Fundamental Positions II

CALL......$4.76........................$3.62...... ...................(-23.9%)
SAFM......$26.45.....................$28.67....... .................+8.3%
FORD......$10.74.....................$4.54....... .................(-57.7%)
UST.......$41.25.....................$44.06....... ..................+6.8%
CTT......$4.00.......................$2.57........ ..................(-35.7%)
CQB......$17.47.....................$13.51........ .................(-22.6%)
TOL......$29.78.....................$27.17........ .................(-8.5%)
GKIS.....$14.05.....................$13.39........ ..................[-4.6%]%
KND......$21.94.....................$25.39.... ......................+15.7%

SGTL....$10.30.....................$4.46...... .....................(-56.5%)
EVCI....$1.44.......................$0.81........ ...................(-43.0%)
DRYS....$10.59....................$9.18...... ....................(-13.3%)
SEPR....$92.50.................................... ..............................
Aggregate......................................... ....................[-18.0%]

Closed Trades

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%

Aggregate..............+30.2%

jog on
d998

Hi there Mr Ducati

Are you still providing us with your purchases etc.

Snake

No, I've been a bit lazy, I only updated Reef.
http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=get_topic;f=8;t=000433;p=27#000397

However they are fully updated each week.
Here is this weeks summary.

CALL......$4.76........................$3.08...... ...................(-35.2%)
SAFM......$26.45.....................$26.30....... .................[0.0%]
FORD......$10.74.....................$4.99....... .................(-53.5%)
UST.......$41.25.....................$52.71....... ..................+27.8%
CTT......$4.00.......................$2.29........ ..................(-42.7%)
CQB......$17.47.....................$15.96........ .................(-8.6%)
TOL......$29.78.....................$25.98........ .................(-12.7%)


SGTL....$10.30.....................$4.78...... .....................(-53.5%)
EVCI....$1.44.......................$0.89........ ...................(-38.1%)
DRYS....$10.59....................$13.50...... ....................+27.4%
SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$39.61............................+5.8%
WON....$6.65.....................$7.10..............................+6.8%
NAFC...$20.52....................$21.27.............................+3.6%

Aggregate......................................... ....................[-12.5%]

Paper trades
CD.....$2.25....................$2.00...............................[-11.1%]

Closed Trades

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%

Aggregate..............+32.1%

jog on
d998

ducati

would u mine rationalising why u think that ford's sp would recover?

and what does ur fundamental analysis tell us about its value?

thanks

CALL......$4.76........................$3.08...... ...................(-35.2%)
SAFM......$26.45.....................$31.69....... .................+19.8%
FORD......$10.74.....................$5.20....... .................(-51.5%)
UST.......$41.25.....................$52.71....... ..................+29.0%
CTT......$4.00.......................$2.49........ ..................(-37.7%)
CQB......$17.47.....................$17.18........ .................(-1.6%)
TOL......$29.78.....................$26.48........ .................(-11.0%)


SGTL....$10.30.....................$4.89...... .....................(-52.5%)
EVCI....$1.44.......................$0.89........ ...................(-38.1%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$39.80............................+6.3%
WON....$6.65.....................$7.36..............................+10.6%
NAFC...$20.52....................$23.01.............................+12.1%

Aggregate......................................... ....................[-11.5%]

Paper trades
CD.....$2.25....................$1.93...............................[-14.2%]

Closed Trades

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%

Aggregate..............+32.4%

jog on
d998

nizar

Only just noticed your post, will come back to it with the analysis.

jog on
d998

Correction to UST

CALL......$4.76........................$3.08...... ...................(-35.2%)
SAFM......$26.45.....................$31.69....... .................+19.8%
FORD......$10.74.....................$5.20....... .................(-51.5%)
UST.......$41.25.....................$53.23....... ..................+29.0%
CTT......$4.00.......................$2.49........ ..................(-37.7%)
CQB......$17.47.....................$17.18........ .................(-1.6%)
TOL......$29.78.....................$26.48........ .................(-11.0%)


SGTL....$10.30.....................$4.89...... .....................(-52.5%)
EVCI....$1.44.......................$0.89........ ...................(-38.1%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$39.80.......... ..................+6.3%
WON....$6.65.....................$7.36............ ..................+10.6%
NAFC...$20.52....................$23.01........... ..................+12.1%

Aggregate......................................... ....................[-11.5%]

Paper trades
CD.....$2.25....................$1.93............. ..................[-14.2%]

Closed Trades

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%

Aggregate..............+32.4%

jog on
d998

Well Duc ,

You do have guts to post & post your position

Bob.

nizar

would u mine rationalising why u think that ford's sp would recover?
and what does ur fundamental analysis tell us about its value?

Click to expand...

With any value purchase you are looking for potential catalysts that will trigger a change in fundamentals, and/or a change in sentiment.

Catalysts

*External
Industrywide consolidation, viz. M&A activity.
Cyclical, industry is coming out of an operating trough.

*Internal
Asset sales, Spinoffs, Share repurchases.
Organizational changes, operational adjustments, strategy changes.

There are any number of other variations to the very broad outlines described above. They all however have one thing in common, and that is changing something.....hopefully for the better. Even assuming that the structural change fails, the perception of activity is often enough to change the sentiment enough that share price improvement is a result in the short-term.

jog on
d998

CALL......$4.76........................$3.05...... ...................(-35.9%)
SAFM......$26.45.....................$31.05....... .................+17.4%
FORD......$10.74.....................$4.99....... .................(-5.5%)
UST.......$41.25.....................$54.05....... ..................+31.0%
CTT......$4.00.......................$2.41........ ..................(-39.7%)
CQB......$17.47.....................$16.50........ .................(-5.5%)
TOL......$29.78.....................$26.11........ .................(-12.3%)


SGTL....$10.30.....................$4.42...... .....................(-57.0%)
EVCI....$1.44.......................$0.67........ ...................(-53.4%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$39.63............................+5.8%
WON....$6.65.....................$7.06..............................+6.1%
NAFC...$20.52....................$23.77.............................+15.8%

Aggregate......................................... ....................[-10.2%]

Paper trades
CD.....$2.25....................$1.93...............................[-14.2%]

Closed Trades

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%

Aggregate..............+32.4%


jog on
d998

Duc

Need some adjustment.

FORD is -55.5% not -5.5%

Could you also show your nett aggregate P & L on all positions?

Whoop's a daisy..........

Correction;

CALL......$4.76........................$3.05...... ...................(-35.9%)
SAFM......$26.45.....................$31.05....... .................+17.4%
FORD......$10.74.....................$4.99....... ...................[-53.5%]
UST.......$41.25.....................$54.05....... ..................+31.0%
CTT......$4.00.......................$2.41........ ..................(-39.7%)
CQB......$17.47.....................$16.50........ .................(-5.5%)
TOL......$29.78.....................$26.11........ .................(-12.3%)


SGTL....$10.30.....................$4.42...... .....................(-57.0%)
EVCI....$1.44.......................$0.67........ ...................(-53.4%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$39.63.......... ..................+5.8%
WON....$6.65.....................$7.06............ ..................+6.1%
NAFC...$20.52....................$23.77........... ..................+15.8%

Aggregate......................................... ....................[-13.9%]

Paper trades
CD.....$2.25....................$1.93............. ..................[-14.2%]

Closed Trades

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%

Aggregate..............+32.4%


jog on
d998

Nett profit on capital invested.

2.26% since January.

CALL......$4.76........................$3.02...... ...................(-36.5%)
SAFM......$26.45.....................$33.50....... .................+26.7%
FORD......$10.74.....................$5.49....... .................(-48.8)
UST.......$41.25.....................$53.99....... ..................+30.8%
CTT......$4.00.......................$2.70........ ..................(-32.5%)
CQB......$17.47.....................$17.14........ .................(-1.8%)
TOL......$29.78.....................$28.15........ .................(-5.4%)


SGTL....$10.30.....................$4.78...... .....................(-53.5%)
EVCI....$1.44.......................$0.62........ ...................(-56.9%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$45.56............................+21.8%
WON....$6.65.....................$7.24..............................+8.8%
NAFC...$20.52....................$24.64.............................+20.0%
CAR....$18.48....................$18.81.............................+1.8%

Aggregate......................................... ....................[-8.9%]


Closed Trades

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%

Aggregate..............+32.4%

Some improvement!!

Just in case anyone was curious as to what happened to CD, the paper trade, this stock was a restructuring, with three spin-off's.

The parent stock CD became CAR, which I bought last week and added to the portfolio.

jog on
d998

Current Price $18.81
Code CAR
Yield 23.5%
Market Capitalization $25226.0 million [adjusted]
TCI Price Target $207.00 to $282.74
Investment Car Rentals
P/E Ratio 2.32
Recommendation Buy

Industry Statistics

Market Capitalization: 21B
Price / Earnings: 15.8
Price / Book: 2.9
Net Profit Margin 6.8%
Price To Free Cash Flow -6.3
Return on Equity: 11.9%
Total Debt / Equity: 1.6
Dividend Yield: 1.2%

In a direct comparison;

Price Ratios Company Industry S&P 500
Current P/E Ratio 2.8 20.9 21.3
P/E Ratio 5-Year High NA 40.7 149.6
P/E Ratio 5-Year Low NA 8.3 13.7
Price/Sales Ratio 0.11 2.41 2.70
Price/Book Value 0.18 3.68 5.14
Price/Cash Flow Ratio 0.70 14.60 15.80

The value metrics utilized in the ratio analysis between CAR, the Industry and the S&P500, leaves very little requiring explanation.
The undervaluation in all areas makes this a very interesting proposition



Profit Margins % Company Industry S&P 500
Gross Margin 31.1 30.0 36.0
Pre-Tax Margin 6.0 12.0 19.3
Net Profit Margin 4.2 10.7 13.4
5 Yr Gross Margins (5-Year Avg.) 35.4 25.1 35.6
5Yr Pretax Margin (5-Year Avg.) 10.1 6.9 16.2
5 Yr Net Profit Margins (5-Year Avg.) 6.7 5.3 10.9

Over the five year aggregate returns, the security has been on a par with the Industry averages.
This bodes well for the future, in that, barring total disaster, CAR should continue more or less as it has on aggregate.

Financial Condition Company Industry S&P 500
Debt/Equity Ratio 1.49 1.00 1.21
Current Ratio 1.0 1.3 1.3
Quick Ratio 1.0 1.0 1.1
Interest Coverage 4.5 10.1 36.5
Leverage Ratio 59.8 52.5 28.4
Book Value/Share 104.75 12.33 17.29

Interest coverage is lower than a pure investment would require for safety. I suggest however that this could be an attractive speculation. That although the Interest coverage is below investment grade,[ by 0.5] that the discount from Book value is so substantial, [$18.81 purchase price, against $104.00 Book value] that even in the event of a liquidation, there is enough asset value to see the holder of the common through a restructuring, or liquidation.


Hidden Cash-Flows

There are hidden cash-flows within Cost of Goods and Selling, General & Administration.
These cash-flows amount to $1.63 per share, a quite substantial sum. These cash-flows may well have been incurred during the current spin-offs.

Spin-off

There have been two businesses spun off from the parent company [CAR] in the last month or so.
This restructuring of the capitalization has resulted in the current situation.
The result, has been, transparency. The earning power of CAR has become easier to recognize, and thus should generate appreciation in the market after the value has been recognized.

Operating Leases
The Operating leases constitute a substantial commitment on the Balance Sheet.
They are however adjusted into the capitalization and the earning power calculated against the capitalized value.
The earnings against capitalization are 10.9% currently, and 8.1% over five years.
This would suggest that they [leases] have value and may in point of fact represent a barrier to entry.

Common Stock
At only 7.5% of the capitalization, the common stock is extremely leveraged.
This has the effect of large swings in both directions. Currently, I feel that the most likely direction is up.
There could be some extreme volatility, so be warned, this could be a wild ride.

Dividend & Dividend Yield
With a 23.5% dividend yield, your purchase price could be amortized in four years, assuming no change in the payout.
At a 33.2% payout ratio, the dividend should be sustainable.
Should earnings increase, then the payout may be increased, should earnings fall, and the dividend be reduced, you still have a fair margin of safety.

Potential Takeover Candidate
At the current valuations, this stock has to be a takeover candidate.
There have in point of fact already been rumors to that effect.
Book Value + premium would be the starting point……. $104.00

Brand Name
Avis & Budget are strong brand names and have intangible value.
How much value is the question, but certainly enough that this is a further justification to a Takeover or Merger offer?

Summary
All in all, this appears to be a gross undervaluation.
It’s not a perfect stock, debt is high in relation to the common, Interest coverage is marginal and Current assets [Working Capital] is at a ratio of 0.59 to Current Liabilities, thus liquidity could become an issue. Having said that the plusses that might come to pass make this an extremely attractive speculation.

There will be no updates for the next 3 weeks, as I am away on business.


CALL......$4.76........................$2.77...... ...................(-41.8%)
SAFM......$26.45.....................$33........ .................+28.1%
FORD......$10.74.....................$5.12....... .................(-52.3%)
UST.......$41.25.....................$54.52....... ..................+32.2%
CTT......$4.00.......................$2.62........ ..................(-34.5%)
CQB......$17.47.....................$15.73........ .................(-9.9%)
TOL......$29.78.....................$27.81........ .................(-6.6%)


SGTL....$10.30.....................$4.71...... .....................(-53.8%)
EVCI....$1.44.......................$0.62........ ...................(-56.9%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$45.67............................+21.9%
WON....$6.65.....................$7.14..............................+7.4%
NAFC...$20.52....................$22.80.............................+11.1%
CAR....$18.48....................$18.27.............................[-1.1%]

Aggregate......................................... ....................[-11.0%]


Closed Trades

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%

Aggregate..............+32.4%

jog on
d998

ducati916 said:

Current Price $18.81
Code CAR
Market Capitalization: 21B
Price / Earnings: 15.8
Price / Book: 2.9
Net Profit Margin 6.8%
Price To Free Cash Flow -6.3
Return on Equity: 11.9%
Total Debt / Equity: 1.6
Dividend Yield: 1.2%


Summary
All in all, this appears to be a gross undervaluation.

Click to expand...

I totally disagree....

PER of 15.8, PB of 2.9, and crappy dividends of 1.2%

This is fairly valued at best.

ducati916 said:

CALL......$4.76........................$3.02...... ...................(-36.5%)
SAFM......$26.45.....................$33.50....... .................+26.7%
FORD......$10.74.....................$5.49....... .................(-48.8)
UST.......$41.25.....................$53.99....... ..................+30.8%
CTT......$4.00.......................$2.70........ ..................(-32.5%)
CQB......$17.47.....................$17.14........ .................(-1.8%)
TOL......$29.78.....................$28.15........ .................(-5.4%)


SGTL....$10.30.....................$4.78...... .....................(-53.5%)
EVCI....$1.44.......................$0.62........ ...................(-56.9%)

SEPR....$92.50.................................... ..............................
OFIX....$37.44....................$45.56............................+21.8%
WON....$6.65.....................$7.24..............................+8.8%
NAFC...$20.52....................$24.64.............................+20.0%
CAR....$18.48....................$18.81.............................+1.8%

Aggregate......................................... ....................[-8.9%]


Closed Trades

ISSC...................+8.1%
HNR....................+21.6%
EGY....................+61.8%
LRT....................+29.2%
KND....................+34.0%
GKIS..................+37.8%
DRYS..................+34.0%

Aggregate..............+32.4%

Click to expand...

I make it your current (not sold yet) aggregate is -9.6%

And overall including those shares you have yet to sell you are up 5%. Which after 40 lots of brokerage (when you sell them all) and tax, and inflation indexed means you are down, certainly not up 32.4%!

But have you included dividends?

And SEPR is $47 what is going on?