What are you buying today?

[Foreign Tuffett]

PCG puts, wish me luck.

 

Could you share your thesis for this trade?

[Ahab]

I think the market is being far too optimistic about the equity value that remains for current shareholders. PG&E needs a lot of capital both to invest in the business and resolve legal liabilities. Moreover, the market may be underestimating the amount of money that needs to go to fire victims (i.e the ongoing dispute over the cause of the Tubbs fire). Ultimately, my base case is that a creditor plan wins out and they extract a large share of the equity.

 

 

[Spekulatius]

CVET

 

Another “crappola” spin-off. What is the thesis now, since the initial thesis of a software subscription business seems to busted? Or is this thesis still intact in your opinion?

[Broeb22]

CVET

 

Another “crappola” spin-off. What is the thesis now, since the initial thesis of a software subscription business seems to busted? Or is this thesis still intact in your opinion?

 

Was the thesis ever that this was a software subscription business? Maybe your opinion of CVET is shared by others, which makes my thesis more plausible that the business fundamentals will be strong for a long time while being hard to understand in the present, and potentially a source of excess returns. But that's what makes a market.

 

[Spekulatius]

CVET

 

Another “crappola” spin-off. What is the thesis now, since the initial thesis of a software subscription business seems to busted? Or is this thesis still intact in your opinion?

 

Was the thesis ever that this was a software subscription business? Maybe your opinion of CVET is shared by others, which makes my thesis more plausible that the business fundamentals will be strong for a long time while being hard to understand in the present, and potentially a source of excess returns. But that's what makes a market.

 

Yes, I believe that was the thesis. But this software business is small and the company is loaded with debt. early indication are that the business doesn’t generate much cash. If you are just interested in the distribution business, you can buy PDCO, which although it is not a pure play on animal health, trades at a very undemanding valuation.

[Gregmal]

added to MSGN in reasonable size @17.5

[Broeb22]

Based on my analysis, which I am quite certain you won't rely on, CVET offers a superior value proposition to its customers, vets. It does so by offering lower inventory carrying costs and bringing the vet practice incremental sales they otherwise would not earn. Vets currently charge exorbitant prices for their prescriptions because much of the inventory moves slow at the individual practice level, but a company like CVET can aggregate the demand of its vets, generate better inventory turns at lower gross margins, and still earn a respectable ROE. The lower gross margin CVET can charge relative to the individual practice is what drives the sales boost for the vet practice.

 

The prescription mgmt. side of CVET is more than anything a means to drive higher sales from the distribution business. The existing distribution business and its sales reps should also drive the adoption of CVET's prescription mgmt. business internationally, which the company is building its capabilities for right now.

 

Yes, the debt is very high. That is an admitted risk for a small position, and one I offset at the portfolio level with a decent amount of cash. 

 

I guess when you boil it down, I believe CVET will earn above-market growth due to the better value prop outlined above, will get some additional gravy from their software-type business, and they operate in a market that grows above inflation with a multi-decade record of doing so. 

 

[CorpRaider]

Had an outstanding limit order fill on $TPR...kind of conflicted about that, but that's probably why I let system 2 put the order in some time ago.  :'(

[james22]

More BRK @ $196.37.

[Viking]

BAC, MS, LUV, SU.TO, FFH, WFT.TO

 

Still about 70% cash

[Agrippa07]

added to BRK.B, MO and WFC

[Spekulatius]

GRIF

 

Same here. Got some GRIF at the close. Also added to FOX, BNTGY, WMB,WAB and a starter in DD (rebought).

[Mephistopheles]

M - Macy’s. I think 3 of their prime properties - Herald Square NY, State Street Chicago and Union Square SF are worth like half the EV of the entire company ($9 b as of today)

[TwoCitiesCapital]

M - Macy’s. I think 3 of their prime properties - Herald Square NY, State Street Chicago and Union Square SF are worth like half the EV of the entire company ($9 b as of today)

 

But as learned with Sears, it matters not what those properties are worth if they're not sold OR if the proceeds from the sale prop up the retail business.

 

Not saying that M is going the way of JCP or Sears - just that I'm skeptical of the value department styles provide overall given my own shopping habits and prior investment experiences

[Gregmal]

M - Macy’s. I think 3 of their prime properties - Herald Square NY, State Street Chicago and Union Square SF are worth like half the EV of the entire company ($9 b as of today)

 

But as learned with Sears, it matters but what those properties are worth of they're not sold OR if the proceeds from the sale prop up the retail business.

 

Not saying that M is going the way of JCP or Sears - just that I'm skeptical of the value department styles provide overall given my own shopping habits and prior investment experiences

 

Macy's needs to demonstrate it is different than everyone else. The playbook for every failing business is more or less SHLD. Sell your valuable assets and keep the crap floating. Macys should immediately spin off a SRG like REIT, sell the Macys retail operations, and then just refocus on Bloomingdales. People buy cheap knock off shit on Amazon all the time. Whereas the moat of Bloomingdales is that no one buys that kind of designer shit they sell online due to knock offs.

[Gregmal]

Just snagged a decent starter chunk of GRIF as the opening spread was fairly narrow.

[bizaro86]

Bought a bit of CARV this AM. Small NYC bank that is down 90% today. Released (not very good) earnings yesterday, but capital ratios still look reasonable and I couldn't find any enforcement actions or anything.

[brycepeterson]

Nibbling on FOX $33-$35.  FCF should range $1.6-$2.0 = 6.25% to 7.5% FCF to EV.  Good assets (Fox News, Fox Sports).  Fairly steady cash flow.  That's a good price vs. all other bizs in market, and considering quality of biz.  I'd buy a lot more, but have reservations on the next generation Murdoch(s) running it.  Just paid $300 million for acq that I don't understand.  Worry it's a trend.

[Saluki]

Bought some more BRK and PBF.  Just starting a new position in EAF. 

[Foreign Tuffett]

Bought a bit of CARV this AM. Small NYC bank that is down 90% today. Released (not very good) earnings yesterday, but capital ratios still look reasonable and I couldn't find any enforcement actions or anything.

 

I'm not familiar with this company whatsoever, but is it actually down by ~90% today? What service is showing it as being down that much? I've checked several and only Seeking Alpha is showing down by ~90%.

 

 

 

[writser]

Agreed. I hope that is not the reason you bought it.

[bizaro86]

Bought a bit of CARV this AM. Small NYC bank that is down 90% today. Released (not very good) earnings yesterday, but capital ratios still look reasonable and I couldn't find any enforcement actions or anything.

 

I'm not familiar with this company whatsoever, but is it actually down by ~90% today? What service is showing it as being down that much? I've checked several and only Seeking Alpha is showing down by ~90%.

 

Thanks! I saw it on the SA biggest losers list, pulled up the 10-Q and checked the P/B and whether it was actually bankrupt and bought a few hundred shares.

 

The $13MM in trust preferreds that haven't been paid for years is a pretty significant factor in the current valuation that I also missed.

 

I though this was an illiquid fat finger type deal, and it wasn't,  so I've sold. Thanks to you both for helping keep my loss on carelessness <$100.

[Foreign Tuffett]

Bought a bit of CARV this AM. Small NYC bank that is down 90% today. Released (not very good) earnings yesterday, but capital ratios still look reasonable and I couldn't find any enforcement actions or anything.

 

I'm not familiar with this company whatsoever, but is it actually down by ~90% today? What service is showing it as being down that much? I've checked several and only Seeking Alpha is showing down by ~90%.

 

Thanks! I saw it on the SA biggest losers list, pulled up the 10-Q and checked the P/B and whether it was actually bankrupt and bought a few hundred shares.

 

The $13MM in trust preferreds that haven't been paid for years is a pretty significant factor in the current valuation that I also missed.

 

I though this was an illiquid fat finger type deal, and it wasn't,  so I've sold. Thanks to you both for helping keep my loss on carelessness <$100.

 

No worries.

[gokou3]

More WFC

[sarganaga]

Bought some Birchcliff Energy (BIREF, BIR.TO) yesterday & today. Has looked cheap for awhile, even cheaper now. Good long term assets, appears to have pretty competent management, Kitimat project (assuming it completes) should add value.