What are you buying today?

[Dinar]

6 minutes ago, Xerxes said:

 

@dealraker

 

Barrons had a recent breakdown of the three business that are going to be spun off.

I posted it on the General Electric thread. Re-posted below.

 

Personally, while i am interested in GE Aerospace (re-named GE Aviation) with Larry Culp at the helm, i dont want to deal with spin-offs in 2023 and 2024.

 

I dont even believe they have shared yet even the proforma capital structure of three companies, since i last looked. I do know however that the remenants of the Baker Hughes stake and AerCap will be remain part of GE Aerospace until fully unwinded, which would probably mean matching liabilities to it.

 

I am not expecting a UTC like spin off of Otis and Carrier.

 

 

 

Have you looked at how GE compares to Siemens Healthineers and Safran?  I think both are much cheaper.

[Xerxes]

4 minutes ago, Dinar said:

Have you looked at how GE compares to Siemens Healthineers and Safran?  I think both are much cheaper.

 

I dont follow Siemens Healthineers. As for SAFRAN, they and General Electric both have a mega business centered around the CFM/Leap engines. But i think we get a lot more optionality with Larry Culp and what he can do with new verticals within the GE Aerospace business than SAFRAN.

 

Even with the CFM/Leap business, GE has more important IP with its design of the engine core (hot section) vs. SAFRAN ownership of the cold section (the outer section). I just think there is more to have with GE as a long term owner.

 

Below is from Barron's. SAFRAN is not hugely cheap.

 

[Dinar]

54 minutes ago, Xerxes said:

 

I dont follow Siemens Healthineers. As for SAFRAN, they and General Electric both have a mega business centered around the CFM/Leap engines. But i think we get a lot more optionality with Larry Culp and what he can do with new verticals within the GE Aerospace business than SAFRAN.

 

Even with the CFM/Leap business, GE has more important IP with its design of the engine core (hot section) vs. SAFRAN ownership of the cold section (the outer section). I just think there is more to have with GE as a long term owner.

 

Below is from Barron's. SAFRAN is not hugely cheap.

 

If I am not mistaken Safran is 8x EPS with net cash on 2025 numbers

[ValueMaven]

I bought some AMT last week.  Everyone hates the stock - debt, leverage, a data center REIT etc ... has fallen dramatically recently .... I've watched it for 5yrs - and this is finally my shot

[Red Lion]

I bought back some CG, BAM, and AMT puts at a significant profit that I sold last week. My only short put outstanding right now is on SUI. 

 

 

[Red Lion]

Opened a position (again) in BUR. 

 

I have been watching this company for years, and it's always fascinated me. I do have some understanding of the business model and have run across litigation financing in my business. 

 

I've never held a long term position in BUR, but I'm planning to start. I've previously traded BUR twice, made a fast 50% profit right after the Muddy Waters report buying on the forced selling, and then had a wash last year. 

 

I sold my shares at the beginning of the market malaise this year for $9.25. Opened a new position about twice the size of the previous one at $7.67 today. Now if only I had left that money in cash instead of reinvesting it in KKR/APO at significantly higher prices...

[Dinar]

VRE April 2023 17.5 calls 

[Red Lion]

Bought debit put spreads on QQQ today expiring 11/7/22, I'm long the $265 put and short the $255 put. My cost basis is $2.51, so the max profit here would be 300% return if QQQ drops 6% from today's price. 

[Cod Liver Oil]

I have owned Itafos (IFOS.V) for a couple of years and buy more when it pulls back like now.

It is the cheapest thing I own at 2 times fcf. Yes, it is a fertilizer company but is a secular bet on the American

food supply chain becoming an area of national security. It's main asset is in Idaho. It is paying down debt rapidly with the gushing fcf, selling non core assets and has responsible and aligned owners in Castlelake.  We don't own much commodity related stuff except TPL but I like the odds on this.

https://itafos.com/

 

[LC]

46 minutes ago, Cod Liver Oil said:

I have owned Itafos (IFOS.V) for a couple of years and buy more when it pulls back like now.

It is the cheapest thing I own at 2 times fcf. Yes, it is a fertilizer company but is a secular bet on the American

food supply chain becoming an area of national security. It's main asset is in Idaho. It is paying down debt rapidly with the gushing fcf, selling non core assets and has responsible and aligned owners in Castlelake.  We don't own much commodity related stuff except TPL but I like the odds on this.

https://itafos.com/

 

 

Do you have a long term view of pricing? I fear prices won't stay elevated as (either or both) new capacity comes online and China resumes exporting. 

[Cod Liver Oil]

@LC I am agnostic on pricing. They have already paid down debt to $100mm.. If they sell the non core foreign assets, they can bring debt to zero. Then you are left owning Conda, one of the largest phosphate mines in the US and probably an asset of national food security.  In a de-globalizing world, that is a nice thing to own.

[Pelagic]

ONEW. Been holding off on buying this for a while finally decided to grab some today.

[PJH111]

3 hours ago, Cod Liver Oil said:

I have owned Itafos (IFOS.V) for a couple of years and buy more when it pulls back like now.

It is the cheapest thing I own at 2 times fcf. Yes, it is a fertilizer company but is a secular bet on the American

food supply chain becoming an area of national security. It's main asset is in Idaho. It is paying down debt rapidly with the gushing fcf, selling non core assets and has responsible and aligned owners in Castlelake.  We don't own much commodity related stuff except TPL but I like the odds on this.

https://itafos.com/

 

This is an interesting one. I looked at this earlier in the year but was concerned by the limited remaining life on their key asset. They tout the potential for expansion but wouldn't that come with substantial capex requirements and other development risks? 

[thepupil]

Kimco 4 1/8% of 2046 at $70.5 / 6.6% +250 

 

$7.5B of debt / $18B EV. LTV = ~40% on market. because buying debt at 70 cents, last dollar is at like 30% LTV. KIM has very long duration fixed debt and owns a bunch of grocery anchored strip centers that i think will be fine over the long term. my current yield of 5.9% is a decent carry and a get a fair bit of convexity/punch if long rates go down. 

 

I bought a HUGE 90 basis point position in these today. 

 

Fortune favors the bold. 

 

 

[Spooky]

Bought some more BAM

[Cod Liver Oil]

@PJH11 Good questions. The mine life extension should be filed within the next few weeks. I have not heard about any objections from Idaho but the chance of denial is non zero. If they get the extension, the stock probably goes up 20% the day of the announcement.  If not, it goes down by a third. I assign a 90% probability of success. Idaho is a red state with a big interest in mining. The feds are actively promoting domestic fertilizer production so I don't anticipate an issue. The cost of developing the new site is about $50mm which Itafos can fund from operations or sale of non core stuff. The existing mine has 3 or 4 years left; the new is supposed to be just as productive.

[dipod]

Sold $50 1 month out puts on CNQ yesterday for $1.62. Should bring cost basis down to $48.38 and provide a stable dividend yield of more than 5%.

[lnofeisone]

8 hours ago, Pelagic said:

ONEW. Been holding off on buying this for a while finally decided to grab some today.

Can you share the rationale and why ONEW over BC?

[Pelagic]

14 hours ago, lnofeisone said:

Can you share the rationale and why ONEW over BC?

 

They're a bit different, retailer vs. manufacturer. Mainly the growth runway ONEW has available to it. They're executing well and have just under a 100 locations currently out of ~4,300 marine retailers so there's quite a bit of room to grow. And I can appreciate their strategy of letting dealerships retain some independence in terms of branding as opposed to MarineMax where a bad experience with one MarineMax can sour a customer to all locations. They also target higher end buyers in what's already a high end industry so in that sense the service revenue they take in at their dealership locations is meaningful and going to help reduce some of the cyclicality of boat sales. Couple that with experienced management and high insider ownership and I think there's a good chance to do well here.

 

There's definitely risk regarding higher rates, and used boats flooding the market from 20/21 era buyers finding they liked the idea of boating better than actually owning a boat. However, if the goal is rolling up mom and pop retailers who are looking for an exit, a slowdown in sales likely let's them make those acquisitions at more attractive prices. 

 

Some background on the retailer side of the industry, there's a partial paywall but what's available for free is quite good.

 

https://inpractise.com/articles/onewater-marine-and-boat-retailing

https://inpractise.com/articles/onewater-marine-boat-manufacturer-and-dealer-relationship

 

 

[lnofeisone]

@Pelagic - thank you. Added to my weekend reading. 

[dipod]

Bought back the $50 CNQ puts to close my position at a profit after the bump today.

[dealraker]

On 10/14/2022 at 6:03 PM, Dinar said:

Have you looked at how GE compares to Siemens Healthineers and Safran?  I think both are much cheaper.

I have bought several small amounts of Siemens starting from the price of $52 and below.

[Red Lion]

I managed to snag 10 contracts of 6/16/23 $5 CLPR CALL options for $1.90 which is their intrinsic value, I don't understand why someone took the other side of that trade. 

[Gregmal]

Started bam 

[thepupil]

Today, I purchased 912810SV1 , the 30 yr TIP issued in February 2021. It has fallen to 62% of par (par has grown 13% because of inflaiton). real rates have gone from -0.5% at the time of issuance to +1.8%. I like this bond because of the discount to par value provides a theoretical put in the event of deflation. if deflation occurs over the course of the bond, the bond will return 1.2%/year because TIPS are floored at their original par value. so the nominal return of this bond will be at least 1.2% /yr, even in a disastrous depression, so it has some of the same i-bond like characteristics of being both deflation and inflation hedge. unlike i-bonds, it wil lmake a  shit ton if real rates decline (if it immediately went to zero real yield, this would return 65%) and if real rates continue to rise it will lose lots of money. 

 

brings me to 17% bonds, and am buying more in 401k every month but taking a pause for now on bonds. About 90% long stocks, 17% long bonds. I guess that makes me a risk partiy investor since i'm levered long both. 

 

I also bought more PSH at a 36% discount to NAV. 

 

I used FRPH to fund both of the purchases. FRPH is great and has been my largest position all year. It's still a large position. one isn't supposed to cut winners but I think FRPH NAV has declined and it's gotten more expensive relative to alternatives. 

 

Edited October 24, 2022 by thepupil