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Posted

SHDL beat me to it. I bought some warrants of IPOA today. Mostly, because I see this as a very successful IPO due to the public's excitement about space travel/exploration.

 

SPACs are great. I dont know why people invest money in CDs and Treasuries. SPACs more or less give you a worst case treasury type return, with upside on a good deal announcement. Plus warrants/rights.

 

This should pop, but holy he heck, 2.5x 2023 revenue! Talk about a margin of safety. LOL. Good trade though here with a floor on the stock.

Posted

Sold Aug. 16 $30 TPR puts

 

Thanks

Lance

 

Lance,

 

I used to do a lot of option trading with TPR, but it kind of fell off my radar when I got called out back in January 2018. I just wrote some July 12, $29 puts. Thanks for bringing it back to my attention!

 

Mike

Posted

I started a small position in ADT (it IPO'd at $14 and is at ~$6 now and I love a bargain).  I also took another bite of TPHS at $3.71 (it's only slightly above the price for the giant blocktrade that Michael Price brought from Mercato).

Posted

Rolled some of my fixed income exposure in the form of ZROZ into Annaly stock.

 

Kind of figured it's basically the same thing - leveraged returns on rates. That being said, Annaly should prove more sensitive to changes at the front-end if cuts come to fruition given their use of short-term funding/leverage.

Posted

SQBG - Very tiny position. Priced like it's going bankrupt. Sold off two significant brands for $166mn ($40mn earn out potential as well - ~12x EBITDA or ~3.9x sales). Remaining business priced at ~6x EBITDA and 3.6x sales. Brands that are remaining seem on par with brands sold (EBITDA is higher on remaining brands partly due to way sold brands were structured). SQBG still has room left on covenants. Seems like a decent probability option. Debt is termed out till about 2024.

Posted

It’s been almost a year since the below post and I’m still waiting for Uranium to get moving.

 

I bought some NXE, CCO, and EFR.DB today.

 

This second half of this podcast by Mike Alkin who is a former hedge fund manager and now runs a Uranium dedicated fund sums up the bull case quite well.

 

http://themikealkinshow.curzioresearch.libsynpro.com/stop-looking-at-your-stock-screens-for-great-ideas-do-this-instead-ep-60

 

 

I bought some EFR.DB-TSX yesterday.

 

It’s a pretty interesting piece of paper to have access to a potential Uranium bull market while getting paid to wait. Maturity is Dec 2020, strike is C$4.15. Implied vol of the outstanding warrants is over 60% while the debs trade at par.

 

The debt issue is also a small part of the capital structure and I don’t think they will have a problem raising money but of course I think the debs could be a multibagger.

 

So from what I can tell, the interest rate on the debs varies between 8.5-13.5%, depending on the (weekly) spot market price of uranium oxide. Management doesn't expect the price to exceed 54.99 by 2020, the price above which the interest rate increases (and price is currently at 22.75$, from Google).

 

Any reason to be optimistic about a bull market in uranium?

 

Yes, I think so. The current Uranium spot price is too low for anyone to make money. Most producers locked into long term contract pricing much higher than spot which are expiring over the next few years. In response, Cameco and other large producers have decided to cut production and use existing inventory and buy in the spot market to fulfill production in order to preserve their resource for higher prices. Utilities will have to negotiate contract pricing soon and it will likely come in well above current prices. It’s a classical deep cyclical play that is complicated by an opaque market, two tiered pricing and extremely long lead times.

 

I bought more yesterday with the stock surging higher and a holder of the debentures being forced to sell for what I can only assume are liquidity reasons.

 

EFR down 36% and EFR.DB down 9% on rumours that Trump will reject the Section 232 petition. Yikes.

Posted

PBF, I only bought a little when it came down last time and regretted it, now I am sizing up as I sell other things off.  And I just started a position in IPI (I liked the water rights part of this business but now that Potash prices have gone from the low $200s a ton to the low $300s  a ton, the mining side should be profitable too and the shotgun will be firing with both barrels).

Posted

Adding to MEGACPO.MX (Megacable)

 

Is there any plan to use more debt with the company?  It looks cheap on an EV basis, but if they don't use any more debt, I don't see how that changes. 

Posted

Adding to MEGACPO.MX (Megacable)

 

Is there any plan to use more debt with the company?  It looks cheap on an EV basis, but if they don't use any more debt, I don't see how that changes.

 

Yes, it trades at around 7x trailing EBITDA. I like that they essentially use zero debt at this point. One thing to consider is that interest rates in Mexico are fairly high right now (be careful with MXN on margin , I paid more than 8% on a little of margin debt at Interactive brokers). Megacable is a pure play broadband bet for me. I think the economics are close to what they are in the US and much better than Europe, and the penetration is still low, so there should be a good LT growth potential.

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