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What are you buying today?


LowIQinvestor

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Entercom (market puking like it's Burford!)

 

Company is overly indebted + terrestrial radio is a no growth industry. That said, the price action today does seem extreme.

 

The amount of (very underwater) stock the Chairman of the Board has purchased in the open market since the CBS transaction is insane.

Leverage is high, but as recently as April they issued bonds at 6,5% due 2027 and got more favorable terms on their term loan. Those bonds traded ABOVE par today, so there's a big discrepancy between bond investors and equity investors - I'm betting the equity guys are acting hysterical.

 

Also picked up some Gray Television (shoutout to Packer). Trading 15/share while generating 4 dollar per share in FCF - and guiding for higher next year. Those bonds are also trading like it's smooth sailing.

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SU.TO

 

I was wondering if Suncor was one Berkshire would consider acquiring (in its entirety, they already own a small position).  I had noticed a bunch of private jet traffic between Omaha and Kelowna, but since Suncor is not located there I suppose it is unrelated...  Only other frequent/recent NetJets trips to Omaha were from Van Nuys.

 

Berkshire always seems to be poking around the oil sands but never makes big direct investments, they seem more interested in selling the shovels. Kelowna is pretty popular with Albertans it could just be Abel visiting family etc...

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Is anyone familiar with DXC? Stock is tanking today. I've followed at arms length for a while but am trying to brush up quickly. Thanks in advance!

 

Familiar is too strong of a word, but I have owned them for a little while. I was attracted by the cheap metrics. I sold after reviewing the first earnings after they announced their LXFT acquisition , which had not closed yet at that time. ( it was a negative earnings surprise). I felt this was quite complex and the business may be in rapid decline. Also, the Luxoft acquisition felt like a desperate measure. I exited flat, so avoided this dumpster fire. This company feels like a bunch of crappy IT companies held together tight duct tape. The buybacks have significantly worsened their balance sheet. I don’t feel like I have a handle if this can turn around and managment isn’t exactly inspiring either.

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Again,

 

 

Can I ask for your view on EW and its prospects?  It's not a company that gets a lot of analysis or opinion.

 

I'm not a very good or diligent analyst & tend to go with my gut on a lot of things. My thoughts on Edwards will be riddled with bias based on the fact that it has been the single most successful investment I've ever made.

 

I bought Edwards back in 2013 when they were going through a patent dispute over the TAVR (trans-aortal valve replacement) with Medtronic.

 

They prevailed in the suit & have since made acquisitions which got them into mitral with the PASCAL & Cardioband products. Mitral is proving to be much more difficult but has more potential patients.

 

Their main product is tissue vales & they also offer the newer minimally invasive trans-catheter products. The pivotal acquisition which got them into the Sapien market was done at a quarter of what Medtronic paid to acquire the same technology.

 

The minimally invasive Sapien valve replacements are approved for use on patients who can't tolerate having their chests opened for a traditional procedure & recently the company's Sapien valve has expanded its indication to include the intermediate risk pool, and is expected to include low surgical risk patients soon.

 

Continued domination of the tissue valve market & the expansion of indications to lower risk patients & eventual (maybe) mainstream use of minimally invasive valve replacements are what I pin my hopes on..

 

Sales reps are highly trained & sit in on procedures. I remember reading something that said they tied sales reps compensation to successful procedures instead of sales volume but this may be faulty memory as I can't find any reference.

 

Gross margins have increased steadily.

 

I like that they rely more on organic growth.

 

Slow & steady buybacks.

 

Executive compensation that seems aligned with shareholders. Bonuses are tied to revenue & FCF instead of earnings.

 

Their main competitors are Medtronic, Abbott & Boston Scientific.

 

Morningstar has a pretty comprehensive writeup with potential negatives.

EW_:_Edwards_Lifesciences_Corp_Analyst_Report_|_Analyst_Report_2019-08.pdf

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Again,

 

 

Can I ask for your view on EW and its prospects?  It's not a company that gets a lot of analysis or opinion.

 

I'm not a very good or diligent analyst & tend to go with my gut on a lot of things. My thoughts on Edwards will be riddled with bias based on the fact that it has been the single most successful investment I've ever made.

 

....

 

Thanks!  I've been looking at it for awhile, but haven't gotten super comfortable yet.

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Again,

 

 

Can I ask for your view on EW and its prospects?  It's not a company that gets a lot of analysis or opinion.

 

I'm not a very good or diligent analyst & tend to go with my gut on a lot of things. My thoughts on Edwards will be riddled with bias based on the fact that it has been the single most successful investment I've ever made.

 

....

 

Thanks!  I've been looking at it for awhile, but haven't gotten super comfortable yet.

 

I think the price is way too high ATM & I sell a little every now & then to keep the allocation down.

 

It just keeps going up.

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