What are you buying today?

[Lance]

WFC

 

Thanks

Lance

[Gregmal]

bought a little more MSGN

[Castanza]

WFC

 

Thanks

Lance

 

+1

[lnofeisone]

+1 on this. Definitely getting some shares put to me lest we hit 52 before Friday.

[boilermaker75]

Wrote 50-strike, Jan 17 expiration, WFC puts for $0.41 per share

[CorpRaider]

WFC

[gokou3]

Scorpio Tankers STNG

[Broeb22]

OLLI and EVI

[kab60]

Added to BERY and SAVE the other day below 45 and 40 and took at small position in GUD

[BG2008]

Added to BERY and SAVE the other day below 45 and 40 and took at small position in GUD

 

BERY should be interesting with the next couple quarters of earnings.  Down 6% volume wise last year may easily convert into up 2-4% this year which still means down 2-4%, but market will likely like it given the current P/FCF.  Refinancing at 1% and 1.5% means an extra $30-40mm of interest savings. 

[kab60]

Added to BERY and SAVE the other day below 45 and 40 and took at small position in GUD

 

BERY should be interesting with the next couple quarters of earnings.  Down 6% volume wise last year may easily convert into up 2-4% this year which still means down 2-4%, but market will likely like it given the current P/FCF.  Refinancing at 1% and 1.5% means an extra $30-40mm of interest savings.

Yep. If they can grow volumes narrative should change, and debt paydown plus further refi down the line should add nicely to FCF. What nags me a bit is whether their size will start to constrain them down the line in that there are not enough acquisitions that move the needle, but that's some years away and market is still very fragmented. In a 2 pct rate environment I don't see why this should trade at a double digit yield either way.

[John Hjorth]

... What nags me a bit is whether their size will start to constrain them down the line in that there are not enough acquisitions that move the needle, but that's some years away and market is still very fragmented. ...

 

kab60,

 

Nothing ever come easy. With a serial acquirer, based on strong operational execution & proved capital allocation skills, you'll never get over the question: "What is the next one, and how will that one look like for me?"

 

It's just a part of the game, if you invest in [to me, great] stuff like this [bERY].

[gjangal]

Added to BERY and SAVE the other day below 45 and 40 and took at small position in GUD

 

SAVE is interesting here. Cheap and has some growth in it. It is / has opened flying to a wider set of people. Probably has also increased the frequency of flying for some people. Looks cheap with growth. Plane problems in the future be damned, people wanna fly

 

Thanks for the idea

[Ice77]

2222.HK: I initially bought this at 20c a month or so back and then have been adding at 22-28c. Discovered accidentally when KKR bought a majority stake in one of their companies and i saw it in the paper. Just the residual 30% stake in that venture is worth more than the current market cap at that transacted value. Significant net cash plus their remaining biz which is growing well would be worth atleast twice that residual stake. I reckon NAV to be around ~50-60c. 

[Ice77]

CRBP

 

Interesting clinical candidate with an unmet need. It looks to me like they will need to raise cash with a secondary very soon though.

 

It shouldn't be too difficult to raise money (they've already done some licensing deals - one with a Japanese major and they also got some funds from CF foundation). Their Ph 3 results for Lenabasum should most likely be great (their Ph2 data and recent hiring shows they are prepping for approval) - out in a few months. Stock is ripping. Up 60% since this above discussion. Funnily i discovered this stock from a podcast where a healthcare VC with a great track record was pounding the table on it like crazy. 

[Spekulatius]

CRBP

 

Interesting clinical candidate with an unmet need. It looks to me like they will need to raise cash with a secondary very soon though.

 

It shouldn't be too difficult to raise money (they've already done some licensing deals - one with a Japanese major and they also got some funds from CF foundation). Their Ph 3 results for Lenabasum should most likely be great (their Ph2 data and recent hiring shows they are prepping for approval) - out in a few months. Stock is ripping. Up 60% since this above discussion. Funnily i discovered this stock from a podcast where a healthcare VC with a great track record was pounding the table on it like crazy.

 

Yes, stock has rebounded substantially. Would you mind disclosing the podcast? I am constantly looking for new material.

[Ice77]

Would you mind disclosing the podcast? I am constantly looking for new material.

 

Sal Daher's podcast on iOS

[Spekulatius]

Would you mind disclosing the podcast? I am constantly looking for new material.

 

Sal Daher's podcast on iOS

 

Thanks, this “Angel Invest Boston” podcast is a great podcast series, especially since I live in the greater Boston area. Subscribed.

[Stuart D]

2222.HK: I initially bought this at 20c a month or so back and then have been adding at 22-28c. Discovered accidentally when KKR bought a majority stake in one of their companies and i saw it in the paper. Just the residual 30% stake in that venture is worth more than the current market cap at that transacted value. Significant net cash plus their remaining biz which is growing well would be worth atleast twice that residual stake. I reckon NAV to be around ~50-60c.

 

Nice idea, thanks for sharing.

[spartansaver]

ARPO - Aerpio Pharmaceuticals - Trading below net cash and the company announced in Oct. that it is reviewing strategic alternatives and streamlining operations to preserve cash. Cash at the end of Q4 will probably end around 38mn, and I expect that R&D should be minimal going forward. Perhaps $2mn cash flow burn per quarter. Current market cap is $25mn, so maybe 1.5 years before the company cash starts trending below current market cap. The company has ~$400mn in possible royalty payments, and at the end of phase 1 development for an eye pressure/glaucoma drug (eye pressure drug will only be developed on a partnership basis going forward). CEO owns ~14% of company.

[boilermaker75]

Wrote 50-strike, Jan 17 expiration, WFC puts for $0.41 per share

 

Wrote some 48.5-strike, Jan 17 expiration, EFC puts for  $0.25 per share this morning. Hopefully this was a better point than my last write!

[Broeb22]

In short:

 

The business solves a problem for its customers (vets)

The end market is attractive (pet care) given its recession-resistance

The valuation looks increasingly attractive given a price for the entire enterprise of $2.3 billion and unlevered free cash from the legacy Henry Schein business of about $150 million, giving us a 6.7%  unlevered free cash yield on just Henry Schein. This effectively values Vets First Choice, which is why everyone was so excited about the stock in the first place, at zero.

 

I've purchased twice now, once around $13 per share and again yesterday below $11.

 

It's a small position for me given the leverage and somewhat limited free cash flow. In a downturn, they will generate cash from inventory liquidation, but still the free cash could be ugly and people who don't understand the business now really won't want to own it in a downturn. So, I've left some room to average down further because I think I could get a chance to.

 

https://research-doc.credit-suisse.com/docView?language=ENG&format=PDF&sourceid=csplusresearchcp&document_id=1080485861&serialid=LwV70A1WGcAVwyFsrunHo7%2BWJh%2FyveCGDQap19XIDWs%3D&cspId=1928917291656192000

 

To invert this, with CVET doing poorly, it seems that HSIC (from which CVET was spun off) dodged a bullet and ought to be a better business now. It seems reasonably valued too. I put it on my watch list together with CVET. I would be more inclined to buy HSIC here than CVET.

 

Returns since this post: CVET 34.4%; HSIC 12.2%.

 

[Gregmal]

In short:

 

The business solves a problem for its customers (vets)

The end market is attractive (pet care) given its recession-resistance

The valuation looks increasingly attractive given a price for the entire enterprise of $2.3 billion and unlevered free cash from the legacy Henry Schein business of about $150 million, giving us a 6.7%  unlevered free cash yield on just Henry Schein. This effectively values Vets First Choice, which is why everyone was so excited about the stock in the first place, at zero.

 

I've purchased twice now, once around $13 per share and again yesterday below $11.

 

It's a small position for me given the leverage and somewhat limited free cash flow. In a downturn, they will generate cash from inventory liquidation, but still the free cash could be ugly and people who don't understand the business now really won't want to own it in a downturn. So, I've left some room to average down further because I think I could get a chance to.

 

https://research-doc.credit-suisse.com/docView?language=ENG&format=PDF&sourceid=csplusresearchcp&document_id=1080485861&serialid=LwV70A1WGcAVwyFsrunHo7%2BWJh%2FyveCGDQap19XIDWs%3D&cspId=1928917291656192000

 

To invert this, with CVET doing poorly, it seems that HSIC (from which CVET was spun off) dodged a bullet and ought to be a better business now. It seems reasonably valued too. I put it on my watch list together with CVET. I would be more inclined to buy HSIC here than CVET.

 

Returns since this post: CVET 34.4%; HSIC 12.2%.

 

To be fair, everything is up huge during this timeframe. Except maybe smart money hedge fund guys who are probably up like 1.5%.

[Broeb22]

I’ll take it any way I can get it. CVET divesting a non core division for a little more than $100 million gives me confidence that new mgmt. understands the situation and isn’t wasting time.

[Spekulatius]

I’ll take it any way I can get it. CVET divesting a non core division for a little more than $100 million gives me confidence that new mgmt. understands the situation and isn’t wasting time.

 

CVET is a pretty levered bet. It can go up an down a lot. I think the last quarterly earnings report which wasn’t as bad as thought turned the stock around.

 

Congrats to the win. I have kept it on my watchlist and will keep watching it.