Ross812 Posted March 22 Share Posted March 22 Buying some DFIN and HSY from proceeds of an irresponsibly large HQI position. Link to comment Share on other sites More sharing options...
lnofeisone Posted March 22 Share Posted March 22 50 minutes ago, Ross812 said: Buying some DFIN and HSY from proceeds of an irresponsibly large HQI position. are you bailing on HQI or rightsizing? Link to comment Share on other sites More sharing options...
Ross812 Posted March 22 Share Posted March 22 1 hour ago, lnofeisone said: are you bailing on HQI or rightsizing? Just right sizing. It was over a 7% position this morning after earnings and I'm more comfortable in the 4 to 5% range. I'm down to a 6%ish position. I've been buying for the last couple weeks in the 12.1X's and was selling this morning in the 12.80+ range. It's tough getting in and out of when in only trades 15k shares a day and and individual can be a significant portion of that. Link to comment Share on other sites More sharing options...
lnofeisone Posted March 22 Share Posted March 22 9 minutes ago, Ross812 said: Just right sizing. It was over a 7% position this morning after earnings and I'm more comfortable in the 4 to 5% range. I'm down to a 6%ish position. I've been buying for the last couple weeks in the 12.1X's and was selling this morning in the 12.80+ range. It's tough getting in and out of when in only trades 15k shares a day and and individual can be a significant portion of that. Got it. Thanks. I'm looking to double this one to roughly 5% range. I think the challenges will work themselves out and we'll be heading back to the 20+ range. Link to comment Share on other sites More sharing options...
dipod Posted March 22 Share Posted March 22 PARA Link to comment Share on other sites More sharing options...
Ross812 Posted March 22 Share Posted March 22 2 hours ago, lnofeisone said: Got it. Thanks. I'm looking to double this one to roughly 5% range. I think the challenges will work themselves out and we'll be heading back to the 20+ range. Even with some acquisition expenses, tough YoY workers comp. increases, and a temporary staffing market down 9% YoY, HQI is doing well which speaks to the quality of the business. The case is pretty straight forward in my mind - hit less than 50% SG&A on franchise revenue of $36M and a 17% tax rate and you are looking at $15M in earnings on 13.8M shares outstanding - and this is earnings power in an off-cycle year! You're paying 10x EBIT and 12x earnings right now for a company growing at 27%. I get the argument growth is coming from acquisition and that is worth a lesser multiple, but acquisitions are immediately accretive to the bottom line. Look at MRI Network (which is under earning right now), acquired 4Q22 for $13.3M and added $7.8M in revenue in the last year; they paid <2x franchise revenue. Northbound (higher quality executive staffing) was purchase for $11.4M and generated $1.1M in 10 months ($1.3M proforma); 8.75x franchise revenue Dubin - 10 months $.11M ($132k proforma) on a $2.5M outlay. 19x franchise revenue TEC - looks to be $1.1M on a $7.8M. 7x franchise revenue Temp Alternatives- $523k (though not all converted to franchises yet) off $7M. 14x franchise revenue Together its $10.7M (proforma) in franchise earnings acquired for $42M. Assume 50% SG&A and slap a low 10x EBIT multiplier and you are adding $53.5M to the market-cap (27% growth). Looks like a sustainable roll-up to me. Organic growth should follow growth in temporary staffing. Check this by looking at HQI ex-franchise revenue from FY23 acquisitions ($9.6M) which is $26.2M vs $28.9M (FY22) down 9.3% which is in line with temporary staffing down ~9%. The good new is temporary staffing follows GDP over the long term so the business should grow organically by 2-3%. I don't know what kind of EBIT HQI should trade at, but its not 10x and when you start playing with the EBIT multiple the spring keeps tightening. Link to comment Share on other sites More sharing options...
lnofeisone Posted March 23 Share Posted March 23 16 hours ago, Ross812 said: Even with some acquisition expenses, tough YoY workers comp. increases, and a temporary staffing market down 9% YoY, HQI is doing well which speaks to the quality of the business. The case is pretty straight forward in my mind - hit less than 50% SG&A on franchise revenue of $36M and a 17% tax rate and you are looking at $15M in earnings on 13.8M shares outstanding - and this is earnings power in an off-cycle year! You're paying 10x EBIT and 12x earnings right now for a company growing at 27%. I get the argument growth is coming from acquisition and that is worth a lesser multiple, but acquisitions are immediately accretive to the bottom line. Look at MRI Network (which is under earning right now), acquired 4Q22 for $13.3M and added $7.8M in revenue in the last year; they paid <2x franchise revenue. Northbound (higher quality executive staffing) was purchase for $11.4M and generated $1.1M in 10 months ($1.3M proforma); 8.75x franchise revenue Dubin - 10 months $.11M ($132k proforma) on a $2.5M outlay. 19x franchise revenue TEC - looks to be $1.1M on a $7.8M. 7x franchise revenue Temp Alternatives- $523k (though not all converted to franchises yet) off $7M. 14x franchise revenue Together its $10.7M (proforma) in franchise earnings acquired for $42M. Assume 50% SG&A and slap a low 10x EBIT multiplier and you are adding $53.5M to the market-cap (27% growth). Looks like a sustainable roll-up to me. Organic growth should follow growth in temporary staffing. Check this by looking at HQI ex-franchise revenue from FY23 acquisitions ($9.6M) which is $26.2M vs $28.9M (FY22) down 9.3% which is in line with temporary staffing down ~9%. The good new is temporary staffing follows GDP over the long term so the business should grow organically by 2-3%. I don't know what kind of EBIT HQI should trade at, but its not 10x and when you start playing with the EBIT multiple the spring keeps tightening. Thanks for this. I think they are reasonably good with the roll ups and you are right. The spring keeps tightening. Just needs some patience. Link to comment Share on other sites More sharing options...
Ross812 Posted March 25 Share Posted March 25 Well, that didn't last long. More HQI this morning. $11.50-$11.70 Link to comment Share on other sites More sharing options...
Castanza Posted March 25 Share Posted March 25 1 minute ago, Ross812 said: Well, that didn't last long. More HQI this morning. $11.50-$11.70 I almost pulled the trigger on some more, but don't really want to size this any larger unless it gets ungodly cheap. Wouldn't mind seeing some more insider buying like last year as well. Link to comment Share on other sites More sharing options...
Ross812 Posted March 25 Share Posted March 25 I went to 7.X% when it was in the low 12's after insider buying in January and February and sold down to 6% last week when it popped to 13 after earnings. I had higher sell orders that never triggered. I was a little shocked when i saw an 11.XX quote this morning as I didn't expect this back below 13 range after earnings. Maybe I'm missing something. Link to comment Share on other sites More sharing options...
Ross812 Posted March 25 Share Posted March 25 I'd ideally like to hold HQI at a 5% cost basis and let it run. My trading around has just been lowering the cost basis. I did buy a little with OPM this morning. Link to comment Share on other sites More sharing options...
gfp Posted March 27 Share Posted March 27 On 3/19/2024 at 3:30 PM, Gregmal said: Yup. Small fund being put together so a few employees can pay taxes. Bloomberg Businessweek has a nice long article on Michael Rubin and Fanatics today - https://www.bloomberg.com/news/features/2024-03-27/how-fanatics-ceo-michael-rubin-came-to-rule-sports-trading-cards?srnd=homepage-americas Link to comment Share on other sites More sharing options...
Gregmal Posted March 27 Share Posted March 27 15 minutes ago, gfp said: Bloomberg Businessweek has a nice long article on Michael Rubin and Fanatics today - https://www.bloomberg.com/news/features/2024-03-27/how-fanatics-ceo-michael-rubin-came-to-rule-sports-trading-cards?srnd=homepage-americas NIce. Yea these guys are doing something incredible. Sports monetization is all about the licensing and Rubin has basically used Fanatics plus initial ownership in a couple teams to infiltrate that ecosystem. It started out as just apparel and now its basically in everything. This will be a royalty like machine on the Big 4 American Leagues. The key of course, is you need the teams and leagues to grant you the licenses...and well, he's allowed the Players Unions to be large investors in Fanatics....how brilliant. Its now in the Players interests to let Fanatics make as much money as possible. Link to comment Share on other sites More sharing options...
Dinar Posted March 27 Share Posted March 27 KSB in Germany. Link to comment Share on other sites More sharing options...
EBITDAg Posted March 27 Share Posted March 27 (edited) 2 hours ago, Gregmal said: NIce. Yea these guys are doing something incredible. Sports monetization is all about the licensing and Rubin has basically used Fanatics plus initial ownership in a couple teams to infiltrate that ecosystem. It started out as just apparel and now its basically in everything. This will be a royalty like machine on the Big 4 American Leagues. The key of course, is you need the teams and leagues to grant you the licenses...and well, he's allowed the Players Unions to be large investors in Fanatics....how brilliant. Its now in the Players interests to let Fanatics make as much money as possible. I do wonder how sustainable their growth is when their product quality is complete garbage. Great companies don't cut corners. I wonder if their sports cards are as bad as their apparel. Edited March 27 by EBITDAg Link to comment Share on other sites More sharing options...
Saluki Posted March 27 Share Posted March 27 Small adds to CPNG, NTDOY and ATEX with some dividends that came in. Link to comment Share on other sites More sharing options...
Malmqky Posted March 27 Share Posted March 27 PDD tracker with JOE dividends. Link to comment Share on other sites More sharing options...
Pauly Posted March 28 Share Posted March 28 8 hours ago, EBITDAg said: I do wonder how sustainable their growth is when their product quality is complete garbage. Great companies don't cut corners. I wonder if their sports cards are as bad as their apparel. Yeah I do hope they can figure out their quality issues. I know for hockey jerseys they're considered absolute junk next to Adidas, and the see-through baseball pant debacle has brought their name to the masses for all the wrong reasons. Still, they seem to be taking over sports apparel. Link to comment Share on other sites More sharing options...
CorpRaider Posted March 29 Share Posted March 29 (edited) Bought some more $LUV last week. Edited March 29 by CorpRaider Link to comment Share on other sites More sharing options...
Dinar Posted March 30 Share Posted March 30 Bought Talen Energy - TLNE on Friday. Link to comment Share on other sites More sharing options...
Eng12345 Posted April 1 Share Posted April 1 On 3/29/2024 at 11:04 PM, Dinar said: Bought Talen Energy - TLNE on Friday. Interesting what's the thesis here? Link to comment Share on other sites More sharing options...
longlake95 Posted April 1 Share Posted April 1 bought more GIL on the 26th. I'm in the camp that Chamandy is coming back. Probably wrong though. Link to comment Share on other sites More sharing options...
Dinar Posted April 1 Share Posted April 1 1 hour ago, Eng12345 said: Interesting what's the thesis here? So, with the caveat that I should have bought at half the price, the thesis is: demand for power is going up, price for power is going up, this company will see growing profits, will buy back shares, and is at a huge discount to CEG and sells at a double digit free cash flow yield a year or two out. Link to comment Share on other sites More sharing options...
bizaro86 Posted April 1 Share Posted April 1 3 hours ago, Dinar said: So, with the caveat that I should have bought at half the price, the thesis is: demand for power is going up, price for power is going up, this company will see growing profits, will buy back shares, and is at a huge discount to CEG and sells at a double digit free cash flow yield a year or two out. You might have bought my shares! I bought this in the fall, mostly of the VIC thesis which I liked. But I think lower natural gas prices put a bit of a cap on the upside here so I took the profits. The federal minimum price of nuclear really limits the downside, so I think it's probably fine here, but if nat gas stays low I think that will limit upside. Uplisting and index add catalysts still to come though, so I certainly could have sold too early. Link to comment Share on other sites More sharing options...
Dinar Posted April 1 Share Posted April 1 2 minutes ago, bizaro86 said: You might have bought my shares! I bought this in the fall, mostly of the VIC thesis which I liked. But I think lower natural gas prices put a bit of a cap on the upside here so I took the profits. The federal minimum price of nuclear really limits the downside, so I think it's probably fine here, but if nat gas stays low I think that will limit upside. Uplisting and index add catalysts still to come though, so I certainly could have sold too early. You were smarter than I was. I think the sale of the assets in Texas + the deal with Amazon are a very big deal. Link to comment Share on other sites More sharing options...
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