KJP
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Posts posted by KJP
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19 hours ago, ValueArb said:
TLNE's tender offer can be read here. The big issue is that it has an out to cancel the tender if a small basket of energy stocks drops by 10%, which by my calculations is down 14% at the moment.
Yes, the provision has been triggered, so Talen could cancel the offer if it wanted to.
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46 minutes ago, gfp said:
Is your assumption that 99 shares is an odd lot here?
Yes, that's one of them. I have seen 99 shares referred to in a couple of secondary sources but cannot verify it yet myself.
EDIT: Apparently it takes the administrator 24-48 hours to email the Offer to Purchase once requested. They did confirm to me over the phone that an odd let is anything less than 100 shares.
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Talen is not an SEC filer so the Offer to Purchase is not available on EDGAR. The press release tells you how to get it. I have requested it but haven't yet received it. Nevertheless, I bought yesterday based on some assumptions about what's in it.
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If the theme you are looking at is increased electrification and dealing with it effects, IES Holdings and Acorn Energy (remote generator monitoring and control with new demand response offering) may interest you. Here is a thread on IES Holdings:
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The Inhibrx transaction should close soon: https://inhibrx.investorroom.com/2024-05-10-Inhibrx,-Inc-Announces-Updated-When-Issued-Trading-Date-for-Anticipated-Spin-Off
You get cash, shares in a SpinCo*, and a CVR. Depending on where the SpinCo trades, it looks like you're getting a decent CVR fairly cheap.
*Although the record date for the spin is May 17, an earlier press release stated that the the publicly traded shares will trade with the rights to the spinoff until the distribution. So, I believe if you buy in the open market today you still get the spin.
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Catalyst Bancorp (CLST) isn't a particularly well positioned or well run bank. But (i) it's overcapitalized, (ii) in October it will be 3 years post-conversion, (iii) it has been and continues to sell at a significant discount to book, (iv) it has consistently bought back shares and just authorized another repurchase, and (v) the CEO owns some shares and would get ~$1 million in change of control payments.
Most of the points above can be seen in yesterday's earnings release: https://catalystbank.investorroom.com/2024-05-02-Catalyst-Bancorp,-Inc-Announces-2024-First-Quarter-Results-and-Approval-of-New-Share-Repurchase-Plan
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Solitron Devices
Thomasville Bancshares
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1 minute ago, Luca said:
Yep, and a -30% crash will get you down to -90% and that can happen but I also think that with all the buybacks, sentiment bottom and ongoing recovery that the window to go into china with leverage looks relatively attractive here, ill leave some space to DCA into this too.
That likely is not what @Spekulatius was referring to. 3x funds rebalance on a daily basis. So, over time they do not track 3x the cumulative performance of the index. A simple example:
Buy at 100
Day 1: index goes to 105, so up 5% -- 3x goes up 15%, so 3x fund to 115.
Day 2: index goes back to 100. This is down 5/105 = down 4.7619%, so 3x fund will be down 3 x 4.7619 = 14.2857%. 115 * (1 - .142857) = 98.57. The 3x fund has underperformed (3 x cumulative return of the index).
This effect will magnify over time and can be particularly brutal in volatile but overall flat markets. -
4 hours ago, pricingpower said:
One aspect I'm not clear on is if shares need to be moved out of street name to be sure to get the cash out treatment... seems like will need to register them pre the record date for the reverse split / subsequent split. Anyone looked into whether the transfer agent has any unexpected fees? Googling a bit seems most brokers are 0-$100 for using the direct registration system but transfer agents also sometimes have additional fees.
I feel for the middle office guy somewhere who's about to get a tsunami of 9,999 share registration requests.
The release says: "
If consummated, the Proposed Transaction would apply directly to record holders of the Company’s common stock. Persons who hold shares of common stock in “street name” are encouraged to contact their bank, broker or other nominee for information on how the Proposed Transaction may affect any shares of the Company’s common stock held for their account. If you hold in “street name” fewer than 10,000 shares in any one account, the Proposed Transaction may apply indirectly to your shares as described in the proxy statement to be filed in connection with this Proposed Transaction.Normally this is not an issue and the reverse split occurs at the individual account level, not at the aggregated broker level. But the disclaimer is interesting. If I was going to hold through the transaction, I'd look at the proxy statement and then contact my broker. -
On 2/10/2024 at 8:28 PM, treasurehunt said:
Thanks. I found this presentation very interesting. At least EPD is financially motivated to do a good job of modeling supply and demand.
More today on EPD's view: https://ir.enterpriseproducts.com/news-releases/news-release-details/enterprise-build-new-natural-gas-processing-plant-delaware-basin
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1 hour ago, gfp said:
Thanks for posting - regarding this statement, "Ashford estimates that approximately 1.1 million shares (representing approximately 31% of the shares of common stock currently outstanding) would be cashed out in the Proposed Transaction and the aggregate cost to the Company of the Proposed Transaction would be approximately $5.5 million, plus transaction expenses, which are estimated to be approximately $6.7 million. Ashford intends to fund such costs using cash-on-hand."
Isn't there a decent chance that shares transfer to a bunch of 9.9k share owners / baby arbs and the company doesn't have the cash to redeem the much higher than projected number of shares?
That is possible. But take a look at insider ownership. The structure suggests to me that they want to cash out as many as possible.
EDIT: It's enough of an issue that I wouldn't buy this at, say, $4.80 today. I bought pre-market and my limit sell order already hit for most of those shares. I'm going to keep an eye on it and see if the spread widens out again.
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Ashford Inc. go private transaction via 1 for 10,000 reverse split: https://ashfordinc.q4ir.com/news-events/press-releases/news-details/2024/ASHFORD-INC.S-BOARD-OF-DIRECTORS-APPROVES-PLAN-TO-TERMINATE-REGISTRATION-OF-ITS-COMMON-STOCK/default.aspx
Stock price has been volatile this morning, but IRR would be good if deal closes on time. According to the press release, they don't appear to be aggregating across accounts either. So, if you're comfortable with the deal, you could put a decent amount of money into this. Subject to shareholder vote with targeted closing in summer 2024.
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15 hours ago, treasurehunt said:
Your post is all about demand. What about supply? US natural gas production has more than doubled in the last 20 years thanks mostly to shale. I think you'll need to have a strong view on future production in order to predict prices.
Slides 29-35 of EPD's investor presentation may be useful here: https://ir.enterpriseproducts.com/static-files/7dfd6fce-afdb-4869-af76-5f745faa7ba2
I have no idea how accurate those forecasts will turn out to be, but you can see from their CapEx that they are putting their money where their mouths are.
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William Penn Bancorporation
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In today's presentation, Charter projects $2,000 - $2,500/passing (doesn't include cost of the drop) for its greenfield footprint expansions. See slide 11: https://ir.charter.com/static-files/ba52d4ff-3a83-415b-8c1a-1f0a9a12df8b
On slide 12, they show post-subsidy cost/passing for the rural buildouts. It's well over $3,000/passing.
On slide 13, they show margin profile of rural buildouts. They claim 70% gross margin with some of the revenue being video and mobile. So broadband only would appear to be above 80%.
Based on the dot plot on slide 13, average penetration appears to be ~45% at 15 months. I believe these subsidized rural areas have some of the weakest current broadband offerings in the country. So, someone overbuilding an average existing cable broadband system with fiber likely would not achieve a similar penetration timetable.
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2 hours ago, dwy000 said:
Other than BOC's numbers the other one you can use to measure is Tucows (Ting Fiber). They're pretty similar in that they go into very small, newer communities (often new builds). The actual returns are still TBD because they generally assume a very strong level of uptake and pricing that takes years to normalize. They often also don't take into account the response from incumbents (if there are any) with promo pricing and retention offers that were never factored into the planning models. I haven't seen any that have hit their projections or have turned cash flow positive to the level where you can judge long term capital returns.
Edit - I took a quick look at Tucows. Thru 3Q they state they have invested $329m of capex in the biz since 2015 (this includes a couple small acqns). For just the past 3 yrs they will have EBITDA losses of another $80m or so. Haven't looked further back. So all in, they're about $425-450m of spend. Right now they have 41k subs. Let's say they can get that up to 60k on the current builds. They seem to charge about $100/mo with 60% gross margins.
$450m of spend for 60k subs is about $7100/subscriber. At 20% op margin that's $240/yr which is a 3.4% ROIC.
What is the incremental OpEx/SG&A after a new subscriber connects? Assuming this is just broadband, and not video, it should be very low. So, incremental operating margin, which is probably the best way to assess incremental new build CapEx, is likely much higher than 20%. Also, 60% gross margin on broadband seems low. Tucows claims much higher. See slide 25: https://ir.tucows.com/wp-content/uploads/2023-Q3-TCX-results-investor-deck.pdf Put those two things together and you'll get much higher (claimed) margins. See slide 26.
I do want to note that I've never been able to reconcile that slide (which they've long had in their presentations) with the segment numbers. The CapEx/passing in the segment financials always seems higher than what they put on that slide. [The slide is showing cost per passing, not cost per subscriber, and doesn't include the cost of the drop to the house of a new subscriber.]
I also agree with you that there are other costs besides CapEx that must be incurred to get the system to steady state/50% penetration (marketing, etc.) so the EBITDA losses should be included, not just the CapEx, when looking at returns on capital.
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18 minutes ago, Hektor said:
@KJP Out of curiosity, why Asbury? why at this price? Thanks,
I think Asbury is a good to very good (and well managed) business trading at less than 10x normalized earnings. I recognize, though, that earnings are likely to come down as new car margins normalize.
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Asbury Automotive
Rand Worldwide
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32 minutes ago, Morgan said:
@Longnose Thank you for sharing TBTC. I have not done any kind of deep analysis, but I just want to ask.
What do you think of the declining revenues since Q12022? Revenues have had some cyclicality over the years, so maybe this is par for the course? There was a similar pattern in 2012 to 2017, then again from 2018 to 2022. Do you feel revenues are growing from more and more business or simply keeping up with inflation? Revenues have trended upwards for 10 years though.
Revenue is lumpy because they record significant one-time revenue when they initially sell a system (and system sales vary significantly from period to period) and then ongoing maintenance revenue for all installed systems. The maintenance revenue has been steadily increasing over the years. See, e.g., page 7 of the latest 10-Q to see the lumpiness in system sales: https://www.sec.gov/ix?doc=/Archives/edgar/data/1090396/000143774923031496/tbltrc20230930_10q.htm
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10 hours ago, John Hjorth said:
Which Canadian and / or North American banks are you invested in?
I hope that you wouldn't mind to share. - Thank you in advance. - And as already written : All replies from everyone welcome!
Truxton Trust (TRUX)
FFB Bancorp (FFBB)
United Bancorporation of Alabama (UBAB)
Citizens Bancshares Corporation (CZBS)
OP Bancorp (OPBK)
Exchange Bank of Santa Rosa (EXSR)
M&F Bancorp, Inc. (MFBP)
These are all very small US banks.
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33 minutes ago, Spooky said:
I would be interested in digging into some micro / nano caps.
There are several threads about small caps and nano caps on this board, but they don't get much interest. See, e.g., the threads on Terravest, Keck Seng, Black Diamond (now Clarus), Hamilton Thorne, ECA Marcellus Trust, Unit Corp, New Lease Office Properties, Macfarlane Group, NIcholas Financial, Hirequest, MachTen, Hingham, Solitron Devices, Calloway's Nursery.
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On micro/nano vs. large cap and management quality, amount of work, etc, compare these two documents:
https://www.citigroup.com/rcs/citigpa/storage/public/citi-2022-annual-report.pdf
https://ir.truxtontrust.com/static-files/a30c48a8-5f9a-4bac-9273-062f5f3dad41
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Keck Seng Investments (0184.HK)
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16% - US community bank basket
13% - Fairfax
13% - Cash [from recent sales and special dividends]
10% - IAC Corp.
10% - FRP Holdings
7% - IDT Corp.
6% - Unit Corp.
5% - Solitron Devices
5% - Black Stone Minerals
3% - Leatt Corp.
3% - Turning Point Brands
3% - Macfarlane Group plc
3% - Nickel 28 Capital Corp.
2% - Enterprise Products Partners
2% - Clipper Realty
Tidbits
in General Discussion
Posted
The tender was fully subscribed the early tender deadline and closed at $116: https://talenenergy.investorroom.com/2024-06-13-Talen-Energy-Corporation-Announces-Early-Tender-Results-of-its-Previously-Announced-Tender-Offer-to-Repurchase-up-to-600,000,000-of-its-Common-Stock