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2018 Ideas

never looked at it before today because its a mid cap. and most small cos have ****ty results. but this is a diamon in the rough.

excellent company. and excellent pick. has a long run rate. but this is definitely in early stages and they are killin it. every new store  they build has a payback period of less than 1 year 150% ROI first year (DAFUQ) but they built that **** at the profitable areas not the ****ty midwest which is going ot be there go to sooner or later (but no sign of this yet) 600 stores (growin it at 20% per year), they have the potential to build 2500 before **** slows down. 1st year performance over the years is steady at 2 mil a pop and the ebitda margins are bomb diggity at 25%. same store sales are ok.

cons. i have never heard of them (could actually be a good thing) its a discount store for young people. the stock is super expensive. its about a 25x multiple at 5b and 200m ebitda., lets assume best case scenario for each new store. 500k aditional ebitda per store. 1900 potential stores.  thats about 950m. or 1.2b ebitda to its current valuation of 5b. thats pretty cheap at 4x and should prolly trade around 10x or 12b. growing store base at 20% that’ll take them about 8 years. at current prices thats like a 12 percent appreciation per year. a huge con is they sell to a younger group which is pretty faddy. but its a discounter which is everybody’s wet dream in the space. 

thx for sharing. adding to list.

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

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STZ is also a really good GARP name. Been in the stock since ~$156… I think there’s still a lot of room for growth. Biggest idiosyncratic risk at this point (in my opinion) is US trade tensions with Mexico escalating and NAFTA being terminated, but I believe they’ve been preparing for that scenario since Trump got elected.

Hey Hamilton, have a holly jolly Christmas.

STZ is quality

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

RIP

Black Swan wrote:

Yeah but FCF yield is about 10% with ~4% dividend yield and good coverage from 2019 onward (2018 has some restructuring and CAPEX).  Honestly, this is your prototypical Buffett consumer staples value play with solid metrics, stable performance, old time brand recognition and simple business model.  A common feedback I’ve heard from people about this name is along the lines of “I’m almost surprised Buffett doesn’t own this.”  I figure put this away in a long term portfolio on recent weakness and forget about it for a few years.

https://nypost.com/2018/06/22/kraft-interested-in-buying-campbell-soup/

BRK owned Kraft Heinz interested in Campbell Soup

Add this to my calls on Joy Global (bought by Komatsu within 6 mos) amd ERJ (talks wrapping up with Boeing).  I’m in the wrong business, should be doing merger arb.

#FreeCVM #FreeTurd #2007-2017

haha. was about to post that link too. saw it on jpm early look.

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

thanatos0320 wrote:

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%…

Cha ching! Up 81.4% to $32.13. I think I’ll sell now.

Great pick man.  Don’t forget to let the winners ride 

He can’t. It was acquired

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

Nerdyblop wrote:

He can’t. It was acquired

True. I really wasn’t surprised by it, though. Given their circumstances, you expected an aquisition. I just didn’t expect UNFI to do it given their current exposure to Whole Foods.

I’m not too sure if this acquisition by UNFI was a good one, as they now have too much exposure with Whole Foods- Whole Foods represents 30% of sales. If Amazon decides to self-distribute or diversify its supply needs longer term, then UNFI could really be hurt. United Natural Foods also has to worry about a number of recent acquisitions by Supervalu that have not been fully integrated and the synergies have not been fully realized. With EBITDA in decline at both companies, there is a lot of work that will be required… UNFI definitely paid a premium that’s hard to be enthusiastic about..

nah good job. lots of people were on it for acquisition play. it played off! co’s a pos.

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

GE going < $10?

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

RIP

ran across the Pershing newsletter. apparently mgmt repurchased 18% of the shares the last 2 months!!!?!?!?!!?

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

RIP

Black Swan wrote:

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.

loeb just dropped more on it

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

igor555 wrote:

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

SIG doing better than expected

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

RIP

TLRY jeez… That stock is up to $83.10 from $25.35 a month ago. I guess the cannabis stocks are really starting to take off… 

thanatos0320 wrote:

TLRY jeez… That stock is up to $83.10 from $25.35 a month ago. I guess the cannabis stocks are really starting to take off… 

Or they took off already and are starting to crash…

But it is tempting which is why I bought two already. We’ll see what happens at the end of the year.

TLRY listed on NASDAQ, so liquidity is driving the stock to a large extent. Most of these stocks trade OTC in the US. I’m waiting for the next NASDAQ listing to check it out. 

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

- AF hivemind

IsThereAny wrote:

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.

Another big earnings beat… MOONing

Hey Hamilton, have a holly jolly Christmas.

brain_wash_your_face wrote:

TLRY listed on NASDAQ, so liquidity is driving the stock to a large extent. Most of these stocks trade OTC in the US. I’m waiting for the next NASDAQ listing to check it out. 

WTF. This thing is up to 232.48….. That’s 910% higher than the IPO price. This thing has to pop soon.

thanatos0320 wrote:

WTF. This thing is up to 232.48….. That’s 910% higher than the IPO price. This thing has to pop soon.

Short it.

hei.so wrote:

thanatos0320 wrote:

WTF. This thing is up to 232.48….. That’s 910% higher than the IPO price. This thing has to pop soon.

Short it.

Saw some screen shots on Twitter that you can’t short it.  But options are probably the best move anyway 

market cap is $20b but revenues is $20m…..wow talk about hype.

anyways…as for ideas, I like broadcom (avgo). Check out their operating cash flows….latest mgmt comments and quarterly numbers suggest they may be increasing dividends….P/e and ebitda multiples are cheap compared to not only sp500 but also to peers.

Be yourself. The world worships the original.

i actually track avgo. so i decided to look it up, anyways it’s a high growth companies that does a lot of acquisitions. after the 19b ca tech acq in july 2018, post acq ev of ~130b with new debt included. 24b rev, 12b ebitda. normalized net income prolly at 5b. 8.5 fcf. 5.5x rev.  11x ebitda. 15x fcf. 26x NI. they are cheap. these dudes tried to buy qcom for 130b in 2017 (lolzars). they bought broadcom in 2015 for 37b. so they an acq play. because of this all metrics are expanding qoq. growth is prolly 20% yoy. margins are still expanding but its already kinda high wit op margins about 50%. they have good borrowing costs at 3% so it makes sense for them to acquire other cos, plus they stagger their debt. overall its a good company, but i dont like the acq strategy as they plan to keep acquiring other infra software cos and cost cutting. this is essentially a private equity tech firm. now the co has been successful at doing this, but ish too risky for me. i like my growth the way i like my food: organic.

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

i’m not too focused on past or even current ratios or valuation metrics. I am more interested in catalysts…..What is in the pipeline operational wise that can raise or lower its earnings and surprise q numbers? 

Be yourself. The world worships the original.

Bought some Micron today at close ($45.98) ahead of earnings release.

Tepper was prettyyyy bullish on CNBC last week.

Hey Hamilton, have a holly jolly Christmas.

GE cutting divy again 

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

RIP

igor555 wrote:

GE cutting divy again 

What happened to this company?  Was its capital arm really hiding all the rot within the industrial side?

Hard to believe

capital segment is the main issue, but their entire company is in decline except aviation and healthcare. here are the negatives!

capital segment from 2015 to 2017 loss -8b, -1.3b, -6.8b. (they are continuing to shrink this by another 25b, currently around 136b in assets vs 494b in 2014 before they started the firesale, and 661b at its peak in 2008). they are expecting to breakeven for ge capital in a year.

power segment from 2015 to 2017 had gains of 4.8b, 5.1b, 2.8b. there is a turnaround. multiyear fix.

oil and gas from 2015 to 2017 went from 2.4b, 1.4b, 0.3b. they spun it off and plan to sell.

lighting and transportation also in decline.

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

Oil and gas is not in decline.  Look at WTI.  Look at the broad industry.  Baker Hughes is a powerhouse in the LNG, drilling, processing and deep water arena.  GE owns 63% of BHGE which is a public company, the market value of their shares is about $22B and their lockup will expire midyear at which point they’ll liquidate.  ~$22B of cash coming back to a $120B company…

Power (~29%) isn’t in structural decline, it’s still the backbone of global power generation.  But it is a very cyclical business.  They completed the Alstom acquisition at the exact peak right as Siemens and others were scaling back (Classic Immelt).  Right now Siemen’s estimates global turbine demand is about 1/3 of manufacturing capacity (basically GE and Siemens).  Hence the major restructuring and write down at GE.  It will be cash generative again (very soon) as the restructuring annualizes, but it’s a fixed cost manufacturing business and they had to match their footprint.

Aerospace (~22%) is booming with next gen production but in ramp this year (using cash) owing to w/c and production build out, will be cranking out cash next year.

Healthcare (~15%) is great and will be spun with debt in early 2019.

Transportation deal should close by year end with $2.9B in cash consideration and primarily an equity stake in a dominating industry company.

Lighting shouldn’t even be mentioned, it’s <10% of revenue and being sold.

There was a lot of rot in the finance arm, but they took their write-downs and are in the process of selling that down.  People that can’t understand this value case should just stay out of industrials.  But people who don’t understand the business and aren’t accustomed to cyclicals will continue to live in the past talking about headlines while actual value analysts are looking at the wall of capital return and annualizing restructuring (~$3B of cost out in the last 12 months including >10,000 laid off) can do the simple math.  Culp coming in off the board and pushing out Flannery right as this was about to go down for a $300M pay package and the glory will forever be one of the coldest moves of all time.  I have a large chunk of shares at a high cost base ($14) but loaded up on long $18 strike calls the day of the Culp announcement (up >70%).  All is right.

#FreeCVM #FreeTurd #2007-2017

best of luck. 

how much $$ did you drop on GE as stock?

how much $$ did you drop on the calls? at what expiration? planning to hold to the end like erj?

also just fyi, market cap is 120b, but enterprise value is like 180b. market cap can easily change, but the debt you have, that **** needs to be paid in full.

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