if anyone bought the ATH debt you made a good return very fast
http://finance.yahoo.com/news/athaba...221500150.html

^ yup, bond went from 79 to 101 at my broker, nice job.

Any other debt plays you looking at?

Ahnuld can you discuss your NTS pick a bit more? I've noticed it down close to a $1 now, and you liked it up in the $1.30 range. I'm certainly intrigued by that whole sector. I just wonder about all the aspects of this business that I know nothing about, and how to evaluate their year going forward.

well im seeing them having moved from 75 to 85 from the bond dealers but it will probably get called for par in November

so this is definitely the highest risk/reward stock I recommended.

Nano has two divisions. the first is the exciting one long term but will take longer to monetize. this is their nanotech security feature division. To put it simply they have developed the technology to punch nanoholes into any surface in a way to create a holographic effect. The science is, roughly, that the perforations are so precise different wavelengths that compose color in light bounce back while others dont to create color shifting. They can make this into logos, faces, words, pretty much anything. And since these holes dont need to punch through the object, just perforate the surface they can be used in anything from bills and coins, to pills and clothing.

Rather than sell the technology they intend to license it out on a royalty basis. x dollars per million impressions or something like that. The cost of creating the "stamp" to do the impressions is fairly low so the incremental profit on the revenue is huge. This is the blue sky portion of the stock. They are in discussions with central banks to add this security feature but I think their first big deal with be announced soon in the ticket realm. They said on their december call they hoped to announce something in January, and the obviously missed this target. From discussions with management my understanding is nothing fell through, there are just some delays with clearance. So im expecting some announcement fairly soon. This wouldnt be a big revenue generator but would be great costly marketing. Could jumpstart some orders outside the central bank field (who are extremely slow movers).

The second part of their business should get us to profitability sooner. Here they acquired the rights and technology for optical thin film, color shifting strips placed on currency as an anti counterfeiting measure. This has some revenues now but not enough to break even. However there are enough clues out there that make it sound like they are very close to getting a big ongoing order from china. They have said they have been in testing with a large asian customer for some time. They also said on their last call they have sent many test batches but hope to sign a definitive agreement in early 2016 and start ramping up production in the spring. China recently introduced a new 100 yuan note that contains the security optical thin film nanotech produces and they didnt roll it out in a big way yet.It all checks out to me that china is the most likely asian buyer

http://shanghaiist.com/2015/11/12/ne...yuan_notes.php

I think based on projected order sizes and industry pricing one order from china for one note would get nano from burning cash to generating close to 10mm ebitda a year. That gets us to the $1.75-2.00 range, a very good return from here. And we still have the nano blue sky possibility.

This one is clearly risky since they have no large contracts signed and are still losing money but it has the potential to be a large multibagger and I dont think the odds are that bad. Good risk/reward

covered my amaya some time ago around $16

RYCEY got some nice new orders from Iran this week. More importantly it contains a bunch of orders for A380 which had been sturggling for order last couple of years and some orders for A330ceo which helps rolls manage the transition to the neo with great volumes/less downtime

I appreciate you taking the time to write that, very informative. Before asking I did pore over their website and was genuinely fascinated by the sector and the upside. The first tranche of shares I have already bought are TFSA shares. I've simply been debating sizing the play in accordance with how my research plays out. The part I'm still struggling to piece together is what kind of market share they can hope for (but if one big contract is enough to make it $2, maybe this is a pointless exercise). After a bunch of digging around I found this which finally lead me to the other (huge) players in the space:

http://www.currencyconference.com/cc15-sponsors

Before I start to sift through the competing products, I guess my question is this:

Are those big players currently failing badly enough that governments will turn to a technology like this? Would a giant like China turn to a microcap for their needs over an established player? And lastly, would someone like De la Rue or Giesecke & Devrient / Louisenthal buy them out if they land a customer like the government of China? Seems like they'd never get a better spot/buy out price.

Thanks again Ahnuld

G&D are pretty much the only other guys in the world who do the optical thin film. No one does the nano stuff. It would make sense for someone to buy them out but they would have to pay up. The CEO owns about 13% of the company if I recall and is an optimistic entrepreneur type (thats both good and bad) so he wouldnt sell cheap.

In terms of why china would deal with them? The OTF division they bought was a part of fortress paper. The managers there already had some relationships with central banks so its not out of left field. Plus nano has been trying to sell central banks on the nano security features for a few years now so they would know each other as well.

but yeah if not for the evidence of china doing this meshing well with mgmt public comments for the past year I wouldnt have bought it. Seems like we are close.

I have been tracking this one too being that I'm a Canuck, and have been very interested in the recent drop in share price.

I completely agree with most of your analysis. The one area I'm still very torn on here is how the Liberal government affects them (and actually many other CDN oil companies) for say the next 4 years. Do you think they thrive under the Liberals who might require stricter environmental regs?

^ Regulations for tailings ponds are set by the Alberta government. Suncor is already aggressively reclaiming their ponds but the industry can definitely use a kick in the ass here to do more.

I have been looking at NAL too but am more intrigued by the debt, you can get 9% yields out to 2021.

Liberals shouldnt matter much, more what the provincial NDP does. They already announced royalty chnages last week and oil sands changes a few months ago and it wasnt so bad. Good for some, bad for others, not massive changes overall. Shouldnt affect newalta that much

ahnuld: First of all, thanks for doing this. I always enjoy reading these, and I know a lot of other people do too.

Question for you: I assume you do a lot of your company modeling in Excel. Would you be open to sharing a sample model sometime, maybe as like a read-only document on Google Docs? I'd like to learn more about the process that you use, and I imagine I'm not the only one.

Great Thread Ahnuld....some real nice stuff,along w/your consistent updates ,as well as answering any questions members may have

TheDempster

NICK results a touch light due to extra provisioning but omg I just looked through Santanders results (sc) and thats why you dont use 8-1 leverage in this business. in last 6 months NICK is down 20% while Santander is down 60%.

Anyways, NICK is trading at 5.5x next 12 months earnings and .8 book. Very cheap for a very solid company

Other update: I picked up some CF jan 2018 calls at $40 for 2.98

Was waiting for them to close the CHS deal and get cashed up. That deal works out to them effectively selling 9% of themselves for $113 per share vs $30 trading price today.

Not sure why you think the provisioning is extra. Basically equal to the charge offs, which is the minimum a company should provision unless it is over-reserved.

I meant extra provisioning compared to my expectations...

Ahnuld, thoughts on Intermap Technologies' SDI deal from June finally being executed? Obviously a great sign but I figured it might have ripped about twice as high as it has so far.

Is more clarity on their debt restructuring necessary to keep this thing from going to $1+/share? I would assume that the Vertex royalty component eventually gets re-structured/converted? Assuming the long-term interests are aligned.

Provisioning is likely to keep increasing. Charge off % has been ticking up despite the gas dividend to consumers and a growing book. Larger book and higher charge off % usually mean you need to provision more. Yields have been compressing. Profitability has been declining sequentially for the past few quarters. Not sure what will turn it around.

STRZA hit hard, pulled down 22% on a Lions Gate miss. Possible talks about a merger.

honestly sometimes the fast money is so dumb. company is still going to make $3 per share in 2017. it should be trading at 15x that in 12 months

yes to all but im not going to get into imp in this thread

provisions are very high compared to a cycle average and not far off recession levels. It will turn down with time as it always does. The stress hitting some subprime auto lenders like SC is a good thing mid term, gets the marginal guys out of the market and nick can start buying at larger discounts again

Provisions are high because charge-offs are high. Yields are compressing and charge-offs are increasing due to the highly competitive environment as mentioned in the press release. SCUSA is not a marginal player and is unlikely to pull back. Given access to cheaper capital through securitization, larger subprime auto lenders like SCUSA have a real advantage over smaller players. Closure of the securitization market to the larger subprime auto lenders is really the only catalyst for smaller players to get back on even footing. Given recent turmoil in credit markets, this could happen. It's unlikely, but that would have to be the thesis here in my view.