Value Investing HSBC moved vast sums of dirty money after paying record laundering fine |
- HSBC moved vast sums of dirty money after paying record laundering fine
- Damodaran - A skeptical look at ESG
- Nikola Founder Trevor Milton to Step Down as Executive Chairman; Stock Plunges
- Microsoft to Buy Bethesda for $7.5 Billion
- AMC Networks ($AMCX) -- A Deep Value Play with a Near-Term Catalyst
- Ant Group (Part II): A Blue or Red Ocean? — LONGRIVER
- Commoditize Your Complement
- Long Thesis on Surbane Propane Partners
| HSBC moved vast sums of dirty money after paying record laundering fine Posted: 21 Sep 2020 06:30 PM PDT |
| Damodaran - A skeptical look at ESG Posted: 21 Sep 2020 10:30 PM PDT |
| Nikola Founder Trevor Milton to Step Down as Executive Chairman; Stock Plunges Posted: 21 Sep 2020 04:44 AM PDT |
| Microsoft to Buy Bethesda for $7.5 Billion Posted: 21 Sep 2020 06:55 AM PDT |
| AMC Networks ($AMCX) -- A Deep Value Play with a Near-Term Catalyst Posted: 21 Sep 2020 07:27 AM PDT I'm still pretty new at this, so constructive feedback much appreciated! AMC Networks ($AMCX) is a media company that owns cable channels, including AMC and BBC America. It's also the channel responsible for some of the most iconic television shows of the past two decades, including Mad Men and Breaking Bad. Thesis: AMC is a deep value play currently trading at an 5-6x EV/EBIT and 50% FCF yield that offers a near-term catalyst in the form of a 20% buy-back program over the next month. Combined with the fact that ~20% of the float is currently short, there is the potential for a rapid rise in price. Decline of Linear TV The major concern of cable companies is the trend of cord cutting and the rise of streaming services. I am not here to argue against this trend — I think it is one that will continue to prove itself true in the coming years. AMC, however, is doing a reasonable job of adjusting to this new medium, and it is still in fairly good financial health. Let's unpack both of these points further:
Catalyst The company announced a $250 million share buyback (all in cash) this past week that will be completed in the coming month, which represents about 20% of all shares outstanding. Combine this with the fact that ~20% of the current float is short, and you have the potential for a major short squeeze. [link] [comments]  |
| Ant Group (Part II): A Blue or Red Ocean? — LONGRIVER Posted: 21 Sep 2020 04:53 AM PDT |
| Posted: 21 Sep 2020 05:54 AM PDT |
| Long Thesis on Surbane Propane Partners Posted: 21 Sep 2020 05:26 AM PDT First of all credit to my boy Jon that did all the research here is the original one: https://docs.google.com/document/d/1kz37xHfjS-8nM853P9gjKYjOr_GJ0X-PoGne-J6RSVk/edit?usp=sharing Propane Arbitrage The Ultimate Natural Disaster Trade? Updates Propane Update GTrends Charts Factors Increasing Propane Sales RV Sales soaring Increased demand for propane grills and camp stoves Due to social distancing requirements, restaurants, schools, and homeowners are all buying outdoor space heaters for the fall and winter months. Increase in retail propane use is much greater than the decrease in commercial propane use, from Covid19. Record breaking hurricane season Derecho Wildfires Increased sales of Generac and other propane generators Because propane is currently only 5% of the household energy market, there is plenty of room for growth Below are bullet points of Google Trends data for this current period compared to last year's data at this time. It shows the percentage increases when compared with August 2019. The charts show the width of the uptrends. The main point of interest is the increase in sustained volume on the charts, when compared with past years. "Generac propane generator" - up 442% this year "Generac propane" - up 245% this year "propane generator" - up 21% this year "patio heater" - up 236% this year "propane tank refill" - up 11% this year "outdoor space heater" - up 300% this year "propane tank" - up 137% this year "propane" - up 10% this year "propane grill" - up 34% this year "gas stove" - up 15% this year "gas stove near me" - up 22% this year "portable stove" - up 69% this year "propane camping stove" - up 138% this year "propane camp stove" - up 57% this year "suburban propane near me" - up 90% this year "propane torch" - up 18% this year "propane tank delivery near me" - down 22% since this time last year, but higher volume overall Google Trend Charts If you pull up these trend charts on google you will see that the seasonal spikes usually peak during Sept-Nov which is peak hurricane season. This year is different! This year we are seeing the spike come in late July and early August. A full month early! And not only is the spike starting early, but for some of these terms it is already higher than the previous peaks for the last five years! Articles and Excerpts Space & Outdoor Heaters to Benefit from Outdoor Living Trends "As temperatures drop, consumers will seek ways to make their outdoor living spaces more comfortable. In particular, patio heating products (fire pits, fireplaces, and radiant heaters) , already a fast-growing outdoor living product, is expected to see a boost in demand." https://www.prnewswire.com/news-releases/what-new-covid-consumer-trends-can-you-expect-this-fall-301103813.html Amid ventilation worries, schools mull outdoor classes during coronavirus pandemic "Some schools have equipped tents with propane heaters…" Transitioning Outdoor Dining to Fall is a Focus of Merchants' Meeting "Fire pits are also in style… But they're going fast. A spokesperson for Wayfair said searches for patio heaters are up more than 70 percent in the last five weeks compared to this time other years. (Fire pit searches are up 60 percent)." "We even see customers buying two and three, you know, or multiple heaters at a time," she said. "Because they want to stay outside as long as possible and they know that as November hits, you can't go anywhere. They can at least go outside." "Andy Starr, of restaurant supplier Boston Showcase Company , which has had clients such as Davio's, Grill 23 & Bar, and Uni, said that in normal times the company wouldn't keep a surplus of patio heaters in stock. But because of the pandemic, it brought in a supply to have them on hand." https://www.bostonglobe.com/2020/08/23/lifestyle/next-hot-pandemic-purchase-is-heat-lamp/ "The pandemic appears to be boosting demand for warmth on the patio, whether at the end of an electrical cord or a fire poker. Galanter & Jones typically enjoys 20% year-over-year growth in sales; in 2020, it's seen a spike of 37% over 2019. Searches for 'outdoor fireplaces' and 'fire pits' on home-goods site Perigold are up 72% year over year. Eight of the nine fire pits that Martha Stewart released through Wayfair this spring—in styles from faux fieldstone to black powder-coated steel—have sold out." https://www.wsj.com/articles/make-the-most-of-your-patio-all-fall-and-winter-an-outdoor-decor-guide-11598068861 Propane market is soaring. https://www.marketwatch.com/press-release/liquefied-petroleum-gas-market-is-soaring-rapidly-on-account-of-high-energy-requirement-and-growing-demand-as-cooking-fuel-globally-till-2024-million-insights-2020-07-15?mod=mw_quote_news 2020 propane supplies may tighten later this year, not even taking into account the record hurricane season this year… https://www.argusmedia.com/en/news/2118137-us-propane-supplies-looking-tighter-later-in-2020 "Propane is mostly used for heating purposes, though it has industrial applications, as well. That said, this is really a niche in the larger energy sector , accounting for just 5% or so of the household energy market. Suburban estimates that its market share is about 5%, making it the third-largest propane distributor in the United States. The top three only account for around a quarter of the market." https://www.nasdaq.com/articles/better-buy%3A-ge-vs.-suburban-propane-partners-2020-08-02 Chief Executive Officer Michael A. Stivala said, "The financial results for the fiscal 2020 third quarter were exceptionally strong for Suburban Propane – representing the highest level of Adjusted EBITDA for any third quarter in our history… an increase in residential demand more than offset softness in the commercial and industrial sectors during the third quarter."... "Retail propane gallons sold in the third quarter of fiscal 2020 of 75.4 million gallons increased 2.2% compared to the prior year third quarter." https://www.prnewswire.com/news-releases/suburban-propane-partners-lp-announces-third-quarter-results-301107183.html "In fact, in our residential sector, volumes increased more than 21% over the prior year. As a result, the physical 2020 third quarter was an exceptionally strong quarter for Suburban Propane. Adjusted EBITDA of $32.2 million, was $12.1 million or 61% higher than the prior year third quarter and, in fact, represented the highest level of adjusted EBITDA for any third quarter in our history. During the quarter, we also repaid more than $35 million under our revolving credit facility from excess cash flows, which resulted in a significant improvement in our leverage metrics compared to the second quarter." "From a customer mix perspective, residential volumes increased 21% compared to the prior year, whereas commercial and industrial volumes decreased 9%. In the commodity markets, wholesale propane prices remain relatively low compared to historical levels, but increased steadily during the quarter with the price of propane, basis Mont Belvieu, rising from $0.27 per gallon at the start of the quarter to $0.46 per gallon at the end of June." "Total gross margins of $146.4 million for the third quarter increased $10.9 million or 8% compared to the prior year, primarily due to higher propane volumes and higher average unit margins. Overall, propane unit margins increased $0.09 per gallon or 5.2% compared to the prior year due to favorable volume mix and from the year-over-year decrease in commodity prices… With respect to expenses, despite the 2% increase in volume sold, combined operating and G&A expenses decreased $1.1 million or 1% compared to the prior year." "Net interest expense of $18.5 million for the third quarter decreased $400,000 compared to the prior year, primarily due to a decrease in benchmark interest rates on borrowings under our revolver. Total capital spending for the third quarter of $5.6 million was $2.1 million lower than the prior year, due to a lower level of spending on vehicles and tanks. Turning to our balance sheet. During the third quarter, we repaid more than $35 million under our revolver with cash flows from operating activities." "In the early part of the fourth quarter, our collection activities continue to improve and are nearing the historical levels that we would generally experience for this time of the year. While we're encouraged by the improvement, this is something that we continue to closely monitor. From a leverage perspective, the increase in adjusted EBITDA coupled with the debt repayment during the third quarter resulted in our consolidated leverage ratio improving to 4.83 times at the end of June compared to 5.22 times at the end of the second quarter." "Our borrowings under revolver at the end of Q3 were $109.7 million, which was $17.5 million lower than June 2019 and $3.8 million lower than the level at the beginning of the fiscal year. We remain well within our debt covenant requirements. We'll continue utilizing excess cash flows in a balanced fashion to strengthen the balance sheet and to invest in strategic growth." "While we may experience continued softness in demand from our commercial and industrial customers in the near term, our efficient and flexible business model leaves us well-positioned to support our customers and local communities as they recover. Interestingly, what we are also seeing is a recognition that propane is a part of the solution in the recovery as a result of its clean burning attributes and the portability and dependability of propane to support new applications as businesses and local communities adapt to the new social distancing guidelines with more outdoor activities." "Since most RV appliances run on propane – whether it's a propane-powered cooktop, furnace, grill, refrigerator, hot water heater or generator – higher RV sales inevitably lead to higher propane sales." "The results of a survey conducted by Ipsos, in partnership with RVIA, reinforce what the RVIA is hearing from dealers. According to the survey – which examines consumer interest and planned action on travel choices in light of the pandemic – 46 million Americans plan to take an RV trip in the next 12 months. To put that in perspective, there are currently 11 million RVers, says Geraci. In addition, 20 percent of U.S. survey respondents indicated more interest in RVs as a recreational travel option in the aftermath of COVID-19 – the highest of any option tested – over car and tent, cruise, car and rental stay, and air and rental stay." "For the short term, at least, propane marketers should expect to sell more gallons to RV customers..." "Though RV manufacturers do produce all-electric options, the vast majority of RVs – both motorhomes and towable campers – use propane to power appliances, says Geraci of the RVIA." "Propane can also fuel generators that power lights and air conditioning units... In addition, propane may benefit from a trend in RV design toward an enhanced home-like experience with more appliances like washers, dryers and outdoor kitchens. These options provide additional burner tip opportunities for propane. Larger RVs, for example, are using two furnaces, which require more propane, notes Bruce Hopkins, vice president of standards with the RVIA." https://www.lpgasmagazine.com/surge-in-rv-sales-presents-opportunities-for-propane/ Videos Mark Rachel, Propane Industry, LP Gas Magazine ("Uptrend in pricing"/"Stay well ahead of the game"/"Flatten the demand curve") https://www.youtube.com/watch?v=wgVL51u7g60 Mark Rachel Vid 2 https://www.youtube.com/watch?v=xYNXCiD0OF0 Stock Pick Suburban Propane Partners, L.P. (SPH) Third largest propane distributor in the US. Propane supplier for retail users, RV parks, and retail sellers (for grills, heaters, etc.) The ONLY publicly traded propane distributor in the US. (Ferrellgas is publicly traded but they are probably going bankrupt. Amerigas is owned by UGI and is only a fraction of their market cap.) Small market cap ($800M) Q3 gross margins increased 8% over Q3 2019. Very low profile company that does not seem to be on Wall Street's radar yet. Next earnings report comes out in November. Could be a good earnings play. Phone Calls Called a few Suburban Propane offices around the country to ask about their services and found the following. Most recommended a 250gal tank for a 3 bed/2 bath home, with just one appliance using propane. Normally 3-4 refills per year. Installation price = $125, with one year refill contract Suburban Propane can also install propane tanks and pipes for Generac propane generators and provide refills. Recommended tank size for a 22KW Generac generator is 250-1000gal, depending on usage. To power the average home, a 22KW Generac generator will use about 2gal/hr. If used for 10hrs/day, that is 12.5 days with a 250gal tank. In a normal year, most Generac users will only need one refill. In bad hurricane areas this can be 1-4 times per year. Price quotes ranged from $2.09/gal to $2.18/gal ($522.5 - $545 per refill, with 250gal tank) Negative Factors Suburban Propane does not directly fill small propane tanks used for grills, space heaters, etc. (It supplies the companies who do) Suburban Propane has high debt levels Suburban Propane just slashed the dividend in half (now 9.4%) Profit margins are thin [link] [comments]  |
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