What are you buying today?

[cubsfan]

^ Yup! My thanks on ALCO, it's been tough to accumulate, but worthwhile!

 

[Gregmal]

4 hours ago, gfp said:

Yeah that market reaction is pretty funny considering they had basically already pre-announced everything they said today. Maybe added some specifics but this “news” was out there

 

Yea I think theres two reasons for that. 1) the company has been left for dead and 2) often with land sales, putting them under contract and closing them are not necessarily the same thing. You definitely dont get 100% credit in the public markets until the checks are cashed. 

 

Either way, glad to see people making money. If you think a 5% dividend yield, and ~70% of NAV is fairish value for a company in a stable/boring business, thats expected to grow earnings, continue paying down debt, and increasing dividends while basking in the Sun Belt growth story....well you've still got about 20% upside til that happens. The volume of late has been good, they've been doing IR work. Remy has stopped selling. And they've shown theyre willing to sell the land. All good stuff. 

[rayfinkle]

On 5/20/2021 at 12:25 PM, Gregmal said:

Nearly tripled my position in ALCO over the past few days. What do you do when you have maybe 10-15% potential drawdown risk and 10-100% highly probable, eventual upside? Especially with a hard asset play where drawdowns will just be temporary and simply add to the upside? Swing big. Worst scenario IMO is it continues to be dead money and pays you 72c a share(which they're about to start ramping). Cash is trash.

Hey Greg- any chance you can point to a write up ? I checked out the May 2020 VIC already.  Thanks! 

[Gregmal]

11 hours ago, rayfinkle said:

Hey Greg- any chance you can point to a write up ? I checked out the May 2020 VIC already.  Thanks! 

Hi Ray,

 

Thanks for mentioning the VIC writeup, I cant believe I hadn't seen it before but was a good read. I dont really think there's a specific writeup I can point to. I've followed the company for years and one of the beauties of a company like this is that its pretty static. Once you familiarize yourself with the assets there's not a whole lot of upkeep you need to do on your thesis outside of fairly simple stuff like listening/reading transcripts. What lead me to conclude this is now a good IRR type investment this winter and especially this spring was several things. 

 

1) Its failed to participate in any sort of appreciation seen by most assets/companies despite the fact that there hasn't been any value destruction here.

2) Management now has a multi year track record of solid decision making and is now starting to do IR work.

3) FL and Sun Belt RE, especially land, has gotten so hot its inevitable that it starts bleeding into this valuation. Because of 2) you can get confident that it will be capitalized on.

4) All else fails you have such a margin of safety(even still at $34 IMO) that its unlikely you lose anything but opportunity cost..which in a fickle market isnt too much of a concern to me. 

[Gregmal]

shorted a few CLF 6/25 $20 puts

[rkbabang]

A starting position in SOXQ, an ETF which tracks the PHLX Semiconductor Sector Index.  I'm really bullish on the semiconductor industry for at least the next 18-24 months and think the index will do well.  I already own 2 of the components NVDA and the company I work for: ADI.   I like most of the companies on the index (except for Intel, which I'm not so sure of) and was having trouble picking just 1 or two more to invest in.  So the ETF it is.

 

[valueventures]

Started a position in NNI

[K2SO]

MSTR Jan 23 puts.

[ncage]

More $BABA

[Castanza]

BSM, VNOM, FLMN

 

Made it a basket

Edited June 16, 2021 by Castanza

[changegonnacome]

4 hours ago, K2SO said:

MSTR Jan 23 puts.

 

Interesting - writer or buyer? and at what strike. Its quite amazing what he’s doing there - effectively has turned his company into a defacto BTC etf/proxy

[fareastwarriors]

added a bit to PCYO under $13

[K2SO]

18 hours ago, changegonnacome said:

 

Interesting - writer or buyer? and at what strike. Its quite amazing what he’s doing there - effectively has turned his company into a defacto BTC etf/proxy

 

Buyer. Way out of the money. Will add to this over time if BTC continues to rise.

It's "amazing" what he's done but I think it goes down in history as a remarkably stupid move. 

 

[cubsfan]

On 3/18/2021 at 3:05 PM, cubsfan said:

 

More PANW - $318

Sold PANW - $370 

[Gregmal]

Been shorting Jan 22 puts ~30-50% OTM on CLF, SLB, RIG and buying Jan 23 calls ~50-100% OTM. 

 

Also small adds to ALCO, JOE, MSGS

Edited June 17, 2021 by Gregmal

[cubsfan]

^ Dude you are a wealth of great ideas!

[CorpRaider]

BRK.B, LLOY (UK)

[shamelesscloner]

Naspers (NPSNY)

[Monsieur_dee]

Orders went through for VZ & HUN

[fareastwarriors]

Picked up some more JBGS under $33

[lnofeisone]

bought some ELAN, MIC, and JBGS

[gokou3]

BTI. 7.7% yield

[Castanza]

Small starter position in RRC 

 

Management has been very disciplined with paying down debt. Target is to get to sub 2x by end of 2022. At this point they would consider dividend or stock repurchase. Projections show sub 1.5x by 2023. Management is focused on generating free cash flow 

 

They have the best assets in Appalachia and are also the most efficient operators. Continued efficiency growth is on the front burner. I believe in the call they said they got under 12k per linear foot and as a result are revisiting their best producing wells. 
 

they see tailwinds for propane and gas in Asia. Consolidations and acquisitions are only on the table if it checks multiple boxes. Efficiency, debt pay down or RFC generation. 
 

Q1 call had a lot of good questions. 

Edited June 19, 2021 by Castanza

[rayfinkle]

On 6/15/2021 at 7:58 AM, Gregmal said:

Hi Ray,

 

Thanks for mentioning the VIC writeup, I cant believe I hadn't seen it before but was a good read. I dont really think there's a specific writeup I can point to. I've followed the company for years and one of the beauties of a company like this is that its pretty static. Once you familiarize yourself with the assets there's not a whole lot of upkeep you need to do on your thesis outside of fairly simple stuff like listening/reading transcripts. What lead me to conclude this is now a good IRR type investment this winter and especially this spring was several things. 

 

1) Its failed to participate in any sort of appreciation seen by most assets/companies despite the fact that there hasn't been any value destruction here.

2) Management now has a multi year track record of solid decision making and is now starting to do IR work.

3) FL and Sun Belt RE, especially land, has gotten so hot its inevitable that it starts bleeding into this valuation. Because of 2) you can get confident that it will be capitalized on.

4) All else fails you have such a margin of safety(even still at $34 IMO) that its unlikely you lose anything but opportunity cost..which in a fickle market isnt too much of a concern to me. 

Thanks Greg! How do you get comfortable with the “control family” risks? Eg stagnation, lack of incentive in support of minority investors, etc.?  In briefly going over the latest deck it seems like they at least talk the talk of closing value to NAV gap. 

[Gregmal]

3 hours ago, rayfinkle said:

Thanks Greg! How do you get comfortable with the “control family” risks? Eg stagnation, lack of incentive in support of minority investors, etc.?  In briefly going over the latest deck it seems like they at least talk the talk of closing value to NAV gap. 

 

Its really just the Trefalet outfit that has a big handle on control via share ownership. Otherwise there's a pretty solid record of doing the right thing with this group. I do think there is legitimacy to the concern of a stale, good ole boys club, entrenched board...but I dont care because they've been making the right moves for several years now and thats all that matter. If you go back and pull up their reports + outside analysis of the evolution and 5 year plan thats been executed since 2017-18 or whatever, its impressive.