Posts In: Stock Ideas

Geoff Gannon March 30, 2018 Premium Articles-01, Stock Ideas

ExxonMobil (XOM): A Blue-Chip Energy Company Likely to Provide Double-Digit Returns

Member write-up by Trey Henninger   Exxon Mobil (XOM) is one of the oil majors. Traditionally, being an oil major has meant being a fully vertically integrated company from oil exploration, drilling, refining, and chemical production. ExxonMobil continues to fulfill that role, but they are much more than an oil company today. Although they are typically billed as an oil AND gas company, they are much more.   Business Model Overview   ExxonMobil is a very complicated business with many different parts. The simple way…...

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Geoff Gannon March 30, 2018 Premium Articles-01, Stock Ideas

EM Systems: The Japanese Industry Leader in Pharmacy Software

Member write-up by Clayton Young.   Thinking Points EM Systems (TSE: 4820) is an industry leader in pharmacy software looking to leverage its strengths in closely related industries. The company’s biggest strength is its business model, which lowers industry standard system implementation costs and better aligns cost structure to its customers’ operating performance. Share price is a little elevated today at 1,398 yen per share (13.8 TTM EV/EBIT). Investors can reasonably expect an investment CAGR between negative 2.5% and 8.8% over the next three years…....

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Geoff Gannon March 26, 2018 Premium Articles-01, Stock Ideas

Why I’ve Passed on Keweenaw Land Association (so far)

Trey had a good question in response to my Keweenaw Land Association article: “Are you willing to share your reason for not investing at this time? My first pass analysis leads me to also not choose to invest at this time. For me, it’s a matter of opportunity cost. Simply beating the S&P500 is insufficient. Since the S&P500 is projected to return much lower than its historic rates of return, my current opportunity set is much better. That’s really always been my hesitation with owning…...

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Geoff Gannon March 22, 2018 Premium Articles-01, Stock Ideas

Keweenaw Land Association: Buy Timberland at Appraisal Value – Get a Proxy Battle for Free

Keweenaw Land Association (KEWL) is an illiquid, unlisted stock. It trades something like $15,000 to $20,000 worth of stock on an average day. The company does not file with the SEC. However, you can find plenty of information – including investor presentations, annual reports, quarterly reports, and other news – at the “company reports” section of Keweenaw’s website. You can also find news about the company – including press releases from a 26% shareholder who is trying to take control of the  board – at…...

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Geoff Gannon March 22, 2018 Premium Articles-01, Stock Ideas

Fairfax Financial Holdings: Large Upside Potential with Minimal Downside

Member write-up by: Alex Middleton   Introduction  In the past 10 years Fairfax Financial has achieved what can easily be considered sub part returns, however I believe that the company will outperform the S&P significantly in the next 10 years as a result of the improved rate of return on their investment portfolio and a multiple expansion on their stock.  One of the main reasons that their stock is undervalued today is because people are anticipating that Fairfax’s growth will underperform in the future as…...

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Geoff Gannon March 21, 2018 Premium Articles-01, Stock Ideas

Summerset (SUM): A New Zealand Retirement Village Developer with “Float”

Member write-up by: André Kostolany Investment Horizon: 5+ years Market Cap: 1,494MM NZD Type: Compounder Net Debt: 348 NZDMM Target Upside: 150% (ability to compound 20%+ p.a.) Price/Net Tangible Assets: 1.95x Country: New Zealand Price/Underlying TTM EPS: 18.0x Industry: Senior Living Price/IFRS TTM EPS: 6.8x   Summerset (SUM) is a retirement village developer and operator. It has created 20% CAGR in shareholder value since its IPO in 2011 and is just entering an accelerating growth period Summerset’s operating model is that it operates its retirement…...

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Geoff Gannon March 16, 2018 Premium Articles-01, Stock Ideas

Amadeus: An Aggregation Platform and IT Business That Will Grow Along with Airline Passenger Volumes

Member write-up by Philip Hutchinson   Amadeus is a large, Spanish-headquartered IT company serving customers in the travel industry, tied to the long-term growth of transactions in the global travel industry.   First, let’s talk a bit about what the company does. Although all of Amadeus’ activities relate to the travel industry, the company is in effect two completely separate businesses: the operation of a global distribution system (“GDS”) and the provision of software to companies in the travel industry – mainly airlines.   Amadeus…...

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Geoff Gannon March 14, 2018 Premium Articles-01, Stock Ideas

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 Premium Articles-01, Stock Ideas

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 Premium Articles-01, Stock Ideas

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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