thefatbaboon Posted April 6, 2014 Posted April 6, 2014 My amazing charting skills suggest that it should at least dip to 26 ;D How do you come to that number? I can only "see" that it has a high chance of falling further, but i don`t "see" yet how far. At 20 there is a massive support, but that doesn`t mean it drops that low. I pulled the number out of my ass - where i find most of my best charting insights.
CorpRaider Posted April 7, 2014 Posted April 7, 2014 haha! I'm trying to get it at a valuation that based on my back of the envelope, uncle carl style analysis gives me a ~50% return to Elan's valuation of the royalty co.
Ross812 Posted April 7, 2014 Posted April 7, 2014 Started a small position in Lab Corp. - LH Ross, Been thinking about LH - I love the industry. Question though, why LH over Quest? jwfm, The short answer is management at LH is better than DGX. Quest and LH both grow through acquisition but Quest has proven again and again to destroy value when they acquire. Quest seems to take 1-2 years to fully digest a new lab (they have nothing to show for a couple big acquisitions) where LH does the same in 1-2 quarters. I think both companies are in a fantastic business. Together, they have the same kind of moat UPS, MSFT, or even KO possess. Long term, I think North American demographics and universal health care are going to provide a nice tail wind for both companies.
Zorrofan Posted April 7, 2014 Posted April 7, 2014 Started a small position in Lab Corp. - LH Ross, Been thinking about LH - I love the industry. Question though, why LH over Quest? jwfm, The short answer is management at LH is better than DGX. Quest and LH both grow through acquisition but Quest has proven again and again to destroy value when they acquire. Quest seems to take 1-2 years to fully digest a new lab (they have nothing to show for a couple big acquisitions) where LH does the same in 1-2 quarters. I think both companies are in a fantastic business. Together, they have the same kind of moat UPS, MSFT, or even KO possess. Long term, I think North American demographics and universal health care are going to provide a nice tail wind for both companies. Ross, Not that I think you are wrong, but I always look for the possible mistake in my thinking before investing. So let me go all Charlie Munger on you for a moment. What if a company like Opko Health actually manages to come up with a diagnostic test that can be done in your doctor's office (something they are working on) based on a simple blood test? What about the impact of government payment reductions? LH stated that this cost them over $100 million in 2013 alone? Looking forward to your comments as the idea does look interesting..... cheers Zorro
Ross812 Posted April 7, 2014 Posted April 7, 2014 Started a small position in Lab Corp. - LH Ross, Been thinking about LH - I love the industry. Question though, why LH over Quest? jwfm, The short answer is management at LH is better than DGX. Quest and LH both grow through acquisition but Quest has proven again and again to destroy value when they acquire. Quest seems to take 1-2 years to fully digest a new lab (they have nothing to show for a couple big acquisitions) where LH does the same in 1-2 quarters. I think both companies are in a fantastic business. Together, they have the same kind of moat UPS, MSFT, or even KO possess. Long term, I think North American demographics and universal health care are going to provide a nice tail wind for both companies. Ross, Not that I think you are wrong, but I always look for the possible mistake in my thinking before investing. So let me go all Charlie Munger on you for a moment. What if a company like Opko Health actually manages to come up with a diagnostic test that can be done in your doctor's office (something they are working on) based on a simple blood test? What about the impact of government payment reductions? LH stated that this cost them over $100 million in 2013 alone? Looking forward to your comments as the idea does look interesting..... cheers Zorro Zorro, I'll hit the government reductions first. The Midcare/caid acutually increased reimbursement 1% last year. LH lost money on routine standard tests that were moved onto the governments "not approved list". To give an analogy; there where 10 types of tests approved and reimbursed at $100 in 2012. In 2013, doctors ordered the same tests, LH performed the testing and sent the bill to the government. The government, in turn, decided in Q4 of 13 that 2 of the 10 tests were no longer covered and rather than reimbursing LH sent bills to individuals on medicare. (LH will have very limited success collecting these debts) The remaining 8 tests were reimbursed at $101 each. Management stated that they will simply abandon these tests billed to medicare in the future and stated that this is a temporary problem. Once doctors start getting sued when patients suffer because they are unable to get routine and best practice testing reimbursed; the government will change course. Until then, LH will not be giving any more free testing. HR 4015 passed the house on the 14th of March (this was not expected). This allows Medicare to reimburse doctors and labs at a rate greater than sustainable growth rate (SGR) in the future; meaning LH should actually pick up revenue growth from the government abandoning SGR @ 1% per year to something closer to YoY cost of care inflation - roughly 4%. Regarding being Charlie Mungered on the moat. I tend to think of moats as being sustainable if they can be expanded while under siege. The testing business is a technology arms race at its heart and technology always gets more and more complex as it matures. Opko Health may design a great real time test that replaces an offering by LH, but what about LH's 500 other offerings, or the new relatively complex genomics testing they are rolling out? Everyone expects new technology to replace existing technology, but in most cases, there is room for both. I.E. laptops and smartphones, SSD and HDD, credit cards and mobile payment. We are taking a pretty big leap to assign risk to a technology that a company may develop that may be an acceptable replacement for a current product that may be adopted by the medical community at large. I learned my lesson with inverting investments too much and tearing down moats based on new technology. A few years ago, I could have bought WDC at $23 but I didn't because I was convinced SSD would replace WDC's HDDs. Looking back on it, I missed out on a 400% gain and a position in a consistently growing company with a sustainable competitive advantage as part of the data storage duopoly.
Zorrofan Posted April 7, 2014 Posted April 7, 2014 Ross, Thanks for your response! You have given me a great deal to think about (and another 10K to read!!) as I can't really find a flaw in your analysis. :D cheers Zorro
menlo Posted April 7, 2014 Posted April 7, 2014 RE: LH and DGX, this company http://www.wired.com/2014/02/elizabeth-holmes-theranos/ might be a competitor (I don't know the industry).
frommi Posted April 8, 2014 Posted April 8, 2014 My amazing charting skills suggest that it should at least dip to 26 ;D How do you come to that number? I can only "see" that it has a high chance of falling further, but i don`t "see" yet how far. At 20 there is a massive support, but that doesn`t mean it drops that low. After looking at this again, it has now a high chance of turning when the daily high of yesterday is beaten. But probably its best to ignore me with so much stupid shit that i post. :)
yadayada Posted April 8, 2014 Posted April 8, 2014 woops wrong topic wheres that thread where you post your portfolio lol
gary17 Posted April 8, 2014 Posted April 8, 2014 I think it's called current holdings... but if you search I suspect many hits will come out! just state it here is fine I think... cheers Gary
yadayada Posted April 8, 2014 Posted April 8, 2014 K here goes: Not sure about sizing portfolio SNMX – Senomyx 6,50% ACW – Accuride 4,00% GNCMA – General communications 6,00% DAP.U – Xpel tech 6,00% 0184 – Keck Seng investments 6,00% OUTR – Outerwall 6,00% GPIV33 – GP investments 5,00% XON – Intrexon 1,50% EHL – Emeco holdings 6,00% LUKOY – Luke oil 4,00% LRM – Lombard risk 4,00% AMNL – Applied minerals 2,00% PIH – Property insurance 3,00% FIAT – Fiat 3,00% 63,00% Average upside is like 300% or something. Very mixed portfolio. Downside is limited in most cases by assets or by bad things being priced in mostly, and with the speculative ideas, insiders have alot more to lose then me. The idea that i really like best is Senomyx. I have a hard time killing that one, insiders absolutley love it (putting most of their networth while in SNMX case not even overly promoting it) and it just looks like the market is really badly mispricing that one. Usually with that amount of upside, the products arent approved or not even ready to manufacture yet. But here they already have all that, AND they have already made deals with the people who will use it lol. Maybe i willl add 1-2% more there. Curious what will happen in the next few years. Going to be very interesting to sweat this out. First year where i will have more then half of my money in stocks. I want to be 75% invested tho. I think i should add to some of those ideas, but not sure. Got some reading to do :) Maybe i did focus a bit too much on upside tho. OUTR might be risky, Lombard is risky, adn there are 3 speculative ideas in there for almost 10% that are not making money but have huge potential upside.
Lance Posted April 8, 2014 Posted April 8, 2014 I wrote puts on AIG and sold calls against shares I own. Thanks Lance
gokou3 Posted April 11, 2014 Posted April 11, 2014 Got out of the 2015 BAC calls a while ago and now partially rolling over to a 2016 $12 position. I think the $20B market cap decline relative to its recent high is excessive vs. 1) its new legal costs (credit card settlement, etc) and 2) lower than expected capital return to shareholders.
Kraven Posted April 11, 2014 Posted April 11, 2014 Got out of the 2015 BAC calls a while ago and now partially rolling over to a 2016 $12 position. I think the $20B market cap decline relative to its recent high is excessive vs. 1) its new legal costs (credit card settlement, etc) and 2) lower than expected capital return to shareholders. I noted many times that the capital return would likely disappoint and be low. My views on this were hissed by many of the true believers on the board. People believe what they want to believe.
wescobrk Posted April 11, 2014 Posted April 11, 2014 "I noted many times that the capital return would likely disappoint and be low. My views on this were hissed by many of the true believers on the board. People believe what they want to believe." I thought bac would disappoint as well but I also thought citi would pass three stress tests when I saw them 160 basis higher than bac on stressed tier 1 but we all know how great that decision of was mine. This is a humbling business. I have new appreciation for Buffett always looking for the sure thing.
ERICOPOLY Posted April 11, 2014 Posted April 11, 2014 Got out of the 2015 BAC calls a while ago and now partially rolling over to a 2016 $12 position. I think the $20B market cap decline relative to its recent high is excessive vs. 1) its new legal costs (credit card settlement, etc) and 2) lower than expected capital return to shareholders. I noted many times that the capital return would likely disappoint and be low. My views on this were hissed by many of the true believers on the board. People believe what they want to believe. The capital return was pretty much maximized I felt. At least, based on what was left to return after the Fed stress test dictated how much they would need to hold onto to stay above the minimums in their scenario. The part that I didn't expect was how little would be left to return in the stress scenario. The Fed didn't seem to have any problem letting them return all of the excess -- there just wasn't much "excess". The Fed stress test is sort of a back-door means of raising capital levels well above what the B3 guidelines allow.
Spekulatius Posted April 13, 2014 Posted April 13, 2014 At 5$/share, buying back stock would have done wonders for BAC, at current valuations, I think they are better off paying some dividends. BAC trades at almost the same price/tangible ratio than JPM and JPM is arguable a much better managed bank.
blainehodder Posted April 14, 2014 Posted April 14, 2014 JPM warrants. JPM seems like a fantastic deal at these levels if Jamie Dimon is even close in his assumptions of return on TBPS. I guess the market doesn't believe him. I do. -TBPS of 40.82 x 15% ROTCE = 6.12 EPS -TBPS increased at 12%/yr since 05, no dip in crisis, no dip from settlements, no dip from Whale losses -Maintained 15% ROTCE as capital requirements have increased. -Pruning the loser businesses. -Fastest growing deposits. -Uptick of 6B if interests rates "normalize" I hope they are executing on the buybacks right now in a big way.
randomep Posted April 15, 2014 Posted April 15, 2014 K here goes: Not sure about sizing portfolio SNMX – Senomyx 6,50% ACW – Accuride 4,00% GNCMA – General communications 6,00% DAP.U – Xpel tech 6,00% 0184 – Keck Seng investments 6,00% OUTR – Outerwall 6,00% GPIV33 – GP investments 5,00% XON – Intrexon 1,50% EHL – Emeco holdings 6,00% LUKOY – Luke oil 4,00% LRM – Lombard risk 4,00% AMNL – Applied minerals 2,00% PIH – Property insurance 3,00% FIAT – Fiat 3,00% 63,00% Average upside is like 300% or something. Very mixed portfolio. Downside is limited in most cases by assets or by bad things being priced in mostly, and with the speculative ideas, insiders have alot more to lose then me. The idea that i really like best is Senomyx. I have a hard time killing that one, insiders absolutley love it (putting most of their networth while in SNMX case not even overly promoting it) and it just looks like the market is really badly mispricing that one. Usually with that amount of upside, the products arent approved or not even ready to manufacture yet. But here they already have all that, AND they have already made deals with the people who will use it lol. Maybe i willl add 1-2% more there. Curious what will happen in the next few years. Going to be very interesting to sweat this out. First year where i will have more then half of my money in stocks. I want to be 75% invested tho. I think i should add to some of those ideas, but not sure. Got some reading to do :) Maybe i did focus a bit too much on upside tho. OUTR might be risky, Lombard is risky, adn there are 3 speculative ideas in there for almost 10% that are not making money but have huge potential upside. hi yadayada, I am always trying to get ideas from others' portfolio, but you are really mad about SNMX? why? I just downloaded their 10K and they are losing money, do I have the right company? Why is it so good? thanks
phil_Buffett Posted April 15, 2014 Posted April 15, 2014 AIQ, altius, alderon, GM, Sberbank, Horsehead, BYD, RJET, Sprint, Clarke
bmichaud Posted April 15, 2014 Posted April 15, 2014 Continuing to buy the RWM dips - bought more on this morning's market pop.
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