Despite the decline in the portfolio, it is the 12th quarter the strategy has beat the S&P 500 out of 13 quarters since inception. During September, FatAlpha dropped -2.39% vs -3.01% for the market. Over the last 39 months, the S&P has declined during 12 of these. The strategy has outperformed in 10 of those months with an average decline of -0.81% vs -2.52% for the … [Read more...]
Archives for October 2015
Apple – The Big Picture And Why You Should Own It
Summary Let's stop playing the game "What do we find to worry about next", and focus on the facts. Apple's finance performance is mind boggling - Stronger than any other company with sales above $30 billion. Apple's stock is cheap as it trades at a discount to historicals. Focusing on the huge amount of free cash flow results in a great deal of upside (40-80%). … [Read more...]
Low DRAM Prices Present An Opportunity To Get Long Micron
Summary The stock is trading at an EV/EBITDA of 3.6x. The decline in DRAM prices have hurt performance and the stock price. There is a growth story developing with potentially very hot new products in the next few years. INTC cooperation appears solid and Samsung will not initiate a price war. The stock is still cheap even with 2016 or 4Q15 annualized numbers. … [Read more...]
Sanderson Farms: Still Cheap Despite Decline in Chicken Prices
Summary Sanderson Farms is trading at an EV/EBITDA of less than 3x. The decline in chicken prices have had an adverse effect on the company's performance. Despite this, higher volumes and lower costs have helped cushion the drop. Market is too pessimistic. Using analysts' projections, the stock is cheap, trading at 11x 2016 EPS. With an almost debt-free balance … [Read more...]
Apollo Educations Operational Bottom Is Not In Sight
Summary The company's EV/EBITDA is less than one! The deterioration in the financials and student enrollment is dramatic. Historical "education violations" are a red flag and surprise regulatory action is always possible. With most recent "event" in October, investors should note this risk. While currently cheap, the operation bottom is not in sight and management … [Read more...]
Back of The Envelope Valuation of Valeant
Summary Known Facts: New business plan includes more R&D, small price hikes and less M&A. Hence the story has changed. By focusing on what we know and EV/Sales, we can avoid discussion on GAAP vs. non-GAAP figures and get to a valuation. Back of the envelop puts VRX enterprise value and hence equity value much below the current stock price. The drama … [Read more...]
Valeant (VRX): Better Than TV!
Guys, if you haven't been following the Valeant story. Then wake up! :) This is better than Prison Break and Star Wars. Recap: VRX is pharma hedge fund darling. Largest position in Ackman's portfolio. VRX selling point is that they don't do R&D as it costs too much, so they acquire drug companies, fire the employees and push up the price of drugs. So huge growth, … [Read more...]
