Tidbits

[gfp]

8 minutes ago, KJP said:

Odd-lot tender:  https://www.otcmarkets.com/stock/TLNE/news/Talen-Energy-Corporation-Commences-a-Tender-Offer-to-Repurchase-up-to-600000000-of-its-Common-Stock?id=442166

 

Talen is not an SEC filer so the Offer to Purchase is not available on EDGAR.  The press release tells you how to get it.  I have requested it but haven't yet received it.  Nevertheless, I bought yesterday based on some assumptions about what's in it.  

 

Is your assumption that 99 shares is an odd lot here?

[KJP]

46 minutes ago, gfp said:

 

Is your assumption that 99 shares is an odd lot here?

 

Yes, that's one of them.  I have seen 99 shares referred to in a couple of secondary sources but cannot verify it yet myself.

 

EDIT:  Apparently it takes the administrator 24-48 hours to email the Offer to Purchase once requested.  They did confirm to me over the phone that an odd let is anything less than 100 shares.

Edited June 5 by KJP

[Eng12345]

On 6/5/2024 at 8:38 AM, KJP said:

Odd-lot tender:  https://www.otcmarkets.com/stock/TLNE/news/Talen-Energy-Corporation-Commences-a-Tender-Offer-to-Repurchase-up-to-600000000-of-its-Common-Stock?id=442166

 

Talen is not an SEC filer so the Offer to Purchase is not available on EDGAR.  The press release tells you how to get it.  I have requested it but haven't yet received it.  Nevertheless, I bought yesterday based on some assumptions about what's in it.  

 

 

Theres a podcast on TLNE if you are interested... I have taken a small position, but I should have purchased two months ago when dinar pointed it out. 

 

I'm not interested in their tender offer. 

[Eng12345]

 

 

Just watched this short 60 minutes clip that sparked my interest... thought it addressed some interesting questions I've had based on my own career thus far. Think there is a lot of merit to employee ownership. Starting out of college I worked at Kiewit which was employee owned by those with 5+ years. I never made it to ownership but heard a lot of the virtues of the program - and frankly it showed in how much the middle level management cared about making good, long-term decisions and putting in the requisite effort and hours. 

 

On the other side of the coin, I went to the exact opposite culture at a big 3 auto manufacturer and saw just how bad the employee culture can get when employee don't feel invested. Even many mid-level managers etc did not give a hoot about making good decisions or putting in the requisite hours. I'm beginning to realize that I capital structure matters for performance... the question is how much. 

 

I think Stavros had an excellent point that in some of these crappy firms employees feel the social contract is broken. I couldn't have stated my experience at big 3 more succinctly. 

[gfp]

On 6/5/2024 at 9:25 AM, KJP said:

 

Yes, that's one of them.  I have seen 99 shares referred to in a couple of secondary sources but cannot verify it yet myself.

 

EDIT:  Apparently it takes the administrator 24-48 hours to email the Offer to Purchase once requested.  They did confirm to me over the phone that an odd let is anything less than 100 shares.

 

Thanks for sharing.  I'll keep an eye on it.  I tried for 108 and 108.50 like a cheapskate and didn't get anything of course.  I like the early tender bonus - nice little feature

[ValueArb]

TLNE's tender offer can be read here. The big issue is that it has an out to cancel the tender if a small basket of energy stocks drops by 10%, which by my calculations is down 14% at the moment.

 

https://www.dropbox.com/scl/fi/pw3zsirmdj2uwqv7s3mut/Talen-Offer-to-Purchase-Final.PDF?rlkey=ofbeviytkuw5q3ilkn9x7p1w3&e=1&st=ufkg6s2l&dl=0

[Saluki]

I heard someone mention that the NY Times now makes more from games like Wordle than they do reporting news.  It sounded wrong, but I looked it up:

 

https://www.axios.com/2024/01/29/wordle-nyt-games-news-media-layoffs

 

• The company's subscription revenue increased nearly 10% to $418.6 million in the third quarter of 2023 — with digital product earnings rising nearly 16%, to $282.2 million, driven in part by bundles.

 

Buffett realized that Textiles was a bad business and he didn't keep the money losing arm because Berkshire is a textile company. By contrast, Sears always saw itself as a retailer, and the people at the top were jealous of the fast growing and highly profitable new parts of the company because it was a threat to the power of the retail executives. So they spun off Allstate, Dean Witter and Discover card, and stayed a retailer. 

 

I wonder if the NYTimes will eventually realize that they are a gaming company, and get rid of all those reporters, printing presses and news offices and just focus on what is actually driving the train forward. 

[ValueArb]

8 minutes ago, Saluki said:

I heard someone mention that the NY Times now makes more from games like Wordle than they do reporting news.  It sounded wrong, but I looked it up:

 

https://www.axios.com/2024/01/29/wordle-nyt-games-news-media-layoffs

 

• The company's subscription revenue increased nearly 10% to $418.6 million in the third quarter of 2023 — with digital product earnings rising nearly 16%, to $282.2 million, driven in part by bundles.

 

Buffett realized that Textiles was a bad business and he didn't keep the money losing arm because Berkshire is a textile company. By contrast, Sears always saw itself as a retailer, and the people at the top were jealous of the fast growing and highly profitable new parts of the company because it was a threat to the power of the retail executives. So they spun off Allstate, Dean Witter and Discover card, and stayed a retailer. 

 

I wonder if the NYTimes will eventually realize that they are a gaming company, and get rid of all those reporters, printing presses and news offices and just focus on what is actually driving the train forward. 

 

 

So is now the fastest career ending decision a NYT columnist can make is not writing a critique of Democrats, or Republican, but Wordle?

[Sweet]

Important to keep some perspective.  As my father says ‘you can’t take the money with you’.

 

 

Edited June 6 by Sweet

[KJP]

19 hours ago, ValueArb said:

TLNE's tender offer can be read here. The big issue is that it has an out to cancel the tender if a small basket of energy stocks drops by 10%, which by my calculations is down 14% at the moment.

 

https://www.dropbox.com/scl/fi/pw3zsirmdj2uwqv7s3mut/Talen-Offer-to-Purchase-Final.PDF?rlkey=ofbeviytkuw5q3ilkn9x7p1w3&e=1&st=ufkg6s2l&dl=0

 

Yes, the provision has been triggered, so Talen could cancel the offer if it wanted to.   

[KJP]

On 6/7/2024 at 8:14 AM, KJP said:

 

Yes, the provision has been triggered, so Talen could cancel the offer if it wanted to.   

 

The tender was fully subscribed the early tender deadline and closed at $116:  https://talenenergy.investorroom.com/2024-06-13-Talen-Energy-Corporation-Announces-Early-Tender-Results-of-its-Previously-Announced-Tender-Offer-to-Repurchase-up-to-600,000,000-of-its-Common-Stock

[Saluki]

 

The post (I think it was deleted) bemoaning the value of this board reminded me of this clip of an interview with Steve Cohen's performance coach.  There are lots of things that are too hard for you individually, but collectively you can do a lot by putting your heads together and problem solving. 

 

Even Buffett had Munger to bounce ideas off of, and people like Bill Ackman are the public face of their funds, but they don't run one man shops.  

[Sweet]

https://www.be-long.co/#hiw
 

Came across this company today.  It’s a UK based company that is looking to (in their words) provide you with a ‘mortgage’ type loan which you then invest in stocks.  You then pay that principle down like you would do with a regular long term mortgage and hope your investment grows in value over that time.

[Dalal.Holdings]

2 hours ago, Sweet said:

https://www.be-long.co/#hiw
 

Came across this company today.  It’s a UK based company that is looking to (in their words) provide you with a ‘mortgage’ type loan which you then invest in stocks.  You then pay that principle down like you would do with a regular long term mortgage and hope your investment grows in value over that time.

 

Ironic that "be-long.co" sounds like a great short opportunity

[Sweet]

13 hours ago, Dalal.Holdings said:

 

Ironic that "be-long.co" sounds like a great short opportunity

 

[nwoodman]

On 1/28/2024 at 3:52 AM, Spekulatius said:

@John Hjorth Spirax Sarco - a great Uk company has the same thing , you can get a free hard copy of a book about their history. I ordered it and got it a bit later. It’s a great company too, but fully valued.

https://www.spiraxsarcoengineering.com/about-us/our-history

Just started doing some work on Spirax.  Is this still your view?  It piques my interest as a quality compounder that got ahead of itself and has tracked sideways for 5 years.

[Spekulatius]

18 hours ago, nwoodman said:

Just started doing some work on Spirax.  Is this still your view?  It piques my interest as a quality compounder that got ahead of itself and has tracked sideways for 5 years.

Yes, it’s still my view that Spirax is richly valued. Looks to me that it’s single digit grower trading at ~27x earnings. I guess they need another 5 years with a stagnant share price to grow into the current valuation.

Edited July 7 by Spekulatius

[nwoodman]

4 hours ago, Spekulatius said:

Yes, it’s still my view that Spirax is richly valued. Looks to me that it’s single digit grower trading at ~27x earnings. I guess they need another 5 years with a stagnant share price to grow into the current valuation.

Cheers,  I couldn’t get Spirax to work until the share price is in the range £55-65.  Even then you start to make up narratives around future growth.  I do like the STS and Watson-Marlow businesses but not at any price.  To get near today’s price (£85.80) you start putting on some egregious sales multiples:

 

Valuing each division separately (using 2023 revenue and a revenue multiple): Steam Thermal Solutions: 910.1m * 4 = £3,640.4m Electric Thermal Solutions: 378.5m * 3 = £1,135.5m Watson-Marlow: 394.0m * 5 = £1,970.0m Total: £6,745.9m Less net debt: 6745.9m - 763.4m = £5,982.5m Per share: 5982.5m / 73.6m shares = 8128p per share

 

Operating Profit Margins

1. Steam Thermal Solutions (STS): 2023: 24.6% 2022: 23.8% Change: +80 basis points
2. Electric Thermal Solutions (ETS): 2023: 15.6% 2022: 15.6% Change: No change
3. Watson-Marlow: 2023: 23.8% 2022: 32.8% Change: -900 basis points

A crude estimate on net margins:

 

The group's adjusted effective tax rate for 2023 was 25.5%.

1. Steam Thermal Solutions (STS): Revenue: £910.1m Adjusted operating profit: £224.0m Estimated net profit: £224.0m * (1 - 0.255) = £166.9m Estimated net profit margin: 166.9 / 910.1 = 18.3%
2. Electric Thermal Solutions (ETS): Revenue: £378.5m Adjusted operating profit: £59.2m Estimated net profit: £59.2m * (1 - 0.255) = £44.1m Estimated net profit margin: 44.1 / 378.5 = 11.7%
3. Watson-Marlow: Revenue: £394.0m Adjusted operating profit: £93.7m Estimated net profit: £93.7m * (1 - 0.255) = £69.8m Estimated net profit margin: 69.8 / 394.0 = 17.7%

Watchlist for this one.

[Saluki]

Someone who knows about my interest in sea drones sent me this: 

 

He created Oculus headsets as a teenager. Now he makes AI weapons for Ukraine : NPR

 

I assumed the guy on the Silicon Valley TV show was completely made up, but Palmer Luckey is Keenan Feldspar! 

 

He seems like an interesting guy and politics aside I appreciate that he doesn't take himself too seriously.  Besides the Hawaiian shirts, I've seen a few interviews when someone is asking a question and they say that he left Facebook, and he is quick to correct them.  "I didn't leave Facebook, they fired me.  Then they lied about why they fired me, so I sued them and won $100 million." 

 

So nice to hear the truth unsugarcoated rather than "I wanted to pursue other opportunities" or "I felt I did all I could there and it was time to move on" or "I wanted to spend time with my family." 

[Saluki]

On 5/15/2024 at 10:49 AM, ValueArb said:

Whoops, missed this. Carlyle capitulated, TJ raises the flag on another victory but still need to see how the business responds to loosening the leash.

 

https://finance.yahoo.com/news/complete-solaria-signs-term-sheet-120000656.html

 

 

Right before Carlyle folded, this was $0.55, two months later it's $1.62.  Definitely way to speculative for me based on the debt and potential for bankruptcy, but if anyone bought this to bet on the jockey, not the horse, congrats on a nice 2 month return. 

 

Looks like they eliminated the debt and are now on the offensive.  They just acquired an engineering firm to boost their sales and installation capabilities. 

 

Complete Solar Acquires Core Energy (yahoo.com)

 

Still not for me, but I have a 1.5% position in Enphase, TJ's other's company, and a small amount of shares in Enovix as schmuck insurance in his other venture.  

 

Peter Lynch said that the problem with most turnarounds is that they never turn around, but for guys who have that turnaround gene, it's like the one eyed man in the land of the blind. 

[Sweet]

One of the more interesting articles from CNBC about a Finnish bank called Nordea Bank - which I’ve never heard of before.

 

https://archive.ph/qn7gi

 

PE of 8, divy 9%, but stock has done nothing for nearly 20 years.

[Sweet]

This is insane

[Saluki]

17 hours ago, Sweet said:

This is insane

 

It's fascinating that none of the Trillion-dollar companies are on there.  Besides the fact that they are the slow changing, predictable businesses that Uncle Warren loves, it's fascinating that they are all between 70 and 100 years old, so the length of runway is vital.  

 

Besides the names I expected like Coke and John Deere, I almost fell out of my chair when I saw Tootsie Roll.  

[73 Reds]

38 minutes ago, Saluki said:

 

It's fascinating that none of the Trillion-dollar companies are on there.  Besides the fact that they are the slow changing, predictable businesses that Uncle Warren loves, it's fascinating that they are all between 70 and 100 years old, so the length of runway is vital.  

 

Besides the names I expected like Coke and John Deere, I almost fell out of my chair when I saw Tootsie Roll.  

In the battle of age vs. velocity, age wins!  But to be serious, given enough time, Berkshire will likely supplant a few of the names on that list.  Those names look a lot like a list of dividend aristocrats.  A long time ago I considered simply buying all dividend aristocrats and leaving them in a "coffee can" to grow.  Probably not a bad strategy for someone with no interest whatsoever in investments or for others who chronically underachieve.

[adesigar]

2 hours ago, 73 Reds said:

In the battle of age vs. velocity, age wins!  But to be serious, given enough time, Berkshire will likely supplant a few of the names on that list.  Those names look a lot like a list of dividend aristocrats.  A long time ago I considered simply buying all dividend aristocrats and leaving them in a "coffee can" to grow.  Probably not a bad strategy for someone with no interest whatsoever in investments or for others who chronically underachieve.

 

Berkshire should already be on this list. It should be above XOM.