What are you buying today?

[investor1]

TWM.TO

[elliott]

SE0010296582 Ether Tracker  (beware, 2.5% annual fees)

[Libs]

SSPK - WeedMaps

[clutch]

Starter ABNB

 

Same

[Gregmal]

Got an ABNB tracker too. Also added to ARKG short. Beautiful fade action there. Had a field day with ALCO. Upped a 20 bps position up to about 3% on the opportunity with the peculiar volume.

[CorpRaider]

AIV

[Spekulatius]

Added a bit of 9988.HK (BABA) in HK overnight.

[willie2013]

AIV

[Castanza]

ATCO

[SafetyinNumbers]

Adding more ATTO on a retest of the breakout at $12ish.

 

I'm not very technically inclined but that seems like an important level.

 

More importantly to me, the move from $10ish to $12ish, took the EV/EBITDA multiple from 3.7x to 3.9x so there seems like a lot more room to run if multiples can expand or if investors can gain more confidence in the numbers after they report Q4 or if Goldman finally updates their estimates.

 

ATTO bonds are trading in the high 90s (due in 2022) so a bit of a disconnect between equity and debt persists. The equity is significantly less liquid than the bonds which might help explain the disconnect.

 

https://finra-markets.morningstar.com/BondCenter/BondTradeActivitySearchResult.jsp?ticker=FATNL4525153&startdata-ipsquote-timestamp=12%2F15%2F2019&enddata-ipsquote-timestamp=12%2F15%2F2020

 

Added more ATTO today

 

Tiny market cap but big company.

 

They reported a strong Q3 and will likely again in Q4. Goldman, one of the three analysts didn’t update estimates post earnings last month so the forward EBITDA consensus is way too low. I think he’s either embarrassed or indifferent (ATTO reported $45m in EBITDA and GS was at $18m). Either way, consensus 2021E EBITDA is only $158m, while the three estimates are $114m, $174m and $185m. For 2022E, the consensus is $171m with Goldman at $138m and the other estimate at $204m.

 

Throwing out Goldman’s stale estimates, ATTO is trading at 3.7x EV/EBITDA.

 

Competitor Concentrix (CNXC) was just listed on the Nasdaq after spinning out of Synnex and it trades at ~9x EBITDA making, ATTO quite accretive for an acquisition. Slide 31/32 in their analyst meeting deck make a pretty good case to buy Atento to solve for growth in emerging markets and for accretive acquisitions.

 

https://ir.concentrix.com/static-files/6c895513-f519-46ce-9566-5c33ca93a8dc

 

I think this deal happens within two years which will be after ATTO management gets margins up to its target of 15% and the stock price is much higher.

 

At 8x EBITDA on the consensus 2022E number of $204m, yields a target of $70 vs the current price of $10.45.

 

Lots of room to be wrong in between those numbers and still be happy. In fact, I think the EBITDA estimates are too low so I see upside beyond that.

[fareastwarriors]

AIV

 

 

+1

[valueinvestor]

WE.V

[Gregmal]

Added a small bit to DKS. Picked up AIV under $5 for a trade. Will probably sell it within 24 hours.

 

EDIT: also shorted a small bit of CVNA

[ourkid8]

I am extremely bullish on ATCO's prospects going forward. Close to 30% of my portfolio is in this position

 

1. Strengthening a moat around with their business being the lowest cost ship leaser

2. Improving their credit rating and the company should be investment grade over the next year

3. Acquiring ships with long term leases and with a ~20%-25%  ROE (They also have one of the youngest fleets out of their competitors)

4.  Atlas will be locking in long term rates at these elevated levels (Almost 15% of their fleet on contracts will roll-off in 2021 so its a huge huge tailwind)

 

I am very curious on what David Sokal / Bing Chan can do with APR as they have highlighted that they would like to move the company from short to long term contracts in the energy space.  My only negative I see is I would prefer that the company eliminates the dividend so they can continue to reinvest at very high rate of return. 

 

ATCO

[Gregmal]

Got some AIV at the pre market open mid 4s. Early bird gets the worm? Or flattened at the open?

[Castanza]

I am extremely bullish on ATCO's prospects going forward. Close to 30% of my portfolio is in this position

 

1. Strengthening a moat around with their business being the lowest cost ship leaser

2. Improving their credit rating and the company should be investment grade over the next year

3. Acquiring ships with long term leases and with a ~20%-25%  ROE (They also have one of the youngest fleets out of their competitors)

4.  Atlas will be locking in long term rates at these elevated levels (Almost 15% of their fleet on contracts will roll-off in 2021 so its a huge huge tailwind)

 

I am very curious on what David Sokal / Bing Chan can do with APR as they have highlighted that they would like to move the company from short to long term contracts in the energy space.  My only negative I see is I would prefer that the company eliminates the dividend so they can continue to reinvest at very high rate of return. 

 

ATCO

 

Agree with all the above. I'm adding quite a bit more here. Getting close to a 15% position

[Gregmal]

Got an ABNB tracker too. Also added to ARKG short. Beautiful fade action there. Had a field day with ALCO. Upped a 20 bps position up to about 3% on the opportunity with the peculiar volume.

 

https://www.alicoinc.com/news/detail/1352/state-of-florida-approves-option-agreement-with-alico-to

 

Always great doing biz with the government in a business friendly state. Another $14m straight to the bank. Not this first transaction of this nature and I'm expecting more of this in the future. Stock is wildly undervalued.

[thepupil]

Got an ABNB tracker too. Also added to ARKG short. Beautiful fade action there. Had a field day with ALCO. Upped a 20 bps position up to about 3% on the opportunity with the peculiar volume.

 

https://www.alicoinc.com/news/detail/1352/state-of-florida-approves-option-agreement-with-alico-to

 

Always great doing biz with the government in a business friendly state. Another $14m straight to the bank. Not this first transaction of this nature and I'm expecting more of this in the future. Stock is wildly undervalued.

 

party like it's 2005, what's next some TRC?

 

And  yes I'm aware that ALCO has changed drastically since its land bank value trap days, Trafelet drama and all that stuff.

[Gregmal]

Got an ABNB tracker too. Also added to ARKG short. Beautiful fade action there. Had a field day with ALCO. Upped a 20 bps position up to about 3% on the opportunity with the peculiar volume.

 

https://www.alicoinc.com/news/detail/1352/state-of-florida-approves-option-agreement-with-alico-to

 

Always great doing biz with the government in a business friendly state. Another $14m straight to the bank. Not this first transaction of this nature and I'm expecting more of this in the future. Stock is wildly undervalued.

 

party like it's 2005, what's next some TRC?

 

And  yes I'm aware that ALCO has changed drastically since its land bank value trap days, Trafelet drama and all that stuff.

 

Long and strong the Sun Belt, baby!

 

The mid 2000s housing bubble was more or less the 1990s tech bubble. Guess what came after that in tech? I think its our time here. Runway is long. I'll get scared the day I hear a coastal liberal governor start talking about lowering taxes or implementing some sort of weather changing apparatus that provides 70 and sunny 10 months a year for residents....

[gfp]

Trafelet!  Thats the name I was trying to think of.  He was part of the group that were buying control of ALICO in the open market back in the day right?  It didn't go particularly well as I remember.  Haven't thought much of Alico since except for driving down Alico Road in Fort Myers a couple times.

 

Is Citrus production still being hit by Greening or whatever the scourge was?

[Gregmal]

A lot of the greening stuff is resolved. Dont worry, my hippie sister who aced her SATs, turned down Princeton to go to UF, and then decided to work for FWC for $35k a year has great contacts in this space!(said 50% serious and 50% sarcastically).

 

Alico has been recycling the conservation/protected land proceeds into additional groves. There is not really a catalyst here. But I think they've demonstrated over the past few years that theyre shareholder friendly enough. Solid inflation projection on multiple fronts here. Some free optionality on the mineral rights. I think its a pretty good 10-15% a year total return for a good long while candidate.

[shhughes1116]

Trafelet!  Thats the name I was trying to think of.  He was part of the group that were buying control of ALICO in the open market back in the day right?  It didn't go particularly well as I remember.  Haven't thought much of Alico since except for driving down Alico Road in Fort Myers a couple times.

 

Is Citrus production still being hit by Greening or whatever the scourge was?

 

Yes, greening is still negatively impacting citrus production in Florida.  Production is down more than 50% over the last ten years.  The various interventions studied and applied have not been effective at reducing the spread.  Infected trees have also been found outside of Florida, in Southern California and South Texas.  There is a semi-last ditch collaboration with Bayer AG to identify a solution.  In the meantime, a substantial amount of groves in Florida get transitioned to cattle grazing land.

[Gregmal]

Trafelet!  Thats the name I was trying to think of.  He was part of the group that were buying control of ALICO in the open market back in the day right?  It didn't go particularly well as I remember.  Haven't thought much of Alico since except for driving down Alico Road in Fort Myers a couple times.

 

Is Citrus production still being hit by Greening or whatever the scourge was?

 

Yes, greening is still negatively impacting citrus production in Florida.  Production is down more than 50% over the last ten years.  The various interventions studied and applied have not been effective at reducing the spread.  Infected trees have also been found outside of Florida, in Southern California and South Texas.  There is a semi-last ditch collaboration with Bayer AG to identify a solution.  In the meantime, a substantial amount of groves in Florida get transitioned to cattle grazing land.

 

Yea this is probably a more informative answer than the one I gave lol. What you're looking at for Alico is a couple things that largely balance out. So the low point of ~25M pounds set a few years back was a one off. You had 43M this year vs 46M the year prior. 42M in 2017 and this up from 25m or so in the earlier part of the decade. That said, this is somewhat of an "apples to oranges!" comp. They consistently plant new trees and have been acquiring stabilized groves as well recently with land sale proceeds. However an overall decline in production is typically offset by price increases. Additionally, they generate over 80% of their revenue from a contract with Tropicana which they've literally had forever.

 

So greening is an issue. It isnt really effecting Alico to any major degree due to the above, especially the way it was feared to in 2016 IIRC, rather it is something that effects the small grove operator/mom and pop type farmer. Typical big corporation will win type of things. With the benefit of decreased production equalling higher prices.

[gfp]

Thanks to you both

[kab60]

Small position in SUS:LN based on like 30 minutes of reading, this guy did a great writeup: http://lewissrobinson.com/