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Geoff Gannon March 14, 2018

Pendrell (PCOA) Follow-Up: Reading into a CEO’s Past and the Dangers of “Dark” Stocks

A member commented to the write-up I did yesterday on Pendrell. I think the comment and my response are worth making into a full follow-up “memo”. So, here they are: “Geoff, This company definitely seems promising. I saw the blog post from Hidden Value that you retweeted and ended up buying a small starter position in the company after reading the 10k. That was before even seeing that you ended up writing a post on it. I’m struggling to decide how to size the position...

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Geoff Gannon March 13, 2018

Pendrell (PCOA): A Company with Cash, a Tax Asset, and Almost No Liabilities

Pendrell is essentially a non-operating company with two assets: cash and net operating loss carryforwards. The cash appears on the balance sheet. The net operating loss carryforwards do not. The most recent balance sheet is dated December 31st, 2017. It is found in the 10-K. Total liabilities are $9 million while accounts receivable are $17 million. Since accounts receivable alone can cover all liabilities – I’ll assume that all cash is surplus cash. Cash is $184 million. The company has 242,769 shares outstanding (there are...

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Geoff Gannon March 11, 2018

Booking Holdings (BKNG): A Fast Growing Industry Leader Built on Network Effects and a Strong Brand

  Write-up by Mister Compounder   Summary   Asset light business model, with infinite return on capital, that requires little capital to grow enabling the use of cash flow for other purposes. Booking is currently trading at a free cash flow yield of 3.6%, before acquisitions and including adjustments for dilution of 1% The risks involve pricey valuation, overpaying for acquisitions in M&A deals, young industry and risks of increasing competition due to the attractive economics of the industry.   Overview   Booking Holdings (formerly...

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