wescobrk Posted March 18, 2020 Share Posted March 18, 2020 We are probably a few weeks away, but I'm going to allocate maybe 5% of my capital to potential 10-100 baggers. I'm fully aware most of the companies I choose will go under but if I buy 20 companies and 3 or 4 go up 50 fold, that is pretty damn attractive. Feel free for anyone to post companies they think might drop that far and are willing to put a small amount of capital for companies that are cyclical and might pull through. Thanks. Link to comment Share on other sites More sharing options...
valuedontlie Posted March 18, 2020 Share Posted March 18, 2020 i think 20 names might be too low... if they have 10-100x potential then they're likely levered, beaten up, low/negative cash flow, and heading towards the $1 PPS range... i would absolutely buy a basket of 100-200 of these names if you put the list together :) Link to comment Share on other sites More sharing options...
Studesy Posted March 18, 2020 Share Posted March 18, 2020 Teck Link to comment Share on other sites More sharing options...
wescobrk Posted March 18, 2020 Author Share Posted March 18, 2020 i think 20 names might be too low... if they have 10-100x potential then they're likely levered, beaten up, low/negative cash flow, and heading towards the $1 PPS range... i would absolutely buy a basket of 100-200 of these names if you put the list together :) ha, ok, I'll get to work. :) Link to comment Share on other sites More sharing options...
wescobrk Posted March 18, 2020 Author Share Posted March 18, 2020 Anyone want to venture which casinos will NOT go under? MGM is under $9 now. Caesars, Wynn, Las Vegas Sands. LVS seems to have one of the better balance sheets. Red Robin I'm guessing will have to declare bk in the restaurant sector. Link to comment Share on other sites More sharing options...
Kaegi2011 Posted March 18, 2020 Share Posted March 18, 2020 Not sure about 100x, but at some point Wayfair will be a winner. Can't imagine many physical furniture stores are going to make it through this alive. So benefit of online shopping + huge selection, but unclear how many of their sellers can survive... Link to comment Share on other sites More sharing options...
jschembs Posted March 18, 2020 Share Posted March 18, 2020 Not sure about 100x, but at some point Wayfair will be a winner. Can't imagine many physical furniture stores are going to make it through this alive. So benefit of online shopping + huge selection, but unclear how many of their sellers can survive... Perhaps after restructuring - have you looked at their balance sheet and cash flow statement? E-commerce is hard enough to begin with, let alone when you are trying to sell heavy, difficult to ship products at 20-25% gross margins. Link to comment Share on other sites More sharing options...
KJP Posted March 18, 2020 Share Posted March 18, 2020 Not sure about 100x, but at some point Wayfair will be a winner. Can't imagine many physical furniture stores are going to make it through this alive. So benefit of online shopping + huge selection, but unclear how many of their sellers can survive... Perhaps after restructuring - have you looked at their balance sheet and cash flow statement? E-commerce is hard enough to begin with, let alone when you are trying to sell heavy, difficult to ship products at 20-25% gross margins. Also consider that a company that enjoys a negative working capital cycle when sales are expanding (and finances growth from that) will see that unwind, with declining sales causing a cash drain. Link to comment Share on other sites More sharing options...
jschembs Posted March 18, 2020 Share Posted March 18, 2020 Not sure about 100x, but at some point Wayfair will be a winner. Can't imagine many physical furniture stores are going to make it through this alive. So benefit of online shopping + huge selection, but unclear how many of their sellers can survive... Perhaps after restructuring - have you looked at their balance sheet and cash flow statement? E-commerce is hard enough to begin with, let alone when you are trying to sell heavy, difficult to ship products at 20-25% gross margins. Also consider that a company that enjoys a negative working capital cycle when sales are expanding (and finances growth from that) will see that unwind, with declining sales causing a cash drain. Good point. That could come back to really bite all the SAAS darlings as well. Dig into their wonderful FCF generation and it's mostly D&A, stock compensation (which will likely decline either due to lower headcount, which kills the growth narratives, or employees demanding more comp in the form of cash), and upfront cash payments on multi-year contracts. Link to comment Share on other sites More sharing options...
Cigarbutt Posted March 18, 2020 Share Posted March 18, 2020 Not sure about 100x, but at some point Wayfair will be a winner. Can't imagine many physical furniture stores are going to make it through this alive. So benefit of online shopping + huge selection, but unclear how many of their sellers can survive... Perhaps after restructuring - have you looked at their balance sheet and cash flow statement? E-commerce is hard enough to begin with, let alone when you are trying to sell heavy, difficult to ship products at 20-25% gross margins. Also consider that a company that enjoys a negative working capital cycle when sales are expanding (and finances growth from that) will see that unwind, with declining sales causing a cash drain. Good point. That could come back to really bite all the SAAS darlings as well. Dig into their wonderful FCF generation and it's mostly D&A, stock compensation (which will likely decline either due to lower headcount, which kills the growth narratives, or employees demanding more comp in the form of cash), and upfront cash payments on multi-year contracts. In the furniture retail world, many brick-and-mortar stores have embraced the negative working capital model and now the negative aspects related to cash flow generation are starting to show. Isn't Wayfair the 'champion' of the negative working capital model? Won't slowing (or heaven forbid negative) growth mean losing even more money for a while? https://finbox.com/NYSE:W/explorer/nwc I see Wayfair as a company coming back to earth. What am I missing to explain the potential rebound? Edit: Apologies as I realize that the link submitted may require subscription. The graph in the link basically shows a pattern similar to what Dell accomplished at some point but in an exponential (negative) way. Dell was profitable though. Link to comment Share on other sites More sharing options...
rkbabang Posted March 18, 2020 Share Posted March 18, 2020 Bought a little DDOG and FSLY the other day Don't have much cash unfortunately but if they are anything like 100 baggers a little is all you need. Still looking for ideas. Link to comment Share on other sites More sharing options...
jschembs Posted March 18, 2020 Share Posted March 18, 2020 Bought a little DDOG and FSLY the other day Don't have much cash unfortunately but if they are anything like 100 baggers a little is all you need. Still looking for ideas. That would be impressive if DDOG at 25x revenue turns into a 100 bagger. Link to comment Share on other sites More sharing options...
Spekulatius Posted March 18, 2020 Share Posted March 18, 2020 Not a 100 bagger, but I like PINS. Next revenue numbers may be bad, but I think user engagement will increase. They have plenty cash and I like management. Link to comment Share on other sites More sharing options...
FCharlie Posted March 18, 2020 Share Posted March 18, 2020 United Rentals went up 45X between 2009 and 2018. They survived the last downturn by selling underutilized equipment to bring in cash flow. Prior to the last month or so, EPS estimates were for $25/share next year so if we as a society ever get back to any kind of normal (which I think we will) the earnings power should still be there. May take years to get back there but URI should do well. Link to comment Share on other sites More sharing options...
Kaegi2011 Posted March 18, 2020 Share Posted March 18, 2020 Not sure about 100x, but at some point Wayfair will be a winner. Can't imagine many physical furniture stores are going to make it through this alive. So benefit of online shopping + huge selection, but unclear how many of their sellers can survive... Perhaps after restructuring - have you looked at their balance sheet and cash flow statement? E-commerce is hard enough to begin with, let alone when you are trying to sell heavy, difficult to ship products at 20-25% gross margins. Also consider that a company that enjoys a negative working capital cycle when sales are expanding (and finances growth from that) will see that unwind, with declining sales causing a cash drain. Good point. That could come back to really bite all the SAAS darlings as well. Dig into their wonderful FCF generation and it's mostly D&A, stock compensation (which will likely decline either due to lower headcount, which kills the growth narratives, or employees demanding more comp in the form of cash), and upfront cash payments on multi-year contracts. In the furniture retail world, many brick-and-mortar stores have embraced the negative working capital model and now the negative aspects related to cash flow generation are starting to show. Isn't Wayfair the 'champion' of the negative working capital model? Won't slowing (or heaven forbid negative) growth mean losing even more money for a while? https://finbox.com/NYSE:W/explorer/nwc I see Wayfair as a company coming back to earth. What am I missing to explain the potential rebound? Edit: Apologies as I realize that the link submitted may require subscription. The graph in the link basically shows a pattern similar to what Dell accomplished at some point but in an exponential (negative) way. Dell was profitable though. All fair points, and I realize it's not a risk free name, but that's why it's even in the discussion, because if it was not down something like 85% we wouldn't be talking about it. On the other hand, I don't think it's unrealistic to think that if they can survive relatively unscathed and that this crisis impacts their competitors much more than them. Of course, I could be wrong on all of this. Link to comment Share on other sites More sharing options...
Castanza Posted April 6, 2020 Share Posted April 6, 2020 Not sure about 100x, but at some point Wayfair will be a winner. Can't imagine many physical furniture stores are going to make it through this alive. So benefit of online shopping + huge selection, but unclear how many of their sellers can survive... Perhaps after restructuring - have you looked at their balance sheet and cash flow statement? E-commerce is hard enough to begin with, let alone when you are trying to sell heavy, difficult to ship products at 20-25% gross margins. Also consider that a company that enjoys a negative working capital cycle when sales are expanding (and finances growth from that) will see that unwind, with declining sales causing a cash drain. Good point. That could come back to really bite all the SAAS darlings as well. Dig into their wonderful FCF generation and it's mostly D&A, stock compensation (which will likely decline either due to lower headcount, which kills the growth narratives, or employees demanding more comp in the form of cash), and upfront cash payments on multi-year contracts. In the furniture retail world, many brick-and-mortar stores have embraced the negative working capital model and now the negative aspects related to cash flow generation are starting to show. Isn't Wayfair the 'champion' of the negative working capital model? Won't slowing (or heaven forbid negative) growth mean losing even more money for a while? https://finbox.com/NYSE:W/explorer/nwc I see Wayfair as a company coming back to earth. What am I missing to explain the potential rebound? Edit: Apologies as I realize that the link submitted may require subscription. The graph in the link basically shows a pattern similar to what Dell accomplished at some point but in an exponential (negative) way. Dell was profitable though. All fair points, and I realize it's not a risk free name, but that's why it's even in the discussion, because if it was not down something like 85% we wouldn't be talking about it. On the other hand, I don't think it's unrealistic to think that if they can survive relatively unscathed and that this crisis impacts their competitors much more than them. Of course, I could be wrong on all of this. W up 42% today... Link to comment Share on other sites More sharing options...
alpha Posted April 6, 2020 Share Posted April 6, 2020 United Rentals went up 45X between 2009 and 2018. They survived the last downturn by selling underutilized equipment to bring in cash flow. Prior to the last month or so, EPS estimates were for $25/share next year so if we as a society ever get back to any kind of normal (which I think we will) the earnings power should still be there. May take years to get back there but URI should do well. I haven't looked at the company in ages, but at one point a significant amount of sales were coming from the fracking industry. Is that still the case? Link to comment Share on other sites More sharing options...
ScottHall Posted April 6, 2020 Share Posted April 6, 2020 WAAAAYFAIR YOU'VE GOT JUST WHAT I NEED Um but seriously IDK. Cool real estate ops out there but haven't seen a lot of 100x yet... Been very lazy this sell off... only put a little dry powder to work. May miss out. We'll see. Oh well! Link to comment Share on other sites More sharing options...
The Investor Posted April 6, 2020 Share Posted April 6, 2020 Cardlytics and XLMedia are worth analysing. Link to comment Share on other sites More sharing options...
Gregmal Posted April 6, 2020 Share Posted April 6, 2020 I wager there’s going to be some in the areas hit worst. Maybe we get another AMRQ. Link to comment Share on other sites More sharing options...
Kaegi2011 Posted April 7, 2020 Share Posted April 7, 2020 WAAAAYFAIR YOU'VE GOT JUST WHAT I NEED Um but seriously IDK. Cool real estate ops out there but haven't seen a lot of 100x yet... Been very lazy this sell off... only put a little dry powder to work. May miss out. We'll see. Oh well! Well at 75 bucks now W is prob not the risk/reward vs. 50 bucks ago... Link to comment Share on other sites More sharing options...
Guest cherzeca Posted April 7, 2020 Share Posted April 7, 2020 it seems that the market is discounting some sort of cases/deaths curve flattening. while we have had a nice bounce already, I think one would be well advised (if you are at all inclined) to increase exposure now rather than lament not having done so earlier. sometimes it is better to be a little late. Link to comment Share on other sites More sharing options...
Kaegi2011 Posted May 5, 2020 Share Posted May 5, 2020 Not sure about 100x, but at some point Wayfair will be a winner. Can't imagine many physical furniture stores are going to make it through this alive. So benefit of online shopping + huge selection, but unclear how many of their sellers can survive... Don't mean to gloat, but damn if I've ever made a call with this rate of IRR... Now if I only listened to myself in size! Link to comment Share on other sites More sharing options...
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