Value Investing Short selling around the expiration of IPO share lockups |
- Short selling around the expiration of IPO share lockups
- A current value investment idea
- Regarding recent claims that Allan Mecham's performance is not as high as reported:
- Harvard's Blown Bet
- Looking for a partner
- Should I sell Boeing based on the new tariff?
- Thoughts on Voice commerce
- EV calculation question (which debt - Airline)
- Bill Miller: "Bubbles are necessary to bring capital into the market..."
- Containers and Packaging Companies: Challenges Aplenty
| Short selling around the expiration of IPO share lockups Posted: 01 Mar 2018 06:47 PM PST |
| A current value investment idea Posted: 01 Mar 2018 09:21 PM PST Disclaimer: I hold a position in this company. Do not rely solely on this write-up. Do your own work to come to your own decision, this all based on my opinion and my opinion only. I bought this company back when it was at about 26 dollars per share. There is still a chance to get into this company making it a considerable value buy and has about a 40 percent upside still. The following thesis will be presented back when I wrote it up when the share price was at about 26 dollars per share. Fabrinet is a company that is a manufacturer of services and products for OEM industries. Fabrinet is focused in six industries, Aerospace; Automotive; Industrial; Lasers; Medical; and Optical. Fabrinet has found itself a niche market, and with significant barriers to entry, it can be hard to replicate its products to the customers that its sales to. Fabrinet can be regarded as a small company and currently standing at just below a 1-Billion-dollar valuation it's not really talked about. FN has been down from its 52-week high about 44% so it has removed a ton of downside risk. And that is what has to lead me to talk about this situation. As seen by many value investors out there it has not been a favorable climate for value investors, as David Einhorn explained on his recent performance letter, but although I do believe it has been a tough environment I do believe that Fabrinet can be one of those situations where value investors can profit from. FN has been steadily breaking itself into a market that is not really covered and that is the manufacturer to OEM's and although that can be a small market it is one that FN has been taking advantage for itself. FN gets its revenue from three regions, the U.S.; Asia-Pacific; and Europe. And with its optical communications revenue stream growing the most, it can be said that it can be its backbone of the company for the future to come. Valuations Market Cap- $1000million Total Debt- $71million Total Cash- $285million Enterprising Value- $786million EBITDA- $131million EV/EBITDA 6x The 5-year average for EV/EBITDA has lingered around the 8.5x zone, and the 3 years average EV/EBITDA has been about 10.5x now with the current EV/EBITDA multiple of 6 has been the lowest it has been in the last 3 years, and even though the EBITDA has been growing at a substantial rate. If we leave it at the EBITDA of 131 and multiply it by the average 5 years multiple it would move the EV up to $1067million and would equate to a stock price of 33.7$/ share. Let us look at the numbers: EBITDA $131million Shares Out 38million Price/ share $33.72 Market Cap $1281.65million Total Debt $71million Total Cash $285million EV $1067.65million EV/EBITDA 8.15x But that is looking at is if the company did not make any more EBITDA, with a strong quarter coming up I would look at things from a more realist perspective and that it is implementing a 15 increase to last year's EBITDA of $131million to $150 million. That would allow for a median between the 5-year average EV/EBITDA of 8.5x and 3-year average EV/EBITDA of 10.5x to a neutral ground of 9.5xEV/EBITDA. Now with that situation occurring it would result in a stock price of $43/ share. giving it a 60% upside to its current levels. This is how it would work out: EBITDA $150million Shares Out 38million Price/ share $43.13 Market Cap $1639million Total Debt $71million Total Cash $285million EV $1425million EV/EBITDA 9.5x And given that the stock has already had a large amount of sell off I can say that it has a lot more room to move up now than down. And given that the EV/EBITDA for 2016 was 12 would render a stock price of $53 per share. That would give the stock a 40 percent margin of error. And the worst-case scenario is the stock goes back to its low EV/EBITDA multiples of 4.5 it would bring the stock price down to $23 dollars per share, an 11% drop in value. although highly unlikely, still possible. But the realistic case being a 60 percent upside allows me to conclude that this is a true value buy. I believe that the catalyst will be Once seller sentiment subsides, and or offer is made on the table to purchase FN given its ability for the purchaser to pocket a profit from the cash on hand that FN has. I hope that this idea will spark a chain of other value investors to post up their ideas on here. [link] [comments]  |
| Regarding recent claims that Allan Mecham's performance is not as high as reported: Posted: 01 Mar 2018 09:18 PM PST The guy does seem to have a point, it is suspicious that Mecham's overall performance appears to be greater than the performance of his largest holdings. When I tested his portfolio on WhaleWisdom, though, he's compounded at around 28% over the past 2 years, which seems consistent with reported performance. If anyone has a WhaleWisdom subscription I'd love to see his fund performance with manager weighted holdings back to 2006. If his 13-f performance truly is materially lower than his fund performance, it would seem that he is either using some form of leverage, or is lying. Anyone have any thoughts? I'd really like him to be legit. [link] [comments]  |
| Posted: 01 Mar 2018 02:53 PM PST |
| Posted: 01 Mar 2018 06:42 PM PST Hi, my name is Aaron and i live in Europe. I'm in equity/debt markets and I'm searching for a partner to start an asset management (active) business from scratch in NYC. I'm looking for someone who has no responsibilities (wife, kids) and willing to work and live together and eat shit (not literally) with me. I'm young and i have nothing to lose. Honestly i'm looking for a friend. If you are intrested pm me. [link] [comments]  |
| Should I sell Boeing based on the new tariff? Posted: 01 Mar 2018 04:29 PM PST Boeing had an amazing run. I sold half this afternoon and I'm considering selling the other half. Does anyone have any insight? Has America ever imposed these types of tariffs? My rationale is that the planes are made out of steel and aluminum, this will raise their component prices and might lead to retaliatory tariffs against their planes. [link] [comments]  |
| Posted: 01 Mar 2018 07:22 PM PST I'm curious to hear this community's thoughts on if/ to what extent Alexa and other voice driven devices will change ecommerce. It seems like everywhere I look everyone is a mouth piece for Scott Galloway and is regurgitating verbatim that Alexa is about to destroy brands and become the dominant channel for online shopping. I totally disagree with this sentiment but have yet to find someone who agrees with me. I simply don't believe it will ever be a good shopping experience regardless of how advanced the technology gets. Unless you're ordering a fully commoditized product (double A batteries) I don't see how voice is more effective or efficient. Would like to hear other practical ways voice is actually easier than mobile for shopping if you have any ideas. [link] [comments]  |
| EV calculation question (which debt - Airline) Posted: 01 Mar 2018 10:45 AM PST Hi guys, having a problem with calculating EV for Norwegian Air (Airline). Company has:
*My question is: are all these liabilities interest bearing and I use total liabilities? *Or do I leave out Air traffic settlement liabilities? or anything else? Edit: formating [link] [comments]  |
| Bill Miller: "Bubbles are necessary to bring capital into the market..." Posted: 01 Mar 2018 02:05 PM PST |
| Containers and Packaging Companies: Challenges Aplenty Posted: 01 Mar 2018 04:59 AM PST |
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