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Hubris

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Everything posted by Hubris

  1. I always use free cash flow and some these MLPs have attractive reinvestment opportunities. So its combination of dividends and growth that you are getting out the best ones. You also have to factor in debt since for example PSXP has ample room to lever up and acquire more midstream assets from PSX.
  2. Thanks for great the presentation. I love the manual of ideas and the book! I'm on the last chapter of the book its been a great read!
  3. If its in magic formula and an equity stub so it's never easy to own. I don't know about reimbursements but I think quite a few within space are trading at depressed valuations. How is their business replaceable though?
  4. Although this is much more mainstream than when Lynch started doing it I think. I still thinks its relevant since PSX, VLO, MPC and other refiners might be moving to drop some of their midstream and downstream assets into similar structures. I found a couple of presentations that seem to be a good introduction to the structures. I think the conglomerate nature of many energy assets might be tax inefficient and could have huge restructuring potential. Panel_Presentation_Wed_Morning_Evolution_of_the_MLP.pdf MLP_101.pdf
  5. I think we can now add JCP to the list here as well... ;D Its amazing how some turnaround can't turn...
  6. That's great best of luck to you guys! We have a similar arrangement while where some of them are in PE and others are in banking. It's much more common here in the Middle East/Asia to have such arrangements.
  7. Thanks Packer! I also like LEE although BRK and GS own the common cash flow has been steady for four years and their repaying debt at a pretty steady pace. There has been a recent insider buy by the CFO and the CEO took I think around half her pay in equity which has doubled since then. The CEO has also some higher cost basis shares which were repurchased prior to their prepackaged bankruptcy.
  8. Hi I do realize the risks entailed. For example Buffet and GS own the junior debt in Lee while Apollo and TPG created CZR and are participating in the rights offering and fully subscribing. I just think at a certain prices these are investable with outsized returns. I've been very comfortable in this area for a while now. Some of these were trading at over 50% FCF last year. You really have to make a judgement against the business going forward. I'm saying this is an area of big winners and big losers the key is telling the difference. Just sifting the world for a mis-priced bet!
  9. I've just joined the board recently. You all have provided so much insight into so many companies I thought I might humbly contribute insight into a profitable area of investment I feel might be overlooked by some: I think equity stubs might be very interesting and can provide outsized returns. I can emphasize more on picking your spots here. I'm hoping this thread leads to some idea generation. My current list of ideas which I'm working through: Lee Enterprises (LEE) McClatchy (MNI) Caesar's (CZR) Radio One (ROAIK) Rite Aid (RAD) Cenveo (CVO) DexMedia (DXM) Gentiva Health Services (GTIV) OI SA (OIBR) These are all highly levered equity stubs. I think they will serve as fertile ground for research. Note: CZR is going ahead with a rights offering to spin-off its World Series of Poker intangible assets and its stake in two casinos. So its stub value + rights value. (Non-transferrable rights) Endo Health (ENDP) used to be part of this list however MV has gone up quite a bit and is a nice turnaround at this point.
  10. I guess if ur priming through JPM (Neovest) u could post these trades quite easily. If you do looks at P/E your effectively buying these businesses at P/E 3-6
  11. Well you have to consider which investors your targeting in the future. Since many of your ideas seem to be short term catalyst driven tax exempt investors will enjoy superior returns. Small funds usually cost about $20,000 $40,000 to setup. Consider fund admin and audit as well. Do you want small offices as support or medium sized enterprises ($2B+) for admin? Do you want second tier auditors BDO, Grant Thornton, etc. or one of the big four? It just depends how aggressive you are about raising capital in my opinion, the pricier options are brands which lend some credibility to your operation. (This is based on perspectives here in the Middle East, however I feel it might still apply in the states.) The legal structure you choose will matter if your ever going to consider a master/feeder structure for onshore/offshore investors. The most valuable advice I got was to add a pay in kind clause to the offering documents. Its just like how warren distributed the BRK shares to the original partners. If you ever think permanent capital might be more attractive than fees this is an issue you must think about.
  12. Looked at a tender they did last year. However with odd lots and the pro-rata distribution ur returns aren't that great. It might also be worth noting the number of previously tendered shares. If it were only that easy!
  13. Great book read it cover to cover... Couldn't put it down! My favorite current OUTSIDER is Mike White (DTV). Grew up in the Cola Wars era is very intent of not replicating the experience with Pay TV. Astounding capital allocation with a ROIC of 23% last year and excess cash and some leverage for buy backs. DTV would certainly qualify for some serious buy backs like this book covers if you look at it now they've bought back about 59% of their stock since 2005. (Credit for the find goes to Mr. Weschler.) Who would you guys view as a similar outsider in a good business?
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