Value Investing CHKE - The timing is right. The worst is behind them, the future is profitable. $8m/yr guidance (vs. |
- CHKE - The timing is right. The worst is behind them, the future is profitable. $8m/yr guidance (vs.
- Discussion on Netflix from a security analysis perspective
- Warren Buffett on buying bitcoin: 'That is not investing'
- Sohn 2018: Vostok New Ventures (VNV) [as a vehicle for buying Avito]
- [Help] R&D Capitalization Decreasing EBIT in DCF Analysis
- What is Research Management at an Investment bank?
- Are ray dalio’s shorts in eu really shorts on china?
- Burggraben presentation: Are you ready for triple digit oil?
| CHKE - The timing is right. The worst is behind them, the future is profitable. $8m/yr guidance (vs. Posted: 29 Apr 2018 01:51 AM PDT Buffett is proud of the fact that he used buy stocks for 2 times earnings. These days that can be hard to find, off the shelf, but I think Cherokee is available for a price that is as low as it can reasonably go, considering that it's future is not bankruptcy. The pessimistic view here is that Cherokee lost Target and Kohl's as distributors. The silver lining to this is that they are now non-exclusive and can ink distribution deals with whomever they please. Cherokee has an efficient sales staff, showing capability to find new locations (in store and ecommerce) to sell Cherokee brand goods. Many of these relationships are brand new due to the exclusive history with Target and Kohls. They recently bought new brands, and cut costs 60% in certain acquisitions (Hi Tec). Cherokee generated no less than 32% operating income last year, often over 40% over the last 10 years. They are a lean company with staff and resources. For example, they just entered Lidl Supermarkets, 10,000 chains within Germany and the US (Target has 1,800 stores, Kohl's has 1155 stores). I'm not sure how many people buy clothes at supermarkets, that is some nice distribution, and clearly shows that the managers are targeting highly scalable sales channels. GOOD LUCK! I'm in at $0.88. [link] [comments]  | |||||||||||||||||||||||||||||||||||
| Discussion on Netflix from a security analysis perspective Posted: 28 Apr 2018 09:15 PM PDT Hi all, I'm a long time lurker of this sub and have seen a whole bunch of very useful info on security analysis here, so I thought I'd come here to ask some questions about Netflix. Note: I understand the general sentiment on this stock, and I know this isn't a value play or anything, I'm just more interested in gaining some outside perspective on analysis of the stock. 1) Amortisation of content is a significant cost for Netflix, and they are quite aggressive in how they schedule it (relative to Disney etc.). My thoughts going forward is that amortisation as a % of revenue should decline, as the cost is spread against a greater user (hence revenue) base, and as new subscribers watch old content, current amortisation is overstating the true expense. Basically, there seems to be a fair degree of operating leverage in this model (but this is sort of dependent on how content scales across geographical regions – so far it has proved to scale fairly well). Is this reasonable? 2) In terms of capital structure (both horizon and terminal), I'm having difficulty forecasting given Netflix's operating structure is unique and disruptive (hence I can't see any real mature comparables). I'm essentially assuming refinancing of their current outstanding obligations (and have factored in the announcement of 1.9bn raising – which I have assumed will be raised at the current 10Y B+ spread of 389bps over Rf), and from a covenant perspective, there isn't a whole lot stopping them from increasing their debt load (which seems rather mad to me given their cash flow position). Does anyone have any insight into how to approach the capital structure question? 3) Following on from 2, Netflix has an implied cost of debt which exceeds the weighted yield on their outstanding obligations. By my understanding, their implied cost of debt (given their status as B+) should be ~ 7.5%, but their weighted yield sits around 5% (factoring in their further junk raise). Is this an error made by me? Or is this the debt market essentially riding the equity train? Given the serious risks inherent in the Netflix model, and debts inability to share upside, why would there be such a deviation? I'm sceptical (and fairly ignorant) of the liquidation value of Netflix's assets in a liquidation event. 4) Tax. Although this is a fairly minor point, I'm fairly unfamiliar with the US tax code, and it differs a lot from Australian corporate tax (where I'm from). I've fairly simplistically assumed 25% into perpetuity. My rationale is 21% + a premium for state taxes, and im also considering that going forward, the vast majority of revenue will be taxed overseas, which has a higher marginal tax rate compared to US (I think global average is somewhere around ~28%). 4) Capital expenditure is a huge driver of the model for Netflix. Management have indicated their spending intentions this year, (approx. 7-8bn on a P&L basis – equating to approx. 12.5bn in cash flow). Their current intention seems to be: spend lots on content (and gradually shift to a greater focus on original content to bypass the complicated/costly fee structures of outsourcing content) to attract a customer base. I think one really intriguing element underscoring Netflix is its wealth of user data; it essentially has an amazing insight into the tastes of its consumers and can tailor content to suit these desires – this to me seems like a serious advantage going forward. Does anyone have any insight into how we might expect capex/sales to moderate? Keen to have a good discussion on this security. Thanks guys! [link] [comments]  | |||||||||||||||||||||||||||||||||||
| Warren Buffett on buying bitcoin: 'That is not investing' Posted: 28 Apr 2018 08:40 AM PDT | |||||||||||||||||||||||||||||||||||
| Sohn 2018: Vostok New Ventures (VNV) [as a vehicle for buying Avito] Posted: 28 Apr 2018 08:57 PM PDT | |||||||||||||||||||||||||||||||||||
| [Help] R&D Capitalization Decreasing EBIT in DCF Analysis Posted: 28 Apr 2018 05:37 PM PDT I'm learning security analysis in my free-time, and I'm a little stumped with this. The expense has an amortizable life of around 4 years. I'm trying to capitalize an R&D expense of a company, but it's yielding negative operating income, EBIT, and capital expenditures. It's making my whole valuation wonky. How should I continue from here?
2017's R&D Expense: $131 Amortization: $151.6 (131-151.6 = -$20.6m) Operating Income Decreases by $20.6m Capital Expenditures Decrease by $20.6m Net Income Decrease by $20.6m How would I add this to my capital expenditure estimate? This year's capital expenditure for the company was $3.6m. Do I subtract $20.6m from that and get -$17m? Or would I add that to $3.6, because CapEx is an expense (already implied negative). Should I just fully exclude the R&D capitalization from my estimate? [link] [comments]  | |||||||||||||||||||||||||||||||||||
| What is Research Management at an Investment bank? Posted: 28 Apr 2018 04:40 PM PDT Hi everyone I have a final round interview with 'Research Management' at a large investment bank on Monday and am not sure what to expect. Are these the C suite guys who are in charge of running research? I'm interviewing for an equity research role [link] [comments]  | |||||||||||||||||||||||||||||||||||
| Are ray dalio’s shorts in eu really shorts on china? Posted: 28 Apr 2018 08:43 AM PDT Dalio recently unveiled shorts on eu companies. But could these really be hedges against a slowdown in China? Dalio has been trying to build business in China for years. China is notoriously difficult to navigate and if the government doesn't like you, you will face a wall of bureaucracy as a hedge fund manager. If Dalio put shorts on something like MSCI China ETFs, the Chinese government would refuse to allow him to operate in China and would try and attack him through the part newspaper like they have Soros and Kyle Bass, both yuan bears Trade between eu and china has grown over last twenty years. China is now the eu's biggest trading partner. If China is slowing down, this could explain the EU recent slowdown. Not my own theory, got part of it from zero hedge. But there is logic to it when you feel it out. During his recent trip Dalio even refused to even talk about China.. [link] [comments]  | |||||||||||||||||||||||||||||||||||
| Burggraben presentation: Are you ready for triple digit oil? Posted: 28 Apr 2018 03:36 PM PDT |
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