BG2008

CCRN - Healthcare staffing company with a Founder who returned as CEO. Took EBITDA margin from 3% to 8%. Founder CEO transitioning to Chairman and installing one of his leutenant as CEO. 2021 is a crazy year with $3 EPS so this trades at just under 7x P/FCF. Normalized, this should be about $2 of FCF so 10x FCF for a healthcare staffing biz. There is optionality in Chairman being able to acquire/roll up the space a bit. @wabuffo Take a look

Common or warrants?

I do think that FANGMAG or whatever you call it isn't really that crazy. It is interesting to see that these companies were 5-6% of the index and are now 26%. Whenever someone ask me why have a 1% position, I would probably point them to that trait. Power laws really do move the needle. But yes, there were a ton of shitcos Virgin Nikola GME AMC And 97% of the SPAC deals were total turds It is interesting to see so many of the #neversell on Twitter staying so quiet lately. What looked like geniuses may just have been a massive pull forward in returns.

For now. Let's not get ahead of ourselves. Us Value Bros are known for being stoics. It is good for me to go through my own version of 1999 and not bought into the growth hypes and see these growth names get crushed. You can read about it and try to understand it from the history books. But it is another thing to live through it and deal with potential under performance. To say that it didn't bother me would be disingenuous. It got me curious enough to throw 1-2% at $PTON etc. But not enough for me to throw in the towel on my RE shitcos and completely change my strategy. So I am proud of sticking to my strategy with a bit of experimentation mixed in.

Jeez, I did not know I was in literal "Hunger Games"

I was going to post something similar. @gregmal absolutely called the Sunbelt Multi-family trends in 2021. Holy crap. I wish I had paid more attention to it. I would love to hear what other people think 2022 key themes will be. 2020 was obviously covid beneficiaries. 2021 was a slaughter for the likes of $PTON etc. On the RE side, I think $CLPR is poised to perform as the rent increases gets passed through via quarterly new leasing and lease renewals. I think 2022 is finally the NYC recovery year. NYC office may catch a bid as well. Maybe? $FRPH remains my biggest position and one of my favorite as it benefits from infrastructure bill passage, pricing power in the aggregate royalty, Bryant Street should be fully stabilized and they should print a decent GAAP net income number of stabilization as well. Their Greenville, SC (Sunbelt MF) should also stabilize well and print a really good GAAP net income number. It is low leverage, good management team, and a sleep well at night. Inflation will be very good for them. Recession, they will weather it well. Just solid all around. I like $PTON in small sizes, 1%. I like $AMBP, it's boring packaging with lots of growth. Potential to double in 2-3 years. The $AMBP 5 year warrants are interesting as well. I have shorted some TLT (20yr US Treasury) as I think inflation will eventually cause rates to go higher. It's more of a hedge due to my large RE exposure. I think $HQI remains one of the more fascinating picks due to the jockey. $INDT trades close to NAV. So it is not pound the table anymore. But it will be interesting to see what the CEO/Chairman combo can do.

Signed up today. Been using this app for quite a while now. At this price point, it is a no brainer. I would love it if the financials can go back 30 years if possible. Gurufocus does that. It allows me to look at what happened to companies following the Dot Com bubble bursting and the GFC. Thanks.

Proven Leonard at Constellation Software Malone at TCI and Liberty Warren Kanders - Sold company after 100 bagger and now doing it with Clarus again WEB - Berkshire Emerging - This is the more fun category! @wabuffo Rick Hermmann - HireQuest - TBD, but it is fun to try to spot them before it becomes a 10 bagger I'll add more as I think of more

May just as well have a CoB rager at the Navy Yard next fall Bakers above the Buff Dog! Wow!

Can we have a CoB meet up for FRPH next fall in DC. Free baseball game, free property tour, and there are lots of beer gardens

FRPH got to $53 and change today, it's getting to table pounding territory. These 30-80% drawdowns in crap tech growth names is really something!!! With FRPH, I'm thinking rock pits and DC waterfront property. Go back to reading or playing with my kid. If it goes to $49, they have bought back stock in the past. If it goes to $40 somehow (can't imagine), they will probably buyback 5% of the S/O like they did last year.

I guess on a long enough time frame, we all buy Visa and Mastercard

With the recent selloff, a lot of stocks are down quite a bit. Anything table pounding? I still like FRPH a lot, but it hasn't sold off as much. At $50, it would be back the truck up stuff again. I still like Clipper and it has whipsawed around the past couple of days. At low $8s with a potential $20 NAV, it's got one of the higher upsides. Most of NYC are probably double and triple protected against whatever Covid variant coming its way already between vaccination and infection. I am joking, but probably some truth to it. But obviously Covid is not a great headline. But if it recovered from the surge earlier this year, it will do fine and the AFFO will still comp double digits as the base is so easy to beat from late 2020 and early 2021. If HQI goes to $18, I may sell some Berry and pick up some more. I think at $18, you're getting a potential long term compounder at 15-18x normalized FCF multiple. But it offers a path for years of organic growth.

Don't bother with HHC, you'll burn your brains out. That's advance stuff. FRPH has complexity, but it's doable in my opinion.

Start with FRPH and look over their Investor Day presentation. From a valuation perspective, use 5% cap rate for their royalty business, 4.25% for their multi-family, and book value for projects they invest in. If you can get to the current price, then you know you get a lot of optionality for free on their future developments in the waterfront in DC, the land sale in Fort Myers in 2028, and etc. I think NAV is $90 currently and $110 in 2 years. But I probably have the highest valuation of all out there. They own some of the best assets out there and if you google FRP Holdings, you'll find some letters, presentations, and Substack writes up. There are a range of valuations. The RE specialist tends to have higher NAVs the generalists tend to have lower NAV, but everyone tend to agree that the Baker family is shareholder friendly and FRPH is trading at some discount to NAV. What's important is that they are good capital allocators. I have done some math, most of their projects earns 20-30% IRRs from writing the checks to stabilization. I don't think they have invested in anything that earns less than 15% IRR in the last 5-6 years. What's even more impressive is that they have allocated very well into opportunity zones following the sale of their warehouses to Blackstone. OZ investments tend to target 6-8% due to the tax advantage nature.

@Gregmal I want to shit on SPG and then I realize that you're teaching me stuff and I am too emotionally tied to my prior. Part of what I want to work on in 2022 will be to be more open minded and avoid biases

FRP Holdings for the next 15 years, Howard Hughes Corp as well. But many on this board are not very friendly towards that second choice. INDT is interesting to follow and track for the next 5 years. I have avoided SRG and will continue to. Digital Bridge (formerly Colony) is interesting mostly due to new CEO. There are a bunch of people on ReTwit that are interesting. Although I tend to find some of them a bit overwhelming with their non-stop postings. But you can try curating a list there. Bobby Fijian for understanding apartment lay outs Moses Kagan for SoCal apartments Nick Huber for B and C self storage (his posts are a bit much for my taste) Strip Mall Guy is pretty good (but buys into strip malls a bit too much) There are a bit too much 'hustle" for my taste which is what you need on the private side IMO @thepupil and @Gregmal on this board are great with different strength. Gregmal has a nose for what's going to work in the near term. Pupil just has a wild range of knowledge. The funniest contrast between public RE and private RE is that all the guys on ReTwit congratulate each other when they buy a piece. Pupil and I joke that that is when "the suffering starts" on the public side as FRPH still trades at around 50-55% of 2023 YE NAV by my estimates People on this board complain a lot about G&A and I'll bet that the ReTwit probably charges a lot more in acquisition fees, mgt fees, performance fees etc. Some of them joke about how private RE guys can milk fees even if they aren't that great @Packer16 has invested in some private RE deals and he can probably share some thoughts Blackstone and Brookfield have great long term track records. But their business today is generating 8-10% net returns for their pension/endowment clients at scale with billions of capital deployed. it is a different game than pupil, Gregmal, and me aiming for 20+% IRRs. We are investing peanuts, they are investing hundreds of billions. If you want an example, look at what Blackstone has done by focusing on warehouses since the GFC. Having that insight and seemingly paying up for warehouses has been a homerun for them. Zell has largely sat on the side line which may prove wise in hindsight. But a lot of his public vehicles has lagged. Equity Common Wealth and his trailer park business Simon is obviously smart - But I have avoided retail and malls. I will continue to do so as I see what is happening on the e-commerce side. Those warehouses keep getting closer and closer to that last mile. For the trophy retail assets that are truly unique, I am open minded.

You timed this one well

Good price. I've paid more than that on average.

What price?

Passed? Isn't this proposed?

Thanks Eric! Is that 5% of capital at risk? Also what strike? I really appreciate you sharing the details.

What duration? How much of a position size?

I have been thinking about this scenario as I have a lot of hard asset exposure. It is certainly possible. The takeaway is that do you 1) Do nothing and continue let your cash erode its purchasing power? 2) Buy hard assets with long term debt? 3) hedge the interest rate exposure by shorting some 10-30 year debt (can really backfire if rates go even lower) 4) Some combo? I don't have an answer and I am looking for one. I think the scenario that you laid out hurts all asset classes. It goes back to picking 1) or 2). I would argue that good hard asset is probably better than rolling the dice on O&G or metals or some other commodity. Okay I am biased. But I have warmed up my mind to having 2-3% O&G and just view it as heavy inflation protection. I appreciate you "red teaming" the scenario.

I had a conversation with an investor who said "OMG, 4.25% cap rate for the Maren, what if interest rates go to 6%?" I sat down and did a model on a 6% interest rate at year 10-12, and figured that rent will probably grow 5-6% a year in that kind of inflationary environment. When you lock in mortgages for 10-12 years, you get a lot of rent growth to alleviate cap rate expansion. I came out with nominal returns that are still around 9-12% on a 10-12 year hold until mortgage maturity. This assumes you own great products like Dock 79 and The Maren by the water which is naturally supply constrained. Replacement cost will be higher. There are other ways to value a piece of hard asset. I spoke with someone smart once and I said "I own x units of residential in NYC, I don't think of it in terms of $, I think of it as I own 1/4-1/3 of the gross income of a family in NYC for perpetuity while my debt servicing cost stays flat." Sometimes, we have to look through the clutter that is "financial analysis" and figure out what we really own which is the very bottom layer of the pyramid in Maslow's hierarchy, namely shelter for people. On that note, I need to do my 2020 taxes.