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Examples of prescient analysis


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Wanted to compile good reports on multi-baggers. Some pitches that come to mind are Dominoes in 2011, XPEL in 2018, Hawaiian Holdings 2012, Microsoft in 2011 and Apple in 2016. With hindsight being 20/20 nearly all these valuations were far too conservative. What is your "meat of the bone" opinion on what characteristics they share? Please add your own to the list.

 

https://www.valueinvestorsclub.com/idea/Dominos/0279779048

https://www.valueinvestorsclub.com/idea/XPEL_TECHNOLOGIES_CORP/2951964403

http://quinzedix.blogspot.com/2012/07/hawaiian-holdings-air-transport.html

https://www.valueinvestorsclub.com/idea/MICROSOFT_CORP/3182922554

https://www.valueinvestorsclub.com/idea/APPLE_INC/4003116338

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I posted this at the time in the AAPL thread, but talk about prescient!

 

https://seekingalpha.com/instablog/6460311-unemon1/5255152-long-aapl-5-owner-warren-buffet-knows-apple-is-easy-5minus-10-bagger-145

 

 

This one I also thought was not just well done, but ballsy given how outrageous some of the stuff that was occurring around this company and some of the "participants" was. Definition of contrarian, definition of a pair of grapefruits.

 

https://www.presciencepoint.com/wp-content/uploads/2019/01/Prescience_Point-MiMedx_MDXG-Long.pdf

 

EDIT: Add these two as well.

 

https://www.valueinvestorsclub.com/idea/STRAIGHT_PATH_COMMUNICATIONS/2721907799

 

https://www.valueinvestorsclub.com/idea/STRAIGHT_PATH_COMMUNICATIONS/1546820512

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A few more:

 

https://www.valueinvestorsclub.com/idea/CAMBIUM_LEARNING_GROUP_INC/8176075446  [The author posts here from time to time]

https://www.valueinvestorsclub.com/idea/PAR_TECHNOLOGY_CORP/1485959546

https://www.valueinvestorsclub.com/idea/NVR_Inc./1871818862

 

I doubt there's one common characteristic that each of these analyses shares.  It may be useful to compare the company's actual business performance to how the narrative evolved over time.  For example, with Xpel, there are VIC writeups from 2013, 2015, 2018 and 2019 and a thread on this board that began many years ago.  The share price also didn't go straight up during that period; someone who bought at points in 2015 was sitting on a 50% loss three years later, with more severe declines in between.  How much did the business's underlying trajectory change versus the market perception of the business (evidenced by share price multiple) change?  To the extent it's the latter, why caused the market perception change? 

 

EDIT:  You can also look at the US cable/broadband companies.  This was a very well known business (Malone, Cable Cowboys, etc.), yet investors have made boatloads of money in it over the last 6-7 years.  Writeup examples:

https://www.valueinvestorsclub.com/idea/CABLE_ONE_INC/1796245057

https://www.valueinvestorsclub.com/idea/CHARTER_COMMUNICATIONS_INC/5795599545

 

 

 

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Thanks for sharing guys. While these are rare, I love getting an idea of what people were thinking at that point in time. Seems like it was extremely obvious to the analyst in each case (based on verbiage), and thesis seemed to be pretty simple. Kind of like the Buffett adage (has to hit you over the head).   

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I know what I was thinking. I felt there was risk that MA and V could be disrupted. That was clearly not the case, but I think many fellow investors made the same mistake.

 

Again, if you were correct about the duration of the moat, being off a bit on valuation didn’t really matter. At current multiples ( roughly 3x what they were back then) I don’t think that’s the case any more though.

 

With current valuation multiples, I would argue that investing in MA or V is just a bet on low interest rates.

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  • 5 weeks later...

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