Sign up  |  Log in

2018 Ideas

Nerdyblop wrote:

personally i think anything above 4x is a lot. in addition you are not talking post acq. 14b debt. ebitda of around 2b so thats 7x. when you include debt, that fcf does not look appealing. its less than 5%. of course this is pre synergies but im not really down to trust all those synergies.

Fake News.  Moody’s puts pro-forma leverage at 4.8x in June down to 4.0x within 24 months of the acquisition and pre-acquisition the debt was around 2x.

“We estimate that debt/EBITDA at closing will approximate 5.0x before synergies, compared to 2.2x currently. Campbell should be able to reduce debt/EBITDA below 4.0x within 24 months through core operating cash flow and cost synergies.”

Too risky from the guy who hyped SNAP.  Next!

#FreeCVM #FreeTurd #2007-2017

See how TagniFi is helping investment professionals streamline their valuation and analysis process in Excel. Sign up for a fee trial today.

didnt know that the rise in debt in q1 reflected deal closure which occured q1. anyways if you think 5x is a great ratio then by all means! you a buyer now im guessing?

main point is deal is ****ty. not accretive. which is why prices sunk.

also for the record i did say i didnt buy snap cuz i was too ***** to buy a risky stock. i was just trying to find a justification for the price. which imo is still plausible.

I love my cheese. I got to have my cheddar.

Let’s switch gears. Any short ideas???? Especially industrial related.

Nerdyblop wrote:

didnt know that the rise in debt in q1 reflected deal closure which occured q1. anyways if you think 5x is a great ratio then by all means! you a buyer now im guessing?

main point is deal is ****ty. not accretive. which is why prices sunk.

also for the record i did say i didnt buy snap cuz i was too ***** to buy a risky stock. i was just trying to find a justification for the price. which imo is still plausible.

Haha, it’s fine I just need to dial back the trolling a bit sometimes.

I am a buyer of CPB at these levels, although I haven’t bit yet.

#FreeCVM #FreeTurd #2007-2017

im keeping an eye on SIG. hope they have a bad quarter and stock falls a bit more.

love the business they need to get some thing in order and continue developing their e commerce platform.

KHC has some more room to fall IMO

"You want a quote? Haven’t I written enough already???"

RIP

What do you like about SIG? I would think the whole jewelry industry is getting disrupted by direct to consumer models like blue nile with super low margins. What makes SIG with retail presence competitive relative to those e-commerce platforms selling super low margins while customers are getting more and more value-oriented. 

SIG has the #2 jewelry e-commerce platform. they entered e-sales party pretty late but that part is doing well.

i think they can leverage their zales/jarred names to increase presence online. 

they are closing a bunch of stores and concentrating on the redundancy of having a jared and zales in the same mall.

only planning on opening 20-30 strategic stores.

cash flow is nice, debt pretty low. the ceo is working on a turnaround and i think with another drop it is an attractive bargain

could also be attractive to a PE firm

"You want a quote? Haven’t I written enough already???"

RIP

Thanks will keep an eye on this :>

in terms of product quality and price. from a consumer perspective, can yall tell me what’s it like to go to these diamond stores vs say a discount retailer or a random no name competitor or online shops c2c b2c.  percent of sales online/off and level of growth off vs on yoy cagr past 5 yrs. why do you say turnaround? 

All VVS’, put you in a necklace
Girl, you look beautiful tonight

Stars on the roof, they matching with the jewelry

I love my cheese. I got to have my cheddar.

Nerdyblop wrote:

in terms of product quality and price. from a consumer perspective, can yall tell me what’s it like to go to these diamond stores vs say a discount retailer or a random no name competitor or online shops c2c b2c.  percent of sales online/off and level of growth off vs on yoy cagr past 5 yrs. why do you say turnaround? 

All VVS’, put you in a necklace
Girl, you look beautiful tonight

Stars on the roof, they matching with the jewelry

You know what I was thinking along those lines just now haha… it is really a commodity unless you are one of those super high-end chains like Tiffany. Consumers are getting smarter everyday, especially the younger generations.

The one caveat I’d add is that for your middle class or lower to middle class, Kays or whatever may not be Tiffany’s but people enjoy the feeling of going in and having a sales person help you through what is still a large and luxury purchase.  Being surrounded by the setting and told what you’re doing is good is all part of the process.  Especially for non-engagement type jewelry where the significant other can participate in the purchase and add to the experience.  

It’s also important to remember that we’re analysts.  Learning about the four C’s, navigating a priced market and making calculated big ticket purchases sight unseen are more in our wheelhouse.  For a lot of people that is a daunting prospect and still leaves room for Kays where a sales person can guide them.

Paying an extra grand or whatever at Kays for a $10k ring may seem excessive for the experience but tbh, I went through the purchase process at Tiffany’s and ultimately wound up going Blue Nile because while I liked their setting more, I was getting stones several grades better at BN for like $15-20k less ring cost.  I just couldn’t rationalize spending that much more for sheer waste.  Yet, look at their results… this is absolutely not my sector of expertise but I’m inclined to say there’s a read through there.

#FreeCVM #FreeTurd #2007-2017

Problem is alot of those e-commerce platforms now have strategic flag ship locations for people to try out the on-line models in-store so that bridges the gap somewhat. I’ve seen Blue-Nile stores inside a few popular Malls I go to. For engagement rings the diamond is really a commodity and it is very easy for people to find information online about the 4Cs.

Blue Nile only has six locations nationwide.

For your typical American it’s still one thing to read about the four C’s and another to feel comfortable with the result of your research on a big ticket purchase unseen.

You go to the store and your fiance likes a certain ring you’re getting that one, not rolling the dice on some other.

#FreeCVM #FreeTurd #2007-2017

To add context, long term I think you’re right (2019+) and as a pair trade, Blue Nile may beat brick and mortar like Kays, but for 2018 at least I’d be more inclined to expect upside surprises and would be much more likely to take the long vs the short on Kays if I had to take a side.  I think these long term narratives tend to run ahead of results and can get people caught out of position.

#FreeCVM #FreeTurd #2007-2017

Black Swan wrote:

To add context, long term I think you’re right (2019+) and as a pair trade, Blue Nile may beat brick and mortar like Kays, but for 2018 at least I’d be more inclined to expect upside surprises and would be much more likely to take the long vs the short on Kays if I had to take a side.  I think these long term narratives tend to run ahead of results and can get people caught out of position.

I think this is spot on.

these guys are absolutely killing it. upward trajectory. but its recession prone.  sss is down 5% so the stores are less effective and they closing ****, and they are overpaying for e commerce. selling cheap though! some key points:

1st issue they dont do so well during recessions.whats funny is they sold a huge chunk of receivables, and are selling the fianncing business moving forward. smart imo. but they prolly reduce the risk on recessions of peepz not paying. plus they have used it to pay down debt adn will buy back shares in 2019 they still have about 650m authorized. so they reduced their own risk.

2nd issue they are closing more stores than they are opening. sss is falling about 4%/yaer  for last 3 years. the prior 3 before this, they were killing it but no longer the case. so they are value stage. this is a value co. so i expect eps to be in decline irrespective of whether a recession hits. which is prolyl why they cheap. imho they should continue paying down debt and avoid sahre buybacks while the econ is still good. they should improve their grade.

3rd issue they are trying to shift to online. e commerce at 8% (500m) of sales plannign to bump to 15% (id assume 1b) in 2021. they jsut bught anotehr co recently for 320m at 4x revenue and will be 20% of e commerce. is this smart? well its eps neutral which means they didnt make money. but it could improve their online experience. it grew 30% yoy, and e commerce is prolly the segment that will grow. blue nile  ev is 500m and rev grew 8% last 5 years. margin are de minimis. and its selling at 1x rev.

I love my cheese. I got to have my cheddar.

yes the product is a commodity. most ppl dont have a family friend that is a jeweler. so they end up going to jarred/kay/zales or blue nile.

blue nile has the advantage now in e commerce.  signet bought JamesAllen.com which is the #2 e commerce platform behind blue nile (iirc).  

if you are going jewlery/ring shopping  you ar gonna look online first. when you are ready to buy wouldnt you want to try it on before buying and see what it looks like. thru jarred/kay/zales you would be able to walk into a store next day and try it on.

also someone will always be there to assist you with any questions you have. you also have the piece of mind vs shopping at independent jewler who may or may not be honest or offer any warranty or whatever.

imo the combination of the ecommerce  platform and in store experience would be hard to beat. 

btw berkshire owns helzebrg

"You want a quote? Haven’t I written enough already???"

RIP

there was haevy volume at $38. there is a serious player there.

I love my cheese. I got to have my cheddar.

Overall sentiment is too negative with GE. It’s looking grim again.

i am a long-time blue nile customer. have bought maybe 8-10 items including engagement and wedding rings off blue nile. you basically get 50% off the best deal you can find or barter for in store. signet has a completely different feel online, kind of like their stores, cheap but still more expensive than blue nile. i have bought a couple of cheap unique things off signet online over the years but wouldn’t buy there online unless it is a unique item. i think the true threat for signet is amazon. the entire model is reliant on engagement rings. they are the big margin products and most people’s largest jewelry purchase by far.

i agree the vast majority of the populace prefers going into the store for this purchase but this will change. there is a sort of stigma with buying an engagement ring online but when your wife shows up with 2x the ring, the stigma goes away pretty quickly. a couple of my buddies have opted for blue nile because the difference in diamond size for the same price is impossible to pass up. i don’t see how signet can offer prices that are competitive with blue nile while maintaining a retail footprint. this is an existential issue for them. blue nile is just starting to gain material market share as well making signet’s retail footprint perpetually unprofitable.

we’ll see. there will certainly be plenty of opportunities to trade it but long-term value is tough to see as a long-time blue nile customer.

tbh the cheapest way to buy a ring is just to get that **** used. these are largely depreciating assets like cars, and people typically get divorced and would want to get rid for it real cheap. in addition, people often trade up and have many old rings they dont even use.

but as a funy fact margins at sig are at 35% vs 20% for nile. implying a markup of 55% vs 25% respectively.

I love my cheese. I got to have my cheddar.

Yeah, but nobody wants to bring the mojo of a divorce into an engagement ring.  Plus they represent a clean start.

#FreeCVM #FreeTurd #2007-2017

We had an heirloom ring from my nana. Stone not that big, but meaningful. Needless to say, my wife’s wedding band is blingtastic.

you basically need to come from a target school pedigree/work at prestigious firm in the US/have a really good connection.

- AF hivemind

I mean, Princess Kate was wearing a ring from Diana… if it’s good enough for them it’s good enough for plebs like us lol. 

https://www.eonline.com/de/news/540427/you-won-t-believe-how-much-kate-m...

lol das a half milli ring. anyways, the more expensive the ring, the more rare it is, the more it acts like an investment. but in any case, her ring had a cagr of 7%. not exactly amazing, but pretty good considering most depreciate.

I love my cheese. I got to have my cheddar.

get yo sig on

"You want a quote? Haven’t I written enough already???"

RIP

that was a prescient call /clap

^ I want in on the credit for that one.

#FreeCVM #FreeTurd #2007-2017

thanatos0320 wrote:

Supervalu (SVU)

Their wholesale segment outperformed. This segment is 80% of sales. The 2 acquisitions for the wholesale division are going better than expected and the synergies from one of the the acquisitions has been raised to $80MM from $60MM.

Their retail segment has been holding down their profitability but is finally beginning to show improvement. In the earnings call yesterday, management announced they will be selling off it’s unprofitable Shop ‘n Save retail businesses. They have entered in to a definitive leaseback agreement which will be bring in $450MM that will be used to deleverage. There is a strong push to turn around the retail segment.

Management is putting more focus on improving online business, and has been ramping up its delivery service. SVU recently got a contract with Instacart to provide store coupons and loyalty rewards on it’s e-commerce sites.

Reason’s the price target may not be achieved:

  • Retail has caused SVU’s shares to plunge due to stiff competition. This led to retail stores being sold
  • Declining gross margin
  • Strong competition

Up 16.67% since this post. Still looking for another 26%…

FIVE

Bought it about a month ago (entry @ ~$74)… they reported solid earnings/guidance yesterday after market close and trading up 20%+ today. May want to wait for a better entry but I think this is a winner long-term. Relatively cheap growth… sitting @ ~39x forward P/E with 24% 4-yr rev CAGR and ~34% 4-yr EPS CAGR. Could expand store base by ~4x according to some analysts with a payback period for each store of only ~ 8 months. No debt. Worth putting on your watch list at least imo.

Hey Hamilton, have a holly jolly Christmas.