Jump to content

What are you buying today?


LowIQinvestor

Recommended Posts

BABA  (Yes I am a growth investor now with BABA,AMZN,FAST,VRX,BR, AAPL and CTSH making up 50% of my portfolio)

 

Curious how you rationalize currents prices of say, BABA or AMZN? Do you run some sort of DCF out many years, assuming the companies will grow into their valuations and still give you sufficient safety in your investment?

 

I'm not looking to attack, genuinely curious as to the thought process :)

 

See AMZN thread, I have elaborated my thinking many times there.

 

BABA is also similar, but more growth and lower margins (as % of GMV). I think once they get their market share, they are going to take advantage of the associated network effects to increase the margins to more "normal" levels. Btw, next year BABA's GMV in china is estimated to be 80% of WMT's GMV worldwide next year.

 

How would you compare BABA with Softbank? I own softbank because I wanted to own BABA.

Link to comment
Share on other sites

Softbank is definitely more undervalued than Alibaba is. However, the discount to the sum-of-parts valuation at the moment persists because of Softbank's less than stellar investment in Sprint. At this point, Yahoo is a better indirect vehicle to play Alibaba through.

Link to comment
Share on other sites

2% position in FAST. I hope it keeps going down then I'll be adding more.

 

I wrote some April 40-strike puts on FAST today. In a week I'll either have a starter position in FAST at a basis of $39.15 or $0.85 per share profit.

 

Im watching fast too, do you think the multiple premium is still justified at these prices?

Link to comment
Share on other sites

BABA  (Yes I am a growth investor now with BABA,AMZN,FAST,VRX,BR, AAPL and CTSH making up 50% of my portfolio)

 

Curious how you rationalize currents prices of say, BABA or AMZN? Do you run some sort of DCF out many years, assuming the companies will grow into their valuations and still give you sufficient safety in your investment?

 

I'm not looking to attack, genuinely curious as to the thought process :)

 

See AMZN thread, I have elaborated my thinking many times there.

 

BABA is also similar, but more growth and lower margins (as % of GMV). I think once they get their market share, they are going to take advantage of the associated network effects to increase the margins to more "normal" levels. Btw, next year BABA's GMV in china is estimated to be 80% of WMT's GMV worldwide next year.

 

How would you compare BABA with Softbank? I own softbank because I wanted to own BABA.

 

I also owned Softbank  because of BABA. I like Softbank and it is definitely more undervalued, but as others have pointed out, the discount persists for different reasons and I made the call that at this point, I'd rather have direct exposure to BABA than indirect given where BABA price is. So replaced Softbank with BABA. Might swap again if the BABA: Softbank ratio improves and  I see Sprint turning around a bit.

Link to comment
Share on other sites

2% position in FAST. I hope it keeps going down then I'll be adding more.

 

I wrote some April 40-strike puts on FAST today. In a week I'll either have a starter position in FAST at a basis of $39.15 or $0.85 per share profit.

 

Im watching fast too, do you think the multiple premium is still justified at these prices?

 

I can't tell for sure if they're going to keep growing like in the past but I do like that insiders are buying and the shares buyback. I am prepared to buy more if it does go down a lot.

Link to comment
Share on other sites

2% position in FAST. I hope it keeps going down then I'll be adding more.

 

I wrote some April 40-strike puts on FAST today. In a week I'll either have a starter position in FAST at a basis of $39.15 or $0.85 per share profit.

 

Im watching fast too, do you think the multiple premium is still justified at these prices?

 

I can't tell for sure if they're going to keep growing like in the past but I do like that insiders are buying and the shares buyback. I am prepared to buy more if it does go down a lot.

 

I do not know if the high multiple is justified. I'll get more serious about looking into FAST if I get put to on Friday! In the FAST thread Phaceliacapital points out that FAST has always been priced at a high multiple. Of course that is no justification unless the growth is still there. I also noticed the insiders were buying and that helped pushed me to go ahead and write some puts.

 

Edit: FAST is by far the highest multiple stock I have looked at in a long time.

Link to comment
Share on other sites

2% position in FAST. I hope it keeps going down then I'll be adding more.

 

I wrote some April 40-strike puts on FAST today. In a week I'll either have a starter position in FAST at a basis of $39.15 or $0.85 per share profit.

 

Im watching fast too, do you think the multiple premium is still justified at these prices?

 

I can't tell for sure if they're going to keep growing like in the past but I do like that insiders are buying and the shares buyback. I am prepared to buy more if it does go down a lot.

 

I do not know if the high multiple is justified. I'll get more serious about looking into FAST if I get put to on Friday! In the FAST thread Phaceliacapital points out that FAST has always been priced at a high multiple. Of course that is no justification unless the growth is still there. I also noticed the insiders were buying and that helped pushed me to go ahead and write some puts.

 

Edit: FAST is by far the highest multiple stock I have looked at in a long time.

 

Don't you think the predictability of the business deserves a higher multiple than average?

Regarding growth, their investor presentation points to a very long runway ....so I am not concerned abt the growth as such (it will happen, just a matter of when).

 

I recently swapped some of my long held AIG position to FAST - moving up the quality of business chain. I can sleep better with my entire net worth invested in FAST as opposed to AIG even though the multiple on AIG is paltry.

Link to comment
Share on other sites

2% position in FAST. I hope it keeps going down then I'll be adding more.

 

I wrote some April 40-strike puts on FAST today. In a week I'll either have a starter position in FAST at a basis of $39.15 or $0.85 per share profit.

 

Im watching fast too, do you think the multiple premium is still justified at these prices?

 

I can't tell for sure if they're going to keep growing like in the past but I do like that insiders are buying and the shares buyback. I am prepared to buy more if it does go down a lot.

 

I do not know if the high multiple is justified. I'll get more serious about looking into FAST if I get put to on Friday! In the FAST thread Phaceliacapital points out that FAST has always been priced at a high multiple. Of course that is no justification unless the growth is still there. I also noticed the insiders were buying and that helped pushed me to go ahead and write some puts.

 

Edit: FAST is by far the highest multiple stock I have looked at in a long time.

 

Don't you think the predictability of the business deserves a higher multiple than average?

Regarding growth, their investor presentation points to a very long runway ....so I am not concerned abt the growth as such (it will happen, just a matter of when).

 

I recently swapped some of my long held AIG position to FAST - moving up the quality of business chain. I can sleep better with my entire net worth invested in FAST as opposed to AIG even though the multiple on AIG is paltry.

 

That's good to hear about FAST as FAST is now below the strike price on my put options!

 

I don't know much about FAST, so I do not know how to judge the multiple. A predictable business that pays a 2.8% dividend with a long runway sounds like the sort of company I would like to own. If put to it would just be a small position for me, but incentive to get going with my research!

Link to comment
Share on other sites

I've bought a lot of stuff recently.

 

- MEOH

-KN

-Sold Kors shares, bought KORS LEAP Call options Jan 20,2017 (Strike 65)

- SHERF (maybe S on TSE would be better as SHERF is thinly traded)

- ZNGA LEAP CALL Options  Jan 20,2017 (Deep-ITM /Stub Trade)

 

Past 2 months added a few positions

-CLD (best of the breed low-sulfur PRB surface coal miner)

-MRC (PVF company)

 

Link to comment
Share on other sites

Ahhh Zynga is heavily misunderstood.

 

Its more a reflection on mobile gaming (fast growing industry) and their upcoming pipeline.

 

They have pivoted away from the old medium (facebook games) and towards the new medium which is mobile gaming. It just took some time to turn the ship around.

 

They have

1) Command and Conquer game called Empire and Allies coming to mobile

2) Dawn of Titans  (go look up the in-game trailers. Graphic is amazing!)

3) Book Value is right around $2 (Probably closer to $2.50 if you count that real estate in SF has skyrocketed).

4) Amortization of software/ depreciation accounting rules and goodwill write-downs will hide some of it true earnings

5) R&D for Games is big up-front investment. This likely accounts for their continued burn.

 

I structured it as a $1 strike as a Zynga stub trade (BV around $2). Assuming revenues stabilize, cash-burn slows, and one of the game gets in the top 5 (which is highly likely) you are looking at a share price of between $6-8.

 

I think Mark Pincus is a glory-hog and couldn't help come back when Zynga coming back. Its a definite good time to hop in before the games get out of beta and public sentiment changes against Zynga.

Link to comment
Share on other sites

Just bought a small chunk of PGR- Progressive- shares

 

-PE of 12.5

- Excellent underwritten insurance company (consistent combined ratio of around 92-96)

- Coast to coast P/C and auto coverage

- Conservative investor that returns excess cash (this year was 2.5% dividend and ~2% of float stock buyback).

- Payout ratio on dividend is at 25% <---- Def room to grow

- Great marketing division (Flo!)

 

 

 

 

 

Link to comment
Share on other sites

Lance,

 

As a holder of KMI I am curious why you sold? My feeling is Rich Kinder will use the current turmoil to add assets at attractive prices but I am always looking for the flaw in my reasoning. If you don't mind sharing why you sold?

 

thanks

Zorro

Link to comment
Share on other sites

Hi Zorrofan - I sold KMI to raise cash for purchasing during the downturn that I've been expecting but never seems to arrive.  I still like KMI and will likely buy it back in the event it move below my sell price. 

 

Thanks,

Lance 

Link to comment
Share on other sites

Hi Zorrofan - I sold KMI to raise cash for purchasing during the downturn that I've been expecting but never seems to arrive.  I still like KMI and will likely buy it back in the event it move below my sell price. 

 

Thanks,

Lance

 

Lance,

 

thanks for your reply - if it is any consolation I've been raising cash too but I am starting to wonder if the FED will ever let the market correct....

 

cheers

Zorro

 

 

 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...