What Buffalos Can Say about Interest Rates
The Austro Value Investor
by
3y ago
When I was 3 years old, my parents would take me to the American Museum of Natural History. We lived in New Jersey at the time, and our apartment was just on the other side of the George Washington bridge.   If you had to guess what was my favorite part about the museum was (after the gift shop, of course), you’d think of the popular exhibits. The behemoth dinosaur skeletons in the Hall of Dinosaurs, the Hall of North American Mammals, the Easter Island head? They’re all good fun, but didn’t compare to the hall of dioramas. I was fascinated by the dioramas, and had my eye on one in partic ..read more
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We're going back to our Austrian roots...It's Time for a History Lesson
The Austro Value Investor
by
3y ago
For those who want a concise history of parallels to compare with today's absurdities, look no further. (Originally written: 2018) A Brief History of Booms and Busts in 20th and 21st Century United States   The Federal Reserve set the stage for The Great Depression beginning around 1920s when it began a series of credit expansions, each resulting in bouts of inflation. The largest credit expansion occurred around 1927, and created unsustainable speculative bubbles in the stock market and in land, setting the stage for The Great Depression with a prior recession. President Hoover exacerb ..read more
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Carrier (CARR)
The Austro Value Investor
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4y ago
Stock Price: $17.07 Market Cap: 14.7B Enterprise Value: 17.8B Thesis: While Carrier trades at a heavy discount to its peers, it has a lot going for it. Unlike its peers, Carrier is a growing diversified HVAC, refrigeration, & security solutions manufacturing. In the long-run, it has established a quality reputation despite its concentrated customer base, and it’s an ideal outsourcer. Despite headwinds from the cyclical peak in installation to its large debt burden (which can become a permanent issue), Carrier continues to benefit from secular trends in the current COVID-19 environment, and ..read more
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HP Inc. (HPQ)
The Austro Value Investor
by
4y ago
Share Price: $18.23 Market Cap: $27.7B Enterprise Value: $28B Business Overview: Revenue Breakdown 7% - Personal Systems: Workstations & other personal systems 41% - Personal Systems: Notebooks 20% - Personal Systems: Desktops 21% - Printing: Supplies 7% - Printing: Commercial hardware 4% - Printing: Consumer hardware Segment Information Personal Systems This segment consists of commercial and consumer desktop and notebook personal computers, workstations, commercial mobility devices, and retail point-of-sale (POS) systems. Notebook PC’s, printing supplies, desktop PC’s account ..read more
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Marathon Petroleum: Only For a Spin(off)
The Austro Value Investor
by
4y ago
Marathon Petroleum (MPC) Stock Price: $55.12 Market Cap: $28B EV: $54B Conclusion While MPC by itself is not attractive (see risks cited), the increasing prospect of the Speedway spin-off has intrigued me to pursue this as an idea. Business Review Segments: Refining & Marketing- Consists of 16 refineries, it’s the nation’s largest refining business, and responsible for the production of higher value products. The largest refineries are Galveston Bay, Dickinson Renewable Diesel, and LARIC. The segment is focusing on increasing capacity in order to upgrade residual fuel oil and export capa ..read more
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Standby for Our Newest Segment!
The Austro Value Investor
by
4y ago
As the last post has foreshadowed, the next value stock ideas we will be posting will be focused on special situations. The following are companies that will be written up in the coming weeks: Marathon Petroleum (MPC), with emphasis on the upcoming Speedway spin-off (convenience stores) American Outdoor Brands (AOBC), with emphasis on the upcoming Smith & Wesson spin-off (guns & rifles) HP Inc (HPQ), with emphasis on the tender offer made by Xerox Titan Technologies (TIVO), with emphasis on the potential spinoff of its products business ..read more
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Cheat Sheet for Special Situations
The Austro Value Investor
by
4y ago
Definition: A special situation is a time-based, catalyst-driven subset of value investing. Naturally, the security trades at a price below intrinsic value, borne out of others' ignorance of the situation, and the investor tendency to avoid something that looks difficult to decipher. In other words, on the surface, these situations look "risky." Ambiguity fosters that appearance. As Maurece Schiller (the father of Special Situation Investing) puts it, these situations are unified by "corporate action." Types of Special Situations Mergers & Acquisitions (esp. those accompanied by a corpora ..read more
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Cheat Sheet for Special Situations
The Austro Value Investor
by
4y ago
Definition: A special situation is a time-based, catalyst-driven subset of value investing. Naturally, the security trades at a price below intrinsic value, borne out of others' ignorance of the situation, and the investor tendency to avoid something that looks difficult to decipher. In other words, on the surface, these situations look "risky." Ambiguity fosters that appearance. As Schiller (the father of Special Situation Investing) puts it, these situations are unified by "corporate action." Types of Special Situations Mergers & Acquisitions (esp. those accompanied by a corporate raide ..read more
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(False) Dichotomy of Yields
The Austro Value Investor
by
4y ago
“‘It’s pretty eye-opening if you’ve been doing [ratings] for 20-plus years, to see how much more leverage a number of these companies can incur with the same credit rating…there’s definitely some ratings inflation.” -Greg Haendel, Tortoise (Source: WSJ) In times where it seems like the facts themselves seem to contradict what is presented as an either-or categorization, it helps to check your premises. Chances are, one of them is incorrect. Among the most obvious signs of fragility is the investor frenzy for Twitter’s and Restaurant Brands’s junk-rated bonds. What does it say about the co ..read more
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Cowen Group (COWN)
The Austro Value Investor
by
4y ago
Stock price: $13.82 Market Cap: $424.8 million Enterprise Value: $380.1 million Catalysts: 1.     Share buybacks: Board approved purchase of up to $178.6 million (Dec. 31 2018), and during 2019, the company repurchased $32.7 million worth of stock. Even though buybacks create value for shareholders, the may come at the risk of the company becoming thinly capitalized. The biggest impediment to buybacks is that Cowen has assets in liquid positions. However, as buybacks tend to decrease capitalization, the company does not want a scenario to arise in which they become a forced seller in order to ..read more
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