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Wrote BBBY FEB2019 12$ puts for 1.29$. Stock is reasonable cheap if margins stabilize on typical retailer levels (which they did the last two quarters) and these option premiums are so fat its unbelievable. This name is also very hated right now, can`t remember that last time i read so many negative comments and articles on SA.

 

Excellent, timely, read on the situation.

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Excellent, timely, read on the situation.

 

Thanks, but that was just luck.

 

You haven’t seen their stores, that’s why....It feels like it’s  dying and Toys r Us 10 years ago. I haven’t been to their stores in years, it’s totally redundant with Target and AMZN if you have prime. They were very popular in the 90’s and early 2000’s, but then slowly lost their touch.

 

Thanks for your comment, that was the reason to think harder and look again at the numbers and buy some more stock. Critical comments are underrated!

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Wrote BBBY FEB2019 12$ puts for 1.29$. Stock is reasonable cheap if margins stabilize on typical retailer levels (which they did the last two quarters) and these option premiums are so fat its unbelievable. This name is also very hated right now, can`t remember that last time i read so many negative comments and articles on SA.

 

Bought them back for 0.18$ to reduce risk. (because of leverage, but i keep a portion of the stock that i bought with cash.)

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Wrote BBBY FEB2019 12$ puts for 1.29$. Stock is reasonable cheap if margins stabilize on typical retailer levels (which they did the last two quarters) and these option premiums are so fat its unbelievable. This name is also very hated right now, can`t remember that last time i read so many negative comments and articles on SA.

 

Bought them back for 0.18$ to reduce risk. (because of leverage, but i keep a portion of the stock that i bought with cash.)

 

Now you have beer money for the weekend!

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Bought Arconic shares today.  Seems they are about to be sold.  Likely to Apollo

 

I am watching this stock too, but isn’t the relatively small premium to the current market cap ( rumored purchase price is $11B, current market cap is $9.8B) a concern. That’s just a 12% premium to the current price. This seems to be a difficult business to run and really not worth  as much than thought.

 

 

Sold out of Arconic today at 20.20, break-even for me.  Deal set to be announced between 21-22 per WSJ.  Would expect a decent spread to remain until closing.  No loss but still a disappointing premium.  Good call Spek.

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Bought a starter in FRA.DE  Fraport is the owner of Frankfurt Airport. Trading at around  9x EV/EBITDA which is cheaper than for most of its history. I am not sure but a strike of the security personell and the trouble with Brexit (which will affect air traffic from Britain) seem to put pressure on this stock. Recent operational performance had been decent.

 

FWIW, I have started to reduce my overweight position in pipeline stocks (WMB and ENB) . I am still holding good chunks and ENB is still my largest position (or close to it). I guess I just have a weakness for infrastructure stocks.

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FWIW, I have started to reduce my overweight position in pipeline stocks (WMB and ENB) .

 

May I ask why?

 

Valuation is looking less attractive. Pipeline stocks had several failed attempts to move higher in the past. I still own a good bunch but I am reducing positions as they get more overweighted. I would scale back on when they fall again. FWIW, ENB is an ~10% position currently. That‘s pretty high for me.

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Added to Metro Bank (MTRO.L) - UK exchange

Hi. I've been looking a bit into that. Seems very interesting. Have you seen a decent writeup anywhere or mind to share a couple of points?

 

What's obvious is the deposit growth, which is incredible. The culture is based on the Commerce Bank model, that Vernon Hill "invented" in America.

The culture is real - I can tell you that. Both customers and employees love this company. You have 56 "stores" going to 100-130, roughly in 5-6 years.

The "store model" is totally repeatable - and UK will eventually support, perhaps, 200 stores.

 

There are structural reasons for the growth - by that I mean - the UK banking sector is being forced to shrink (I mean the legacy banks) as the

UK regulators and the public's interests have not been served. (RBS is still 65% owned by gov).  So some assets are being dispersed, the market is opening up, and

legacy branches have closed at a fast rate due to cost cutting and poor locations. So there are significant industry tailwinds for the

growth of "challenger" banks. Metro is the best of them all. It's the fastest growing bank I have ever seen in my life.

 

Looks like Metro Bank is blowing up. Risk weighting for mortgages off - they had  RWA for commercial mortgages at 50% rather than 100%. Did they forgot to read the manual for bank accounting in the UK? Looks doomed to me, or at least has to raise capital. On then surface, it still looks adequately capitalized, but I stay away from financials that can’t get their accounting right - a lot of them become doughnuts.

https://finance.yahoo.com/news/british-lender-metro-banks-2018-072746266.html

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Added to Metro Bank (MTRO.L) - UK exchange

Hi. I've been looking a bit into that. Seems very interesting. Have you seen a decent writeup anywhere or mind to share a couple of points?

 

What's obvious is the deposit growth, which is incredible. The culture is based on the Commerce Bank model, that Vernon Hill "invented" in America.

The culture is real - I can tell you that. Both customers and employees love this company. You have 56 "stores" going to 100-130, roughly in 5-6 years.

The "store model" is totally repeatable - and UK will eventually support, perhaps, 200 stores.

 

There are structural reasons for the growth - by that I mean - the UK banking sector is being forced to shrink (I mean the legacy banks) as the

UK regulators and the public's interests have not been served. (RBS is still 65% owned by gov).  So some assets are being dispersed, the market is opening up, and

legacy branches have closed at a fast rate due to cost cutting and poor locations. So there are significant industry tailwinds for the

growth of "challenger" banks. Metro is the best of them all. It's the fastest growing bank I have ever seen in my life.

 

Looks like Metro Bank is blowing up. Risk weighting for mortgages off - they had  RWA for commercial mortgages at 50% rather than 100%. Did they forgot to read the manual for bank accounting in the UK? Looks doomed to me, or at least has to raise capital. On then surface, it still looks adequately capitalized, but I stay away from financials that can’t get their accounting right - a lot of them become doughnuts.

https://finance.yahoo.com/news/british-lender-metro-banks-2018-072746266.html

I'm not savy enough to figure out this Company (and luckily stayed away even though the story looked compelling), but their trading update really rubs me the wrong way. For someone as simple as me I'd think everything was fine and dandy even though they had a lil' slip up with some loan designations... Check it out for yourself.

 

https://www.metrobankonline.co.uk/globalassets/documents/investor_documents/metro_bank_trading_update.pdf

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Why MO over the other tobacco companies if you don't mind?

 

I own them all (MO,PM,BTI,IMBBY) and MO was the smallest position, now they are all equal weighted. Can`t really decide which one is better, they are all cheap and have different problems and opportunities.

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The loan designation mistake looks like a very basic mistake and one can only conclude that they are not competent to run a bank. I think their regulators will come to the same conclusion.

 

I have seen these innocent “trading updates” before where it sounds like a small hiccup while the company is blowing up. I guess it’s British understatement.

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Bought Arconic shares today.  Seems they are about to be sold.  Likely to Apollo

 

I am watching this stock too, but isn’t the relatively small premium to the current market cap ( rumored purchase price is $11B, current market cap is $9.8B) a concern. That’s just a 12% premium to the current price. This seems to be a difficult business to run and really not worth  as much than thought.

 

 

Sold out of Arconic today at 20.20, break-even for me.  Deal set to be announced between 21-22 per WSJ.  Would expect a decent spread to remain until closing.  No loss but still a disappointing premium.  Good call Spek.

 

Good call.  Deal fell through, and stock price retreated accordingly.

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I also joined the MO club slightly after the price drop yesterday. Will be happy to hold for years, but unless there’s future crazy price movement, i am not sure I will be adding more as it is about a 10% position.

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