspective I see what you are saying. But it is possible that Chanos and Einhorn and other shorts will take a bath on a $420 buyout AND that their fundamental valuation reasoning about the company was correct - and the financial difficulty they foresee will happen in a private company context. In regards to the bold, this could occur, but that is irrelevant. As an investment manager, your job is to get it right, not to "be right". There is a big difference and it's not something I'm sure guys like Einhorn and Ackman understand. It’s a probability game. Sometimes you are right, but it doesn’t work out or facts change, sometimes you are wrong and you still can make money. right am bearish on TSLA based on its financials, bt I don’t think I would short this stock ever. Puts are a different matter, and I think it’s reasonable to buy some. If it doesn’t work out, you hopefully small bet will be worthless, if you Artenreichtum, you could make multiples of you bet. It's a probability game if you are strictly an academic, which guys like Einhorn clearly are. There is something else, in layman's terms called gut instinct, and that's what separates the best from the rest. Knowing something changed and pivoting, sometimes without even knowing what exactly changed, just knowing that "something" did. I guess it could also be called market timing. I mean Einhorn's "big one" was his Allied Capital short. But in reality he was early as hell, and needed a once or twice in a century type of event to even make money on it. Truth is he could have shorted pretty much any financial company and had the same results. So he wasn't even really right IMO. I'm about as bearish on Tesla as anyone. I've shorted it in the past from time to time. But it's clear to anyone with any sort of investing acumen that it wasn't worth shorting, probably back in 2014 or 2015. These guys, just don't get it. They have zero ability to adapt and like Berkowitz with SHLD and Ackman with VRX and HLF and pretty much everything else he's ever owned, run their mouths about how right they are so it's great to get the rare event when they have to face reality and have a nice big slice of humble pie.

I don't have a dog in this and I see what you are saying - at some point you are wrong because of opportunity costs, etc. But people were saying this for a the last few years about Valeant and a few other noteworthy examples (short-sellers has losses for a few years and were told that the market had proven them wrong) - people shorted it for multiple years while the stock in question did nothing but soar. But, with either a long or a short, if your reasoning and value are correct, then you will ultimately be correct but it can take more than two years for your investment to pay off. If you are a value investor, even on the short-side, you are not wrong simply because the market has moved further away from what you consider the intrinsic value of your investment. Shorting, however, it is harder to see it through, and the unlimited downside means that when you are wrong, but think you're right and ride it out for many years, the losses can be extreme - so from that perspective I see what you are saying. But it is possible that Chanos and Einhorn and other shorts will take a bath on a $420 buyout AND that their fundamental valuation reasoning about the company was correct - and the financial difficulty they foresee will happen in a private company context. In regards to the bold, this could occur, but that is irrelevant. As an investment manager, your job is to get it right, not to "be right". There is a big difference and it's not something I'm sure guys like Einhorn and Ackman understand.