What are you buying today?

[Spekulatius]

2 hours ago, Ross812 said:

Started a position in Dollar General. Its been on the watchlist for a few years and picking this up at a PE of 15 seems to be a fair price for a great company. 

I looked at $DG but a few things give me pause. The biggest issue is that $DG's Same store sales have been trailing WMT for quit a time and have been getting weaker. So the recent fallout is not a new problem, but has been lingering for a while. In the last quarter, SSS have been barely positive and given the history of retail, I think there is quite some likelihood of negative comps next quarter. I believe the issues with DG are perhaps more structural than temporary, so i marked this at waiting another quarter and see where the KPI go.

 

The balance sheet isn't the greatest either with ~3x debt to EBITDA, if I see this correctly.

 

I could well miss an opportunity here, but so be it.

Edited June 8, 2023 by Spekulatius

[Parsad]

2 hours ago, Spekulatius said:

I looked at $DG but a few things give me pause. The biggest issue is that $DG's Same store sales have been trailing WMT for quit a time and have been getting weaker. So the recent fallout is not a new problem, but has been lingering for a while. In the last quarter, SSS have been barely positive and given the history of retail, I think there is quite some likelihood of negative comps next quarter. I believe the issues with DG are perhaps more structural than temporary, so i marked this at waiting another quarter and see where the KPI go.

 

The balance sheet isn't the greatest either with ~3x debt to EBITDA, if I see this correctly.

 

I could well miss an opportunity here, but so be it.

 

Also looked at it yesterday...the debt gave me pause.  Cheers!

[Luca]

Bought back into Micron, went up 5% since i sold it but still bullish on them long term.

[Gregmal]

Started some MMM. 

[rkbabang]

BTC.    Yes, I buy some small amount of Bitcoin every week, but today was a major purchase.   I funded it by converting 40% of my ETH into BTC, all of my XTZ into BTC, plus new cash as well.

 

[Sweet]

19 minutes ago, rkbabang said:

BTC.    Yes, I buy some small amount of Bitcoin every week, but today was a major purchase.   I funded it by converting 40% of my ETH into BTC, all of my XTZ into BTC, plus new cash as well.

 

Why today?

[rkbabang]

28 minutes ago, Sweet said:

Why today?

 

I'm becoming more and more sure that BTC is going to be the crypto you want to hold.  I don't see XTZ going anywhere, I originally bought it at the ICO and have held and staked it since, but I don't see any reason for XTZ over say ETH, ADA, etc... long term.   I think ETH has a future, but I can't see why the SEC would say that ADA is a security but ETH is not.  I think ETH is going to be targeted by the SEC at some point, probably soon. And when that happens its price will drop relative to BTC and I'd lose my chance to convert at a favorable ratio.  So today I made the decision to do it.   Even before this business with the SEC this week I had already made the decision that I want to hold a lot more BTC than ETH.   I've been watching the ETH/BTC pair for a few weeks and I just got sick of waiting. 

[CorpRaider]

SAVE

[Spekulatius]

Bought a box of vintage 70‘s Sci Fi magazines found through Nextdoor:

 

[WayWardCloud]

5 hours ago, Gregmal said:

Started some MMM. 

6% dividend, nice! Would love to hear your thesis.

[Gregmal]

19 minutes ago, WayWardCloud said:

6% dividend, nice! Would love to hear your thesis.

Nothing high level. Just seems to be one of those every once in a while setups where you have a really good, resilient business getting sludged up by a temporary issue. Balance sheet is solid, trades at a low multiple. Just seems like an easy thing to buy a bit here and maybe somewhat lower and then just put it away for a while. 

[Ulti]

1 hour ago, Gregmal said:

where you have a really good, resilient business getting sludged up by a temporary issue

hope your right .... 30% of all cases pending in federal court are for the military earplug litigation.  3m and Aearo tried to get this resolved by bankruptcy action but a judge denied them. This and forever chemicals( this seems to be settling soon)  held me back from reestablishing a position.

 

[RedLion]

8 minutes ago, Ulti said:

hope your right .... 30% of all cases pending in federal court are for the military earplug litigation.  3m and Aearo tried to get this resolved by bankruptcy action but a judge denied them. This and forever chemicals( this seems to be settling soon)  held me back from reestablishing a position.

 

The forever chemicals are an even bigger issue. Potentially asbestos 2.0. 

[Ulti]

23 minutes ago, RedLion said:

The forever chemicals are an even bigger issue. Potentially asbestos 2.0. 

I think ( last time I looked) Valueline was talking $1 per share in annual ongoing expenses for the foreseeable 

future and this might be a best case scenario 

[Gregmal]

9 minutes ago, Ulti said:

I think ( last time I looked) Valueline was talking $1 per share in annual ongoing expenses for the foreseeable 

future and this might be a best case scenario 

This is a classic 20x high quality American blue chip if none of the litigation existed. So back tracking that into the current valuation, what is the market pricing in? Seems like it’s at least $30-40b.

[Ulti]

24 minutes ago, Gregmal said:

This is a classic 20x high quality American blue chip if none of the litigation existed. So back tracking that into the current valuation, what is the market pricing in? Seems like it’s at least $30-40b.

I owned this for a long time( used a lot of their products for many years) and sold at the start of the litigation mess… Totally agree that this is a bargain….part of their weakness could be the strong $  since they export a lot of shit … also their sale of their food safety division was a one off and that’s a 1/4 billion of sales off the top …. I’m not well versed in the type of litigation they are going thru .. how does this play out? Seems like it’s going to play out for years to come

[Spekulatius]

1 hour ago, RedLion said:

The forever chemicals are an even bigger issue. Potentially asbestos 2.0. 

I agree, resolving these forever chemicals will get very very expensive. It’s a bit more like DDT (which is sort of a forever chemical) than asbestos in a way. DDT happened early enough that the companies producing and using it escaped legislation back then but a similar thing now - oh wey….

[james22]

I've a significant amount of MMM trapped in a Trust.

 

Don't know what I'd do with it if I could.

[Luca]

Starter in Evolution AB! 

 

 

Edited June 12, 2023 by Luca

[RedLion]

On 6/9/2023 at 7:11 PM, Spekulatius said:

I agree, resolving these forever chemicals will get very very expensive. It’s a bit more like DDT (which is sort of a forever chemical) than asbestos in a way. DDT happened early enough that the companies producing and using it escaped legislation back then but a similar thing now - oh wey….

I know there are talks of technologies to literally skim them from drinking water. Nationwide. Worldwide maybe. If this was just the earplug thing I’d be loading up on margin now, but this is hard to handicap. 

[Castanza]

17 minutes ago, RedLion said:

I know there are talks of technologies to literally skim them from drinking water. Nationwide. Worldwide maybe. If this was just the earplug thing I’d be loading up on margin now, but this is hard to handicap. 

 

Same, I've always had my eye on this Co. But it seems like this will be a class action punching bag for the next decade or more. 

[Gregmal]

24 minutes ago, Castanza said:

 

Same, I've always had my eye on this Co. But it seems like this will be a class action punching bag for the next decade or more. 

Hasn’t this been true of tobacco now for like 4 decades? 
 

I was talking with someone on this recently and another prevailing thought was simply the 30,000 ft view acknowledging that hey, DuPont is still around when they’re like the king of liability related issues. 
 

So it really just comes down to price. Which here, is definitely reasonable. 

[Ulti]

3 minutes ago, Gregmal said:

Hasn’t this been true of tobacco now for like 4 decades? 
 

I was talking with someone on this recently and another prevailing thought was simply the 30,000 ft view acknowledging that hey, DuPont is still around when they’re like the king of liability related issues. 
 

So it really just comes down to price. Which here, is definitely reasonable. 

One thing that has not been mentioned is the healthcare spinoff that should take place by years end... I think that MMM will retain 12% of the new company and will also slowly sell what they retain.... This could bring in some extra cash

but the healthcare division has been struggling over the past few years,with shrinking margins.

[RedLion]

10 minutes ago, Gregmal said:

Hasn’t this been true of tobacco now for like 4 decades? 
 

I was talking with someone on this recently and another prevailing thought was simply the 30,000 ft view acknowledging that hey, DuPont is still around when they’re like the king of liability related issues. 
 

So it really just comes down to price. Which here, is definitely reasonable. 

I remember reading somewhere that litigation outcomes are typically over discounted into stocks and it can be a great strategy to buy stocks selling down on litigation concerns. 
 

I do think there’s been a bit of an inflection point recently with larger jury verdicts, huge settlements (look at Jpm settling these tangential claims about Epstein for hundreds of millions, crazy), some plaintiff friendly rulings re: Texas two step bankruptcy. 
 

Dupont was fortunate to be the king of liability back then versus now. 100%. 
 

My personal feeling is that what used to be a winning strategy, just like spin-offs, might lose some of its appeal in a developing society where corporations get taken down by mass tort and other legal liability. 
 

Two examples of recent years are the Purdue pharma and pacific gas and electric. 
 

I think this stock probably does great, and maybe does quite poorly. Maybe the play is to buy leaps, calls and puts. 

Edited June 12, 2023 by RedLion

[Castanza]

30 minutes ago, Gregmal said:

Hasn’t this been true of tobacco now for like 4 decades? 
 

I was talking with someone on this recently and another prevailing thought was simply the 30,000 ft view acknowledging that hey, DuPont is still around when they’re like the king of liability related issues. 
 

So it really just comes down to price. Which here, is definitely reasonable. 

 

Yeah but DD has averaged like 3% since 2013 lol I guess with MMM you get a nice divy, but there is no guarantee that stays around. Could go either way, but every time I get invest in stocks with litigation ongoing i get cucked.