The idea behind this was to see if I could come up with a screen that included the characteristics of a great company and backtested well. So what are these characteristics? High returns on capital. High margins. Consistently generate free cash flow. Not too much debt. Stable revenues with either growth or at worse small declines (yes even the best companies … [Read more...]
Why I’m Long HCA Holdings
Summary: The stock is cheaply priced for its strong fundamentals. The company's business is recession proof with a moat. If the company continues on its current path, then shareholders will be rewarded with significantly above-average returns. HCA Holdings (HCA) is a long position that I hold in my personal portfolio. This article discusses the reasons I … [Read more...]
Icahn And Starboard Could Be Betting On The Wrong Horse
Summary: Icahn and Starboard built positions in Newell Brands. Starboard will no longer try to replace the entire board. Both activists have seats with Icahn supporting the current plan. The Jarden acquisition was ridiculously expensive and promised growth and profits have yet to be realized. The company is riskier than investors may realize. EPS is guided as flat … [Read more...]
Norbord: An Indirect Play On Housing
If you are looking for a way to profit from an improving housing market then Norbord is worth checking out. A material used in houses is oriented strand board. Norbord is a pure play on the commodity. If demand for housing and thus OSB continues, then Norbord has yet to achieve peak cycle. The housing market still remains below the historical average. This is an idea that … [Read more...]
Taking Some Profit In Abercrombie
I've been interested in Abercrombie & Fitch (ANF) since it appeared as a potential investment in my value model. In 2015, I made a quick profit of around 25% and over the last year, I've repositioned myself as the stock dropped below intrinsic value and went to a full position at $12. I had thought that American Eagle could have purchased the company but in a surprise … [Read more...]
The Blood Bath at Bed Bath & Beyond
In May 2017 I was invited by Diego Moreno to the Forum Family office event in Omaha, the day before the Berkshire Hathaway meeting. At the event, I presented a long idea which was Bed Bath & Beyond (BBBY). Today I changed that view. To see the 2017 presentation please click here to see or download the presentation. (If you 'run' the slideshow in PowerPoint then you will … [Read more...]
Interesting Deep Value Idea Despite The Future EPS Miss
Would you be interested in an opportunity in a company trading at 2x EV/EBITDA, under 5x P/E with a sustainable 11%+ dividend yield, that increased revenues 7% in the most recent fiscal year, and net debt practically at zero? I sure am! Gamestop (GME) is such an opportunity but obviously not without risk. The majority of the company's sales and profits comes from selling … [Read more...]
