n.r98

Herbalife? Stock got killed on declining volumes v 2021 and guiding to a full year decline in volumes and revenue. But guiding adj EPS of 3.50-4? Their adjustments are not egregious so even taking low end of guidance is 6.5x P/E or with 700m of guided EBITDA, and 4.5b of EV, 6.5x EBITDA - both measures at low end of historical range. Share cannibal, FCF generative and good level of insider buying last few months - seems like what matters is whether volume declines will stabilize and eventually return to growth - insiders seem to agree that headwinds are temporal.

What's the gameplan? Is it a dejavu trade like last Q or more a mid/lt hold.

Some updates.. JD Sports(retailer) now up 20% since 27/6... was quite too cheap and still pretty cheap given their leadership position in athleisure. Certain retailers bought right seem to do pretty well. Wrks.ln (retailer) - insider Carolyne just purchased a couple grand of stock, volume increased lately on said news. Stock still trades at close to 1x EBITDA. Ptec (not retailer) - stock climbing after arbs dumped stock upon TTB walking. Rumours that JKO wants to make a bid but the price action seems to point to incremental buyers due to relative undervaluation (?). Other interesting ideas that could be bought on weakness - $DOCS (Dr Martens) - strong revenue growth over long period of time - question is, what's their secret sauce? I think fashion retailers with conservative b/s can survive the fashion troughs, revamp themselves and survive a lot longer than people think; ofc not long term holds but tradeable. Some US ideas - A&F has revamped itself to remain relevant and despite poor cap alloc (repo shares at much higher prices), think this trades at a low 2-3x normalized EBITDA. $LEVI is interesting too, like Dr Martens, has a long history and could probably be bought on weakness - is unlike A&f though as I think they're less exposed to fashion cyclicals.

$PTEC, TTB walks away - can see why in hindsight. But latest RNS shown great results for PTEC and an extremely low valuation; bidding war also proves asset is worth more ££.

Heavy insider buying at $ARKR, anyone has some snap thesis/pitfalls on this?

Not an expert here but given the duopolistic dynamics that have been ongoing for quite a while, why haven't prices been raised already, to the point of free cash flow positivity for both players? And if they were warring, what would make them "collaborate" eventually? Also, the delivery business seems like a very competitive one with thin margins and if Uber determines to make it big, would it then be a huge cost center for them? Sorry for bombarding.

What is your thought process with Uber here? Flow reversals?

Rarely binary. But current cycle looks interesting vs previous cycles - strong balance sheets and cash flows and at 3-4x multiples. If underlying commod remains strong, could easily net higher $ from here and if sentiment returns, another oomph from the multiple expansion. Also oil e.g. doesnt have to be much higher, around these prices is perfect; higher prices only seem to incentivize swifter transitions and political pressures. But maybe this pov is too simplistic and some other pig has said this before.

In light of the headfake narrative as postulated by Burry and a few other members of the board, would it then be an apt strategy to take on a basket of high risk assets to play the Fed going dovish somewhere later this year?

Delayed but JD reported p good profits over fy 21. They are guiding to flat profits despite the last 4-5 months generating +5% over previous comps. Company is in a net cash posn even after netting for the minority put options. With retailers trading at low multiples across the globe, huge opp for JD to continue acq spree with its cash position. Company also made the right decision to raise equity at stock peak. Governance overhang remains. Can't wrap my head though on why theyre so confident in their outlook vs ASOS for e.g. - athleisure has stronger customer base? World Cup tailwinds? Moreover, was in the store just last week pre Myk and still had to queue p long. Also Punch Card Mgmt just took a posn in Countryside Partnerships - apparently transitioning to an asset light model. Maybe the board has some opinions on said names..

TheWorks.Ln - value retailer - trades at <2x EBITDA, no debt and net cash, think dividend reinstitution should be a catalyst in July. Playtech, igaming plug-in software, hard to build and very valuable, probably gets acquired soon at a >20% premium; even without it, business is cheap annualizing their latest quarter. JD Sports looks interesting as well, not mentioned anywhere - corp governance overhang but tremendous value creation over the last decade, youngies love shopping for athleisure there, trades at what 4x EBITDA?

As KJP mentioned, it's formulaic given the denominator you are using. What if depreciation is overstated and massively reduces EBIT? Then suddenly you're left with a firm that seems to be reinvesting a large portion of its NOPAT; that's why you have to penalize both the denominator and numerator with this accounting figure. Also don't forget you're tying this formula in with ROC(via multiplication) to obtain earnings growth - ROC given it uses net fixed assets, nets out depreciation. Hence your CAPEX assuming all is capitalized as PPE, has to net out depreciation for the multiplication to be accurate.

@Blugolds11 I'm much younger than you, final year in college so idk the perception in the early 2000s. Would argue that A&F's downfall was more than just the dispelling of exclusion but rather, digitization changing the clothing landscape and just quite simply, a change in what's in fashion.... happened to suits etc.. the in-thing now being athleisure(?); the last straw of A&F was in my high school days, cc 2013ish and I never thought the clothes looked good at all. In any case, it's just too hard to predict these things; Uniqlo is thriving on simplicity now, "it's back to basics again"... And now with Insta/tiktok models dictating what's "lit" and what's "drip", no one brand really has the monopoly to dictate where the next hot thing is and every brand is just a sheeple to some extent... could argue NIke is a trendsetter but more generally speaking. Do watch the Boeing one, I thought it was r good.. a little engineering, a little corp culture etc, bueno!

This isnt a movie/tv show recommendation but 2 recents docs on Netflix 1. Downfall: The Case against Boeing 2. White Hot: The rise and fall of Abercrombie & Fitch are quite well worth the watch. The first even more so than the second.

Nice interview but always get the feeling that Ted is very secretive with his process and approach towards markets.. Or maybe it's really *that simple*. He also sounds exactly like Warren: talks, laughs and outlook re life and success...no wonder they get along.

Amazing!! congrats aws

Anyone have thoughts on the merger arb 12-13% spread(bid price $12) re $PGRE. Got the idea from SSI. Trades at a cheap valuation with cap rates higher than average NY Office buildings and peers. Previous takeover attempt by Bow Street was rejected within 2 weeks but at a lowball price around 10. Pre announcement price of $9.3, but business is improving with dividend increase, even if deal falls through, don't think you lose much money, if any at all. Current acquirer is Monarch, expert in the field of office R.E and now owns 5.5% stake purchased with average 9 bucks ish.

Read it too. Would give it a 7 probably, a good counterweight if you historically read more "value-type" books. Many good case studies on various failed tech darlings. The share price examples were unfortunate though, $SFIX, $ZG.. they were all artifactual but then again, doesn't take away the overall premise. Large addressable market allows sustained high growth, management is important, strong revenue growth is important, ensure strong customer obsession, history of innovation will prevent intertia, buy when dislocated.

He was pitching Github at 60x revenue at the latest Sohn conference as the next Atlassian. At that sort of multiple, you're really asking for it imo. His book got a little too momo lately but I'm just perplexed why he didnt do well from 2015 to 2019 despite owning all the best names and seems like it's due to turnover maybe - that's really what I'm trying to pin - how to lose even when you own winning stocks. And with regards to the "severe underperformance at times", barring any easing, I really doubt many of the high flyer names will see their shares return to their former glory in many many years. Easy to say in hindsight but why weren't the various overblown stocks a "sell"? Buffett bemoaned not selling Coke at the height of the dotcom bubble; a lot of this fundies were around during the dotcom, YL included, what got into their heads? Why wasn't $CVNA a sell when it ran from $10 to $380 or smt? Really exposes a lot of dogma in the industry and all the more the importance of not classifying anyone with a silky speech, supranormal tech returns during COVID and beautiful ppt slides as a "guru" whatsoever.

https://www.wsj.com/articles/aravt-global-shutting-down-as-hedge-funds-get-hit-by-unraveling-of-growth-trade-11646908200?mod=markets_lead_pos11 Anyone knows why this fund performed so badly even prior to Covid? "From its start through 2018, Aravt averaged gains of less than 2% a year compared with more than 9% for the S&P 500, including dividends. Mr. Liow by early 2019 had “streamlined” his investment team, a change he told investors would improve returns. Indeed, the hedge fund gained 31% and 36% in 2019 and 2020, respectively, but its assets by mid-2020 had dwindled to $500 million as investors stung by earlier losses defected." https://sec.report/CIK/0001601160 Just a brief look at the 13Fs, they had all the names that were the winners of the decade, Alphabet, o reilly, paypal, visa, transdigm, charter, you name it. Surely, these would have been adequate to generate market beating performance. Anyone with more intimate knowledge on this? Was it too high turnover? There looks to have been a lot more turnover than other growth oriented funds etc. Also, once again another reminder to be wary of "investment gurus" with their impressive talks, conferences and podcasts. No axe to grind here, just genuinely curious and hoping to get some interesting perspectives.

Anyone here have any concise high level thoughts on Burlington stores and how it compares with TJX, Rost etc. Don't hear this co mentioned much anywhere; valuations have returned to earth and clearly the market placed a stamp of "high quality" prior. These thrift guys tend to do fine even during recessions (08,09).

Consider a look at Israeli based payment co, Shva.

This whole thread has gone from moderately informative to just downright toxic. I suggest we end this whole conversation; Pabrai is just a fella clawing his way through the woods like all of us. Let's mind our own business.

It's tough. He's vocal about it but he's still struggling with "quality". Reminds me of Robert Pirsig's novel, Zen and the art of motorcycle maintenance. - "Quality is a characteristic of thought and statement that is recognized by a nonthinking process. Because definitions are a product of rigid, formal thinking, quality cannot be defined."" "intellectuals usually have the greatest trouble seeing this Quality, precisely because they are so swift and absolute about snapping everything into intellectual form." "People differ about Quality, not because Quality is different, but because people are different in terms of experience." Everytime Buffett has attempted to define "quality" in a specific parochial way - "so good a fool can run", "inevitable", "non-changing", it has not stood the test of time. It's paradoxical; mental models are good but model rigidity is bad.

Humble opinion: I admire Pabrai's generosity and am thankful for the amazing yet simple investing lessons he has taught over the years. But sometimes, I think he shares a little too much and unwittingly drills those ideas into his head; "I am a cheapskate", "P/E 1 or 2", "I'm a spawner guy now". He admires Nick Sleep a lot and one of Nick Sleep's weapons was a conscientious awareness of not pounding dogma into his own head. Heck even terms like "value investor", "growth investor", "microcap investor" are ideologies and dogmas that may eventually slice one in the throat. Ultimately, one is just looking to do intelligent things and navigate this amazing puzzle capitalism has provided us with.