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What are you buying today?


LowIQinvestor

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Anthem still looks a little expensive, doesn't it? Mind sharing the napkin thesis?

 

Napkin thesis came from a recent WFC report on the health care insurance group. ANTM trades at an almost 40% discount to market, which is close to a recent trough discount in 2013 (42%). Average discount to market is ~23%.

 

ANTM is the largest insurer in the market it operates together with UNH. scale matters and health I surname is a pretty good business. Stock trades on political concerns (it fell to a recent low during the first democratic debate when Medicare for all become a big talking point), but those political trends tend to be overrated by Mr Market. If you look further back, then ANTM has traded at single digit PE vs 12x now, so there room to fall.

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Added to MSGN, tendering top of range. We'll see what pro-ration ends up at.

 

Curious sell-off, perhaps because it is not possible to tender anymore at some brokers? Admittedly an extremely weak thesis but the setup in general looks ok too (huge tender, insiders not selling, shares close to a three-year low so some bagholders might not be willing to sell) .. Still one hour left at IB. Might buy a few shares and tender at any price.

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Almost doubled my position in AYR. Possibly the best risk/reward and margin of safety Ive seen in a very long time. Now trading at basically 2.5x 2020 adjusted EBIDTA. Buyback starts October 1st.

 

I'm not familiar with this kind of company but the numbers look interesting. How do you evaluate the risk of leasees not paying?

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Almost doubled my position in AYR. Possibly the best risk/reward and margin of safety Ive seen in a very long time. Now trading at basically 2.5x 2020 adjusted EBIDTA. Buyback starts October 1st.

 

I'm not familiar with this kind of company but the numbers look interesting. How do you evaluate the risk of leasees not paying?

 

What do you mean by leasees not paying? They do not have the model that relies on leasing. IIPR, which is basically in that line of business and is actually quite interesting as a REIT but not something I own or have gotten intimate enough with the expel certain question marks tackles this kind of stuff.

 

AYR has the bulk of it's forward guidance hinged to its wholesale buildout. To date they've been successful with this and there is little to see why this can not continue. Demand is easily there and they produce basically at a $1400/lb rate with the market somewhere around $2800-$3000/lb. So they have stupid margins on this stuff with demand through the roof and really very few viable competitors on that scale AND existing relationships with about 65% of the MA businesses licensed to sell.

 

The stock is crazy cheap on an absolute basis for ANY type of business, including even melting ice cubes and cigar butt stuff but when you then put into perspective that this is a hyper growth market with surrounding states likely legalizing in the near future(especially if blue states get more blue next election), and I think it solely comes down to walking the talk so to speak. I get it, this is the most disgusting and vociferously contested optical investment known to man. The post deal SPAC. So it's absolutely astute of investors to heed that. And maybe this time it's not different. My one internal assessment of risk is that I attribute the expectation of certain traits...ie relentless volatility and price declines during certain expected periods, as things that support the "why the opportunity exists" question, but also, are characteristics of other totally unrelated but more malignant signs of a different thesis... but that's what makes a market. All I know is if they hit numbers next year, or even just top $100M in EBITDA, this should be at least a double. Whereas if they miss by 50% you still can kind of justify the current share price quite easily. I think it's really just about doing what they are saying and so far have proven that they can do. Once its been shown, fundamentals will be valued in a more traditional way. Until then it carries the skull and cross bones of the putrid post deal SPAC...

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Bought a bit more FOX and a starter in ANTM.

 

ANTM doesn't look cheap at all. Could you share the thesis?

 

It’s GARP. ~$19/ share in earnings and a growth rate > 10%. It’s not crazy cheap, but it trades at a historically large discount to market in terms of PE. This discount is due to political uncertainty (some Democratic candidates proposing single payer /Medicare for all).

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Almost doubled my position in AYR. Possibly the best risk/reward and margin of safety Ive seen in a very long time. Now trading at basically 2.5x 2020 adjusted EBIDTA. Buyback starts October 1st.

 

I'm not familiar with this kind of company but the numbers look interesting. How do you evaluate the risk of leasees not paying?

 

What do you mean by leasees not paying? They do not have the model that relies on leasing. ...

 

My guess: he's talking about Aircastle ($AYR), you are talking about AYR strategies ($AYR-A.CA).

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Almost doubled my position in AYR. Possibly the best risk/reward and margin of safety Ive seen in a very long time. Now trading at basically 2.5x 2020 adjusted EBIDTA. Buyback starts October 1st.

 

I'm not familiar with this kind of company but the numbers look interesting. How do you evaluate the risk of leasees not paying?

 

What do you mean by leasees not paying? They do not have the model that relies on leasing. ...

 

My guess: he's talking about Aircastle ($AYR), you are talking about AYR strategies ($AYR-A.CA).

 

Indeed.

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