tag:blogger.com,1999:blog-46314239768940807062024-03-14T04:30:20.052-04:00the red cornerred.http://www.blogger.com/profile/04089263693762295793noreply@blogger.comBlogger123125tag:blogger.com,1999:blog-4631423976894080706.post-34512185607912717822018-04-10T13:57:00.001-04:002018-04-10T14:00:02.208-04:00CVR Partners - Nitrogen FertilizersOVERVIEW
CVR Partners is a variable distribution master limited partnership that makes and sells nitrogen fertilizers in the United States.
In an oversupplied and rational market, as currently, the marginal cash delivered cost of nitrogen fertilizers should determine their market price.
In an import dependent market like the United States, the marginal cash delivered cost of red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com138tag:blogger.com,1999:blog-4631423976894080706.post-1235732641783909792017-01-03T09:32:00.000-05:002017-01-03T09:32:31.045-05:002016
2016 looked like this:
My trailing four year pre-tax return is 32.6% which I suppose means that the market owes me two or so years of back pay. Future Bright and Flybe account for most of these payables and I'll no doubt have to wait until such time as their results become machine readable.
In the meantime, I have acquired shares in Rentech and LSB Industries to red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com134tag:blogger.com,1999:blog-4631423976894080706.post-55047622937550808082016-05-18T08:52:00.001-04:002016-05-25T09:31:36.240-04:00LSB Industries - Agricultural & Industrial Chemicals
This is a special situation / turnaround story that appears to have resolved itself.
Management's guidance for 2017 is as follows:
but depends on 95% on-stream rates across its four facilities. I prefer to assume a 90% figure for the Cherokee and Pryor facilities, a $475 medium term average selling price for Ammonia, and $3 cost of gas.
Note that facility turnarounds are red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com154tag:blogger.com,1999:blog-4631423976894080706.post-3817950103001451642016-02-14T14:35:00.000-05:002016-02-14T14:58:25.816-05:00Rentech Nitrogen Partners LP - Fertilizers
There is a wealth of information in the Rentech Nitrogen Partners' and CVR Partners' investor presentations and Form S-4 filings that I won't reproduce here. The basic outline of the investment case, however, is as follows:
UAN plans to merge with (i.e. acquire) RNF;
RNF's unitholders would receive $2.57 per unit in cash consideration, retain 100% of the value of the Pasadena facility,red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com185tag:blogger.com,1999:blog-4631423976894080706.post-29136320642404602172016-01-13T17:25:00.000-05:002016-01-13T19:17:38.729-05:002015
Bent out of shape
2015 turned out thusly [the weighted average portfolio allocations for the year are in blue]:
This was a year in which the results were driven by Future Bright Holdings. Its market cap halved -- and halved again. A market price at, in my view, a deep discount to the value of the business (see below) brings about its own risk of loss via privatization by the owner operatorred.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com141tag:blogger.com,1999:blog-4631423976894080706.post-89593556050003301132015-12-02T17:24:00.000-05:002015-12-22T07:47:38.644-05:00Northgate Plc - Vehicle Rentals
I have both owned and written about this company in the past. It was then a good company with a bad balance sheet; it is now a good company with a good balance sheet.
The apparent cause of the recent decline in share price is the margin deterioration highlighted above. Management has explained the margin decline as attributable to 15 (now 16) new sites in the UK that take time to ramp up red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com44tag:blogger.com,1999:blog-4631423976894080706.post-40303750767817826792015-12-02T15:18:00.001-05:002015-12-03T14:07:51.358-05:00Brammer Plc -- Distributor of MRO components
This company is the leading provider of MRO components to industrial companies in Europe. The business model is, I think, well known: it provides suppliers a direct route to market and offers customers a single interface for accessing vast choice of products. It matches the many to many in a hub-and-spoke arrangement. Market share gains enhance the network effect and thereby entrench the red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com25tag:blogger.com,1999:blog-4631423976894080706.post-78159330222451065032015-11-22T14:40:00.000-05:002015-11-22T15:05:40.930-05:00Global Testing Corporation -- Semiconductor testing services
Introduction
Global Testing Corporation is a Taiwanese company listed on the Singapore Exchange. It provides testing services -- e.g. wafer sorting, final testing services, test program development, conversion and optimization
services, load board and probe card design, and leasing of testers -- to
the semi-conductor industry, focusing on logic and mixed signal semi-conductors
used in red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com11tag:blogger.com,1999:blog-4631423976894080706.post-11569866181901235332015-11-15T16:36:00.003-05:002015-11-15T17:33:01.556-05:00Singapore Shipping Corporation -- Pure Car and Truck Carriers
Business model
This company operates in two segments. Via its shipping segment it is what is known a "gross tonnage provider" for major car and truck carrier operators. That's just what it sounds like: SSC buys ships that it immediately leases to, for example, Wallenius or NYK Line for fifteen year terms or longer. These operators in turn carry Toyotas, Mazdas and the like from the places red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com75tag:blogger.com,1999:blog-4631423976894080706.post-33614314636734051532015-11-13T16:13:00.000-05:002015-11-13T16:13:04.413-05:00Macro Enterprises Inc - Update
14 months on and one finds Macro decidedly out of favor. One can evaluate the pricing of the stock as follows:
These are low expectations -- i.e., that the company will do approximately $30 million in annual work at 20% gross margins -- and, in light of what should be the steady nature of its bread and butter pipeline integrity work, I am not convinced that these red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com8tag:blogger.com,1999:blog-4631423976894080706.post-51065988011353391662015-11-08T18:07:00.000-05:002015-11-23T11:59:03.186-05:00800 Super Holdings - Waste management<!--[if gte mso 9]>
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Orientation
800 Super is a waste management company in Singapore. It has been in business
since 1988 and was publicly listed in 2011.
Large
public sector contracts for waste collection, recycling, street cleaning, and
lansdscaping tend to be awarded for 6 to 8 year terms and smaller, private and
quasi-private sector contracts are red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com44tag:blogger.com,1999:blog-4631423976894080706.post-36697892552736631542015-11-07T08:13:00.002-05:002015-11-07T08:13:59.300-05:00Dawson Geophysical -- Seismic Exploration Services
This is an idea that has little to commend it other than price. It is a "cigar butt" but not a bad one at that.
The company provides seismic exploration services to the oil and gas industry and accounts for about half of the supply in the onshore North America market. Revenues are transactional rather than recurring and visibility is low. Nevertheless, the company expects that it is able to red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com20tag:blogger.com,1999:blog-4631423976894080706.post-3396199919693821882015-11-04T19:34:00.000-05:002015-11-09T17:48:56.919-05:00Flybe plc - Regional Airline<!--[if gte mso 9]>
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red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com302tag:blogger.com,1999:blog-4631423976894080706.post-70501487514784737242015-09-09T10:04:00.000-04:002015-09-09T11:34:03.186-04:00Texhong Textile - Update
Texhong reported results last month and provided an update on its outlook. I'll attempt to summarize the state of play here.
I'll start with what I'll call its legacy business. What I wrote out in long form here can be summarized via a wide angle view thus (apologies for the formatting):
There is a central tendency to margins and ROE despite the volatility in cotton prices because,red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com157tag:blogger.com,1999:blog-4631423976894080706.post-56695165108839671892015-08-25T11:22:00.001-04:002015-08-25T11:39:11.912-04:00Future Bright - H1 2015 (1 of 2)
The company has upgraded the detail with which it reports results so that we can now substitute management provided information for some of the informed guesstimates that I attempted in a prior post.
For the moment, I am particularly interested in the question: How much did the company earn before its investments in the Huafa mall and in the food souvenir business?
This is what the answer red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com40tag:blogger.com,1999:blog-4631423976894080706.post-11291286569214437792015-05-08T10:34:00.002-04:002015-05-08T10:34:59.089-04:00Enterprise Group, Inc - Exit
The Board of Enterprise would like to re-price management's option grants at a lower strike price.
A reasonable person could link this development with last quarter's earnings miss.
Investing in this company's stock was my mistake, not theirs. They are who they are and I should have known better.
In any case, I no longer have any confidence that the earning red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com62tag:blogger.com,1999:blog-4631423976894080706.post-48216338125867399102015-04-02T20:29:00.000-04:002015-04-03T15:49:47.457-04:00Future Bright - 2014 Results and Outlook
CONTEXT
(i) Other than Food & Catering
Let me first attempt to contextualize the discussion about the food and catering business by removing it altogether:
(ii) Food & Catering
A refresher: the food and catering business consists of a number of parts that, for the sake of clarity, I will categorize as follows
Restaurants, coffee shops, and food court counters located red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com76tag:blogger.com,1999:blog-4631423976894080706.post-40259881072471055782015-04-01T12:08:00.001-04:002015-04-01T16:49:14.858-04:00Texhong Textile - 2014 Results & Outlook
When I first wrote about Texhong I suggested that the low-end run rate gross margin would approximate 15.7%. The full year 2014 results seem to bear this out.
Remember that the company holds 30 days of inventory so that as prices fall last month's more expensive cotton is sold on at today's lower prices. It is the direction -- and not the level -- of cotton prices that matter.
This is red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com23tag:blogger.com,1999:blog-4631423976894080706.post-85166922941704739952015-02-19T19:30:00.000-05:002015-02-19T19:39:59.173-05:00A UK Portfolio 2014 - 2016<!--[if gte mso 9]>
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This is the third in a series [2012 to 2014 is here and 2013 to 2015 is here].
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red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com37tag:blogger.com,1999:blog-4631423976894080706.post-1836940659778237292015-02-07T14:46:00.002-05:002015-02-09T09:27:18.725-05:00Hawaiian Holdings
This may be the last time I write something about Hawaiian Holdings. It reported full year earnings a few days ago and provided guidance for the year ahead. Its guidance provided for fuel costs of $1.90 to $2.00 per gallon.
I am instead going to plug in a fuel cost of $2.30 per gallon (corresponding with $75/bbl for Brent) so that 2015 looks something like this:
and, consequently,red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com52tag:blogger.com,1999:blog-4631423976894080706.post-83115197839624854752015-01-11T21:10:00.002-05:002015-01-11T21:27:15.726-05:00A Brief Sketch of My Approach to Value Investing<!--[if gte mso 9]>
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red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com40tag:blogger.com,1999:blog-4631423976894080706.post-23036614094451181632015-01-05T20:18:00.000-05:002015-01-05T20:18:14.591-05:002014
2014
looked like this:
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red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com20tag:blogger.com,1999:blog-4631423976894080706.post-12201399587120147352014-11-16T15:27:00.000-05:002014-11-16T18:28:31.255-05:00Enterprise Group - Q3 Update
Three of my large positions -- Hawaiian Holdings, Future Bright, and Enterprise Group -- have reported quarterly results over the last month.
Of these, the most attention grabbing has been the set of results posted by Enterprise, in large part because the company has now announced two consecutive quarters of rental volumes and margins that are below its own projections. The pace of red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com56tag:blogger.com,1999:blog-4631423976894080706.post-23967869081438118612014-08-30T10:43:00.000-04:002014-08-30T13:46:49.033-04:00Macro EnterprisesI maintain a watch list of two hundred or so names that I have looked at and think are interesting in the expectation that the one or more will, sooner or later, come down to a price I'm comfortable paying. I use google drive.
Macro is a straightforward enough idea that it requires very little narrative and therefore provides a good opportunity to share the form and content of my watch list.&red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com87tag:blogger.com,1999:blog-4631423976894080706.post-34904861678822206792014-08-17T13:54:00.005-04:002014-08-17T23:04:13.611-04:00Texhong Textile 1st Half Results
Texhong has reported its first half results. Those of us who have been following this stock saw what we had expected to see: 3 months of cotton inventory bought at higher than current market prices were sold at lower cotton yarn ASPs. Gross margins were crimped, and operating leverage ensured that net margins were gutted.
If we add back the 302 million yuan lost due to red.http://www.blogger.com/profile/04089263693762295793noreply@blogger.com43