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    Value Investing Q1 2020 Letters & Reports

    April 08, 2020

    Value Investing Q1 2020 Letters & Reports

    Q1 2020 Letters & Reports

    Posted: 07 Apr 2020 12:35 PM PDT

    Investment Firm Date Posted
    A Primer on Reading Annual Reports April 7
    Absolute Return Partners April 7
    Bankruptcy Law Primer April 7
    Berkshire Hathaway Annual Report April 7
    Crescat Capital - Blood in the Streets April 7
    Fundsmith April 7
    Glasshouse Research - Cubic Corp April 7
    Grants - Grand Tour of Junk April 7
    Hindenburg Research - HF Foods April 7
    Horizon Kinetics - March 20 April 7
    Horizon Kinetics - March 25 April 7
    Howard Marks Memo - March 3 April 7
    Howard Marks Memo - March 19 April 7
    Howard Marks Memo - March 31 April 7
    J Capital - GDS Holdings April 7
    James Montier - Fear and Psychology of Bear Markets April 7
    Jamie Dimon April 7
    JDP Capital April 7
    JPMorgan - Guide to the Markets April 7
    Oaktree Capital - Assessing Relative Credit April 7
    Oaktree Capital - Risks and Opportunities in EM April 7
    O'Shaughnessey Asset Management April 7
    Pershing Square Capital - Annual Letter April 7
    Pershing Square Capital - CDS Trade April 7
    Sequoia Fund April 7
    Spruce Point Capital - WD-40 April 7
    Wedgewood Partners April 7
    Wolfpack Research - IQIYI April 7
    Akre Focus Fund April 7
    Bill Nygren Commentary April 8
    Howard Marks Memo - April 7 April 8
    Vltava Fund April 8
    Vulcan Value Partners April 8
    Interview Date Posted
    Bill Ackman - Bloomberg April 7
    Bill Ackman - CNBC April 7
    Jim Chanos April 7
    Murray Stahl April 7
    Oaktree Capital - Emerging Markets April 7
    Oaktree Capital - Relative Value April 7
    Steve Bregman April 7
    Fundsmith Annual Meeting April 8
    submitted by /u/Beren-
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    Muddy Waters is Short eHealth Inc. (EHTH US)

    Posted: 08 Apr 2020 06:09 AM PDT

    New Memo from Howard Marks: “Calibrating”

    Posted: 07 Apr 2020 03:06 PM PDT

    WeWork Directors Sue SoftBank Over Decision to Abandon Deal

    Posted: 07 Apr 2020 07:49 AM PDT

    Valuation models in the current economic environment.

    Posted: 07 Apr 2020 02:10 PM PDT

    I'm relatively new to calculating WACC and building Discounted Cash Flow models so excuse my ignorance, I'm just trying to get an understanding.

    1. How do you predict cash flows in a time where businesses are shut, employees are laid off and people aren't outside spending money, particularly being due to a pandemic. It seems rather impossible, particularly if you're looking for an investment with a 1-3 year time period. If you're looking for longer term (5+) would it be reasonable to use an average FCF number (say past 3-5 years) with conservative inputs? This can obviously wildly fluctuate on the industry and how it performs in different points in the economic cycle. Trying to model what the company's cash flows are going to be over the next 2-3 years feels like more assumptions which can be flawed and is completely dependent on a virus that's unpredictable and out of my control.
    2. Calculating WACC when companies are restructuring their capital. Again, seems unpredictable.
    3. Risk free rates at all time lows because of the uncertainty of the economic future. Do you continue to use the 10-Year Treasury despite yielding 0.7% which could be significantly higher or lower over the next few years.

    Obviously lots of this is dependent on the business, just a general discussion on how to approach them in the current environment and how to take on the uncertainty in financial modelling.

    submitted by /u/vBocaj
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    $IQ Short Report by Wolfpack Research

    Posted: 07 Apr 2020 10:26 AM PDT

    Stock buybacks expected to halve as companies bolster defences

    Posted: 07 Apr 2020 10:31 AM PDT

    Nova LifeStyle, Inc. 2018 10-k (NVFY)

    Posted: 07 Apr 2020 06:42 AM PDT

    Currently sifting through small companies for value opportunities and came across company Nova LifeStyle inc. They have delayed release of their 2019 filling so I decided to look at their 2018 10-k. I think this company is a perfect example of what to watch out for as, in my opinion, it looks very distressed and may go bankrupt.

    At first look they are posting consistent revenues and positive earnings. Current assets to current liabilities ratio is really large, also insignificant amount of debt. All good, I thought.

    Then taking a look at their cash flow statements I noticed that in the past ten years, the company's operations only generated cash 3 of those 10 years (last time positive was 2013). They also roll over debt each year (increasing) and it looks like they pay it before closing the books for the year so it doesn't appear on the balance sheet. I thought this was strange and decided to look into it. I found that their A/R was greatly increasing and last 10k they posted an AR that was on a trajectory to be greater than their revenues (Revenues $88M, AR $67M). This was a huge red flag to me as they are either not able to collect on their customers, are fabricating sales and running them through AR, or a combination of the two. Their 10k states (pg22) that they have had issues collecting from customers and state that $40M of 67M is over 180 days past due but they only list their allowance as 224k.

    I thought that if this company was doing this poorly in a boom economy I would venture a guess that they probably will not be around long in a recession economy.

    Anyways, wanted to share that even though you may have certain ratios that you look for in a company, always go deeper. Read the 10-k! The notes to the financial statements is a required and necessary component of the complete set of financial statements. I have had my mind changed on companies that may have had great financials but their strategy or decisions about things I disagreed with and decided not to invest.

    submitted by /u/BeirutrulesMrBarnes
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    RCG Sequoia Fund Q1 2020 Letter

    Posted: 07 Apr 2020 10:02 AM PDT

    Buffett and Airlines $BRK $DAL $UAL $LUV

    Posted: 07 Apr 2020 07:54 AM PDT

    Datadog (DDOG) Stock Analysis

    Posted: 07 Apr 2020 07:52 AM PDT

    $TAL Education Group Discovered Employee Wrongdoing (Inflated Sales)

    Posted: 07 Apr 2020 01:37 PM PDT

    A Conversation With the Sequoia Fund’s Managers

    Posted: 07 Apr 2020 07:50 AM PDT
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