KOCH INDUSTRIES INC,has filed Form 13F for Q4 2020.Opened new positions in
$ADT

$LADR

$MDP

They bought 1.625 million shares of $MDP in their new position. About 40 million dollars worth.

Total individual and institutional ownership of the stock is approaching 110%. That means that any share you buy is very likely being borrowed by a short seller that is looking to keep the value suppressed so that they can use the price action to cover. If we experience a high volume day the stock is going to increase very quickly as there aren’t enough available shares. The number of shortable shares keeps getting smaller everyday as new institutions initiate positions like the KOCH brothers just did with a new 1.6 million share position. The market cap is only 1.3 billion so with 110 percent ownership of the float every share purchase puts huge upward pressure. Institutions added very heavily to their positions last quarter and have had a month and a half to add even more. We are on the verge of a very big short squeeze if even one more buyer decides to take on a 5 percent position. Short interest is 4 million shares that don’t really exist in the market.

dont forget that a large chunk of their fiscal q4 revenue was from political campaigns, which are now paused for probably the next 18 months. And Covid will prove to be a net positive for these publishing companies. ****, one of their biggest sites is allrecipes.com.. of course, traffic will explode when nearly every restaurant in the world is closed.

Once everything opens up and there aren't any huge political campaigns buying every ad impression online and traffic drops with people back at work and outside earnings will go back to normal.

i do still like the business model and company long term.

the short squeeze narrative is being pushed a lot now on Reddits, I just don't think it applies so much and game stop was one in a million. I would focus on the company itself and not worry about squeezes.

In this situation it’s possible but only if buying volume were to increase significantly. Although I’ve seen the narrative being touted in situations where it definitely doesn’t apply, I believe that given the dynamics of the sell off in March that there is a lot higher probability of it happening in a significant number of stocks because of shorts being trapped in a lot more names. The overall market hadn’t had a large pullback in awhile and that is a big contributor to that increased probability.

I’ve been analyzing EPS numbers for hundreds of different companies and I can’t find one that even comes close to that number as a percentage of their stock price.

If they can earn a third of what they just did for the remainder of the year it puts them on pace for their market cap to triple at a 15x multiple. They are going to do better than that.

they will never get a 15x multiple. not until debt is substantially reduced.

It’s interesting how when a company crushes earnings and makes a strong profit people try to find every reason that it can’t be a good investment by throwing doubt on the results. But when a company is losing huge money like Live Nation the market goes out of its way to give it the benefit of the doubt. Earnings are insurance against the bullshit of this market bubble. They are the truest thing in this entire market.

What you’re saying makes no sense. The debt wasn’t the result of bad management. It was used to purchase assets to grow earnings. That result is happening. By the end of this year the stock will be at 60 or the company will be bought.

And they are up 100% in the last 3-4 months. You are expecting another 300% in the next 10?

You should consider what Ahnuld has to say on the subject. He is actually a professional

It doesn't matter that it was up 100 percent over the last three months. An investment decision is like selling something to yourself. If you have the right standards then the result you achieve will not be based on luck. Good management is about removing the objections to the investment decision so that there is a strong interest in the stock and the value of the company appreciates.

Of course, debt matters but the context of the debt also matters. It would be like a bank that makes a bunch of bad loans and then has a huge hole in the balance sheet. This situation is like a bank that made a lot of high-quality loans and owns them as assets that offset the liabilities of the money it has borrowed. If Meredith has to pay 30 million in interest to buy assets that are earning 200 million then who cares. They are growing revenue in most segments and the assets are becoming more valuable as a result. They are creating new licensing opportunities with their new brands for products that are sold in stores. The more they do to find ways to generate income from those brands that add value for customers the more those brands generate in revenue and the more they are worth to a potential buyer.

I think management coming out of covid should stop trying to please people that are too worried about the debt. It's like the people that keep alluding that they need to reinstate the dividend. They should tell the analysts to **** off on those two things and take the matter of share appreciation into their own hands.

They know they can easily service the debt and because covid is almost certainly going to be over as a serious threat pretty soon then the debt doesn't matter as a threat to the financial stability of the company. They should focus on the share price today. If I were them I would start buying back shares aggressively to avoid people trying to take control too cheaply at the expense of all the other shareholders. It would be unfair if a buyer comes in at 32 a share when it should be at 50 a share if the market actually understood the business. The truth is this market isn't interested in investing really. It's all gambling now.

With all due respect to ahnuld, he's wrong. I concede to arguments not reputations.

Why?

The implication of his comment was that somehow the stock being up 100 percent in three months makes it less likely that the stock will appreciate another 300 percent in 10 months.

It's not an unusual mentality when much of the market is focused on companies that have no earnings.

In many of those situations, the reasoning behind buying and selling is entirely speculative and market-based. Buying and selling is not really about price discovery that has a strong correlation to earnings. It's mostly market-based flavor of the moment type thing.

When market moves are more likely to be based on traditional valuation then the reasoning behind the increases and decreases are likely to stay correlated as the information confirms the validity of the previous appreciation. So in this situation, a 100 percent in three months doesn't matter much if its still undervalued.

It's also important to look at who the major holders are and how much of the company they own. That's why I tried to highlight that the stock got killed in March when it had its losing quarter and huge short positions have been carried forward ever since until now. Institutions have been using the shorts to control over 100 percent of the company shares now. Those institutions are really unlikely to sell as they hold for funds that aren't usually actively trading. 110 percent of the company is now controlled by large holder's and that is only possible because shorts still have 4 million shares short outstanding that they are trying to work their way out of. They are scared to death of the public getting into this stock. That's why they are engineering such shitty looking price action to keep the public way. To the Meme crowd this looks like an old school boomer stock. They don't know how to value a company because the market has taught them to value the wrong things and it's difficult to blame them.

I disagree. Whether you're framing it in terms of an intrinsic valuation model or a pricing model I think a 100% increase in the price in the past quarter is certainly relevant in forecasting the price over the next 2 quarters or so.

And the level of debt factors into the risk profile so I also disagree that the level of debt they have is irrelevant whether it went to good use or not.

I would admit there is some psychological factor to any stock that is already up, people don't see as much upside. Thats how I think at least and I miss out on a lot of good companies because of it. Though it is still below its pre covid price.

It didn't go up 100% based on past technicals, it was up 100% on market sentiment and expectations of a gang busters quarter, which they got.

I don't see anything too exceptional in their financials. They managed an extra 100 million in revenue yoy and that translated fully to the bottom line. Nice results for sure, but nothing to really indicate this wasn't a seasonal windfall from the election, as suggested earlier. Would need to see some QoQ continuation of these results before getting super excited.

As for the debt, well, I disagree with your assertion that it is meaningless.

Ok so let's say they earn 600 million in 2022 without reducing any debt and they up their cash to 800 million on the balance sheet. What valuation would you give the company then?

They survived a pandemic with the debt so how can it be argued that a world without covid sometime this year will make the debt risk worse?

People shorting the stock knew that the market would attribute the losing quarter with the narrative of them being a stodgy old print media magazine company. When the truth is that they lost money because they already had distribution in place for products that they couldn't sell because everything got shut down all over the country by governments.

Then they adapted to it and beat last quarter and totally destroyed this quarter.

My major point is if they have the cash flow to take on 4 billion in debt and service that debt and still earn 3.13 per share, then they probably have the borrowing capacity to borrow 3 more billion and take the company private at 70 bucks a share.

It's really important to note that the KOCH brothers were their lenders for the TIME acquisition and they just made a 5ish percent investment in the common stock.

There has to be a way to get the juice out of this orange for shareholders. Especially in this ultra favorable interest rate environment. Political revenue, or not, this last quarter puts this company in play.

That's like saying debt or the amount of debt doesn't factor into valuations for any company that survived the pandemic. I don't agree with that.

you seem to not really understand debt and how it impacts earnings.

they made 3.13 in eps BECAUSE they took on tons of debt to buy assets. debt juices eps. when you do acquisitions funded with debt and no equity as long as cost of debt is lower than cost of equity it always increases eps.

this is also why people pay a lower multiple for highly levered companies. the earnings are being boosted by the out of whack capital structure. Its also why people often look at EV/FCFF (unlevered fcf yield) as a better representation of value.

I took a small, gambley position based on this thread...

Up like 20% the last two days, thanks!

To the mooooooooooooon

Congrats on the pop-off

Bump for sale of their TV assets. Owners to get $14.5 per share and 1-1 on their new spinoff. Thanks to OP for the tip.

https://www.wsj.com/articles/barry-d...d=hp_lead_pos2

IAC in talks to buy MDP.