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Multibagger speculative ideas


dolce2think

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Somewhat speculative with multibagger potential, HemaCare (my write-up is here: https://alphavulture.com/2017/05/02/hemacare-deep-value-turning-into-growth-story/). Rapidly growing turnaround story. Lots of upside if they can continue on the current path.

An interesting idea indeed!  Thank you for alerting us to it and sharing your research!

 

Mcap: 30 million

earnings: 0.7 million

Revenue: 13 million

 

So they currently trade at nearly 3 times revenue and the whole case is based on them growing. Seems expensive to me.

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Somewhat speculative with multibagger potential, HemaCare (my write-up is here: https://alphavulture.com/2017/05/02/hemacare-deep-value-turning-into-growth-story/). Rapidly growing turnaround story. Lots of upside if they can continue on the current path.

An interesting idea indeed!  Thank you for alerting us to it and sharing your research!

 

Mcap: 30 million

earnings: 0.7 million

Revenue: 13 million

 

So they currently trade at nearly 3 times revenue and the whole case is based on them growing. Seems expensive to me.

 

I agree with Rukawa, permabear on this board :) . Wish I had listened to him about Ocwen.

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I agree with Rukawa, permabear on this board :) . Wish I had listened to him about Ocwen.

 

This reminds me of the embarrassing situation where I was put on the select team in Soccer even though I sucked because they confused me with a much better player who has the same first name. I think you are confusing with the far more intelligent poster Roark33. I have one comment on Ocwen and it reads:

 

This is one of those cases where I question whether I should even be investing my own money. I was about to invest in this. I never bit the bullet but I was on the verge. I would have never predicted this.

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I agree with Rukawa, permabear on this board :) . Wish I had listened to him about Ocwen.

 

This reminds me of the embarrassing situation where I was put on the select team in Soccer even though I sucked because they confused me with a much better player who has the same first name. I think you are confusing with the far more intelligent poster Roark33. I have one comment on Ocwen and it reads:

 

This is one of those cases where I question whether I should even be investing my own money. I was about to invest in this. I never bit the bullet but I was on the verge. I would have never predicted this.

 

intelligent, honest, self-effacing, disciplined & courageous (Sanjeev should prob add you to the list)

come to think of it, most everyone here (even the irrational politicobullS) have enough integrity to make the cut.

 

What I will defend is that there are a handful of managers I know that are ethically beyond reproach...I consider them friends and mentors...Prem Watsa, Francis Chou, Tim McElvaine, Mohnish Pabrai, Jeff Stacey, Allan Mecham, etc. I would be comfortable with my family investing with any of them.

 

Cheers!

 

stay the horse  ;)

 

oh, and https://www.sporcle.com/games/salifou/samenamegame

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Somewhat speculative with multibagger potential, HemaCare (my write-up is here: https://alphavulture.com/2017/05/02/hemacare-deep-value-turning-into-growth-story/). Rapidly growing turnaround story. Lots of upside if they can continue on the current path.

An interesting idea indeed!  Thank you for alerting us to it and sharing your research!

 

Mcap: 30 million

earnings: 0.7 million

Revenue: 13 million

 

So they currently trade at nearly 3 times revenue and the whole case is based on them growing. Seems expensive to me.

That's why it's in this thread of course :). But saying that something is expensive because it trades at 3x revenue is IMO a bit easy. For some companies that is extremely expensive, for others it can be cheap.

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I agree with Rukawa, permabear on this board :) . Wish I had listened to him about Ocwen.

 

This reminds me of the embarrassing situation where I was put on the select team in Soccer even though I sucked because they confused me with a much better player who has the same first name. I think you are confusing with the far more intelligent poster Roark33. I have one comment on Ocwen and it reads:

 

 

You are right, I did confuse one master with the other.  I confuse Bruce Lee with Chuck Norris the same way. No excuses.

 

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Book value of roughly $1.20/share with no goodwill, no intangible and mostly made up of current assets on a company that is turning around and now making money with little capital needs...

 

Trading closer to book seems like a normal assumption, especially as cash comes in and is used up to reduce debt which will make that per share book value number go even higher.

 

Cardboard

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Similar to Cardboard's BRY idea: Cathedral Energy Services Ltd. (TSX: CET). The company directional drilling services throughout North America. They will continue to benefit from the higher rig demand that the industry has been enjoying. The company issued shares to pay down its debt, and earned $0.06/share in Q1 (though Q2 is more challenging seasonally). I think this company can return to more normal profit levels, and likely see their share price continue to respond positively.

 

The biggest concern is that "customers are pushing our equipment harder than has been the case in the past to improve drilling times.  This has resulted in above average equipment damage and equipment lost-in-hole."  This could lead to opportunity costs when equipment is unable to be repaired. Although this risk exists, I anticipate management will be able to improve contract structures to offset such a situation.

 

Ultimately, I could see the company being valued in the $250m range, as drilling activity continues, and the Saudis push further cuts to enable their Aramco IPO to be successful.

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Interesting idea Sharad or trading for just under half of book value, net debt of essentially zero and as you mentioned returning to profitability.

 

I have not focused much on the drillers during this downturn having been more involved into E&P's and other energy service players such as BRY. One thing that I recall from research that I read in 2015 was the importance of having the newest rigs as the older ones may never return to the field.

 

Reading a bit on Cathedral, they seem to have spent a lot of effort on the drill bit itself, measurement tools, etc. and have some proprietary technology which is good. Being a directional driller does that spare them from needing to have the latest high-spec rigs or Tier 1 with high power and capable to "walk" as requested now by most E&P's?

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SPY Sept options. I've had $200 puts.

 

Game ends right prior to Comey 7/24 hearing, after which market will soar.

 

Could you elaborate please - why do you think you'll profit from the puts till the hearing with the market soaring after? The way this is going seems to me that people realise what a nutball djt is and how that will ultimately prevent much of what the market hopes for being implemented?

 

Thanks

C.

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SPY Sept options. I've had $200 puts.

 

Game ends right prior to Comey 7/24 hearing, after which market will soar.

 

Complete opposite. Not only didn't the market care about all that fakenews, I mean, at all, but it looks like the hearing isn't happening either. As far as fakenews goes, this one was insanely fake.

 

Regardless, still accumulating SPY puts. Next time I'll temporarily close out EOD on this type news and reestablish after.

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Based on my review of various Q1 E&P's MD&A, completion activity in the Canadian oil patch is the place where supply/demand is definitely tightening. Some had to delay completing their wells due to lack of crews/equipment.

 

Some wells are getting quite complex with more fracking due to shorter spacing, they have sliding sleeves that need to be opened/closed and some are quite long especially in the Duvernay/Montney.

 

I believe that this augurs very well for ESN or the largest coil rigs owner in Western Canada. Already in Q1 they had very good utilization and are planning to augment staffing by a lot in the Fall.

 

BRY on this pull back remains very attractive in my opinion. Any rig addition means mud, chemicals and other fluids re-stocking. Then you have more usage with more wells being drilled and more wells being more complex.

 

Cardboard

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Another opportunity to buy BRY on the cheap... $0.62 net-net, trading for half of hard book value, P/E of 4, in a business with rising demand and prices. All that for $0.58/share.

 

If you don't like the net debt of $27 million, which will be reduced by the way with cash flow, ask yourself if a potential acquirer would still not be interested in a distribution business that has an EV of $41 million, generates $125 million/year in sales, EBITDA of around $8 million and very little capex needs?

 

Thinking of it further, you can't have it both ways. People can claim that oil will remain cheap due to shale production but, current level of drilling/completion is certainly needed to maintain this pressure on prices.

 

Cardboard

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CBRIQ was writen up on VIC on 6/5. It now trades $0.13 with 82.1 million shares out so market cap is $10.7 million.

 

Docket is here https://cases.primeclerk.com/CIBER/Home-DocketInfo

April MOR (#300) shows $89.5 mm liabilities.

Sales approval order (#235) says winning bid by HTC would result in $91 million cash to estate and assumption of $30 mm liabilities.

Also look at budget on page 193 docket#14.

 

Back of envelope - 91-59=32/82 = $0.39 suggests a 3 bagger.

 

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Docket is here https://cases.primeclerk.com/CIBER/Home-DocketInfo

 

Rough waterfall analysis:

 

From 8k: sale closed 6/8

net proceeds = 90.7

break fee to CG America = 2

dip/wells payoff = 35.7

IBM secured = 1.9

subtotal = 51.1

This should match cash listed on June MOR when it comes out.

 

Post petition liabilities (full of unknowns)

excluded AP = 12.0 (listed on p169, Doc#354)

prof fees carve out = 5.1 (incurred by debtor's professionals only up to sale date)

estimated further prof fees at 2/month times 6 months = 12

estimated additional GUCs (general unsecured claims) = 5

total estimated post petition liabilities = 34.1

 

subtotal = 17.0 = $0.207

 

Further unknowns:

other assets to sell

contingent payments related to previous sales to receive

6/16/17 escrow release 2.5 for Nederland sale

12/16/17 escrow release 2.5 for Nederland sale

8/26/17 potential purchase price adjustment 1.75 Norge sale

8/26/17 escrow release .35 for Norge sale

2/26/18 escrow release .35 for Norge sale

did biz burn cash between 5/20 and 6/8? Budget shows 1.6 burn/wk - could mean additional 4-5 burn. However DIP payout of only 35.7 suggest biz did a lot better than budgeted.

litigation - they sued State of WA for $13 mm in Doc#98, also have litigation against State of HA - I would hope this will be a plus, but they also risk losing a counter suit

additional allowed claims such as lease rejection claims and the like

delays in winding up - these things always seem to take longer than expected to payoff risking more to fee erosion

 

 

 

 

 

 

 

 

 

 

 

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How do you get the $30 million number for the assumption of liabilities? I'm reading the purchase agreement and the liabilities they will assume are basically those that arise after closing (so zero at the moment), accounts payable that are listed on Schedule 1.3(b) (seems to be something like $9 mil?) and employee liabilities listed on Schedule 1.3© (but on this schedule no numbers are reported?).

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How do you get the $30 million number for the assumption of liabilities? I'm reading the purchase agreement and the liabilities they will assume are basically those that arise after closing (so zero at the moment), accounts payable that are listed on Schedule 1.3(b) (seems to be something like $9 mil?) and employee liabilities listed on Schedule 1.3© (but on this schedule no numbers are reported?).

 

Testimony on p7 Doc#235 and listed on p420 Doc#246.

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