tag:blogger.com,1999:blog-4631423976894080706.post3492199854473590363..comments2023-10-17T06:55:06.255-04:00Comments on the red corner: Silver Chef -- Equipment Leasingred.http://www.blogger.com/profile/04089263693762295793noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-4631423976894080706.post-8192977219098617612020-05-28T01:55:45.549-04:002020-05-28T01:55:45.549-04:00Thank you for sharing information. Wonderful blog ...Thank you for sharing information. Wonderful blog & good post.Its really helpful for me, waiting for a more new post. Keep Blogging!Gym Warehousehttps://www.blogger.com/profile/12460243314178152906noreply@blogger.comtag:blogger.com,1999:blog-4631423976894080706.post-62586009312982954682018-08-22T11:35:25.523-04:002018-08-22T11:35:25.523-04:00Sorry for the delay; whether or not i receive noti...Sorry for the delay; whether or not i receive notifications of activity in the comments section has become a bit hit or miss lately.<br /><br />Yes, still following SIV. I don't think $5.75 to $6.00 is an unreasonable valuation, all things considered. <br /><br />However, as you know, there is some uncertainty with regard to the runoff value of the adjacent business (esp when including any possible fine levied by the government). It's a yield vehicle so I don't see any harm in waiting a little longer until news of the the restaurant business' margin deterioration has been fully absorbed,GoGetta's runoff picture is a bit clearer, the sub debt has been issued, and the analysts have had their say.red.https://www.blogger.com/profile/04089263693762295793noreply@blogger.comtag:blogger.com,1999:blog-4631423976894080706.post-75049730402891012092018-08-19T21:19:27.228-04:002018-08-19T21:19:27.228-04:00Curious if you are still following Silver Chef? Ex...Curious if you are still following Silver Chef? Expansion into adjacent vertical went very poorly and now running into covenant issues. AVInoreply@blogger.comtag:blogger.com,1999:blog-4631423976894080706.post-29028691351450645202014-05-24T18:12:06.704-04:002014-05-24T18:12:06.704-04:00"If it did no new business next year would th...<br /><br />"If it did no new business next year would the CRR remain at 30%?"<br /><br />Yes. Spend X in year one and recover X/3 via cash flow every year and your CRR is 33%.<br /><br />But then I don't know what this means:<br />"The reason why silverchefs CRR stays elevated is the revolving pool of inventory while its growing"<br /><br />House was a bad example. I should have used rental car instead.red.https://www.blogger.com/profile/04089263693762295793noreply@blogger.comtag:blogger.com,1999:blog-4631423976894080706.post-29148777728816097642014-05-23T00:50:35.205-04:002014-05-23T00:50:35.205-04:00Interesting analysis around the CRR. Thinking abou...Interesting analysis around the CRR. Thinking about this some more, I somewhat disagree around your analogy of buying a home for 3.5x rental. Silverchefs equipment depreciates rapidly, so what your left with after 3.5 years is a worthless asset which you cant earn much income on. A house on the other hand may appreciate after 3.5 years and continue to earn rental with little capex.<br /><br />The reason why silverchefs CRR stays elevated is the revolving pool of inventory while its growing. If it did no new business next year would the CRR remain at 30%?<br /><br />So overall i think the CRR could be a little misleading as to the true economics of silverchef...<br /><br />What similarities are there between silverchef and midcontintental tab company that suggests using a CRR is appropriate... Are they both capital intensive businesses with fast depreciating assets?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4631423976894080706.post-20202313832660861372014-02-08T08:57:29.897-05:002014-02-08T08:57:29.897-05:00Hi Daniel,
I'm watching it but don't own ...Hi Daniel,<br /><br />I'm watching it but don't own it. Gogetta's not doing well for obvious reasons and if China/commodities blow up, the trading pattern in Emeco tells me that SIV could get a lot cheaper than it is now. <br /><br /> red.https://www.blogger.com/profile/04089263693762295793noreply@blogger.comtag:blogger.com,1999:blog-4631423976894080706.post-2144370082015838122014-02-08T07:41:20.607-05:002014-02-08T07:41:20.607-05:00What is your current opinion on SIV not that it...What is your current opinion on SIV not that it's fallen in price? Assuming you are watching or owning it.Daniel Bradynoreply@blogger.comtag:blogger.com,1999:blog-4631423976894080706.post-63537263425136738732013-03-23T14:26:49.777-04:002013-03-23T14:26:49.777-04:00Silver Chef buys equipment and rents it out. That&...Silver Chef buys equipment and rents it out. That's basically how it works. So, if we calculate how much it spent on buying those assets (Gross cash invested = gross fized assets + gross intengibles + net working capita) we can compare that to how much money those assets are generating (EBITDA - tax). That's the rate at which the cash outlays are being recovered, or the cash recovery rate.<br /><br />You can see from the table above that Silver Chef recovers 30% of its cash investment in a typical year. That's pretty good. It's like buying a house for 300K and renting it out for 150k every year; subtract taxes and you'd get your money back in 3 and 1/2 years. You could buy another house and do it all over again. It'd be a good way to accumulate wealth. <br /><br />Is 30% Silver Chef's true CRR? Barring some accounting impropriety, it does seems to really have been 30%. Will it be 30% in the future? Answering that requires thinking about why it earns such high returns: why can't their customers insist on lower rental fees? Why don't banks and specialty finance companies get into the game? etc. Good returns are always evidence of malfunction competition. <br /><br />I like CRR better because, except under some exceptional circumstances (inflation, for example), I think it captures the economics of the business better than ROIC: ROIC is always molested by management's discretion on how fast to depreciate the assets; CRR isn't. <br /><br />red.https://www.blogger.com/profile/04089263693762295793noreply@blogger.comtag:blogger.com,1999:blog-4631423976894080706.post-32276184311185286852013-03-23T13:44:34.307-04:002013-03-23T13:44:34.307-04:00Hi
How do you calculate cash recovery rate? And w...Hi<br /><br />How do you calculate cash recovery rate? And why do you think its better measure of returns return on operating assets? Do you think that the true return of Silver chef is cash recovery rate or the return on operating assets?<br /><br />thanks again for teh blogMr Anon A Mousehttps://www.blogger.com/profile/02196377744255919184noreply@blogger.comtag:blogger.com,1999:blog-4631423976894080706.post-11596114920592680722012-10-02T09:28:41.102-04:002012-10-02T09:28:41.102-04:00Thanks for the link. It represents the bull case, ...Thanks for the link. It represents the bull case, don't you think? High implied real interest rate and yet they keep coming. From a regulatory risk perspective, it's hard to distinguish this from angel and venture capital taking large equity positions in start-ups. red.https://www.blogger.com/profile/04089263693762295793noreply@blogger.comtag:blogger.com,1999:blog-4631423976894080706.post-25114483055024100382012-09-30T09:39:39.877-04:002012-09-30T09:39:39.877-04:00Thanks for the writeup red.
I found this: http://w...Thanks for the writeup red.<br />I found this: http://www.iifunds.com.au/category/blog-keywords/silver-chef<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4631423976894080706.post-571847605855471552012-09-26T18:54:37.455-04:002012-09-26T18:54:37.455-04:00The marginal opportunity cost of the last few doll...The marginal opportunity cost of the last few dollars in my account. Will I find something better? etc. If I were at 30% cash, I'd buy it. But I'm at 10% cash, and the hurdle is higher. <br /><br />I don't like taking small positions: I know from my own experience that that leads to sloppy thinking, optimism, and sloth. If I go in with a substantial amount at stake, I think abut it more carefully. I might yet buy it, but maybe at a lower price point. red.https://www.blogger.com/profile/04089263693762295793noreply@blogger.comtag:blogger.com,1999:blog-4631423976894080706.post-27835475647950374972012-09-26T18:25:38.115-04:002012-09-26T18:25:38.115-04:00What's keeping you from buying a position?What's keeping you from buying a position?Hielkohttp://alphavulture.comnoreply@blogger.comtag:blogger.com,1999:blog-4631423976894080706.post-13062240817728767502012-09-26T14:32:49.650-04:002012-09-26T14:32:49.650-04:00Important question. This is my take:
First, one r...Important question. This is my take:<br /><br />First, one restaurant requires equipment from a bunch of different manufacturers -- convection ovens, coffee makers, microwaves, oil-filters and so on. <br /><br />Second, if I were a start-up restaurant owner, I'd rather deal with a business that was dispassionate about brand. I decide, or I decide with some impartial advice from the equipment provider. <br /><br />Third, selling is one thing, but renting involves credit credit risk analysis. Silver Chef has 7000 individual customers on the books. Middleby (or others) would have to figure out whether microfinance is something they'd like to get into.<br /><br />Fourth, Middleby is selling to Silver Chef at more-or-less retail price. What does it have to gain by competing with its customer? Not much. It stands to lose more than it gains by doing so.<br />red.https://www.blogger.com/profile/04089263693762295793noreply@blogger.comtag:blogger.com,1999:blog-4631423976894080706.post-17269956361202270762012-09-26T14:01:41.578-04:002012-09-26T14:01:41.578-04:00What is stopping Middleby (or others) from just do...What is stopping Middleby (or others) from just doing this in-house and cutting out the middle man?Paciolinoreply@blogger.com