Ross812

Added to NTDOY and DFIN. Bought a tracker in SSD.

Traded CPNG options for the stock.

Buy a 5yr cd and/or treasury ladder. If you want to buy some equities to b hedge interest rates I'd go no more than 25% and split equality between xlu, xlv, and xlp.

Traded some 2-yr treasuries for 10-yr at 4.51%.

KMI

I'd ideally like to hold HQI at a 5% cost basis and let it run. My trading around has just been lowering the cost basis. I did buy a little with OPM this morning.

I went to 7.X% when it was in the low 12's after insider buying in January and February and sold down to 6% last week when it popped to 13 after earnings. I had higher sell orders that never triggered. I was a little shocked when i saw an 11.XX quote this morning as I didn't expect this back below 13 range after earnings. Maybe I'm missing something.

Well, that didn't last long. More HQI this morning. $11.50-$11.70

Even with some acquisition expenses, tough YoY workers comp. increases, and a temporary staffing market down 9% YoY, HQI is doing well which speaks to the quality of the business. The case is pretty straight forward in my mind - hit less than 50% SG&A on franchise revenue of $36M and a 17% tax rate and you are looking at $15M in earnings on 13.8M shares outstanding - and this is earnings power in an off-cycle year! You're paying 10x EBIT and 12x earnings right now for a company growing at 27%. I get the argument growth is coming from acquisition and that is worth a lesser multiple, but acquisitions are immediately accretive to the bottom line. Look at MRI Network (which is under earning right now), acquired 4Q22 for $13.3M and added $7.8M in revenue in the last year; they paid <2x franchise revenue. Northbound (higher quality executive staffing) was purchase for $11.4M and generated $1.1M in 10 months ($1.3M proforma); 8.75x franchise revenue Dubin - 10 months $.11M ($132k proforma) on a $2.5M outlay. 19x franchise revenue TEC - looks to be $1.1M on a $7.8M. 7x franchise revenue Temp Alternatives- $523k (though not all converted to franchises yet) off $7M. 14x franchise revenue Together its $10.7M (proforma) in franchise earnings acquired for $42M. Assume 50% SG&A and slap a low 10x EBIT multiplier and you are adding $53.5M to the market-cap (27% growth). Looks like a sustainable roll-up to me. Organic growth should follow growth in temporary staffing. Check this by looking at HQI ex-franchise revenue from FY23 acquisitions ($9.6M) which is $26.2M vs $28.9M (FY22) down 9.3% which is in line with temporary staffing down ~9%. The good new is temporary staffing follows GDP over the long term so the business should grow organically by 2-3%. I don't know what kind of EBIT HQI should trade at, but its not 10x and when you start playing with the EBIT multiple the spring keeps tightening.

Just right sizing. It was over a 7% position this morning after earnings and I'm more comfortable in the 4 to 5% range. I'm down to a 6%ish position. I've been buying for the last couple weeks in the 12.1X's and was selling this morning in the 12.80+ range. It's tough getting in and out of when in only trades 15k shares a day and and individual can be a significant portion of that.

Buying some DFIN and HSY from proceeds of an irresponsibly large HQI position.

Thought I'd check in on this: 26% 29% FFH 9% BRK.B 10% $ 6% USB ($44 to$50 calls on full position) 5% 6% LUV ($35 to$40 calls on full position) 3% 6% NNI (Adding) 5% NTDOY 5% HQI (Adding) 2% 4% HSY (Adding) 2% 4%TOITF 4% ADSK 4% GOOGL 4% DFIN 4% MSGE ($30 CCs on full position) 3% CASH ($50 CCs on full position) 3% HUM 2% CHDN 2% JCI 1-2% in tracking positions - BAC, ASHTY, LHX, META, CPNG calls, BABA, BABA calls

Its about 30% for me and 10% of OPM I manage.

HQI at $12.80

Hershey milk chocolate is only 11% cocoa, Cadbury is 26%, and special dark is 45% and the bulk of their confectionary products are 50% or less chocolate by weight. Hershey can raise prices in line with their competitors and actually increase margins. In addition, Hershey sources cocoa from negotiated supply contracts as well as futures so brunt of the current spike shouldn't hit them unless it persists.