Best Idea(s) for 2025

[Dinar]

With all due respect, are you guys actually looking for idea or excuses?  There are incredible number of excellent opportunities to deploy capital where it is hard to imagine not making four or more times your money over the next decade.  

[Gregmal]

44 minutes ago, Dinar said:

With all due respect, are you guys actually looking for idea or excuses?  There are incredible number of excellent opportunities to deploy capital where it is hard to imagine not making four or more times your money over the next decade.  

Totally; there’s so many cheap stocks right now I find it hard to fathom how so many people are currently obsessed and brainwashed with thinking they need to be in cash or that there’s some sort of widespread bubble. 

[Spekulatius]

Unidata UD.MI - a small cap Italian fiber play. has been a pretty good operational performer since the IPO in 2020 but shares have come down quite a bit the last year. Fiber played as well as Europe have gone out of fashion. I think it’s a great buy here.

[Cod Liver Oil]

4 hours ago, Dinar said:

With all due respect, are you guys actually looking for idea or excuses?  There are incredible number of excellent opportunities to deploy capital where it is hard to imagine not making four or more times your money over the next decade.  

Choked laughing at this. Vintage Dinar. Acid truth. 

Edited December 29, 2024 by Cod Liver Oil

[Luke]

7 hours ago, Dinar said:

With all due respect, are you guys actually looking for idea or excuses?  There are incredible number of excellent opportunities to deploy capital where it is hard to imagine not making four or more times your money over the next decade.  

Which ones are your best 3 4x ideas?

[Dinar]

18 minutes ago, Luke said:

Which ones are your best 3 4x ideas?

a) New England Realty (NEN) - for US investors ONLY due to tax headaches for foreigners

b) Madison Square Garden Entertainment (MSGE)

c) Canadian Pacific Railroad

d) Heidelberg Materials, CRH & Arcosa (sand/gravel/cement/aggregates basket)

 

[Dalal.Holdings]

22 minutes ago, Dinar said:

a) New England Realty (NEN) - for US investors ONLY due to tax headaches for foreigners

b) Madison Square Garden Entertainment (MSGE)

c) Canadian Pacific Railroad

d) Heidelberg Materials, CRH & Arcosa (sand/gravel/cement/aggregates basket)

 

 

These are easy 4 baggers in 10 years? Now I’ve heard it all

[Dalal.Holdings]

The Top is close. I can smell it. I'm tapped out of U.S. markets other than some core holdings.

 

Oh, and I wouldn't be so quick to make fun of people who hold cash. Even Ole Warren is there. Those with cash will be the ones to buy the fire sale.

[Dinar]

3 minutes ago, Dalal.Holdings said:

 

These are easy 4 baggers in 10 years? Now I’ve heard it all

And you disagree why? 

a) NEN is selling at a 10% cap rate, and something like a 13% free cash flow yield to the equity.  Add rent growth, of even 3-4% per annum, and your return is 16-20% per annum depending on expense growth (I'd assume expense growth of 3% per annum) and the benefit of leverage.

b) Heidelberg Materials is selling at 9.5x 2025 EPS, 8.5x 2026 EPS, and 7.75x 2027 EPS.   What do you think the returns here will be?  CRH has had numerous insider buys over the past 2 years, including a USD 2MM by director at 99 in December and another $150K by another director at 98+ at the end of December. 

c) MSGE has a 7% free cash flow yield to the equity, with plenty of levers to increase profitability.  For instance in Q1 revenue from Rockettes was up 15%, half was price and half was volume.  If the company gets to 2019 levels in terms of revenues from Rockettes on an inflation adjusted basis, that takes free cash flow yield to 7.5%.  If you have pricing at inflation + 1% for this collection of businesses, then you have free cash flow growing at inflation + 3-5% per annum.   7%+3% (inflation) + 4% (growth due to price ahead of inflation) = 14% per annum.  This does not take into account the benefit of dynamic pricing, ability to increase profitability at the Garden via additional luxury boxes, etc...  Nor do you pay anything for the company's ability to create value via share buy-back.

d) Canadian Pacific Railway.  Did you read the presentation and the 75 page transcript from 2023 investor day?  Have you taken a look at their operating performance and the tendency to under-promise and over-deliver?  What do you think CP results will look like in 2030?  

Thank you. 

[sleepydragon]

35 minutes ago, Dalal.Holdings said:

 

These are easy 4 baggers in 10 years? Now I’ve heard it all

i followed Dinar into COKE and made money.  that was a very good pick. 

[Dalal.Holdings]

9 hours ago, Dinar said:

And you disagree why? 

a) NEN is selling at a 10% cap rate, and something like a 13% free cash flow yield to the equity.  Add rent growth, of even 3-4% per annum, and your return is 16-20% per annum depending on expense growth (I'd assume expense growth of 3% per annum) and the benefit of leverage.

b) Heidelberg Materials is selling at 9.5x 2025 EPS, 8.5x 2026 EPS, and 7.75x 2027 EPS.   What do you think the returns here will be?  CRH has had numerous insider buys over the past 2 years, including a USD 2MM by director at 99 in December and another $150K by another director at 98+ at the end of December. 

c) MSGE has a 7% free cash flow yield to the equity, with plenty of levers to increase profitability.  For instance in Q1 revenue from Rockettes was up 15%, half was price and half was volume.  If the company gets to 2019 levels in terms of revenues from Rockettes on an inflation adjusted basis, that takes free cash flow yield to 7.5%.  If you have pricing at inflation + 1% for this collection of businesses, then you have free cash flow growing at inflation + 3-5% per annum.   7%+3% (inflation) + 4% (growth due to price ahead of inflation) = 14% per annum.  This does not take into account the benefit of dynamic pricing, ability to increase profitability at the Garden via additional luxury boxes, etc...  Nor do you pay anything for the company's ability to create value via share buy-back.

d) Canadian Pacific Railway.  Did you read the presentation and the 75 page transcript from 2023 investor day?  Have you taken a look at their operating performance and the tendency to under-promise and over-deliver?  What do you think CP results will look like in 2030?  

Thank you. 

 

A) highly dependent on interest rates, economic conditions

 

b) High Dependent on Eurozone economic growth, a cyclical, and has already had a big run up

 

c) Need I say more than Dolan. Do the Rockettes have the same franchise value as 20-30 years ago? Too many assumptions for my taste. Certainly not an easy 4 bagger in 10 years.

 

d) A railroad trading at 8x EV/S. Hard Pass.

 

I’ll wait for the fat pitches to come to me instead of making a ton of assumptions about cyclicals trading near their tops, interest rates, the economy, etc. These don’t sound like slam dunks to me at all.

[Dinar]

44 minutes ago, Dalal.Holdings said:

 

A) highly dependent on interest rates, economic conditions

 

b) High Dependent on Eurozone economic growth, a cyclical, and has already had a big run up

 

c) Need I say more than Dolan. Do the Rockettes have the same franchise value as 20-30 years ago? Too many assumptions for my taste. Certainly not an easy 4 bagger in 10 years.

 

d) A railroad trading at 8x EV/S. Hard Pass.

 

I’ll wait for the fat pitches to come to me instead of making a ton of assumptions about cyclicals trading near their tops, interest rates, the economy, etc. These don’t sound like slam dunks to me at all.

Actually, you are making very important assumptions.   If you are sitting in cash, you are assuming that there will be essentially no inflation while you sit on cash.  You are assuming that there will be massive sell-offs in individual securities or stock market as a whole, and relatively soon. 

When I have apartment buildings in Boston area at one-third of replacement cost, a 10% cap rate, 13% cash yield to the equity, with LTV of around 30%, under what scenario other than a Great Depression or deflation or meteorite hitting Boston and wiping out the area, will your cash holding do better over the this position? 

We will have to agree to disagree.  I can make similar arguments for the other names on the list.  We will revisit in 10 years.

[Dalal.Holdings]

“Cash is a call option with no expiration date, an option on every asset class, with no strike price.” —the Goat
 

I’m not mostly sitting in cash though, I’m just looking outside the United States

[Sweet]

10 hours ago, Dinar said:

And you disagree why? 

a) NEN is selling at a 10% cap rate, and something like a 13% free cash flow yield to the equity.  Add rent growth, of even 3-4% per annum, and your return is 16-20% per annum depending on expense growth (I'd assume expense growth of 3% per annum) and the benefit of leverage.

b) Heidelberg Materials is selling at 9.5x 2025 EPS, 8.5x 2026 EPS, and 7.75x 2027 EPS.   What do you think the returns here will be?  CRH has had numerous insider buys over the past 2 years, including a USD 2MM by director at 99 in December and another $150K by another director at 98+ at the end of December. 

c) MSGE has a 7% free cash flow yield to the equity, with plenty of levers to increase profitability.  For instance in Q1 revenue from Rockettes was up 15%, half was price and half was volume.  If the company gets to 2019 levels in terms of revenues from Rockettes on an inflation adjusted basis, that takes free cash flow yield to 7.5%.  If you have pricing at inflation + 1% for this collection of businesses, then you have free cash flow growing at inflation + 3-5% per annum.   7%+3% (inflation) + 4% (growth due to price ahead of inflation) = 14% per annum.  This does not take into account the benefit of dynamic pricing, ability to increase profitability at the Garden via additional luxury boxes, etc...  Nor do you pay anything for the company's ability to create value via share buy-back.

d) Canadian Pacific Railway.  Did you read the presentation and the 75 page transcript from 2023 investor day?  Have you taken a look at their operating performance and the tendency to under-promise and over-deliver?  What do you think CP results will look like in 2030?  

Thank you. 

I agree with the others, I don’t think these are home runs.  However I appreciate that you are sharing your views and hope they do well for you.

[Gregmal]

So an investment that is dependent on rates, the economy, regional occurrences, management, or a cycle, is something to write off? Oh and if the stock has gone up too much recently as well, cross it off? I guess in that case all thats left in cash. 

 

This is kinda the point. It always happens like this. People have investments and others always have excuses not to invest. You can list your investments and then theyre picked apart for the purpose of invalidating them; but the point being that anyone who puts in the works can easily find investments. Or you can be lazy and just find excuses to hold cash. Im old enough now to remember how hot shit everyone holding cash felt after 2022, only to then whiff and play the same game in 2023 and 24. Same happened because of a month long panic in 2020 and in late 2018. Fact of the matter is volatility is part of life in the market. Deal with it, or dont...

[73 Reds]

4 minutes ago, Gregmal said:

So an investment that is dependent on rates, the economy, regional occurrences, management, or a cycle, is something to write off? Oh and if the stock has gone up too much recently as well, cross it off? I guess in that case all thats left in cash. 

 

This is kinda the point. It always happens like this. People have investments and others always have excuses not to invest. You can list your investments and then theyre picked apart for the purpose of invalidating them; but the point being that anyone who puts in the works can easily find investments. Or you can be lazy and just find excuses to hold cash. Im old enough now to remember how hot shit everyone holding cash felt after 2022, only to then whiff and play the same game in 2023 and 24. Same happened because of a month long panic in 2020 and in late 2018. Fact of the matter is volatility is part of life in the market. Deal with it, or dont...

There is always a happy median.  I will free up cash if there is something I'm looking to buy and expect the price to be in range.  But to sit in cash out of fear makes no sense because even cash does not guarantee a risk-free real rate of return and you can find other investments that for all practical purposes do.

[gfp]

Good post and I agree but I had to laugh at "I'm old enough to remember 2022"

[james22]

12 minutes ago, Gregmal said:

So an investment that is dependent on rates, the economy, regional occurrences, management, or a cycle, is something to write off? Oh and if the stock has gone up too much recently as well, cross it off? I guess in that case all thats left in cash. 

 

This is kinda the point. It always happens like this. People have investments and others always have excuses not to invest. You can list your investments and then theyre picked apart for the purpose of invalidating them; but the point being that anyone who puts in the works can easily find investments. Or you can be lazy and just find excuses to hold cash. Im old enough now to remember how hot shit everyone holding cash felt after 2022, only to then whiff and play the same game in 2023 and 24. Same happened because of a month long panic in 2020 and in late 2018. Fact of the matter is volatility is part of life in the market. Deal with it, or dont...

 

X350

 

Unless, of course, you've a successful track record.

[Dinar]

1 hour ago, Dalal.Holdings said:

“Cash is a call option with no expiration date, an option on every asset class, with no strike price.” —the Goat
 

I’m not mostly sitting in cash though, I’m just looking outside the United States

That's only true in the world of zero or very low inflation.  Which securities do you think are cheap?  Thank you.

[KPO]

I’m in the cash heavy camp at the moment, however I think there are many low to medium conviction value opportunities currently available, so I’ll throw a few out there:

- BGS - acquisition candidate with some recent insider buys 

- GMBXF - SOTP/inflation hedge/NA trade exposure w/ railroad concession that’s much larger and more valuable than CP’s KCS-purchased Mexican concession 

- OLN - share repurchase cannibal the past 5 years

- STNE - cheap on virtually any valuation metric, hedge on dollar strength reversing

- HOG - share repurchase cannibal the past 10 years, revenue in secular decline, but strong embedded base, valuable niche brand that could make it an acquisition target

[Dinar]

21 minutes ago, KPO said:

I’m in the cash heavy camp at the moment, however I think there are many low to medium conviction value opportunities currently available, so I’ll throw a few out there:

- BGS - acquisition candidate with some recent insider buys 

- GMBXF - SOTP/inflation hedge/NA trade exposure w/ railroad concession that’s much larger and more valuable than CP’s KCS-purchased Mexican concession 

- OLN - share repurchase cannibal the past 5 years

- STNE - cheap on virtually any valuation metric, hedge on dollar strength reversing

- HOG - share repurchase cannibal the past 10 years, revenue in secular decline, but strong embedded base, valuable niche brand that could make it an acquisition target

GMBXF is very interesting.  What do you think of controlling shareholders?  Are you valuing it on a sum of the parts basis?  How are you looking at valuation?  Thank you.

[Sweet]

1 hour ago, Gregmal said:

So an investment that is dependent on rates, the economy, regional occurrences, management, or a cycle, is something to write off? Oh and if the stock has gone up too much recently as well, cross it off? I guess in that case all thats left in cash. 

 

This is kinda the point. It always happens like this. People have investments and others always have excuses not to invest. You can list your investments and then theyre picked apart for the purpose of invalidating them; but the point being that anyone who puts in the works can easily find investments. Or you can be lazy and just find excuses to hold cash. Im old enough now to remember how hot shit everyone holding cash felt after 2022, only to then whiff and play the same game in 2023 and 24. Same happened because of a month long panic in 2020 and in late 2018. Fact of the matter is volatility is part of life in the market. Deal with it, or dont...

 

This ‘just be lazy’ quip is bull.  In fact I’d say that is a lazy assumption on your part.

 

I have no problem finding stocks on the cheaper side.  It’s got nothing to do with finding value.

 

Having confidence in my convictions is what doesn’t come easy.  I can read all the filings I want, read all the posts I want, but if I don’t know the name well, or haven’t used their product or know someone who has, then I tend to just avoid it.

 

This has cost me in some stocks, but it’s also saved my ass too.

 

Optimists tend to do better in the stock market than pessimists, but some optimists delude themselves about the risks to permanent capital loss.  You used the example of 2022, but this is not 2022.

 

I’d rather underperform and keep what I have than get involved in companies that the only thing I know about is what the CEO writes or says, or some talking head online is pimping.

 

 

Edited December 30, 2024 by Sweet

[Gregmal]

8 minutes ago, Sweet said:

Optimists tend to do better in the stock market than pessimists, but some optimists delude themselves about the risks to permanent capital loss.  You used the example of 2022, but this is not 2022.

Everyone always says this time is different. Go back 4 years. In May 2020, pretty much at the bottom, there was a huge clan of Buffett parrots who used the excuse “Buffett is selling hand over fist and said he isn’t ruling out another Great Depression at the AGM” for missing it all. 
 

When there isn’t Buffett to play the appeal to authority card, there’s always the Gundlach, Drunkenmiller, etc crowd to cite. 
 

Neither bullish nor bearish I just don’t think folks help themselves at all appealing to authority or playing into their biases. Just put your head down and look for places and ideas that should work. 
 

Separately but relatedly, it’s a very obvious giveaway in regards to who is being lazy because the dead giveaway is just pointing to “the index”. Dissect the index or many different areas and sectors, there is a TON that’s not expensive or “in a bubble”….so yes, calling a top based on index levels is the epitome of lazy and uneducated, and should have near zero bearing on one’s ability to find investments. But when one’s wound themselves up thinking the indexes are a bubble that’s about to pop, it’s easy to see why they confuse this with a widespread “don’t go in the water” alert.

[Junior R]

PAX

JOE

LNR

FIH

HSY

PFE

TD

CNR

OXY

BP

[Gregmal]

Like I hate energy, period. But nothing in the entire energy space is expensive at all. Even remotely. Got cash? Go sift through energy companies and sort the top 10% in terms of quality, ie balance sheet, management quality, historical cashflow, asset location, etc.

 

Problem solved. Energy just one example, you can do this with many different sectors. Or you can talk about the index and let the influence of like 8 stocks keep you on the sidelines.