What are you buying today?

[Sunrider]

Added a good amount of PCYO the past week, EZPW, added some CTO, got some GRIF today, and for shits, got into some $5 calls on TAST as there seems to be a reasonable chance this'll bounce over the next Q.

 

Like last year, dont think I really need to do very much in order to do very well in Q1.

 

What is your expectation for EZPW? Seems with Cohn back in charge and paying himself well, no incentive to common stock value? So it's cheap, but seems the market doesn't trust him on account of his past actions, and the financing last year was probably also so expensive because nobody trusts the guy.

Thanks!

 

I'd concur with that assessment. I think saying the bar is low here is an understatement. The guy is a world class scoundrel. I was absolutely floored by the stock awards they hand out as well. But at the current prices, I believe that is well reflected. This company, even with its mismanagement, hasn't spent a whole lot of time trading below a 7 handle. The Cohen thing I think really seemed to be the last straw for many people. So my feel there was that you had a point of capitulation. I certainly wouldn't expect improvement as far as governance goes, but the buyback is important and if used should put a floor under this. And then, again because expectations are so low, I think give this thing a pop once its confirmed they've actually been using it. For a company thats exceptionally cheap, that'll move the needle. My tipping point to jump in a little was the glorious public beating Aaron English put on these guys during the latest call. No I dont think it will change these scumbags, but I think at least temporarily, everyone kind of has an incentive to at least get this back to the pre Cohen announcement levels. Many times Ive found that these hucksters like to remain in the dark and control the narratives. When they get called out like this, sometimes, there may be enough of an ego involved that it compels them to make minor(and usually temporary) adjustments to save face a little bit.

 

Thanks ... I still have a small position (bag holder) ... and have been in two minds on whether to give this another month or just cut it. Simply don’t trust these guys to not do something stupid.

[sleepydragon]

GD and BPR

[Gregmal]

Bought a little more GRIF. If nothing more, because the divergence of GRIF's value relative to the general market melt up, and the lack of SWAN stocks currently available.

[Broeb22]

Bought some GDDY and KAR.

[Spekulatius]

Bought some ATTO as a rebound play.

[SafetyinNumbers]

Bought some ATTO as a rebound play.

 

I posted a comment on this article today:

 

https://seekingalpha.com/article/4314926-atento-deserves-your-attention

 

I think this week's selling is coming from RSU's issued 30 months ago that vested on Jan 2. Last year it was a similar story and the stock declined 14% in 5 days following the vesting of RSUs on a lot of volume and this year it's also down about 14% on significant volume in the 4 days since vesting. Last year ATTO bounced back 13% the following week. Not sure if we'll see a replay but it's a reasonable speculation.

[Spekulatius]

Bought some ATTO as a rebound play.

 

I posted a comment on this article today:

 

https://seekingalpha.com/article/4314926-atento-deserves-your-attention

 

I think this week's selling is coming from RSU's issued 30 months ago that vested on Jan 2. Last year it was a similar story and the stock declined 14% in 5 days following the vesting of RSUs on a lot of volume and this year it's also down about 14% on significant volume in the 4 days since vesting. Last year ATTO bounced back 13% the following week. Not sure if we'll see a replay but it's a reasonable speculation.

 

Thanks good comment. It does seem selling on no news and typically I don’t think that indiscriminate sellers are that well informed.

[SafetyinNumbers]

Bought some ATTO as a rebound play.

 

I posted a comment on this article today:

 

https://seekingalpha.com/article/4314926-atento-deserves-your-attention

 

I think this week's selling is coming from RSU's issued 30 months ago that vested on Jan 2. Last year it was a similar story and the stock declined 14% in 5 days following the vesting of RSUs on a lot of volume and this year it's also down about 14% on significant volume in the 4 days since vesting. Last year ATTO bounced back 13% the following week. Not sure if we'll see a replay but it's a reasonable speculation.

 

Thanks good comment. It does seem selling on no news and typically I don’t think that indiscriminate sellers are that well informed.

 

Thank you.

 

They also filed yesterday for a shareholder meeting to be held on Feb 4 to authorize the BOD to pursue a premium (or discount) tender for up to 30% of the shares at their discretion over the next 5 years.

 

https://www.sec.gov/Archives/edgar/data/1606457/000119312520003870/0001193125-20-003870-index.htm

 

More details in the article above as well.

 

[Gregmal]

Been trading FVE. Maybe something interesting for you special situation folks after restructuring.

[Castanza]

Adding to $DISCA, $BP, $WMB, $T

[spartansaver]

Been trading FVE. Maybe something interesting for you special situation folks after restructuring.

 

It's wild the influence that some bloggers have. It got posted on Clark Street yesterday midday after it had been posted on Twitter the night before by @valuewacatalyst and it's up nearly 60%.

[Gregmal]

Hedged out the bulk of my GM position. Lightened up in high $30's a few months ago and have locked into a trade that makes this now or never with capped downside. Incompetent management and naive shareholders are a recipe for basically what this company has been since its IPO. Things are not dandy when your stock has gone no where, dividend hasn't been raised in years, buybacks nonexistent, and ratings agencies considering your debt-junk. Yet some continue to tell themselves things are great; probably fueled by Buffett inspired "value investor" wisdom.

[JRM]

Hedged out the bulk of my GM position. Lightened up in high $30's a few months ago and have locked into a trade that makes this now or never with capped downside. Incompetent management and naive shareholders are a recipe for basically what this company has been since its IPO. Things are not dandy when your stock has gone no where, dividend hasn't been raised in years, buybacks nonexistent, and ratings agencies considering your debt-junk. Yet some continue to tell themselves things are great; probably fueled by Buffett inspired "value investor" wisdom.

 

Don't forget pissing away money on Lyft, Maven, and probably Cruise.

[Gregmal]

Hedged out the bulk of my GM position. Lightened up in high $30's a few months ago and have locked into a trade that makes this now or never with capped downside. Incompetent management and naive shareholders are a recipe for basically what this company has been since its IPO. Things are not dandy when your stock has gone no where, dividend hasn't been raised in years, buybacks nonexistent, and ratings agencies considering your debt-junk. Yet some continue to tell themselves things are great; probably fueled by Buffett inspired "value investor" wisdom.

 

Don't forget pissing away money on Lyft, Maven, and probably Cruise.

 

While Ive long liked Cruise, it is hard now not to view it through the tainted lens of Softbank being the main reason it's considered a home run...

[Spekulatius]

Hedged out the bulk of my GM position. Lightened up in high $30's a few months ago and have locked into a trade that makes this now or never with capped downside. Incompetent management and naive shareholders are a recipe for basically what this company has been since its IPO. Things are not dandy when your stock has gone no where, dividend hasn't been raised in years, buybacks nonexistent, and ratings agencies considering your debt-junk. Yet some continue to tell themselves things are great; probably fueled by Buffett inspired "value investor" wisdom.

 

Don't forget pissing away money on Lyft, Maven, and probably Cruise.

 

While Ive long liked Cruise, it is hard now not to view it through the tainted lens of Softbank being the main reason it's considered a home run...

 

All the car companies except Tesla have been trading like junk for the last 12 month almost without exception. that includes Europe, and to a to a lesser degree Japan. They are like the c malls of the industrials.

[Gregmal]

Hedged out the bulk of my GM position. Lightened up in high $30's a few months ago and have locked into a trade that makes this now or never with capped downside. Incompetent management and naive shareholders are a recipe for basically what this company has been since its IPO. Things are not dandy when your stock has gone no where, dividend hasn't been raised in years, buybacks nonexistent, and ratings agencies considering your debt-junk. Yet some continue to tell themselves things are great; probably fueled by Buffett inspired "value investor" wisdom.

 

Don't forget pissing away money on Lyft, Maven, and probably Cruise.

 

While Ive long liked Cruise, it is hard now not to view it through the tainted lens of Softbank being the main reason it's considered a home run...

 

All the car companies except Tesla have been trading like junk for the last 12 month almost without exception. that includes Europe, and to a to a lesser degree Japan. They are like the c malls of the industrials.

 

For sure, with regard to the sentiment, but 2019 was yet another record year for auto sales(in $ figures). The problem is they are terrible allocators. E&P companies are probably better peers than the malls. They make tons of money in good years but give none of it back to shareholders because dumb career industry folks run the companies based on out dated and inefficient theories for "what you're supposed to do". Then during the bad years... shit gets ugly.

 

As my bearishness on the overall market has grown, GM has started to bother me more. If this is how they perform in a record market, I probably dont want to be around for when things stop going perfectly.

[Spekulatius]

Hedged out the bulk of my GM position. Lightened up in high $30's a few months ago and have locked into a trade that makes this now or never with capped downside. Incompetent management and naive shareholders are a recipe for basically what this company has been since its IPO. Things are not dandy when your stock has gone no where, dividend hasn't been raised in years, buybacks nonexistent, and ratings agencies considering your debt-junk. Yet some continue to tell themselves things are great; probably fueled by Buffett inspired "value investor" wisdom.

 

Don't forget pissing away money on Lyft, Maven, and probably Cruise.

 

While Ive long liked Cruise, it is hard now not to view it through the tainted lens of Softbank being the main reason it's considered a home run...

 

All the car companies except Tesla have been trading like junk for the last 12 month almost without exception. that includes Europe, and to a to a lesser degree Japan. They are like the c malls of the industrials.

 

For sure, with regard to the sentiment, but 2019 was yet another record year for auto sales(in $ figures). The problem is they are terrible allocators. E&P companies are probably better peers than the malls. They make tons of money in good years but give none of it back to shareholders because dumb career industry folks run the companies based on out dated and inefficient theories for "what you're supposed to do". Then during the bad years... shit gets ugly.

 

As my bearishness on the overall market has grown, GM has started to bother me more. If this is how they perform in a record market, I probably dont want to be around for when things stop going perfectly.

 

How would you run GM better? Large buybacks may not be the best course of action because the stock really didn’t move. In a way it would be wasted.

 

GM will bleed probably bleed $10B+ In cash during a recession because they would need to spent on new models and because the industry is in transition on electrification and self driving cars. There isn’t an easy way out, the business is a value trap.

 

If I had to buy one stock, it would be FCAU. They are winning market share in trucks and the merger with Peugeot will fix their ailing European business hopefully.

[Gregmal]

Yea FCAU has long been a regret of mine. Its been the better investment, largely because Machionne was a world class manager.

 

With GM, you cant be a growth company when revenue isn't going anywhere. You cant be a dividend play, when you cant even bump the payout a mid single digit % every year. You cant be a buyback machine if you refuse to buyback stock, and you cant be a conservative company with a strong balance sheet when you are teetering on junk status.

 

So, I'm not an auto executive and Im not arrogant enough to say I have the formula for running an auto company. But what I do know, is that I would find an identity and just stick to that. GM has half assed everything which is why its gotten credit for nothing. They've gotten some push from shareholders occasionally, and like with Tepper, done enough to shut them up for a bit, and then revert back to bad behavior. Einhorn had a flawed presentation, but the right idea with the dividend shares, and then growth shares. I also think the ship sailed on Cruise. There was a huge opportunity to IPO that in Hong Kong, or even here, and they did nothing. Now its hard not to question that valuation, given it may be another Softbank special.

 

The right move IMO, which would obviously never happen, would be to shut the sedans, sell/JV the truck lines to Toyota or VW(someone dying to get into the NA truck market) and then become a pure play EV/autonomous driving company with only modest exposure to the best parts of "old auto".

[Gregmal]

Picked up a few DD as close to $60 as I could

[StevieV]

Yea FCAU has long been a regret of mine. Its been the better investment, largely because Machionne was a world class manager.

 

With GM, you cant be a growth company when revenue isn't going anywhere. You cant be a dividend play, when you cant even bump the payout a mid single digit % every year. You cant be a buyback machine if you refuse to buyback stock, and you cant be a conservative company with a strong balance sheet when you are teetering on junk status.

 

So, I'm not an auto executive and Im not arrogant enough to say I have the formula for running an auto company. But what I do know, is that I would find an identity and just stick to that. GM has half assed everything which is why its gotten credit for nothing. They've gotten some push from shareholders occasionally, and like with Tepper, done enough to shut them up for a bit, and then revert back to bad behavior. Einhorn had a flawed presentation, but the right idea with the dividend shares, and then growth shares. I also think the ship sailed on Cruise. There was a huge opportunity to IPO that in Hong Kong, or even here, and they did nothing. Now its hard not to question that valuation, given it may be another Softbank special.

 

The right move IMO, which would obviously never happen, would be to shut the sedans, sell/JV the truck lines to Toyota or VW(someone dying to get into the NA truck market) and then become a pure play EV/autonomous driving company with only modest exposure to the best parts of "old auto".

 

Just thinking out loud here.  They aren't going to become a growth company.  Seems like you'd want to - sure up the balance sheet; buyback shares; steadily raise the dividend --> in that order.

 

I don't think that you want to get caught flat-footed on electric or autonomous, but I am not sure overspending in either area makes sense.

 

Regarding EVs, I'm not sure what GM's plans are, but I wouldn't go rushing into launching all kinds of electric vehicle models.  Why rush to launch a bunch of unprofitable vehicles that aren't demanded by the marketplace?  Certainly prepare, but I don't think it is necessary to launch huge lines until there is demand and potential profit and battery tech to make them attractive (I am not familiar with all regulatory issues).  Launch EVs when you can be successful with them.  I'm not sure early unsuccessful generations help.  Did the Bolt and Volt help (though I admit, I though that a plug-in hybrid was a good idea)?

 

I may be way off base, but I don't see EVs as a huge technical challenge for the car companies.  We've been told repeatedly how simple electric motors are.  They aren't developing the battery cells and chemistries (I don't believe).

 

I think AVs are a huge technical challenge and something else you don't want to miss on, but maybe GM should have moved the other way.  Let Mobileye or someone else do the heavy lifting.  Implement it in your cars.  The type of tech needed for AVs aren't what I would consider in GM's typical wheelhouse.

 

That would leave GM in a not great part of the business - car manufacturing.  However, it would at least be in their wheelhouse.

 

Anyway, just thinking out loud.

[CorpRaider]

One reason I decided to sell my GM warrants and never look back was that it appears there are huge, unstated, (mostly) contingent claims of stakeholders (i.e., dealers, unions, and politicians (jobs jobs jobs).  Arguably Tesla (and other new entrants) don't operate with the same huge debt-like claims on future earnings/road blocks to rational operations from the dealer, unions, suppliers, and/or governments etc...as a "national champion"/massive quasi-captive entities, at least at this point.  I guess it is maybe not so different than any other industry where the incumbent can't or won't cannibalize its existing business/relationships.

[Spekulatius]

Picked up a few DD as close to $60 as I could

 

Same here. Price action looks very weak. I think we will get mid fifty prices in a general stock market correction. I did notice some smaller insider sales (Breen etc) at the end of last year.

 

Edit : also added a bit of LBTYK.

[gjangal]

Added DLTR and AMZN

[james22]

VGELX

[newtovalue]

Picked up DISCK - still trading in the mid teens FCF, and now that their Debt is at a level with which they are comfortable, they will look to buyback more stock