What are you buying today?

[Spekulatius]

Bought some PYPL, and a first lot of CTVA. Bought some SPY puts at the close.

[Spekulatius]

 

 

Having observed and used NOW at my prior job as a kind of procurement tool for my group, the UI was not super impressive to me. My teammates constantly complained about NOW's functionality.

 

Thanks for the feedback. I cannot comment on the purchasing part. As a user, I have used the GUI For IT Service and it is head and shoulders above  what we had before. I cannot really comment on NOW software overall but I do know that workflow management is one of those things  that is really core to a companies business processes, unlike applications like slack, which cover communication amongst employees and can get replaced relatively easily without disruption. I think the same thing about some analytics (which tend to affect only a few employers and something managment just says, screw them and put up) or security (which may become more commoditized).

 

So in other words, if  NOW’s products is in a company, it’s almost impossible to get it out gain.

[CorpRaider]

EBAY

[Stuart D]

More SMTA. As far as I can see all looks good. Vote passed, portfolio sale expected to close in a few weeks, Shopko term loan fully recovered. According to the proxy management expects $8.50 - $9.35 per share in distributions. My own calculations get me closer to the top of that range. In fact even slightly above that range but that probably means I am too optimistic about the workout assets.

 

Shares were initially up today (what I would have expected) but around the close there was massive volume and SMTA ended down ~2% instead. Best explanation I could come up with is that some funds are not allowed to hold companies in liquidation and had to sell at today's close. Seems congruent with what happened in the market.

 

But maybe I missed something. Not the most fireproof explanation ever.

 

Even back in the $8.40s SMTA still looks cheapish to me. Not hard at all to come up with an expected distribution figure of over $9, even using conservative assumptions.

 

How did you go with SMTA? Looks as though the distribution has been paid (either that or there is some catastrophe causing a 90% drop).

[Jurgis]

Spek - you should probably start NOW thread.

 

What I don't like about NOW is 0% insider holdings. Which makes it difficult to decide if leadership is gonna be any good going forward - and possibly explains why CEO jumped the ship. With all the issues of insider control ( We know what We mean ), I'd still rather invest in a company with insider holdings or control.

 

Also it's difficult to decide what high-growth, but no/low earnings companies to buy. NOW? WDAY? ZEN? HUBS? PCTY? CRM? VEEV? TEAM? (I have a smattering of tiny positions in some of these).

[Lance]

Wrote puts on CXW and GEO

 

 

Thanks

Lance

[gokou3]

MPLX at <$27; 10% yield.  1.4x distribution coverage. K1.  Possibly catalyst from Elliott requesting to break up MPC (sponsor).

 

https://www.remakingmpc.com/

[Spekulatius]

MPLX at <$27; 10% yield.  1.4x distribution coverage. K1.  Possibly catalyst from Elliott requesting to break up MPC (sponsor).

 

https://www.remakingmpc.com/

 

A breakup of MPC ( Sponsor and majority owner of MPLX  ) is not a positive for MPLX most likely.

[gokou3]

MPLX at <$27; 10% yield.  1.4x distribution coverage. K1.  Possibly catalyst from Elliott requesting to break up MPC (sponsor).

 

https://www.remakingmpc.com/

 

A breakup of MPC ( Sponsor and majority owner of MPLX  ) is not a positive for MPLX most likely.

Could you kindly explain?

[writser]

More SMTA. As far as I can see all looks good. Vote passed, portfolio sale expected to close in a few weeks, Shopko term loan fully recovered. According to the proxy management expects $8.50 - $9.35 per share in distributions. My own calculations get me closer to the top of that range. In fact even slightly above that range but that probably means I am too optimistic about the workout assets.

 

Shares were initially up today (what I would have expected) but around the close there was massive volume and SMTA ended down ~2% instead. Best explanation I could come up with is that some funds are not allowed to hold companies in liquidation and had to sell at today's close. Seems congruent with what happened in the market.

 

But maybe I missed something. Not the most fireproof explanation ever.

 

Even back in the $8.40s SMTA still looks cheapish to me. Not hard at all to come up with an expected distribution figure of over $9, even using conservative assumptions.

 

How did you go with SMTA? Looks as though the distribution has been paid (either that or there is some catastrophe causing a 90% drop).

 

No, stock went ex-div for $8 today. I bought, then I bought more, then I bought more, etc. Was by far my largest position yesterday. Though not very risky given the large upcoming distribution. Basically you could invest a ton of money with very little risk to end up with a small position in the stub on the cheap. I like situations like that. Good spots to park your excess cash for a few weeks if you do your homework.

[Spekulatius]

MPLX at <$27; 10% yield.  1.4x distribution coverage. K1.  Possibly catalyst from Elliott requesting to break up MPC (sponsor).

 

https://www.remakingmpc.com/

 

A breakup of MPC ( Sponsor and majority owner of MPLX  ) is not a positive for MPLX most likely.

Could you kindly explain?

 

As a majority holder of units, MPC would be on both sides of the transaction. If a transaction is favorable for MPC and marginally favorable or neutral for MPLX, it would pass a fairness opinion and would go through. I believe the main Elliot pitch is that MPLX units should be distributed to shareholders. If that happens, I would expect a hell lot of selling because most shareholders can’t or don’t want hold MLP units.

 

This is not directly a negative for the MLP itself, but certainly for the current minority unit holders.

[Spekulatius]

Spek - you should probably start NOW thread.

 

What I don't like about NOW is 0% insider holdings. Which makes it difficult to decide if leadership is gonna be any good going forward - and possibly explains why CEO jumped the ship. With all the issues of insider control ( We know what We mean ), I'd still rather invest in a company with insider holdings or control.

 

Also it's difficult to decide what high-growth, but no/low earnings companies to buy. NOW? WDAY? ZEN? HUBS? PCTY? CRM? VEEV? TEAM? (I have a smattering of tiny positions in some of these).

 

I don’t feel like a thread on just one of these stocks will get much traction, perhaps a thread on SAAS stocks? This is not typical value investor terroir,  but nevertheless interesting.

[gokou3]

MPLX at <$27; 10% yield.  1.4x distribution coverage. K1.  Possibly catalyst from Elliott requesting to break up MPC (sponsor).

 

https://www.remakingmpc.com/

 

A breakup of MPC ( Sponsor and majority owner of MPLX  ) is not a positive for MPLX most likely.

Could you kindly explain?

 

As a majority holder of units, MPC would be on both sides of the transaction. If a transaction is favorable for MPC and marginally favorable or neutral for MPLX, it would pass a fairness opinion and would go through. I believe the main Elliot pitch is that MPLX units should be distributed to shareholders. If that happens, I would expect a hell lot of selling because most shareholders can’t or don’t want hold MLP units.

 

This is not directly a negative for the MLP itself, but certainly for the current minority unit holders.

 

Understood, thanks for the elaboration. Of course there is no guarantee that things will go the way Elliott envisions, but I believe their plan calls for a simple three-way split of the company, i.e. the MPC shareholders end up owning shares in 3 companies.  Wouldn't this simply involve the MPC shareholders getting a pro-rata share of MPC's current 63% ownership in MPLX? I am not creative enough to imagine how MPLX will get screwed in this process.

 

I do agree with you that there may be forced selling after the spin, but the Elliott plan also calls for the conversion to C-corp at the same time so perhaps some forced selling can be offset by new shareholders who currently cannot buy into a MLP.

 

Do you have any insight into MPLX's assets?  Seems like demand for the New England pipeline capacity (20% of EBITDA) is slow, but assets in other areas are in high demand and have good growth opportunity.

[Spekulatius]

I do agree with you that there may be forced selling after the spin, but the Elliott plan also calls for the conversion to C-corp at the same time so perhaps some forced selling can be offset by new shareholders who currently cannot buy into a MLP.

 

Conversion to a C Corp means a huge tax bill for LP’s especially those that held the units long term and have a low tax basis (distributions adjust the cost basis downwards). Same thing happened when Kinder merged then LP into KMI.

 

I agree this would be more technical than fundamental,  it we might get a huge puke, when these initiative comes to pass and LP owners freak out.

[Gregmal]

Added a little bit of ILMN after hours at 298. If the PACB scenario has taught anything, its how dominant ILMN is in that space. And its a beautiful space at that!

[lnofeisone]

I do agree with you that there may be forced selling after the spin, but the Elliott plan also calls for the conversion to C-corp at the same time so perhaps some forced selling can be offset by new shareholders who currently cannot buy into a MLP.

 

Conversion to a C Corp means a huge tax bill for LP’s especially those that held the units long term and have a low tax basis (distributions adjust the cost basis downwards). Same thing happened when Kinder merged then LP into KMI.

 

I agree this would be more technical than fundamental,  it we might get a huge puke, when these initiative comes to pass and LP owners freak out.

 

Agree that MPC holders that don't want/can't hold MLP (as a corporate structure) would sell MPLX if Elliot's plan goes through. However, MLPX can choose to be treated as a C corp for tax purposes without all the headaches of MLP to C corp conversion.

[Charlie]

Bought some Berkshire b shares today.

 

The results on Saturday should be good, the big equity positions are up nicely and Berkshire´s share price is underperforming.

 

A good combination.  :)

[DooDiligence]

Don't u laff as stonks go hi,

4 urs may b the next to die.

 

Ur stonks crawl up,

ur stonks crawl down.

 

Ur stonks play pinochle,

while u frown.

 

They eat your eyes,

they eat your nose.

 

They eat the jelly,

between your toes.

 

---

 

Happy Halloween  ;)

Trump or Treat  :-X

[sleepydragon]

Added to MO

[Sleepwell]

Fiat

[Gregmal]

Put on a little weekend trade with BRK @214.

[Cardboard]

Bought a little bit of SPY puts. It is the wrong time of year to do this (Nov to Apr tend to be strong) and just broke out on chart but, optimism seems a little too strong for my liking. It will be a small hedge/trade.

[Gregmal]

Added some VITR.ST

[John Hjorth]

Bought a little bit of SPY puts. It is the wrong time of year to do this (Nov to Apr tend to be strong) and just broke out on chart but, optimism seems a little too strong for my liking. It will be a small hedge/trade.

 

This move of yours makes great sense to me personally, Cardboard,

 

It seems like Mr. Market has moved into a state of mania, since the beginning of October. We'll likely just get less returns on our long positions going forward.

 

I have right now a feeling of Deja Vu comparable to what happened mid April 2015. It was basically all downhill from there until the early part of February 2016, October 2015 being quite brutal at some point.

 

- - - o 0 o - - -

 

Unfortunately, I personally can't do something like that, for legal and tax reasons.

[Spekulatius]

Bought a little bit of SPY puts. It is the wrong time of year to do this (Nov to Apr tend to be strong) and just broke out on chart but, optimism seems a little too strong for my liking. It will be a small hedge/trade.

 

This move of yours makes great sense to me personally, Cardboard,

 

It seems like Mr. Market has moved into a state of mania, since the beginning of October. We'll likely just get less returns on our long positions going forward.

 

I have right now a feeling of Deja Vu comparable to what happened mid April 2015. It was basically all downhill from there until the early part of February 2016, October 2015 being quite brutal at some point.

 

- - - o 0 o - - -

 

Unfortunately, I personally can't do something like that, for legal and tax reasons.

 

It’s a slow melt up and could go on for a while. I bought a few puts a while ago, which will expire worthless. I think early next year may be a good time to hedge the portfolio again.

 

FWIW, I bought a bit of CTVA finally, as I finally got my price.