rkbabang Posted September 17, 2013 Share Posted September 17, 2013 Can't help but wonder if it isn't Aeropostale, a recent significant decliner that continues to get pounded.... Applying an average net profit margin of 7% to LTM sales of $2.3B, normalized EPS is 2.05. Backing out cash of 1.27 from a $9 stock price gets you to 3.8X earnings, well below Sanjeev's 7X PE target entry point 8) ARO +21% Link to comment Share on other sites More sharing options...
Parsad Posted September 17, 2013 Author Share Posted September 17, 2013 You guys constantly amaze me! That's why this is the best value investing forum around...because of the brainiacs and relentless analysis by the board members. One or more of you has gotten the answer right. I won't say who, what, where or when, but I gave no clues and you guys figured it out. Nice...well done! Cheers! Link to comment Share on other sites More sharing options...
Valuebo Posted September 17, 2013 Share Posted September 17, 2013 Haha amazing. Would love to see some further analysis in all the names summed up. Gratz to whoever got it right! Link to comment Share on other sites More sharing options...
LakesideB Posted September 17, 2013 Share Posted September 17, 2013 With management having that much skin in the game, I would say the probabilities are weighted towards survival. -CM I agree to your statement. Simply put, that is one of the biggest difference I find between this and the fate of yellow media. I should also state that the land is about $16m on their balance sheet or about 15% or so of mkt cap . The BV of that land is truly outdated. I recon the land value in itself is about half the the market cap. Link to comment Share on other sites More sharing options...
augustabound Posted September 17, 2013 Share Posted September 17, 2013 Glacier Media up 6% today on CBF coat-tailing. ;D Link to comment Share on other sites More sharing options...
CanadianMunger Posted September 17, 2013 Share Posted September 17, 2013 With management having that much skin in the game, I would say the probabilities are weighted towards survival. -CM I agree to your statement. Simply put, that is one of the biggest difference I find between this and the fate of yellow media. I should also state that the land is about $16m on their balance sheet or about 15% or so of mkt cap . The BV of that land is truly outdated. I recon the land value in itself is about half the the market cap. Good point. There is some down side protection here, lets hope management initiatives don't move.. well.. glacially :P -CM Link to comment Share on other sites More sharing options...
LakesideB Posted September 17, 2013 Share Posted September 17, 2013 Good point. There is some down side protection here, lets hope management initiatives don't move.. well.. glacially :P -CM They are well aware the circumstances they are facing. You can see it that this quarter they have started selling some non-core real estate to repay some of the debt. The problem is the rapidly dropping EBITDA has the potential to breach covenants before they have the opportunity to sell their RE. Also if u notice, Q3 and Q1 are the weakest quarters due to cyclicality of the business. So the next quarter will be very important in accessing how things are progressing. Link to comment Share on other sites More sharing options...
CanadianMunger Posted September 17, 2013 Share Posted September 17, 2013 It's strange that management would have the confidence to increase the dividend in January, only to face a potential debt covenant breech 6 months later. Lets hope my investment portfolio is not the Titanic that sinks on this Glacier :P -CM Link to comment Share on other sites More sharing options...
LakesideB Posted September 17, 2013 Share Posted September 17, 2013 It's strange that management would have the confidence to increase the dividend in January, only to face a potential debt covenant breech 6 months later. Lets hope my investment portfolio is not the Titanic that sinks on this Glacier :P -CM Early part of this year they thought their investment in Post Media would start paying off. Its been a hole for them with close to 0 ebitda to show for. The investment in that asset continues and these dollars could have been spent growing their 'essential information' business. So a huge opportunity cost as well. This acquisition has been a disaster so far. For all the leverage the company took, it has very little to show for it. But I guess that's the reason why the opportunity exists ... so in a perverse way its good all this is happening. You have to believe in the mgmt at the end of the day. Link to comment Share on other sites More sharing options...
Parsad Posted September 17, 2013 Author Share Posted September 17, 2013 It's strange that management would have the confidence to increase the dividend in January, only to face a potential debt covenant breech 6 months later. Lets hope my investment portfolio is not the Titanic that sinks on this Glacier :P -CM Early part of this year they thought their investment in Post Media would start paying off. Its been a hole for them with close to 0 ebitda to show for. The investment in that asset continues and these dollars could have been spent growing their 'essential information' business. So a huge opportunity cost as well. This acquisition has been a disaster so far. For all the leverage the company took, it has very little to show for it. But I guess that's the reason why the opportunity exists ... so in a perverse way its good all this is happening. You have to believe in the mgmt at the end of the day. Not that this is the investment I'm talking about, but remember that capex has been higher the last few quarters as they pour money into the Postmedia businesses which were under capitalized in the past. They could easily turn the spigot off and pay their dividend or debt, rather than pour more money into capex. Cheers! Link to comment Share on other sites More sharing options...
LakesideB Posted September 17, 2013 Share Posted September 17, 2013 I agree and that's why the current FCF is depressed in my mind. Although I am curious to see that capex this quarter was probably the highest in the last 8 quarters with very little debt repayment. In fact they used cash to buy additional RE (I believe a nicer office building near their location). Somehow, I don't see the urgency to attack the debt that aggressively. Either they have a good visibility on how things will progress from here on or they are being extra confident about things. In the end however, I have confidence in what they are doing and believe this mgmt. Without this belief you would probably stay clear as a 25% FCF number is meaningless if you have a liquidity crisis. Link to comment Share on other sites More sharing options...
wachtwoord Posted September 19, 2013 Share Posted September 19, 2013 Can't help but wonder if it isn't Aeropostale, a recent significant decliner that continues to get pounded.... Applying an average net profit margin of 7% to LTM sales of $2.3B, normalized EPS is 2.05. Backing out cash of 1.27 from a $9 stock price gets you to 3.8X earnings, well below Sanjeev's 7X PE target entry point 8) ARO +21% I hold ARO and am significantly under water on the position :P I bought at $23 en the beginning of 2011 and tripled my position at the end of 2011 at $11.7. It's been a crazy roller coaster since then. The initial decline was caused by the extremely high cotton prices but these have normalized (http://www.indexmundi.com/commodities/?commodity=cotton&months=300 ) cash flow is still climbing back. They still don't have any debt though :) The stock plummeted in August and I think that's a complete overreaction. +21% is just a small recovery :P Link to comment Share on other sites More sharing options...
Evolveus Posted September 19, 2013 Share Posted September 19, 2013 Here is a link to an interesting little write up on ARO. http://basehitinvesting.com/aeropostale-aro-might-offer-turnaround-value/ Still not sure what stock Parsad is buying though I'm glad the thread brought ARO to my attention. Link to comment Share on other sites More sharing options...
CorpRaider Posted September 19, 2013 Share Posted September 19, 2013 If you're talking about an investment in yourself via self help courses at the local community center... >:( Link to comment Share on other sites More sharing options...
pabrai Posted September 21, 2013 Share Posted September 21, 2013 Last nite a plan was hatched. The penguin was brought to Blues Chicsgo on the pretext of listening to some great Blues. The penguin took the bait. He was then drowned slowly as the jagermeisters, baileys, gin n tonics and the rum and cokes flowed endlessly. He and his fellow penguins drank it all. And then the tongue loosened up and the penguin went on and on and on about his love for skating on glaciers, about how glaciers were the best thing around. He loves glaciers to no end. With the info nailed, we. Got him into a cab and bundled up to be ready for AGM Festivities Link to comment Share on other sites More sharing options...
longtermdave Posted September 21, 2013 Share Posted September 21, 2013 Hah! Thanks Mohnish! ;D Link to comment Share on other sites More sharing options...
Liberty Posted September 22, 2013 Share Posted September 22, 2013 :D Link to comment Share on other sites More sharing options...
muscleman Posted September 22, 2013 Share Posted September 22, 2013 Last nite a plan was hatched. The penguin was brought to Blues Chicsgo on the pretext of listening to some great Blues. The penguin took the bait. He was then drowned slowly as the jagermeisters, baileys, gin n tonics and the rum and cokes flowed endlessly. He and his fellow penguins drank it all. And then the tongue loosened up and the penguin went on and on and on about his love for skating on glaciers, about how glaciers were the best thing around. He loves glaciers to no end. With the info nailed, we. Got him into a cab and bundled up to be ready for AGM Festivities Is this is real Pabrai Mohnish? He has an ID in this forum? Wow! :o Link to comment Share on other sites More sharing options...
Parsad Posted September 22, 2013 Author Share Posted September 22, 2013 Last nite a plan was hatched. The penguin was brought to Blues Chicsgo on the pretext of listening to some great Blues. The penguin took the bait. He was then drowned slowly as the jagermeisters, baileys, gin n tonics and the rum and cokes flowed endlessly. He and his fellow penguins drank it all. And then the tongue loosened up and the penguin went on and on and on about his love for skating on glaciers, about how glaciers were the best thing around. He loves glaciers to no end. With the info nailed, we. Got him into a cab and bundled up to be ready for AGM Festivities Is this is real Pabrai Mohnish? He has an ID in this forum? Wow! :o Do you think Mohnish would be caught dead posting on here? Plus he could never write anything that eloquent without using the word "Dhandho" in there somewhere. Plenty of Pabrai groupies out there...they were throwing their underwear at him like he was Tom Jones this weekend. ;D Cheers! Link to comment Share on other sites More sharing options...
muscleman Posted September 22, 2013 Share Posted September 22, 2013 Last nite a plan was hatched. The penguin was brought to Blues Chicsgo on the pretext of listening to some great Blues. The penguin took the bait. He was then drowned slowly as the jagermeisters, baileys, gin n tonics and the rum and cokes flowed endlessly. He and his fellow penguins drank it all. And then the tongue loosened up and the penguin went on and on and on about his love for skating on glaciers, about how glaciers were the best thing around. He loves glaciers to no end. With the info nailed, we. Got him into a cab and bundled up to be ready for AGM Festivities Is this is real Pabrai Mohnish? He has an ID in this forum? Wow! :o Do you think Mohnish would be caught dead posting on here? Plus he could never write anything that eloquent without using the word "Dhandho" in there somewhere. Plenty of Pabrai groupies out there...they were throwing their underwear at him like he was Tom Jones this weekend. ;D Cheers! Haha. If this is the real Pabrai then my next question is did you charge him the $20 one time membership fee for viewing our stock tips! ;D Link to comment Share on other sites More sharing options...
wachtwoord Posted September 22, 2013 Share Posted September 22, 2013 Parsad, your reverse psychology won't work! ;) Link to comment Share on other sites More sharing options...
Parsad Posted September 23, 2013 Author Share Posted September 23, 2013 Parsad, your reverse psychology won't work! ;) If that's what you think...so be it. Cheers! Link to comment Share on other sites More sharing options...
plato1976 Posted October 6, 2013 Share Posted October 6, 2013 btw, did we settle down on the conclusion which stock is *the* so called greatest opp here ? :) Parsad, your reverse psychology won't work! ;) If that's what you think...so be it. Cheers! Link to comment Share on other sites More sharing options...
wachtwoord Posted October 6, 2013 Share Posted October 6, 2013 btw, did we settle down on the conclusion which stock is *the* so called greatest opp here ? :) Parsad, your reverse psychology won't work! ;) If that's what you think...so be it. Cheers! Not really, but most seem to believe it's Glacier Media http://finance.yahoo.com/q?s=GVC.TO%2C+&ql=0 Link to comment Share on other sites More sharing options...
plato1976 Posted October 6, 2013 Share Posted October 6, 2013 In fact, I did some analysis for all picks before he mentioned "someone got it": Those with "X" can be excluded, I think. The one with "?" before it can be a likely candidate. It does look like GVC is the one ! I set up a few criteria like "declined this year and better declining in Aug and early Sep; not a big cap; valuation and corp economics disconnection; and so on" *********************************************************************** XXX JCP XXX SHOS One year ago at the same price XX SD XXX RFP ? BTH Disconnection between economy and valuation ? doesn't look like X AAPL XX LVLT XX RICK ? Callinan Royalties XXX Enbridge ? EBIX Parsad once showed doubt, so it's very unlikely, but anything is possible and maybe he changed his mind ... ? SCU XX RFC ? GLN XX PGH X BP X MSFT XX WDFC ? ARO XXX BPY ? GVC ********************************************************************************** btw, did we settle down on the conclusion which stock is *the* so called greatest opp here ? :) Parsad, your reverse psychology won't work! ;) If that's what you think...so be it. Cheers! Not really, but most seem to believe it's Glacier Media http://finance.yahoo.com/q?s=GVC.TO%2C+&ql=0 Link to comment Share on other sites More sharing options...
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