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    Value Investing Does anybody have a primer on Reinsurance?

    March 06, 2018

    Value Investing Does anybody have a primer on Reinsurance?

    Does anybody have a primer on Reinsurance?

    Posted: 06 Mar 2018 02:27 AM PST

    Recently there has been a lot of corporate activity in this area. I'm trying to understand the logic of Softbank's stake in Swiss RE? There has to be something more there than just valuation...

    submitted by /u/Officer-R
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    Value Pot Stock (PDF)

    Posted: 05 Mar 2018 08:57 PM PST

    Value folks

    Pot stocks sound immediately off-putting to value types given the hype and generally ludicrous valuations in the sector. There is one exception that I picked up on and have been following for the better part of a year.

    Village Farms International is one of the largest greenhouse growers of produce in North America. They are running a JV in Canada on one of their greenhouses for conversion to cannabis cultivation with others potentially in the works.

    This looks like a classic value play. Real estate assets worth in excess of 50% of market cap. Undervalued JV stake on a sum of the parts basis. Complexity in valuation + low float has left it in the dust among a crowd of new retail investors and a few wolves mixed in the crowd. They just got licensed for cultivation on Friday. They're very well positioned in the space as a low cost producer with distinct advantages due to legacy produce business. I will leave the rest up to your due dil.

    Understanding the industry in general and Canadian market well requires a lot of specialized knowledge, but I wanted to share the idea here anyway. As a "value guy" and a long I feel it is my duty to get shareholders involved who aren't total airheads like on the pot boards. That being said I'm happy to try to answer questions since I recognize there is a potentially steep learning curve to understanding this highly regulated and emerging industry and Canadian market. I think the valuation work stands alone and speaks for itself though.

    Analyst price targets (2 covering) were raised to match my estimates post-licensing yesterday. The difference is they attribute no value to unencumbered real estate and their value is attributed to significantly higher valuations on the JV stake. The JV stake is important too, but virtually nobody else is talking about RE value whatsoever.

    Work I did in down time linked below. Designed for people familiar with the situation so you may want to take a look through investor pres and or filings + calls... do your thing on due dil: https://drive.google.com/file/d/1AzyGUyTzcEoljYee9vCe72LKBqoieI5g/view

    EDIT: Some people have taken issue with the RE value part of the thesis. Think of OpCo / PropCo structures and the value of OpCo as the Discounted Cash Flows of the operating business. In a deal, OpCo / PropCo flies. Out of respect for the company and investors, I want to make it perfectly clear that I am not suggesting there is a transaction imminent.

    submitted by /u/jingle_jangler
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    Warrant Hedging

    Posted: 05 Mar 2018 07:24 PM PST

    Hi all, I was just curious if anyone is still doing Ed Thorp-style warrant hedging? In his book Beat the Market he describes a simple system (short warrants, buy common) that can be done by anyone with even a small bankroll (then $2,000, but now let's say $20,000). I was just curious if anyone was doing this or if the returns in this area were no longer attractive.

    submitted by /u/bstout1
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    Warren Buffett Is Even Better Than You Think

    Posted: 05 Mar 2018 07:25 AM PST

    Help calculating PLNT total net leverage ratio

    Posted: 05 Mar 2018 09:32 PM PST

    Hey everyone,

    I'm looking for a little understanding on how Planet Fitness is calculating their total net leverage ratio. In their most recent 10-K (page 58) they stated:

    As of December 31, 2017, we were in compliance with our senior secured credit facility financial covenant with a leverage ratio of 3.4 to 1.0 which was calculated for the twelve months ended December 31, 2017 based upon certain adjustments to EBITDA, as provided for under the terms of our senior secured credit facility.

    Per the terms of their credit agreement (page 35), here is their definition of total net leverage ratio:

    "Total Net Leverage Ratio" means, on any date, the ratio of (a) the difference between (i) Total Indebtedness on such date less (ii) the amount of Unrestricted Cash and Unrestricted Cash Equivalents of the Loan Parties not at any time to exceed $30,000,000 on such date to (b) EBITDA for the period of four consecutive fiscal quarters ended on or most recently prior to such date.

    Just above that there's a definition for total indebtedness which is the sum of 5-6 things which are not immediately clear to me. For brevity in this post I'm not copying it here but the link to the agreement is at the bottom.

    I'd like to see if someone here can come up with the same 3.4 to 1 leverage ratio that they have in their 10K, and show the calculation used to get there based on the numbers in their most recent statements. I've tried a bunch of different calculations but I keep coming up with higher ratios, like 4.69:1 and 4.05:1.

    Any takers?

    Here's the link to their 10K for reference: https://www.sec.gov/Archives/edgar/data/1637207/000156459018004109/plnt-10k_20171231.htm

    And their credit agreement as of 2017: https://www.sec.gov/Archives/edgar/data/0001637207/000119312517187612/d383662dex101.htm

    submitted by /u/ghostofgbt
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    Elliott Builds Telecom Italia Stake to Take on Vivendi

    Posted: 06 Mar 2018 12:07 AM PST

    A Who's Who of VIC Members

    Posted: 05 Mar 2018 04:44 AM PST

    Best Website to get Industry Information?

    Posted: 05 Mar 2018 07:53 AM PST

    I'm just wondering what people use to collect industry information such as market cap, P/E, major players etc. I'm focusing more on healthcare specifically. Any advice would he greatly appreciated.

    submitted by /u/err0r__
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    Adobe Digital Insights - A Mobile First World (2018)

    Posted: 05 Mar 2018 05:27 AM PST

    Great Capital Allocation Makes a Great Company: CCL Industries

    Posted: 05 Mar 2018 07:31 AM PST

    BuzzSumo - Content Trends Report (2018)

    Posted: 05 Mar 2018 05:28 AM PST
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