rkbabang Posted November 17, 2017 Share Posted November 17, 2017 Not today, but earlier this week I added to my MIDD, UBNT, and BAM positions. And took some profits by selling about half of my OSTK holdings. Link to comment Share on other sites More sharing options...
flesh Posted November 17, 2017 Share Posted November 17, 2017 Added ads. vsto good here, cost basis 13.50. -Steady state fcf 120-140m. Achieved by hair cutting 33% (33% greater hair cut that whats been impaired thus far) of acquired post 13 ebitda and normalizing the ammo side of business for pre obama 10 yr cagr growth in nics data. fcf plus interest to ev is still under 10x (conservative because lots of evidence shooting sports have become more main stream) -New ceo likely sand bagged recent qtr so he can now save the day. -Selling some non core assets, mgmt says sales of 130m in this non core segment, so if sold at 1x sales = 130m debt pay down, focused on paying off debt. -Next two year fcf higher than steady state, receivables much higher than payables, destocking happening, likely 150m+ fcf next 1-2 years = significant debt pay down. -Durable brands that aren't going anywhere (unless all brands do) -capex going down back half cy 18, r and d may go down a bit as well -Biggest risks to my mind are further deterioration in retail that's not compensated for by internet penetration on the outdoor brands side -Possibility ammo sales remain muted if everyone really did stock up although this would be temporary Its highly probable the debt/equity looks much, much different end of cy 18. If my assumptions are correct I see 30-90% gains in 18 months absent economic contraction as a run of the mill outcome. Link to comment Share on other sites More sharing options...
kab60 Posted November 17, 2017 Share Posted November 17, 2017 ADS as in Alliance Data Services? Care to distill your thesis into a couple of lines? Link to comment Share on other sites More sharing options...
flesh Posted November 17, 2017 Share Posted November 17, 2017 ADS as in Alliance Data Services? Care to distill your thesis into a couple of lines? I've fine tuned my understanding of the co since but there's is a ADS thread I posted in a month or two back that you can look at. I was going to put out a mini write up on vsto at 13/share in the old vsto thread but no one responds to my posts so I didn't. Link to comment Share on other sites More sharing options...
kab60 Posted November 17, 2017 Share Posted November 17, 2017 ADS as in Alliance Data Services? Care to distill your thesis into a couple of lines? I've fine tuned my understanding of the co since but there's is a ADS thread I posted in a month or two back that you can look at. I was going to put out a mini write up on vsto at 13/share in the old vsto thread but no one responds to my posts so I didn't. Cool! Totally missed that and I was starting to look into it. Thanks. Link to comment Share on other sites More sharing options...
LC Posted November 17, 2017 Share Posted November 17, 2017 bought a little more compass minerals Link to comment Share on other sites More sharing options...
NewbieD Posted November 17, 2017 Share Posted November 17, 2017 Bought a little Ferronordic machines pref. Company announced they redeem half of prefs now, half when they have updated yearly accounts = law requirement. 9-10% yield meantime = a few months. Risk should be low. Added some Storytel. Link to comment Share on other sites More sharing options...
boilermaker75 Posted November 17, 2017 Share Posted November 17, 2017 Rewrote puts that are expiring today, GILD at 70 and AMGN at 170. Again Link to comment Share on other sites More sharing options...
sarganaga Posted November 17, 2017 Share Posted November 17, 2017 Bought small amount of Compass Minerals (CMP) Link to comment Share on other sites More sharing options...
Liberty Posted November 17, 2017 Share Posted November 17, 2017 Bought small amount of Compass Minerals (CMP) Just had a glance out of curiosity. Are you not worried by the debt-to-EBITDA levels? Link to comment Share on other sites More sharing options...
LC Posted November 17, 2017 Share Posted November 17, 2017 Bought small amount of Compass Minerals (CMP) Just had a glance out of curiosity. Are you not worried by the debt-to-EBITDA levels? SI made a good post on the debt here: http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/cmp-compass-minerals-international/msg302112/#msg302112 Just to add a quick caveat: it's definitely a concern and something to monitor. the salt business is pretty stable so it provides some downside protection if the brazil business does not pan out as expected. the next few qs will be illuminating. Link to comment Share on other sites More sharing options...
sarganaga Posted November 18, 2017 Share Posted November 18, 2017 Bought small amount of Compass Minerals (CMP) Just had a glance out of curiosity. Are you not worried by the debt-to-EBITDA levels? That is concerning to me as well. The increased debt due to the acquisition of the rest if Produquima coupled with the poor relative performance of the salt business due to warm winters have made things a bit tight. They claim to be at the end of an intensive capex cycle. They have also done some restructuring, that along with the improvements at Goderich salt mine, will save $50 million a year. According to their last conference call, they expect to be back at their targeted leverage by 2019. I really like salt business and especially the non correlation aspect of it. Link to comment Share on other sites More sharing options...
Liberty Posted November 18, 2017 Share Posted November 18, 2017 Thanks. Have you calculated how big a shock the company could absorb before the debt becomes unmanageable? ie. Some unforeseen delay/downturn/bad luck cuts EBITDA by 10/20/30%? I'm wondering because just looking at the past few years, it looks like op. income is volatile by more than 40% over short periods. By unmanageable I don't necessarily mean it kills it. These companies tend to sell assets in those situations... But that still impairs the value, especially since it's hard to get good prices on distressed sales. Like burning the furniture for heat... Link to comment Share on other sites More sharing options...
sarganaga Posted November 18, 2017 Share Posted November 18, 2017 Thanks. Have you calculated how big a shock the company could absorb before the debt becomes unmanageable? ie. Some unforeseen delay/downturn/bad luck cuts EBITDA by 10/20/30%? I'm wondering because just looking at the past few years, it looks like op. income is volatile by more than 40% over short periods. By unmanageable I don't necessarily mean it kills it. These companies tend to sell assets in those situations... But that still impairs the value, especially since it's hard to get good prices on distressed sales. Like burning the furniture for heat... It looks like they had $130 million in long term debt come due this year, $11 million in 2018, $11 million in 2019, $10 million in 2020, AND $919 million in 2021.Interest expense going forward is a $35 million or less. If they had a 30% drop in EBITDA, I think They'd still be OK for the next few years. The $919 million that needs to be refinanced by 2021 is more concerning if you look at it from a diminished cash flow scenario over the next 3 or 4 years. They also have several tax disputes with the Canadian government, but have already posted deposits that would cover a good portion of the dispute, but worst case could cost them another $50 million +. My misgivings about this are the same as yours. I worry about debt ... a lot. I'm buying it because I think the salt business is a simple wide moat cash machine. I think Produquimica was a good fit for them, although obviously in a more competitive business than salt. It's near multi year lows. Management spells out what is to me a convincing plan going forward, added efficiency in the salt business & growth in the specialty plant input business. I believe them when they say they're going to lower debt. They seem to be shareholder friendly. This will be about a 2-3% holding for me when I finish buying. I will watch the execution of their stated plans going forward very carefully. Link to comment Share on other sites More sharing options...
Liberty Posted November 19, 2017 Share Posted November 19, 2017 Thanks, sarganaga. I can't comment on the actual business, as I just looked at the financials (I try to at least have a quick look when I see a name I haven't seen before), so I know there's a large part of the picture that I'm missing. If it's indeed stable and they can get decent returns on capital because of a moat, then there might be a delevering story. Not knowing the past history of the business, my next question would be how did they get in the current situation and why debt has gone up so much and returns haven't been that good for many years (a turnaround story too?), but I know that's another tangent and I'll move it to the company's thread if I want to know more. Thanks. Link to comment Share on other sites More sharing options...
LC Posted November 19, 2017 Share Posted November 19, 2017 Debt is mainly due to financing the Produquimica acquisition. Recent lower than normal returns are mostly due to warm winters. Link to comment Share on other sites More sharing options...
sarganaga Posted November 20, 2017 Share Posted November 20, 2017 Finished buying a 2.5% position in Compass Minerals (CMP) Link to comment Share on other sites More sharing options...
EricSchleien Posted November 21, 2017 Share Posted November 21, 2017 Increased my position in Liberty Braves and also increased my position in Partners Value Investments LP which in my view is a much better way to invest into Brookfield Asset Management. Link to comment Share on other sites More sharing options...
Paarslaars Posted November 21, 2017 Share Posted November 21, 2017 Have been slowly adding to my oil positions last weeks. OBE is now my second largest position (first BRK) with the drop in FELP. I'm starting to get very concentrated in one industry for the first time, getting a bit nervous. :-\ Link to comment Share on other sites More sharing options...
TorontoRaptorsFan Posted November 21, 2017 Share Posted November 21, 2017 Increased my position in Liberty Braves and also increased my position in Partners Value Investments LP which in my view is a much better way to invest into Brookfield Asset Management. Hi Eric, Why not buy just BAM since they have an ownership stake in a slew of their spinoffs? Link to comment Share on other sites More sharing options...
John Hjorth Posted November 21, 2017 Share Posted November 21, 2017 Increased my position in Liberty Braves and also increased my position in Partners Value Investments LP which in my view is a much better way to invest into Brookfield Asset Management. Hi Eric, Why not buy just BAM since they have an ownership stake in a slew of their spinoffs? Quote from the BAM topic in the Investment Ideas forum: gokou3, PVF.UN is levered with preferred stock also, in layers. Link to comment Share on other sites More sharing options...
Rainforesthiker Posted November 21, 2017 Share Posted November 21, 2017 Bought a 5% position in DISCK (Discovery Communications) after the recent sell-off Link to comment Share on other sites More sharing options...
John Hjorth Posted November 22, 2017 Share Posted November 22, 2017 Bought a 5% position in DISCK (Discovery Communications) after the recent sell-off Somehow, your new board signature has a lot of appeal to me, Jeff! Link to comment Share on other sites More sharing options...
DW Posted November 22, 2017 Share Posted November 22, 2017 Bought a little more Wells Fargo and Google today Link to comment Share on other sites More sharing options...
Rainforesthiker Posted November 26, 2017 Share Posted November 26, 2017 Bought a 5% position in DISCK (Discovery Communications) after the recent sell-off Somehow, your new board signature has a lot of appeal to me, Jeff! :) Link to comment Share on other sites More sharing options...
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