plato1976 Posted December 24, 2013 Share Posted December 24, 2013 Really appreciate your sharing ! In your investment history, is there a case that an initially small position (not on top10 list) turned out to be a huge win and impacted the portfolio performance in a material way. In other words, if you just have held your top10 or top5 positions, would the result be much different ? (I am wondering if your performance would have been even more stellar if you had just held your top 5 positions...) I currently have been looking overseas as there appears to be more bargains there than in the US today. In the past, I have invested in Brazil and some Russian oil companies and now have holdings in Italy and Greece and am looking at firms in Australia and S. Korea. I have not bought distressed debt but have purchased some equity of firms who have gone through BK (NTL, Magellan Health, RCN and Hawaiian Telecom) and equity of some of these holders (AIQ an Oaktree holding). Same challenges as 10 years ago - buying when others don't like a company. I do have some purchase constraints on some microcaps that have small amounts of volume but my sweet spot is higher on the market cap scale. The issue I have had with microcaps has been getting out. My best performing microcap (Acme Communications) was a liquidation so that was not an issue. I don't hate any aspect of investing per se but the hardest part is watching a good idea getting cheaper (which happens most of the time with me) if the market is going up. In terms of market access, I have switched brokers so now I can buy most international equities that I did not have access to previously. At this point, my universe is large enough and not totally explored. Next 10 years I don't know. At some point I may start a fund but I need to get my 2 kids through college first. In addition, I like what I do with folks I enjoy working with so retirement is a way off yet. Packer Link to comment Share on other sites More sharing options...
Packer16 Posted December 24, 2013 Share Posted December 24, 2013 I have bought some Intralot - a Greek gaming machine and lottery operator. As to scale model that can be an advantage. I have looked and like one company Emeco which is a depressed equipment leasor in Australia. I am blessed with everything I would want or require (God, great wife and family and good job and friends) so I don't have any thing on my Christmas list. In terms of bottom stocks outperforming, I can't think of any as I typically will try to load up on stocks I think have outstanding upside. My highest % gainers have only been 5 to 7x gainers. Packer Link to comment Share on other sites More sharing options...
yadayada Posted December 25, 2013 Share Posted December 25, 2013 Interesting, ill look into those :) . How do you screen for ideas? Now that i have a decent understanding of how to value a company, I find screening for ideas the hardest in this market. Link to comment Share on other sites More sharing options...
LC Posted December 25, 2013 Share Posted December 25, 2013 Interesting, ill look into those :) . How do you screen for ideas? Now that i have a decent understanding of how to value a company, I find screening for ideas the hardest in this market. I am having a hard time as well...I'm taking out the "cheapness" screening tools (low P/E, P/B, etc.) and looking for quality company, then using my own analysis to determine cheapness. So I've been screening for sales growth, acceptable debt levels, and decent margins. Then I go from there, and see if any stock price increases this year has been due to p/e expansion along with the S&P or due to continuously improving business. Link to comment Share on other sites More sharing options...
Packer16 Posted December 25, 2013 Share Posted December 25, 2013 I dont' have a screen per se but I look at companies that pass a screen to see if a bargain exists. I also look on an industry basis (by looking at the industry comps) to see if a bargain exists. Packer Link to comment Share on other sites More sharing options...
frommi Posted December 25, 2013 Share Posted December 25, 2013 Where do you get the data of european companies? My greatest problem investing somewhere else as the US is getting quality data cheap. Or do you use a bloomberg at work for that? Link to comment Share on other sites More sharing options...
tombgrt Posted December 25, 2013 Share Posted December 25, 2013 I have bought some Intralot - a Greek gaming machine and lottery operator. Had a quick glance (have to get ready for our christmas dinner.. ;)). Revenue cagr of over 8% since 2007 if you assume revenue of 1.5b EUR for 2013, EBITDA actually lower. I assume much of that growth comes from an increased online presence? How does this compare to other gaming/betting companies? Management also seems to own a very significant stake. The stock does seem to correlate heavily with the Greece stock market which is probably why the bargain (assuming it is) exists, although it has hit a low of 0.67€ in 2012 with ASE (Athens Stock Exchange) hitting an equally low bottom compared to today's price. I obviously have yet to look properly at this name but what metrics do you deem most relevant here Packer? TIA and happy holidays! Link to comment Share on other sites More sharing options...
yadayada Posted December 25, 2013 Share Posted December 25, 2013 what is up with their tax rate? isnt corporate tax rate only like 20 or 25% in greece? the give alot of their ebit away to taxes. Link to comment Share on other sites More sharing options...
Packer16 Posted December 25, 2013 Share Posted December 25, 2013 For Intralot, the investor presentation provides alot of data. Since 2006, the revenue has shifted from Greece/Turkey to the RoW, from 42% of revenues in 2006 to about 8% in 2102. The number of contracts has increased from 20 to 84. The primary metrics I am looking at are EV/EBITDA and FCF yield. These types of companies trade for 8 to 9x EBITDA typically. Packer Link to comment Share on other sites More sharing options...
phil_Buffett Posted December 26, 2013 Share Posted December 26, 2013 For Intralot, the investor presentation provides alot of data. Since 2006, the revenue has shifted from Greece/Turkey to the RoW, from 42% of revenues in 2006 to about 8% in 2102. The number of contracts has increased from 20 to 84. The primary metrics I am looking at are EV/EBITDA and FCF yield. These types of companies trade for 8 to 9x EBITDA typically. Packer packer the presentation was very nice. thank you for the idea. intralot will reduce cap ex in the future and will have a bigger fcf. so if i take the fcf or the ebitda and calculate it, this Company is very undervalued. great idea packer :) Link to comment Share on other sites More sharing options...
hardcorevalue Posted December 26, 2013 Share Posted December 26, 2013 Hi Packer, I'm looking at Intralot. In regards to EV/EBITDA calculations level how are you factoring in the large share of minority earnings. Woudn't the consolidated income number show up in EBITDA and overstate the true number? Thanks very much, great results! Link to comment Share on other sites More sharing options...
krazeenyc Posted December 27, 2013 Share Posted December 27, 2013 what is up with their tax rate? isnt corporate tax rate only like 20 or 25% in greece? the give alot of their ebit away to taxes. they're in gaming. Packer, curious how do you find these companies? :D More important pertaining to Intralot, what are you modeling as maintenance cap ex. Link to comment Share on other sites More sharing options...
Packer16 Posted December 27, 2013 Share Posted December 27, 2013 In terms of the minority interest, the fair value is recorded at acquisition based upon the proportion of the price paid for the total. So if Intralot buys 90% of venture @ $100 then $10 is recorded on the books as a minority interest. Then the accumulated earnings is added to the MI line every year. Based upon the list consolidated subs the largest % interest appears to US-based Intralot Inc. which Intralot owns 85% and the Turkish sub at 45%. They do not break the IS out by country so it is hard to tell how to make an adjustment. If we assume US is most of America segment the adjustment would be $3m in NI in 2012. Packer Link to comment Share on other sites More sharing options...
yadayada Posted December 27, 2013 Share Posted December 27, 2013 what is up with their tax rate? isnt corporate tax rate only like 20 or 25% in greece? the give alot of their ebit away to taxes. they're in gaming. Packer, curious how do you find these companies? :D More important pertaining to Intralot, what are you modeling as maintenance cap ex. yeah but it used to be low. And ladbrokes WH etc have 30%i think. Link to comment Share on other sites More sharing options...
Packer16 Posted December 27, 2013 Share Posted December 27, 2013 The company sell equipment/services around the world so they may have more of an average tax rate of where they sell the equipment/services. I have started an Intralot thread in the ideas section to keep Intralot conversation in one place. Packer Link to comment Share on other sites More sharing options...
jeremykgold Posted December 27, 2013 Share Posted December 27, 2013 As an example for how you come across companies, how did you come across AIQ? It seems at least with companies I've seen you recently talk about (NXST, Gray, etc), you're looking for companies with undervalued or yet to show yet cash flows? But is it just through various reading that you come across these? Link to comment Share on other sites More sharing options...
phil_Buffett Posted December 30, 2013 Share Posted December 30, 2013 packer emeco Looks really interesting. a lot of fear about this Company. very depressed Price. trades under Liquidation value. i like it Link to comment Share on other sites More sharing options...
ZenaidaMacroura Posted December 31, 2013 Share Posted December 31, 2013 Sorry if this is redundant, but what are you top 5 largest holdings? How much fiaty? Link to comment Share on other sites More sharing options...
Packer16 Posted December 31, 2013 Share Posted December 31, 2013 Top 5 at YE are: AIQ, FIATY, FNM/FRE pfds, GNCMA and Intralot. We will see how 2014 goes. I know it will not be as good as 2013. Packer Link to comment Share on other sites More sharing options...
argonaut Posted January 1, 2014 Share Posted January 1, 2014 Hi Packer, I'm curious are you still in Glacier Media or did you move that capital into one of your top 5? Link to comment Share on other sites More sharing options...
Packer16 Posted January 1, 2014 Share Posted January 1, 2014 I am going to give Glacier some more time. I have only been in the position for a few months. I have moved on from SD though. I waited a few years and no one saw the value so maybe the value there is not as big a first presented. Packer Link to comment Share on other sites More sharing options...
ZenaidaMacroura Posted January 1, 2014 Share Posted January 1, 2014 Given AIQ's cash generation, what is your estimation of fair value? At what point will it become to dear to hold? Link to comment Share on other sites More sharing options...
plato1976 Posted January 1, 2014 Share Posted January 1, 2014 I feel SD is different from Glacier SD is about its reserve potential - it's harder to predict or even to track; Glacier is easier to at least track its progress I am going to give Glacier some more time. I have only been in the position for a few months. I have moved on from SD though. I waited a few years and no one saw the value so maybe the value there is not as big a first presented. Packer Link to comment Share on other sites More sharing options...
Packer16 Posted January 1, 2014 Share Posted January 1, 2014 You are correct on the Glacier SD differences. I initially bought SD based upon Ward's and FFH's conviction that value was there. However, I did not have an edge other than other's convictions, a mistake. I held on through the change in management and thought maybe they saw something there and would be able monitize it and that did not occur. So we sit here now with a company whose assets have been through 2 management teams and no value enhancement. The latest is Leon Cooperman saying there is hidden growth in the well production data. I find it hard to believe Leon Cooperman, he is great value investor but not a geologist as far as I know, has an advantage over the 2 management teams and the other majors who probably have looked over SD's assets and passed. This is just too hard for me to figure out if it can be figured out, so I sold. Packer Link to comment Share on other sites More sharing options...
argonaut Posted January 2, 2014 Share Posted January 2, 2014 Thanks for your thoughts on Glacier. It will be interesting as US business slowly improves to hopefully see some head north. I assume we will see 4Q their debt reduced by a chunk of the recent real estate sale and eagerly look forward to see if they have managed their ebitda higher. Link to comment Share on other sites More sharing options...
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