RedDaruma Posted September 14, 2015 Share Posted September 14, 2015 Thank you for pointing out, Packer. I was missing SOTP 101 here. Link to comment Share on other sites More sharing options...
RedDaruma Posted September 19, 2015 Share Posted September 19, 2015 Packer, I think it should be different in each industry/situation but I was wondering if you have any "fair EV/EBITDA or FCF valuation" level in your mind for a company with particular characteristics? (e.g. a company with a stable recurring rev should trade at least 10x etc.) TIA Link to comment Share on other sites More sharing options...
simplefocus Posted September 19, 2015 Share Posted September 19, 2015 Hi Packer, What's your thought on AIQ? Oaktree is out, so does it affect on your outlook of this company? Do you still hold the shares? Thanks. Link to comment Share on other sites More sharing options...
RedDaruma Posted September 21, 2015 Share Posted September 21, 2015 Packer, On capital allocation, is there any metrics that you use to see if a company is allocating capital wisely on share buybacks/payin down debt? I check the change in ebitda/capex for capital spending decisions. TIA Link to comment Share on other sites More sharing options...
argonaut Posted September 24, 2015 Share Posted September 24, 2015 Hi Packer, I own GPiv33 too and in reals its up nicely but in dollars much, much less...are you continuing to hold it because you think it will continue to grow or is there a macro play on currency at work? It seems that with some of these where you switch for greater upsides do you ever sell at a loss (if you have one, you may not :)) and move it to something that has more upside? E.g I assume you still feel intralot has significant upside vs some of the newer names? Do you hedge any of the overseas positions? Link to comment Share on other sites More sharing options...
Homestead31 Posted September 24, 2015 Share Posted September 24, 2015 Hi Packer - earlier you said: "I typically do not perform projections " could you expand on that a bit? are you just looking for what you consider to be "normal" industry multiples based on comps, history, and M&A and then looking for businesses that are below a "normal" multiple and "stable?" Are you spending most of your research time on understanding if the business is indeed stable and then just waiting for mean reversion of the multiple? And if you are not making projections, does that mean you do not look at businesses with temporary problems? and project what they would look like in a year or 3 when they've worked past their problems? this seems to be the approach that many value investors take? thanks so much for this very information thread Link to comment Share on other sites More sharing options...
Packer16 Posted September 25, 2015 Share Posted September 25, 2015 Packer, I think it should be different in each industry/situation but I was wondering if you have any "fair EV/EBITDA or FCF valuation" level in your mind for a company with particular characteristics? (e.g. a company with a stable recurring rev should trade at least 10x etc.) TIA I use industry metrics but cap what I will pay to about 50% of the industry average or 10x EBITDA for a growing firm. Link to comment Share on other sites More sharing options...
Packer16 Posted September 25, 2015 Share Posted September 25, 2015 AIQ is a tough one as I know the asset is cheap. I am going to try to find out Oaktree's reason for selling and try to lobby for incentives to prevent this from becoming a subsidiary of Chinese company that becomes a value trap, although some can rightly say it looks like that today. One incentive is to have management purchase shares or have the $1.5 million of incentives they are getting from the new majority owner vest only if the stock price closes above the Oaktree sale price to ensure that everyone's incentives are aligned. Packer Link to comment Share on other sites More sharing options...
Packer16 Posted September 25, 2015 Share Posted September 25, 2015 As to GP Investments, I still hold unhedged. I think it is a cheap asset manager and a way to play the eventual Brazil recovery. They even recently launched a SPAC in the US which is an interesting idea. I am not sure I would be able to hedge effectively and the cost in Barzil may be high. Yes I do sell at a loss if I can find a greater upside even though I should do it more often than I do. I suppose I have the get back to even bias that most also have. I still think Intralot has some runway as well as Autohellas in Greece. Packer Link to comment Share on other sites More sharing options...
argonaut Posted September 25, 2015 Share Posted September 25, 2015 Thanks Packer! I appreciate your thoughtful response. I know you tend to stick to the smaller players...However as LNG continues to drop...at a certain price would it become interesting? It looks like they are on track for their big projects...which would decrease their leverage and bring profits in over the next few years. Link to comment Share on other sites More sharing options...
influx Posted September 25, 2015 Share Posted September 25, 2015 The stuff I have been buying includes BXE and a SPAC warrant (ROIQW). Of your list I have an opinion on 2 or 3. I looked at PWE but I am only focused on low cost producers for O&G as I am not convinced about a large upward bounce. BXE wins in either scenario. PWE only in the O&G up scenario & will probably have more upside in a bounce but could be 0 also. What is your 1. Investment horizon..holding period..or exit reason/strategy for BXE? 2. How big is BXE in terms of % from your portfolio if I may ask? Thank you Link to comment Share on other sites More sharing options...
RedDaruma Posted September 25, 2015 Share Posted September 25, 2015 Packer, I think it should be different in each industry/situation but I was wondering if you have any "fair EV/EBITDA or FCF valuation" level in your mind for a company with particular characteristics? (e.g. a company with a stable recurring rev should trade at least 10x etc.) TIA I use industry metrics but cap what I will pay to about 50% of the industry average or 10x EBITDA for a growing firm. Much appreciated as always! Link to comment Share on other sites More sharing options...
Packer16 Posted October 2, 2015 Share Posted October 2, 2015 LNG - I have not looked into in detail but I am focusing on cheap low cost gas producers who should benefit from LNG. BXE is a play on incremental cost of production as it is very low and possibly the sale of assets to reduce debt and reveal the hidden low cost Spirit River asset. Exit is when Spirit River value is realized in stock price. Size is about 5%. I have been tracking these but at this point they are to expensive for my taste. I like the business so if any of them decline I will definately take a look. Packer Link to comment Share on other sites More sharing options...
Packer16 Posted October 2, 2015 Share Posted October 2, 2015 Hi Packer - earlier you said: "I typically do not perform projections " could you expand on that a bit? are you just looking for what you consider to be "normal" industry multiples based on comps, history, and M&A and then looking for businesses that are below a "normal" multiple and "stable?" Are you spending most of your research time on understanding if the business is indeed stable and then just waiting for mean reversion of the multiple? And if you are not making projections, does that mean you do not look at businesses with temporary problems? and project what they would look like in a year or 3 when they've worked past their problems? this seems to be the approach that many value investors take? thanks so much for this very information thread I am finding normalized multiples applied to normalized cash flows so there may be some aspect of projections in these normalizations. I do not like to pay for growth so if I can get it with a cheap multiple then that is great but I do not factor it into my IV calculation for a company today. Some of the growth is incorporated into the multiples I apply to get IV. So for some industries like TV broadcasting applying a 9/10x multiple of EBITDA assumes some underlying growth. I also use a lack of cash flow growth as a filter to remove companies I am not interested in investing. Packer Link to comment Share on other sites More sharing options...
Eye4Valu Posted October 2, 2015 Share Posted October 2, 2015 Packer-What do you peg the odds that Green Bay wins the Super Bowl this year? They're looking pretty good again! Link to comment Share on other sites More sharing options...
Homestead31 Posted October 4, 2015 Share Posted October 4, 2015 I am finding normalized multiples applied to normalized cash flows so there may be some aspect of projections in these normalizations. I do not like to pay for growth so if I can get it with a cheap multiple then that is great but I do not factor it into my IV calculation for a company today. Some of the growth is incorporated into the multiples I apply to get IV. So for some industries like TV broadcasting applying a 9/10x multiple of EBITDA assumes some underlying growth. I also use a lack of cash flow growth as a filter to remove companies I am not interested in investing. Packer so basically it sounds like normalized multiples on normalized margins on current revenue for the most part... does that sound right? thanks again Link to comment Share on other sites More sharing options...
Packer16 Posted October 6, 2015 Share Posted October 6, 2015 As to Packers and superbowl odds, I am not objective but I hope they make it and win versus the Patriots. Homestead - that is the approach. Packer Link to comment Share on other sites More sharing options...
Homestead31 Posted October 6, 2015 Share Posted October 6, 2015 it sounds so simple when you say it like that!! haha Link to comment Share on other sites More sharing options...
simplefocus Posted October 31, 2015 Share Posted October 31, 2015 This board has been running wild with VRX. I know you might not have a vested interest in this, but I'm wondering if you have an opinion. Thanks. Link to comment Share on other sites More sharing options...
Packer16 Posted October 31, 2015 Share Posted October 31, 2015 I do have an indirect interest, I own Sequoia. As to VRX, I have been watching from the stands and am not sure how much I can add to what has been said. The key question in my mind is how extensive are the problems at Philidor in terms of other distributors. If Philidor is it, then at today's price it is cheap. If there is more then there may be more downside. A final point that reduced my enthusiasm are Munger's comments. He usually is right. Packer Link to comment Share on other sites More sharing options...
muscleman Posted January 30, 2016 Share Posted January 30, 2016 Packer, if you can only buy one cable company, would you pick GNCMA, CHTR, LILA or LBYTk? Right now GNCMA's EV/EBITDA is the lowest, but the EBITDA consists of a large wireless component, which should trade at a low multiple. On the other hand, the ability to offer triple plays or quad plays seem to be very attractive. Link to comment Share on other sites More sharing options...
frommi Posted January 30, 2016 Share Posted January 30, 2016 Packer, if you can only buy one cable company, would you pick GNCMA, CHTR, LILA or LBYTk? Right now GNCMA's EV/EBITDA is the lowest, but the EBITDA consists of a large wireless component, which should trade at a low multiple. On the other hand, the ability to offer triple plays or quad plays seem to be very attractive. I am not packer but maybe you should look at CABO, too. They increased prices by 10% and added a 1GB option for all customers last quarter and this is not in the numbers at the moment. Very good board, monopoly in its market, underlevered and trades for roughly 8x2016 EV/EBITDA. But probably too expensive for packer. :) Link to comment Share on other sites More sharing options...
Packer16 Posted January 30, 2016 Share Posted January 30, 2016 If l look at the group (GNCMA, CHTR, LILA, LBTYA and CABO) at today's prices, I like GNCMA. GNCMA is selling at 6.4x EBITDA while CHTR is at 9.5x and CABO at 7.9x. The US firms all have about the same margins (EBITDA 33% to 37%) and GNCMA and CHTR the same historical growth over the past 3 to 5 years (about 10%). The foreign ones have higher margins in part due to lower content costs. In terms of positioning, GNMCA has a monopoly on hard wire and an advantaged position in wireless. The others clearly have good hard wire positions with not much in wireless. Although wireless is not a direct threat today, it may be tomorrow and provides growth today. The foreign firms trade at 7.6x for LILA and 8.6x for LBTYA. These also have John Malone at the helm. For foreign cable, I like the Korean players like Hyundai HCN trading at 1.7x EBITDA. Packer Link to comment Share on other sites More sharing options...
fa21212 Posted January 30, 2016 Share Posted January 30, 2016 Packer, Thank you for the excellent insight. Is there a tool that you use to quickly identify foreign firms and their valuations? Are you using CapitalIQ or something else? Any insight is greatly appreciated. Faisal Link to comment Share on other sites More sharing options...
hardcorevalue Posted January 30, 2016 Share Posted January 30, 2016 Sorry if this has been asked Packer but what broker are you using for these Korean companies (Fidelity)? IBKR doesn't seem to offer it to Canadians. Link to comment Share on other sites More sharing options...
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