What are you buying today?

[frommi]

Jan 2018 IWM Puts Strike @120

[randomep]

"A big South African company is selling for 10x dividends"

 

Probably a thread on the board that would make this obvious, but what company?  The only South African company I recall being discussed in depth is Bidvest.

 

Thanks.

 

Nope, the company is not touted by anyone except me I think.

 

Lewis Group:

 

price / shr 45 rand

dividends 5.17 rand

headline earnings: 6.22 rand

 

.... go figure.......

 

post on my website:

http://bovinebear.blogspot.com/search/label/JSE%3ALEW

[Liberty]

Bought some LBTYA recently.

[randomep]

 

- HK real estate companies are selling for 1/3 to 1/4 of the book value of their properties

- Russian companies are selling at 3-4x earnings

- A big South African company is selling for 10x dividends

- I can list profitable Japanese netnet

 

counterpoints for the first two:

-possibly inflated book value (what are the earnings?)

-possibly unsustainable/unreliable earnings (what has reliably flowed to shareholders over the past 5 years?)

 

sometimes cheap is cheap for a good reason, sometimes it's not.

 

 

I am not here to push my stocks on you, I understand you have a legit reason for aversion to them. I am simply arguing with the OP who said that there the market is overvalued.  I believe a 25yr old WEB can make 50% in this market.

 

 

[LC]

 

- HK real estate companies are selling for 1/3 to 1/4 of the book value of their properties

- Russian companies are selling at 3-4x earnings

- A big South African company is selling for 10x dividends

- I can list profitable Japanese netnet

 

counterpoints for the first two:

-possibly inflated book value (what are the earnings?)

-possibly unsustainable/unreliable earnings (what has reliably flowed to shareholders over the past 5 years?)

 

sometimes cheap is cheap for a good reason, sometimes it's not.

 

 

I am not here to push my stocks on you, I understand you have a legit reason for aversion to them. I am simply arguing with the OP who said that there the market is overvalued.  I believe a 25yr old WEB can make 50% in this market.

 

Yeah, nobody pushes stocks on me anymore. Learned that the hard way.

 

Value investing, in my mind, means there is value in the asset greater than its market value. The first two assets you listed, I presented my reasons why the asset value may not be greater than the market value.

 

Saying the market is overvalued is a useless statement unless you are shorting the market. The 'market' is simply a collection of assets.

 

You have not presented a case why the assets you mentioned are trading for less than intrinsic value.

 

Book value =/= intrinsic value

Last years earnings =/= intrinsic value

 

 

I believe a 25yr old WEB can make 50% in this market.

Based on what evidence?

 

[james22]

I didn't realize that the point of a value investing forum was to look at macro factors and determine that there are zero opportunities to be had. I guess I'll come back when all of that stuff has been sorted out...

 

Dan Loeb:

 

Nearly one year into this market cycle, a few truths of hedge fund investing are evident: ... putting money to work in equities and credit today requires a thoughtful perspective on global events. Macro analysis is no longer just for macro traders.

 

http://www.zerohedge.com/news/2016-07-27/dan-loeb-compares-managing-money-2016-game-thrones-slaughter

[writser]

I've been buying as much KAHL as I can get. Opportunity of the year imho.

 

Bought as much as was feasible in the beginning of june ($139.11 average), sold a little bit around $150 a few weeks later, got cashed out yesterday at $159.82. 15% return in 8 weeks for a low-risk merger. I hope a few others managed to pick up a few shares as well.

[Hielko]

I've been buying as much KAHL as I can get. Opportunity of the year imho.

 

Bought as much as was feasible in the beginning of june ($139.11 average), sold a little bit around $150 a few weeks later, got cashed out yesterday at $159.82. 15% return in 8 weeks for a low-risk merger. I hope a few others managed to pick up a few shares as well.

I'd say the lack of replies means a no to the last part of your post :P

[Liberty]

I've been buying as much KAHL as I can get. Opportunity of the year imho.

 

Bought as much as was feasible in the beginning of june ($139.11 average), sold a little bit around $150 a few weeks later, got cashed out yesterday at $159.82. 15% return in 8 weeks for a low-risk merger. I hope a few others managed to pick up a few shares as well.

I'd say the lack of replies means a no to the last part of your post :P

 

Not entirely alone:

 

https://alphavulture.com/2016/07/27/mty-food-group-closes-acquisition-of-kahala-brands/

[writser]

That's Hielko's website :) . But yeah, a few other people managed to buy shares. Liquidity was very limited anyway, idea was only suitable for a handful of small PA's.

[snow pea]

For my part, I didn't pick up any partially because of being a bit late to the party, and partially because of some small logistical hurdles combined with some laziness on my part.  I regret it, but I know myself well enough to recognize that it won't be the last time I miss out on such an opportunity.  I still very much appreciate your bringing it to my attention, writser & Hielko.

[matjone]

Have you guys seen this before where only accredited investors could get cash+stock?  I think this created a really nice wrinkle for accredited investors to exploit.

[writser]

What was the opportunity? The package deal had exactly the same value per share as the cash-only deal. Maybe there are tax advantages for US citizens I am unaware of.

[TwoCitiesCapital]

EXO (Exor)

FCAU (Fiat Chrysler)

[benjamin1978]

EXO (Exor)

FCAU (Fiat Chrysler)

 

TwoCities, if you dont mind me asking, what are you expecting FCAU's Adj EBIT to be this year and next in light of the new guidance?

[TwoCitiesCapital]

EXO (Exor)

FCAU (Fiat Chrysler)

 

TwoCities, if you dont mind me asking, what are you expecting FCAU's Adj EBIT to be this year and next in light of the new guidance?

 

No specific dollar targets on my end. I'm no expert on the automotive industry and don't really have expectations for this years EBIT other than I anticipate that it will likely continue to improve each year going forward for the next 2-3 years.

 

I'm not really expecting miracles - just organic deleveraging and margin improvement from a continuation of the current sales cycle. It's not a large leap of faith for me to believe that they can make more than 2x the current amount of cash flows via margin expansion in 2-3 years time and I believe the current state of U.S. auto market gives them a long runway to achieve this. Of course, there's the upside optionality of a merger/sale even though no one currently seems interested.

 

The position in Exor is only slightly related - obviously there's exposure to Fiat in there, and I know about from following Fiat, but that's more of a "buying a good management team at a discount to NAV" type investment and will likely to continue to hold that long after I've traded out of Fiat.

 

[benjamin1978]

EXO (Exor)

FCAU (Fiat Chrysler)

 

TwoCities, if you dont mind me asking, what are you expecting FCAU's Adj EBIT to be this year and next in light of the new guidance?

 

No specific dollar targets on my end. I'm no expert on the automotive industry and don't really have expectations for this years EBIT other than I anticipate that it will likely continue to improve each year going forward for the next 2-3 years.

 

I'm not really expecting miracles - just organic deleveraging and margin improvement from a continuation of the current sales cycle. It's not a large leap of faith for me to believe that they can make more than 2x the current amount of cash flows via margin expansion in 2-3 years time and I believe the current state of U.S. auto market gives them a long runway to achieve this. Of course, there's the upside optionality of a merger/sale even though no one currently seems interested.

 

The position in Exor is only slightly related - obviously there's exposure to Fiat in there, and I know about from following Fiat, but that's more of a "buying a good management team at a discount to NAV" type investment and will likely to continue to hold that long after I've traded out of Fiat.

 

Interesting, thanks. I actually decided to go for EXO over FCAU because of the management, the add'l layer of discount and also I figure worst case scenario it's better to be totally aligned with the family via EXO equity as opposed to FCAU stock. Do you take their $54 NAV at face value or do you have an adj NAV for EXO?

[TwoCitiesCapital]

EXO (Exor)

FCAU (Fiat Chrysler)

 

TwoCities, if you dont mind me asking, what are you expecting FCAU's Adj EBIT to be this year and next in light of the new guidance?

 

No specific dollar targets on my end. I'm no expert on the automotive industry and don't really have expectations for this years EBIT other than I anticipate that it will likely continue to improve each year going forward for the next 2-3 years.

 

I'm not really expecting miracles - just organic deleveraging and margin improvement from a continuation of the current sales cycle. It's not a large leap of faith for me to believe that they can make more than 2x the current amount of cash flows via margin expansion in 2-3 years time and I believe the current state of U.S. auto market gives them a long runway to achieve this. Of course, there's the upside optionality of a merger/sale even though no one currently seems interested.

 

The position in Exor is only slightly related - obviously there's exposure to Fiat in there, and I know about from following Fiat, but that's more of a "buying a good management team at a discount to NAV" type investment and will likely to continue to hold that long after I've traded out of Fiat.

 

Interesting, thanks. I actually decided to go for EXO over FCAU because of the management, the add'l layer of discount and also I figure worst case scenario it's better to be totally aligned with the family via EXO equity as opposed to FCAU stock. Do you take their $54 NAV at face value or do you have an adj NAV for EXO?

 

Same reasoning for EXO - I may eventually convert the entire Fiat position, but have only just recently started digging into EXO so have maintained my holdings in FCAU for the moment. Today's purchase is my first of EXO and was basically done in addition with the same idea of levering upside exposure in the event FCAU rises in the near to mid term.

 

I typically make simple adjustments to the stated book value of holding companies for things like equity accounting and then apply my own discount factor for companies that I understand less (like Fiat/Ferrari) or are more cyclical/leveraged/etc. In this case, I think a 30+% discount is a reasonably good starting place to get a starter position as I try to better understand the company and peg a value.

[boilermaker75]

Wrote some Aug 52.5-strike puts on EMR this morning after the pullback on the slight earnings miss.

[matjone]

What was the opportunity? The package deal had exactly the same value per share as the cash-only deal. Maybe there are tax advantages for US citizens I am unaware of.

 

Yeah after looking at it again you are right.

[boilermaker75]

Wrote some Aug 52.5-strike puts on EMR this morning after the pullback on the slight earnings miss.

 

Wrote EMR 52.5-strike Sept 16 puts for $1.30 per share.

[John Hjorth]

Bought more Novo Nordisk A/S B [uS ADR: NVO]. It tanked about 10% today under wild trade upon the release of 2016 Q2 reporting this morning. A lot of retail investors was picking it up. 17.4 million shares shifted hand today, total turnover in this stock at Masdaq OMX CPH was  DKK 5.851 B.

[TwoCitiesCapital]

Small speculative position in CMG after watching foot traffic steadily rise of the last 6 weeks at 3 different locations in NYC. Seems like the brand is coming back and I expect Q3 results to improve materially.

 

 

[longlake95]

EFN.TO

[AccentricInv]

Small speculative position in CMG after watching foot traffic steadily rise of the last 6 weeks at 3 different locations in NYC. Seems like the brand is coming back and I expect Q3 results to improve materially.

 

Interestingly, I've noticed this also.  Maybe not the 30min out-the-door, midtown lunch lines from two years ago, but there's actually a wait now during lunch.