Uccmal Posted April 6, 2011 Share Posted April 6, 2011 Bronco, there is not so much now but I can provide retroactive examples which is of course not fair but a search through the board will show that I was in them a long while ago: Mullen Group (2009) Precision Drilling (2009/2010) Manulife Financial - I think this still has between 100-200% upside. (Fall 2010/Now) Russell Metals (spring 2009) Seaspan (2008/2009) Power Financial (late 2009) Fibrek/sfk ( at < 0.50/share) - admittedly margin of safety may not have been there. Bank of America (right now via warrants) Canfor (2010) Canfor Pulp - winter 2010. 2 or 3 others I wont be sharing - not mine to share. I still hold all of these. I have held sfk since befoer ffh - actually sold and bought back; bought Russell unkowingly after FFh recapped them, Mullen from 4 years from an old board member - FFH recently recapped them. Canfor my own idea; SSW we were discussing on board predecessor 2.5 years ago - with Jeast Link to comment Share on other sites More sharing options...
Uccmal Posted April 6, 2011 Share Posted April 6, 2011 Ones I think still have 60% upside and a margin of safety: Fibrek Manulife BAC Maybe SSW - although I have been reducing. As I lose the downside protection I reduce the position sizes especially if there is no dividend so some of those above I have shrunk including fbk, Russell, Seaspan, Power, CFX. Everything Risk adjusted of course. I should add FFH - eventually it will have a 100% upside - in the meantime there is certainly a margin of safety. With BBY for the reasons others have mentioned I am not comfortable with the margin of safety. Certainly worth watching though. Link to comment Share on other sites More sharing options...
turar Posted April 6, 2011 Share Posted April 6, 2011 Hi Uccmal, if I remember correctly, you were not very enthusiastic about MFC last summer, when it was in the $12-13 range. What changed since then? Link to comment Share on other sites More sharing options...
Uccmal Posted April 6, 2011 Share Posted April 6, 2011 Maybe Bronco I should qualify. It has been a long while since I have read the BBY balance sheet but I can rule it out pretty fast on the anecdotal items: internet competition, flat screen price and consequent profit drop (I know this from reading the 10 k of a smaller retailer), not able to assess value at all other than cash value discussed. Unlike a Rim for example BBY has no book value at all in regards to contracts, networks etc. A. Link to comment Share on other sites More sharing options...
Uccmal Posted April 6, 2011 Share Posted April 6, 2011 Turar, you are correct. RE: MFC: With the increase in the equity markets their mark to market losses started to mitigate. They were able to hedge in the US business nicely and rather ahead of time. I took a deeper dive into the numbers to reveie the capital ratios etc. I started buying again in the fall in dribs and drabs and have been buying on dips and selling a little off on rises ever since. Link to comment Share on other sites More sharing options...
finetrader Posted April 6, 2011 Share Posted April 6, 2011 I'm still trying to assess MFC. They have problems getting high ROE with the US division. And management want to get to 13% ROE in 2015.. so this imply that they dont even do 13% at this moment. Book value is at 14.3/share right now. Let say that BV will be around 17$/share in 2015. Put a profit of 13% on it. And apply an appropriate P/E=13 on it.. I get a stock at 28-29$ in 2015. So then what is IV at this moment.. Somewhere between 17 and 28 but most probably closer to 17 than 28. So I don't see a lot of margin of safety there at 17$ share price. But I'm still an unhappy shareholder :( Link to comment Share on other sites More sharing options...
prunes Posted May 2, 2011 Share Posted May 2, 2011 Greenlight Capital has taken a position: Best Buy Inc. (BBY) operates consumer electronics stores in the U.S., Canada, Mexico, Europe and China. The market is concerned that BBY has reached its growth limits within the U.S. and faces declining video, laptop and television sales going forward. We believe that much of BBY’s recent problems were due to last year being a soft-goods holiday season that was particularly poor for televisions. Over the years we have seen many retailers given up for dead after a weak holiday result, only to recover with a change in fashion or product cycle. Bears believe that the internet puts BBY on a path to Blockbuster-video obsolescence. We think that view overstates the risk as there is value in store help, merchandising, service and being able to walk out of the store with your purchase. While BBY’s big box stores in the U.S. are mature (and, in fact, BBY will reduce its footage by a couple percent per year), we believe that BBY has more than offsetting growth opportunities in its Best Buy Mobile concept, international retail, and through additional higher-margin services offerings. In addition, the company currently has minimal leverage and between earnings and working capital improvements should generate almost a 20% free cash flow yield this year. BBY has targeted $1.3 billion of share repurchases this fiscal year, which is approximately 10% of its current market capitalization. The Partnerships established their position at an average price of $33.33 per share, representing a multiple of approximately 10x expected calendar 2011 earnings and less than 8x our estimate of 2012 earnings. BBY stock ended the quarter at $28.72 per share. Based upon the price drop since our acquisition, this has not yet proven to be a good buy. Link to comment Share on other sites More sharing options...
Myth465 Posted May 2, 2011 Author Share Posted May 2, 2011 Interesting. I still think its a good leap value trade, one should be able to get out in Q4 if we have a good Christmas season. Link to comment Share on other sites More sharing options...
prunes Posted June 14, 2011 Share Posted June 14, 2011 Quarterly earnings release today. Shares are up 6%. Revenue rose 1.4%. Same store sales fell 1.7%, the fourth quarterly decline. Domestic mobile phones same-store sales surged 28%, while domestic online revenue grew 12%. Link to comment Share on other sites More sharing options...
Myth465 Posted June 14, 2011 Author Share Posted June 14, 2011 Decided to buy leaps but never got around to it. Did alot of buying yesterday but BBY wasnt one of em. What I bought went up, but I am still watching. I think the threats are overblown. Link to comment Share on other sites More sharing options...
prunes Posted June 21, 2011 Share Posted June 21, 2011 The board of directors of Best Buy Co. approved a $5 billion share buyback, the Richfield, Minn.-based retailer said Tuesday. This new repurchase ends and replaces an earlier $5.5 billion share buyback that had $800 million of remaining authorization in the first fiscal quarter ended May 28. Best Buy will also raise its quarterly cash dividend by 7% to 16 cents a share. Best Buy shares rose 4.3% in pre-market trading. Link to comment Share on other sites More sharing options...
Myth465 Posted June 21, 2011 Author Share Posted June 21, 2011 Now I am kicking myself, could have got in before 28..... Link to comment Share on other sites More sharing options...
prunes Posted June 21, 2011 Share Posted June 21, 2011 This $5 B buyback compares to BBY's total market cap of $12.5 B. Link to comment Share on other sites More sharing options...
prunes Posted August 1, 2011 Share Posted August 1, 2011 http://www.nytimes.com/external/venturebeat/2011/08/01/01venturebeat-best-buy-moves-into-the-connected-tv-busines-51305.html Best Buy Moves Into the Connected TV Business With Tivo’s User Interface Internet connected TVs are becoming a lot more mainstream. The latest sign of that is that Best Buy is announcing its own house label model, dubbed the Insignia Connected TV. Best Buy, the nation’s largest gadget retailer, hopes to capture more margin in the increasingly competitive electronics business by selling its own equipment under Best Buy’s house brand, rather than selling more gadgets under brand name such as Sony or Samsung. It’s a strategy that has been working for a while. This TV will be the first to use Tivo’s design interface, giving Best Buy’s customers a user interface that is well-known as a good way for browsing for shows and watching TV — without a TiVo subscription. I had been pretty skeptical of Web TV which obviously never got off the ground. I haven't seen what the current vintage of "smart TVs" is like, but I agree that there is a niche to be filled for TVs that can directly interface with streaming video services from NFLX, AMZN, Hulu, etc. I like the idea of BBY offering private label merchandise although it remains to be seen whether management can execute properly. Link to comment Share on other sites More sharing options...
beerbaron Posted August 2, 2011 Share Posted August 2, 2011 BBY is trading at a 10B$ market cap, this is getting quite cheap if you believe in Einhorn's thesis. BeerBaron Link to comment Share on other sites More sharing options...
tombgrt Posted August 2, 2011 Share Posted August 2, 2011 $10b market cap and a $5b share buyback program in place sounds interesting. WMT for example is less cheap but feels like the safer bet here. $181b market cap and they will buy back around $15b shares this year. Some moat, less competition, more defensive in an economic turn for the worst, international growth opportunities, dividend growth of 18%/y (a double every 4y...). Any thoughts? Link to comment Share on other sites More sharing options...
Junto Posted September 13, 2011 Share Posted September 13, 2011 Earnings out today, stock down 8%+ at one point this morning. Hit my buy price. Link to comment Share on other sites More sharing options...
beerbaron Posted September 13, 2011 Share Posted September 13, 2011 It's on my wishlist as well. Will revisit tonight... BeerBaron Link to comment Share on other sites More sharing options...
Uccmal Posted September 14, 2011 Share Posted September 14, 2011 I recently, prior to the earnings release, bought some $25 jan 2013 leaps on BBY. I have run through the numbers again and there are still generating pretty good free cash flow. One thing I am curious about is what they make per IPAD. The BBY mobile kiosks are a bonus idea if you ask me. The stock buybacks are extreme. Good management - buying when the stock is down. That is acutally a rarity. I also think the analysts and their store size issues are out to lunch. The leases and store upkeep is not a large cost for BBY. They could downsize and add a grocery aisle ::). The Chinese division Five Star is growing 30% y/y. I am still of the mind that the majority of people for technological products go to a B&M store and will continue to do so. This board is a crappy example of the behaviour of the general populous. One old fellow was in BB store one day and asked me what kind of computer he should buy for his grandchild who was starting University. After talking with him a few moments I realized he had never used a computer. I suggested he asks his grandchild if they could use a new computer or would they prefer the cash and let them decide. Most people are probably closer to him on the knowledge spectrum than to members of this board. Even my wife's neices and nephews, around 20 years old prefer to shop at real stores. Going to the market is an event for most people. Tech heads constantly underestimate this aspect of human behaviour. Link to comment Share on other sites More sharing options...
Kraven Posted September 14, 2011 Share Posted September 14, 2011 I recently, prior to the earnings release, bought some $25 jan 2013 leaps on BBY. I have run through the numbers again and there are still generating pretty good free cash flow. One thing I am curious about is what they make per IPAD. The BBY mobile kiosks are a bonus idea if you ask me. The stock buybacks are extreme. Good management - buying when the stock is down. That is acutally a rarity. I also think the analysts and their store size issues are out to lunch. The leases and store upkeep is not a large cost for BBY. They could downsize and add a grocery aisle ::). The Chinese division Five Star is growing 30% y/y. I am still of the mind that the majority of people for technological products go to a B&M store and will continue to do so. This board is a crappy example of the behaviour of the general populous. One old fellow was in BB store one day and asked me what kind of computer he should buy for his grandchild who was starting University. After talking with him a few moments I realized he had never used a computer. I suggested he asks his grandchild if they could use a new computer or would they prefer the cash and let them decide. Most people are probably closer to him on the knowledge spectrum than to members of this board. Even my wife's neices and nephews, around 20 years old prefer to shop at real stores. Going to the market is an event for most people. Tech heads constantly underestimate this aspect of human behaviour. I think you make some very good points here. People always tend to be biased towards what they are doing themselves and what those immediately around them are doing. So tech savvy people who tech savvy friends tend to believe that everything will just be done online. While there are certainly plenty of things that can be ordered with no problem online, there are many (myself included) that think it's a hassle to have to return something through the mail or if there are questions or issues to have call or email as opposed to just going back to the store. Again, it depends on what it is. If it's a box of diapers, then it's not so much an issue. If it's a new tv, it's easier to have a place to go if there's a problem. Clearly there is a trend towards more and more being done online. It's unstoppable, but unless we are going only be able to buy things on Amazon or at Wal-Mart, it seems to me that there is a place for BBY, etc. Obviously things like margins will continue to be impacted and that's something to put into the mix. Link to comment Share on other sites More sharing options...
turar Posted September 14, 2011 Share Posted September 14, 2011 It's not like BBY doesn't have an online presence. Their website is not bad, and I have bought things from their website. Link to comment Share on other sites More sharing options...
Myth465 Posted October 10, 2011 Author Share Posted October 10, 2011 Great Post - http://adventuresincapitalism.com/post.aspx?id=07cc06de-c56c-414d-8a8a-8133c814cfa7 Link to comment Share on other sites More sharing options...
Uccmal Posted October 10, 2011 Share Posted October 10, 2011 Good article Myth. Bby id one of my smaler leap positions. I will keep rolling them further out and eventually it will catch. 500 b a rear in free cash flow will eat alot of shares at the current price. I am also interested to see how their mall kiosks work out. This will start to show up in the reporting as a larger and larger component. Link to comment Share on other sites More sharing options...
Myth465 Posted October 10, 2011 Author Share Posted October 10, 2011 I still like Best Buy along with a host of other companies. The backdrop though is pretty bad and cash levels are pretty low. Lately I have been asking whats the rush, so I was happy to see Kuppy felt the same way. I would guess we rally for a bit then go back to selling off one reality sets back in... In the meantime I will brush up on my watchlist. Link to comment Share on other sites More sharing options...
Junto Posted December 28, 2011 Share Posted December 28, 2011 I put a post on my blog on Best Buy today. Added recently. Looking at adding more. http://thoughtsofacommunitybanker.blogspot.com/2011/12/bby-business-model-in-transistion.html Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now