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10-yr rates have almost doubled this year.
http://www.bloomberg.com/quote/USGG10YR:IND
http://seekingalpha.com/article/1942101-john-hussman-hovering-with-an-anvil
keep praying.
i dont see systemic risk except that prices are "too high."
there needs to be some event to knock the wind out of the delusional patient.
in 2008-2009 it was gas prices crept up and forced people to choose between their mortgage or going to work (pay for gas)
what could it be right now? higher what? interest rates are at all time lows and things just seem stable..
lower corporate profit margins (reversion to the mean) is something.
but overall, i dont really see a cause for dumping, but who knows.. there is just a lot of money that feels really positive about all this stuff... and who knows... i hope you're right but i doubt it.
the cool thing is that wealth is really concentrated... so we are susceptible to big swings when big boys panic/force liquidate en masse
i've been praying for a really big market crash this year
just another expected event, i've been following for over two years now. this removes a significant potential off-balance sheet liability and means their vietnam business is safe.
Great news. Thanks
congratulations? i know that you've been covering this for at least a year now, i just dont know anything about it myself
Keck Seng Vietnam Litigation DROPPED
http://www.keckseng.com.hk/Files/Announcement/2014/LTN20140103345.pdf
this is more or less agreeable.
codere is an interesting situation, some family is fighting for it's life to maintain ownership of some international gaming company
Glen
Will is a great value investor
mni is letting loose.
will is making a donkey out of me.
Re: Y.WT
Is it me or the warrants right now are expensive versus the stock?
At $7 people are assuming the stock will head to $35/sh ITM while its OTM atm...
The implicit leverage on returns seems to be lost for the warrants.
might consider adding some stock now..
Happy holidays everyone :)
I think China Stocks is latest potential market.
Which company is this?
10 cent 3 year call option...
strike price $2.95.
stock price is $2.17.
it makes $0.88 in EBITDA, decreasing at 16% per year
LFCF per year is presently $0.416
Should I pay 10 cents to buy this call option?
can anyone please help me value this call option?
i agree. but the mistake that i think that you are making is that of the value of your time, if you are making any mistake at all.
there are other, faster ways to make multiples of your money, this one is a super long shot but i agree with you on all accounts and will probably pick some up myself, probably in a few months, probably at around the same price.
mni is undervalued, with a long runway, and all i am saying is that i believe in you so much that i think that you can make more than 10x your money in the next 9 years.
your ROI is higher than that of a long term investment in MNI.
i am willing to bet that in the near future you find something better, but we shall see!
i guess what i am saying is that i'd rather pay a fair price or even a premium for you/your time instead of to buy MNI today...
i'll let you know when i start picking some up... but for now i am not making room for it because Y.WT and ASX:ATI are my two horses in the race... both of which are playing out to my worst case scenarios... but at least they are legit real companies.
yep, just don't bet the farm on this one. (ha!)
95% of my portfolio is in yellow warrants, wouldn't sell any, of course.
I see a likely scenario where MNI returns as much as yellow warrants over the next 9 years. MNI is a much more complicated animal than your back of the envelope numbers, which is of course one of the reasons it's so cheap. The debt is publicly traded with various maturities, interest rates, and prices; the earnings come from an evolving mix of subscription, advertising, "nontraditional", print, digital, and online classified equity investments; the balance sheet has pension liabilities which are very sensitive to interest rates and real estate that is held at cost and depreciated.
I think this is an inflection point for the company, where cash flow and the top line could start growing again, debt gets reduced or refinanced (trading at 110 now), cash starts flowing to the equity holders, and the stock is trading at 1x 2018 FCF.
Having never defaulted, nearing stabilization, domiciled in the US, and with debt trading above par, I think we will see a market that will be much more lenient about debt levels than we see for yellow pages companies around the world.
They certainly diluted the heck out of the company with the latest capital raise but the stk is presently trading at under the latest issue prices which on surface looks somewhat attractive to me. My main concern is the security of the company's concessions. It seems to me that the fledgling government in the DRC could decide to revoke these concession if they wanted to. The company has been in negotiations with the gov't but performance of the stk could very well depend on the outcome of such negotiations. Not the sort of investment I'd mortgage my house to buy but being a sucker for the long shot, I confess I did initiate a small long position.
MNI, it's worth more, but i'm not sure that anybody cares.
http://seekingalpha.com/article/1893261-the-mcclatchy-companys-ceo-presents-at-ubs-global-media-and-communications-conference-transcript?part=single
probably getting in at a good time.
$1.5B net debt
$228M OCF/year
$134M interest expense/year
Equity is valued at $257M/year
the debt is likely sustainable... but i'm not sure that the price of the equity is discounted enough for me to bite right now with y and y.wt as cheap as they are.
ev/ebitda here = 6.15 and the breakdown therefore is roughly:
1.51/(1.51+.257)
85% debt 15% equity.
so the question is, yes, this is a levered capital structure.
what is the equity worth here? $800M? And then that would see incremental cash flow to equity holders of roughly $8M/year, thereby increasing the value of equity by $80M/year
so at $257M, you are basically buying into a situation with my debt adjusted yield of roughly 31%
equ year stock net debt
800 2013 $9.26 1.5
880 2014 $10.19 1.4
960 2015 $11.10 1.3
1020 2016 $11.81 1.2
1100 2017 $12.74 1.1
1180 2018 $13.66 1.0
1240 2019 $14.59 0.9
so, $12.74 from $3.00 in 4 years.
and then it is roughly 6 years till the debt/ebitda even gets close to 3.0x
yeah i mean, that is the value, the question is is the market going to see it? if the assumption that the debt is sustainable is right --- then the question becomes at what level in debt/ebitda is the company free to start paying out a dividend?
anyways, so this is an equity/lfcf play of like 2.7x 257/(228-134)
look at ypg. equity = $540M. LFCF = $200M EQ/LFCF = 2.7x
and ypg is debt free in 2-3 years. already has sustainable debt.
so, to me, what you ought to be doing is crystal clear right now sir.
I'm buying more MNI today and will buy more if it goes lower. Very encouraging presentation from the CEO this week. Rising interest rates should be very positive for the pension fund deficit, and pre-tax cash flow should start to grow as they pay down more debt.
The debt due 2027 and 2029 trading at 70 is a no-brainer if you have access to it. Everything else is trading well above par... which tells me the stock could take off soon.
http://feronia.com/files/doc_presentations/FRN%20Presentation%20March%202013%20FINAL_v001_c61811.pdf
That looks like a very dilutive capital raise.
FRN.V Any thoughts on this one as a long term asset play? The company claims to be the largest farming and oil palm plantation operation in the DRC, Africa with 107,892 hectares of oil palm concessions and 10,000 ha high quality arable farming land. They purchased run down oil palm plantations from Unilever a couple of years ago and are currently refurbishing them to bring them up to their former glory in Unilever's heyday. FRN is currently losing money as they are spending on replanting existing concessions but they recently raised $25 million from deep pocketed gov't backed entities at 10 cents per share and have a market cap of around $50 million.
Just watched your ((Y)) videos....Some of them are hilarious, and other very informative, I like your yellow shades and yellow shirt:))...Good stuff, congrats on your hard work....
Congratulations to Glen,Will and other strong supporters of Y. Y is gaining well due respect now.I benefited from your advice too. Thanks
yeah,
i had a whole list of things they could have quoted me on, haha.
the ones that they chose were the more conservative ones but were also the ones that i could back up with facts:
1. constant ev.
2. debt now trades above par and still has junk ratings
Globe says Yellow Media gains a bit of market respect
( Congrats, but I think they should have also quoted you...eh:)
2013-12-04 08:46 ET - In the News
The Globe and Mail reports in its Wednesday edition Yellow Media has landed with renewed relevance on the doorsteps of investors. The Globe's Tim Shufelt writes one year past restructuring its massive debt load, the company has realized a little progress in repositioning itself.0 Yellow Media is up by more than 150 per cent over the last year, largely on an improvement of its finances and the ability to service its debt. The stock, however, does not yet reflect the company's transformation from a publisher of directories to a digital media business. "With a little bit of ingenuity, these guys could actually turn this ship around," says Keith Richards, portfolio manager at ValueTrend Wealth Management. "Now you can see an awful lot of momentum behind the stock from a technical perspective." Not long ago, Yellow Media was tainted by obsolescence. Few figured on the company's resurrection. So far, investors are reluctant to buy into the idea of Yellow Media as a viable entity sustained primarily by on-line revenue. "It doesn't get as much attention as it probably deserves," Mr. Richards said. "A lot of people got burned on the stock." Even ratings agencies are slow to revisit their beliefs on the company
Thats the part that Im puzzled as well.
Clearly its investment properties and theres revaluation changes impact to P&L but they are still fairly undervalued.. On the other hand, the residential ones are on a as sold basis, doesnt even seem remotely like percentage of completion? Either the appraiser made a big bloop or something else ...
Anw take care, heard of the H7N9 going on at your end.
Merry xmas season everyone :)
The underlying assets are worth 4-5x more, and the share price is almost completely covered by net cash, so I'm still a buyer. The Macau real estate market is still red-hot, they would have no problem selling these if they wanted to. If I have one concern, it's that their strategy is clearly to hold these as investment properties, yet they are being kept as held for sale at cost. Not only that, their investment properties which are supposed to be held at fair value are about 50% undervalued. When you follow the segment revenue, it's mismatched, so it looks like they are trying to hide the true value of the assets, for whatever reason.
They have been transferring cash to their Macau subsidiary, so it's possible we see a bid for reclaimed land near their existing site? If they could pour all this cash and cash flow into a no-brainer development in Macau, the stock could be a ten bagger in a decade.
If you assign a probability to the Vietnam outcome and estimate a time frame for the resolution (still two more appeals courts to go) then discount that liability back to the present, it's a lot less than HK400m.
KS184
Hey Wil and alll, I was looking at this and has went up a buck already. You reckon still good to build up more?
Im concerned about their Vietnam liability but again its not big to cripple, just taking off hk400m off their billions of cash haah.
macau wise sales is slow but i understand from them they are sitting on it, pending the bridge in 2015/6.
Also, a new name.
Lai Sun Garment (191)/ Developments (488)/ Lai Fung/ E-Sun. Have u looked at this before and/or spoke to their folks before?
They have a history of poor execution but recently did see some interesting changes. Not to mention some interesting shareholders as well.
yeah i think we went over this previously... just pretty forgetful these days.
http://seekingalpha.com/article/1863971-yellow-media-up-over-100-ytd-100-to-run
haha that is a pretty dumb question. it's on the balance sheet and in the 10-K
dumb questions but how do you know that they own their various properties and aren't leasing their HQ's?
I think about a few things for this. one, they have real estate that has been held at cost less depreciation over a long period of time for all of their newspaper headquarters. i think this value might actually cover the pension obligations in full. when they sold their miami headquarters a couple of years ago, the proceeds went into the pension fund.
the other thing is, the discount rate used to calculate the npv of pension fund liabilities is historically low due to the low interest rate environment. as the fed raises rates, i think this liability could shrink significantly.
i wonder if they could replace some higher interest rate debt with much cheaper mortgage debt backed by the properties.
MNI
Was also looking at this fella
Their statement on provision for pension seems like it doesnt tell alot. Anyone has any take on the impact of their unfunded pension liabilities?
It's refreshing to see a message board where participants actually do research and aren't afraid to post analysis contrary to the established points of view. Thanks guys!
to will's point that's exactly (well not really) my perspective.
i think that dxm is a toss up right now and i am also willing to bet that dxm makes it in spirit, but not with money, and i also will be making that sort of cash with my Y warrants but i think that in the next 3-6 months we will have significantly better visibility regarding DXM's ability to make it or not.
right now i am uncertain, but in 3-6 months with 2 more quarters under their belt my whole perception could begin to solidify with them either making it or not, but that's really the earliest i could know.
Y is easy money, shooting for the easy 100%+ (it was more than that earlier this year before it went up the first 100%+)
anyway yes, DXM may well end up being worth $150-$250, but it also may end up being worth $0. Even at 51/49 probabilities, i would rather wait 3-6 months or perhaps longer till i am more confident in the outcome before i decide to place my bet, but yes, if in 2 quarters we see meaningful traction over at DXM then I am open to planting my flag there... i just dont think it's going to take the 2-3 years that will thinks it will for me to really have a handle on it, but i wont be jumping in with a core portfolio position either like i have in Y.wt
so there you have it.
also part of my thesis here is y/dxm/solocal/// say solocal and Y all have ev/ebitda of around 5.0x --- well then dxm should not have a debt problem if they can win with their digi biz.
The bank debt of Dex One Corporation (name changed to Dex Media after the merger) was the best performer
among our investment recommendations in 2012 returning over 115%. We have covered the company and the
industry through the last 8 years, two bankruptcies, and the nature of industry risk and the company’s industry
position have changed dramatically, even during the last two years. Two years ago, when the bank debt was trading
in the 40’s, it was clear to us that the company still had a dominant market share and that it will continue generating
impressive and more or less predictable cash flows at least through the next 2-3 years. It was clear that the company
would purchase the under-valued debt in the open market and that the price of securities was simply ridiculous. The
investment thesis had an outstanding safety margin for error. With prices of three silos 30 points higher, the safety
margin for error is lower, and we recommend that investors who have been involved in the name for a long time
consider lightening their exposure to the name. Bank debt silos still offer potential for 25%+ returns. However, these
returns will be achieved only under the condition of the impeccable execution of the turnaround plan the
management has in mind. This execution risk today is substantially higher than it was 2-3 years ago, in our view. If
the execution fails, recoveries can be low, and at this point, it should become clear whether the execution is feasible
or not within the next 2-3 quarters.
Well, at this point, the outcome of the story is sort of binary, and it will become more or less clear by March 2014.
Our analysis presented below shows that if sales continue to decline by double digits through the next 2 years, returns
will likely be negative. At the current price level, we recommend that investors allocate substantially lower portions
of cash to DXM securities in direct correlation with the risk taken.
now, i agree with and understand their new sales strategy, just a matter of measuring the traction over the next few quarterlies
Maybe Dex makes it, maybe not. My bet is yes... but I don't think the market will be fully convinced 2 or even 3 years from now. In that same time frame, I expect to make 5x-10x on the yellow media warrants. If it's time to sell and DXM is attractive then, I may switch.
Y vs DXM - Totally agree that Y appears to be safer than DXM at this point because of DXM's heavy debt load but a case can be made that on a risk adjusted basis DXM may very well win out over the longer term. I don't hold either stk but do continue to hold the Dex One notes due in 2017. For the time being they look safe enough to me but I must confess I'm nervously watching DXM's progress.
Y vs DXM - Totally agree that Y appears to be safer than DXM at this point because of DXM's heavy debt load but a case can be made that on a risk adjusted basis DXM may very well win out over the longer term. I don't hold either stk but do continue to hold the Dex One notes due in 2017. For the time being they look safe enough to me but I must confess I'm nervously watching DXM's progress.
dxm could be the better play, but on a risk adjusted basis, yellow media is no risk if you ask me and dxm is risky at any price because i'm not sure if the debt will take over the company when it comes due or if they can refinance.
I sleep well at night with my warrants.
Any thoughts on today's Seeking Alpha article which concludes that DXM is the better play at this point?
Yellow Media commons shares and warrants.
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