What are you buying today?

[ArminvanBuyout]

On 9/10/2024 at 5:54 PM, Sweet said:

 

I like ABNB too, but think the earnings last year flatter the company and makes it look cheaper than it actually is.

Isn't a large part of ABNB earnings from interesting income? 

[Sweet]

8 minutes ago, ArminvanBuyout said:

Isn't a large part of ABNB earnings from interesting income? 

 

As of last quarter, about a third of it is interest income.

[rkbabang]

They are "interesting income."  I've never seen it used as a verb that way. 

[Gregmal]

What’s wrong with that? It’s a product of float. Which is one of the more desirable aspects of the business 

[thepupil]

I bought some $95 $IYR puts expiring in January 2025. I expect to lose 100% on these and will use the tax loss in '24 or '25 depending on how things are in December. It hedges some of my REIT exposure after a nice run. I don't think these puts are particularly cheap or anything like that...

 

 

[Red Lion]

6 hours ago, StevieV said:

 

No surprise to you, but I think $OWL in the 16s is attractive.  My best guess is that they fall a bit short of their $1/share dividend goal for next year, but I think they'll get to at least something like 92 or 96 cents.  That's a 5-6% yield for next year for a company with very healthy growth, significant "permanent" capital, mostly steady fee, and a decent variety of strategies.

 

Completely agreed. I couldn't care less about $1 in 2025, but if I have an ~5% forward yield and it's able to continue to grow at double digits for 5-10 years, I find that pretty attractive. At least for an alt asset manager. I'm a pretty big fan of the OWL business model and the emphasis on FRE over carry, and I think this should help it trade at a higher multiple. 

 

The most comparable models are BX, BAM, and ARES. And ARES is the most comparable in terms of emphasis on private credit. All of these trade at a richer value, have lower growth, and lower dividend yields than OWL. I'd expect that if OWL avoid a major misstep that this valuation gap will likely close over a period of time, and hopefully will be earning significantly higher FRE/dividends in 3-5 years. 

 

Obviously I love APO/KKR/BX/ARES, but I really think OWL has the most upside at these levels. 

 

 

EDIT: 

 

Just pointing out that all of the major alts (APO, BX, KKR, BAM, CG, ARES, etc.) have made deals to manage insurance AUM, and it appears that OWL is trying to break into the market as well. I think the smaller scale of OWL sets up some really great growth tailwinds as it won't take nearly as much to move the needle in increasing AUM/FRE/DE. 

 

Also, I'm not normally a huge believer in empire builders, but I'm excited about all the tuck in acquisitions that OWL has been pulling off to scale up its credit business. Also I love the general partner business, and I think this has helped OWL identify attractive acquisition targets in addition to being a great source of FRE in itself. 

Edited September 12 by Red Lion

[ICUMD]

Sold loosers.

Bought a lot of Google.

[Dinar]

Bought Glenveagh.  So @changegonnacome, if it works out, I will owe you a barrel of Guinness or Jamieson/Red Spot.  Made it roughly a 4% position.  That Irish stamp duty at 1% is annoying.

[Red Lion]

55 minutes ago, Dinar said:

Bought Glenveagh.  So @changegonnacome, if it works out, I will owe you a barrel of Guinness or Jamieson/Red Spot.  Made it roughly a 4% position.  That Irish stamp duty at 1% is annoying.

 

Beat me to it, I've been planning to open a position here in the near term. 

[changegonnacome]

2 hours ago, Dinar said:

Bought Glenveagh.  So @changegonnacome, if it works out, I will owe you a barrel of Guinness or Jamieson/Red Spot.  Made it roughly a 4% position.  That Irish stamp duty at 1% is annoying.

 

Its a deal!

 

And totally hear you on the stamp duty......the UK and Ireland are literally punching themselves in the face from a capital markets point of view attaching stamp duty to share purchases

[KPO]

Possibly against my better judgment, but I’m a sucker for a 16-17% free cash yield: Starter in SIRI at the end of trading. 

[nwoodman]

JACK.  Last held this 15 years ago.  Love me some shitco action.  PT $65 per share

[SafetyinNumbers]

28 minutes ago, nwoodman said:

JACK.  Last held this 15 years ago.  Love me some shitco action.  PT $65 per share

Raise your JACK with JAKK! 

[Paarslaars]

After earnings in July I sold half of my JOE position at 63$ and in the aug 5 dip bought FFH. This week I reversed that trade.

Edited September 14 by Paarslaars

[nwoodman]

7 hours ago, SafetyinNumbers said:

Raise your JACK with JAKK! 

That would really raise issues with my Shitco Anonymous sponsor

[ArminvanBuyout]

On 9/12/2024 at 12:51 PM, Gregmal said:

What’s wrong with that? It’s a product of float. Which is one of the more desirable aspects of the business 

Neg in a rate cut environment

[coffeecaninvestor]

NSRGY - another boring company at a reasonable valuation and what I view as limited down side risk. 

 

Both JNJ and NSRGY are now 5% positions. 

[KPO]

SIRI

[cubsfan]

On 9/11/2024 at 1:30 PM, Gregmal said:

ABNB and RTO 

 

More RTO 

[Spekulatius]

2 hours ago, cubsfan said:

 

More RTO 

Perhaps it’s me, but management seems clueless on how to turnaround the US Terminex business. First the CEO was talking about search optimization, then improve employee retention to improve customer retention. Both didn’t work even though “initial results were promising”. Now they are saying that costs were too high because they had employee working weekends which of course lead to higher cost due to overtime pay etc. That was done to squeeze out more revenue yet growth has been dropping all along and sits at 1%.

 

I think management need to go here or progress seems unlikely. ROL has none of the issues and has ~8% organic growth, so it’s not the market or consumer, it’s lack of execution for Rentokil in the US.

[cubsfan]

1 hour ago, Spekulatius said:

Perhaps it’s me, but management seems clueless on how to turnaround the US Terminex business. First the CEO was talking about search optimization, then improve employee retention to improve customer retention. Both didn’t work even though “initial results were promising”. Now they are saying that costs were too high because they had employee working weekends which of course lead to higher cost due to overtime pay etc. That was done to squeeze out more revenue yet growth has been dropping all along and sits at 1%.

 

I think management need to go here or progress seems unlikely. ROL has none of the issues and has ~8% organic growth, so it’s not the market or consumer, it’s lack of execution for Rentokil in the US.

 

I can't argue with your criticism. The Terminex acqusition has been a rough one - employee retention has been a real problem. So yeah, it may end up with new management if they can't fix it. Fundamentally, RTO is a dominate business (along with Orkin) that should be earning higher returns once back office systems and duplicate systems are consolidated. It's all about route density and scale. The disparity between Orkin valuation & RTO is much too great.

 

No much excited about the residentail business, but the commercial business is much larger and very lucrative.  The non-US business ought to grow in the 5+% range with developing markets.

 

RTO has been a rollup machine and good with acquisitions - this one was big and difficult.

 

There's been some discussion of RTO here as well:

 

https://thecobf.com/forum/topic/20901-your-largest-equity-buy-in-the-last-three-months-islong-term-buys-mostly/page/6/#comment-579309

 

[coffeecaninvestor]

Starting to buy RTO. 

[collegeinvestor]

GOOG, JNJ, AVUV

[longlake95]

Added to my oil basket yesterday.

CVE & MEG

Edited September 19 by longlake95

[thowed]

Oil Royalties in last 2 weeks: top-up on TPL, LB and PSK (but part swap: sold BSM to fund).