This year has been a year of surprises as conventional wisdom-based forecasts have proven to be like oral agreements: not worth the paper on which they are written. The coming year promises to bring more confusion and volatility as the markets are preparing for the U.S. to be a Trumpian utopia of wealth creation. I caution against blindly accepting this narrative for it will … [Read more...]
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Summary Points: The stock tanked after the deal with Staples collapsed. Management has been taking steps that could positively influence the stock. Stock has found a base while its cheap price (under 3x EV/EBITDA) implies that any positive news will help it recover. Where there is fear, there is opportunity. Office Depot (NYSE:ODP) presents such a case. Value trap … [Read more...]
Summary Points ARCB trades at a discount to competitors; however, relative growth has been average and EBITDA margins are relatively lower. Majority of business is asset-intensive with high capex requirements and limited control over revenues and expenses. Investors should consider off-balance sheet items, pension obligations and make adjustments for equipment … [Read more...]
Summary Points: The company appeared back on track as it closed Q4. Two quarters later, this is in question. Hollister brand has done most of the work while Abercrombie brand is still struggling. Industry-wide decline in same store sales. The problem is not unique to ANF. Comparable sales highly fluctuate. The stock trades below tangible book with a 5.5% dividend … [Read more...]
Summary Points: DeVry came out with an earnings beat with revenue growth and better operating margin. Company has spent hundreds of millions on acquisitions that helped revenue growth. Medical and Healthcare is the most important part of the business but within the segment not all parts are doing well. Enrollments are the key driver and these, in general, remain … [Read more...]
Summary Points: Bears are overly pessimistic while the stock price does not reflect any of the positive evidence from management moves. Management plan is reasonable with plenty of cushion available. Company on track to keep GameStop in business for many years to come. Stock trades at 70% discount to market (lower than 2012 $16 low) with a sustainable 6% dividend … [Read more...]
Summary Points: Historically, Bed Bath & Beyond outpaced its category and has consistently grown sales and profits. Dropping margins have been the biggest issue in the last year. Stock is cheap. Market is pricing in a very dim future. Online sales are expanding at over 20% yoy. A random basket of 40 items was found to be cheaper than Amazon.com. Most Americans … [Read more...]