What are you buying today?

[Dave86ch]

Added to 9988hk and $COIN

Edited March 17, 2022 by Dave86ch

[n.r98]

Anyone have thoughts on the merger arb 12-13% spread(bid price $12) re $PGRE. Got the idea from SSI.

 

Trades at a cheap valuation with cap rates higher than average NY Office buildings and peers. Previous takeover attempt by Bow Street was rejected within 2 weeks but at a lowball price around 10. Pre announcement price of $9.3, but business is improving with dividend increase, even if deal falls through, don't think you lose much money, if any at all.

 

Current acquirer is Monarch, expert in the field of office R.E and now owns 5.5% stake purchased with average 9 bucks ish.

 

 

Edited March 18, 2022 by n.r98

[bargainman]

On 3/17/2022 at 10:07 AM, RedLion said:

Covered my AAPL short at $159. I went short back on December 15 at $178 and plowed the proceeds of the shortsale back into BRK.B (which is up ~17% in the meantime). I'm holding onto the BRK.B, used margin to cover AAPL short. 

 

 

 

What's your strategy here?  Some sort of arb?

[Red Lion]

8 hours ago, bargainman said:

 

What's your strategy here?  Some sort of arb?

I’m experimenting in small doses with short selling. When I put this on in December I felt like AAPL was overextended, and I had a big indirect position through Berkshire Hathaway. So I sold aapl short and then rolled the short sale proceeds back into more Berkshire shares at around $280.
 

In the longer run I’m not an experienced short seller and it makes me uneasy remaining short on a great company like aapl even though it was only a partial hedge for the look through aapl stake from Berkshire Hathaway. It’s not a big position, so I decided to take a ~10% gain covering my short and will pay the margin back and hold the Berkshire shares long term. 
 

I have a big position in bam and I’ve been thinking of short selling bepc/bipc/bbuc to get more exposure to the asset management spinoff so I may experiment with a similar strategy here. 

[maplevalue]

NTDOY

[Spekulatius]

Bought a starter in SWK around $140.

[bennycx]

1 hour ago, Spekulatius said:

Bought a starter in SWK around $140.

Had this on my watchlist for a long time too. Getting to more reasonable levels and they’re focusing on downsizing and buybacks 

[TwoCitiesCapital]

On 3/8/2022 at 4:27 PM, TwoCitiesCapital said:

 

Probably trying to be too smart, but sold April $183 calls against this.

 

Got about $5 of time value per contract and some downside protection since they're ITM by a few percent.

 

Kind of figured this may pull back some over the next month or so now that it's overbought and basically went vertical for a few days.  

 

Just want to take some gains off the table and get paid a little to wait for this to cool off a hair. Hoping for a retest of $180 sometimes around the time the Fed actually hikes rates. 

 

Buying these back.

 

Added SLV call spreads to my precious metals exposure now that the bottom should be in IMO. 

[Spekulatius]

33 minutes ago, bennycx said:

Had this on my watchlist for a long time too. Getting to more reasonable levels and they’re focusing on downsizing and buybacks 

 If SWK can make the 2022 forecast, the stock is cheap. I looked through my records and owned BDK in the past (around 2004) and it worked out well. SWK is a better business than BDK was in 2004 and it's not much more expensive.

 

I like their recent purchases MTD (Cub Cadet tractors) and Craftsman. Both are great brands and were bought for reasonable prices. I also like that they sold their security business for 16x EBITDA and use the proceeds to buy back their own stock at less than 10x EBITDA.

 

I do not like the look of the stock chart currently so I step in accordingly.

Edited March 24, 2022 by Spekulatius

[RichardGibbons]

2 hours ago, Spekulatius said:

SWK is a better business than BDK was in 2004 and it's not much more expensive.

 

I'm curious what you mean by "better business". In 2004, I feel like there were far fewer cheap Chinese brands, and so competition is harder today. On the other hand, they're bigger now and have Craftsman.

 

(I'm not skeptical of your "better business" statement. I'm just trying to figure out in my head how their positioning and competitive has evolved with the changing market, so was hoping you'd have some insight that would give me a shortcut to understanding what's going on.)

[Spekulatius]

48 minutes ago, RichardGibbons said:

 

I'm curious what you mean by "better business". In 2004, I feel like there were far fewer cheap Chinese brands, and so competition is harder today. On the other hand, they're bigger now and have Craftsman.

 

(I'm not skeptical of your "better business" statement. I'm just trying to figure out in my head how their positioning and competitive has evolved with the changing market, so was hoping you'd have some insight that would give me a shortcut to understanding what's going on.)

I looked back and it seems like the profit margins have improved a little (from 11% in 2004 to 12.5%) so maybe not that much better than I thought. They have regained significant scale when they combined with Stanley, as well as the recent acquisition (MTD, Craftmans) so in that sense, I think they have become better or at least more diversified.

 

As for competitors - there was no name Chinese competition in 2004 as well. At some point it does  not matter if you have 3 or 10 no-name competitors.

[lnofeisone]

Bought a starter in CPNG and some TELL (0.5% of portfolio).

 

Tellurian is a highly speculative, most likely binary, energy play. They have all the permits to start an LNG plant (driftwood) but have no funding to get it complete. With Europe looking to diversify nat gas sources and US and EU now establishing a partnership, this is now an interesting play. Few catalysts:

1) They break the ground and start building

2) They get a bank to give them a loan (I think the odds here increased, especially in light of the news on US/EU partnership)

3) CEO is a former co-founder of LNG so knows the game but doesn't have the best of reputations (despite lawsuit dismissal) 

[longlake95]

back into LNR.TO with a starting position.

[Gregmal]

Bought a boatload of PCYO this week from whatever loser is trying to exit. 

[Cod Liver Oil]

I am starting a 500bp allocation to forced liquidations. Bought a little NTP and CPNG.

[cubsfan]

^^ That's hilarious - I did the same after exiting APTS this week.

Just kept hitting the PCYO ask, and here 

I thought it was gonna be hard to buy with the thin trading!

Edited March 25, 2022 by cubsfan

[Gregmal]

Yea you can tell someone is desperate so Ive just been hanging out and waiting for asks to come in. Under 12 been whacking 3,000-5,000 share lots all week. 

[cubsfan]

^^ Nothing like quarter end window dressing!

 

[rayfinkle]

On 3/25/2022 at 1:09 PM, Gregmal said:

Yea you can tell someone is desperate so Ive just been hanging out and waiting for asks to come in. Under 12 been whacking 3,000-5,000 share lots all week. 

Hey Greg- mind linking to a thesis if one’s handy? Been off the forum for a few months! Love forced selling…

[Gregmal]

44 minutes ago, rayfinkle said:

Hey Greg- mind linking to a thesis if one’s handy? Been off the forum for a few months! Love forced selling…

There’s a thread on it and the story is still pretty much the same. Just treading through the whole “time” aspect of the story. Q3 we should really start seeing some fun stuff. But elevator pitch is simple. You’ve got enough water to support a few good sized cities. $1.8b in “eventual” dollars. And the Sky Ranch project currently in phase 2 which should generate cash in excess of the current market cap over the next 5-7 years or so. As the homes get built the recurring revenue from water services grows. Oh yea, it’s all happening in one of the fastest growing MSAs which also happens to be facing a water shortage; Denver. Basically a JOE Jr.

[cubsfan]

^^^ Was reading up the investor materials last night - really is a pretty unique asset with recurring revenue. 

Looks like it will just take some patience.

[Gregmal]

Yup. Harding is excellent as well. Candid and trustworthy, although a tad timid with the cash. But overall, an inflation proof company with hard assets that an idiot could buy and hold, and blindly buy the dip on at these levels and long term make out alright. Not the worst thing given the overall market uncertainty. 

[cubsfan]

^^^ I was looking at the balance sheet - and thinking somewhat the same. Bulletproof, but no leverage, hardly 

any liabilities. What's your take on that? Not like the typical real estate investor?

[Gregmal]

Nah Mark is super conservative. Been at the company for decades and has a lot of his net worth tied up in it. The track record is excellent. Total home run and definition of opportunistic. Look at what they paid for the 900 acres.
 

But otherwise you’d have trouble finding further evidence bc they haven’t done much else. But I do think a buyback is becoming increasingly likely. The board has been reshaped over the years and is definitely shareholder oriented. 

 

But you hit the nail on the head. You can’t destroy the company and don’t need to do much to justify $250m EV.

[gfp]

3 hours ago, Gregmal said:

Look at what they paid for the 900 acres.

 

Was it $7 million?

 

https://www.sec.gov/Archives/edgar/data/0000276720/000095012310072361/c04363e8vk.htm

 

Sounded on the most recent call that a buyback is not in the cards this year.  "I can't have my cake and eat it too just yet."  They are negotiating with land owners for potential M&A and they seem to really like to manage their cash carefully despite having visibility to at least $16m of reimbursements coming back in the near term.  At least they were willing to finance 100% of the construction costs of the rental homes by rolling their finished lots into the equity portion (and instantly making 200k per home that doesn't show up in the financials).

 

I like that Mark is very honest on the calls.  Not overly promotional, not defensive, just answers each question with the truth.  And 18 months out you have some really nice commercial developments anchored by a likely "super center with gas" type of grocery tenant.

Edited March 27, 2022 by gfp