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What are you buying today?


LowIQinvestor

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Amnf ... Reports record quarter after record quarter, increases dividend like clock work (3.5% yield), grows revenue and earnings at above normal rates. Still you don't pay for growth at current price.

 

Hi rpadebet - do you expect higher / faster growth to continue & what do you see as the moat for this business?  How is it possible to do high ROA / ROE ?  No competitors?

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Amnf ... Reports record quarter after record quarter, increases dividend like clock work (3.5% yield), grows revenue and earnings at above normal rates. Still you don't pay for growth at current price.

 

Hi rpadebet - do you expect higher / faster growth to continue & what do you see as the moat for this business?  How is it possible to do high ROA / ROE ?  No competitors?

 

I think we had this discussion last year in the AMNF thread itself. My thoughts haven't changed much since then. I am not sure of a moat presence here, but they are small enough for the growth to continue a while longer. They are growing by selling the same stuff in other geographies. The exit scenario I still think is, once they have a decent sized business, some major buys them at a big premium ( operating expenses are still big part of AMNFs expenses which to a major buyer is all synergy).

 

They made 0.036 EPS last quarter. Assume no more growth and they maintain this EPS for next year, they are @ 0.144 EPS. Stock trading at $2, so PE of <14. So you are not paying for growth and you get a very decent 3.6% dividend yield (approx 50% payout ratio)

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Amnf ... Reports record quarter after record quarter, increases dividend like clock work (3.5% yield), grows revenue and earnings at above normal rates. Still you don't pay for growth at current price.

 

Hi rpadebet - do you expect higher / faster growth to continue & what do you see as the moat for this business?  How is it possible to do high ROA / ROE ?  No competitors?

 

I think we had this discussion last year in the AMNF thread itself. My thoughts haven't changed much since then. I am not sure of a moat presence here, but they are small enough for the growth to continue a while longer. They are growing by selling the same stuff in other geographies. The exit scenario I still think is, once they have a decent sized business, some major buys them at a big premium ( operating expenses are still big part of AMNFs expenses which to a major buyer is all synergy).

 

They made 0.036 EPS last quarter. Assume no more growth and they maintain this EPS for next year, they are @ 0.144 EPS. Stock trading at $2, so PE of <14. So you are not paying for growth and you get a very decent 3.6% dividend yield (approx 50% payout ratio)

 

Thanks for the idea!

Will watch this!

 

Gary

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Genworth at one third of tangible book value.

 

I have not looked at this in detail, but it did catch my eye with the big drop lately.  Question:  How confident are you that they will be able to offset losses caused in their LT care insurance business? 

 

Any write up I can refer to understand the nuances better?

 

Thanks

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Hawks, is encana strictly a bet on gas prices.  Have you compared it to chk?

Check their recent IR presentation, they've made some moves recently and are trying to transition into higher margin product. I actually think it looks interesting, the valuation seems amenable, and it showed up on Clipper's 13F recently.

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dutchman    Not buying for the natural gas, but for their growing exposure to crude oil. With increasing gas asset sales and growing oil reserves, don't think the market yet realizes the transformation. And when some smaller crude oil companies struggle with lower crude prices, ECA will gobble them up on the cheap. Similar story as CHK but ECA is much stronger financially imo.

Also bought more SSW for their growing dividend and all new vessels are fully leased once again.

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OAK

 

Howard Marks, relatively cheap, some hedging as they will do best during times of distress.  I think stock is down right now because the dividend has been low for past few quarters.  It is basically a bet that divvy will bounce back at some point.  Certainly not my most researched stock but come on, it's Howard Marks!

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ASPS

 

ASPS as well. I almost doubled my position today. Ex. OCN and Insurance kickbacks you still have ~50M in net income. This is 21x for a business growing at 25-35% yoy, a good value. Add to this any of the 100M+ of OCN related revenue (ex insurance kickbacks) and you are paying a sliding scale of 7-21x for company with a long runway of 25%+ growth in front of it.

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ASPS

 

ASPS as well. I almost doubled my position today. Ex. OCN and Insurance kickbacks you still have ~50M in net income. This is 21x for a business growing at 25-35% yoy, a good value. Add to this any of the 100M+ of OCN related revenue (ex insurance kickbacks) and you are paying a sliding scale of 7-21x for company with a long runway of 25%+ growth in front of it.

 

What are the odds Erbey doesn't take ASPS private?  I would hate to load up just to see a take-under from management.

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