I am going to do an initial rebuy after the trailer sales report for 2015 comes out (assuming that it is as good as I think it is), and then another one sometime after the first or second earnings report.

2016 will be a rough year unless the trailer sales are good, and from the research so far, trailers are actually spiking for whatever reason and the crazy sales numbers of 2015 are expected to continue through 2016 which gives them an olive branch. If they can survive to mid 2017 and get their lightweight brake tech working and their expansion in Italy working around that time, then they will suddenly start making serious coin and can parlay that into a refinance. That is what I'm playing for now.

stuck a limit order in and got hit on my amaya yesterday. covered low 16's.

also sold out of NHC, too many problems. I hope it goes back to $10 but one issue too many

Just bought some CCG, a merger arb position. I'm coming up with around 20% annualized and risk/reward looks decent

Ahnuld you'll be glad to hear my first trance of HOS filled today, 7.85. Officially on team HOS for the long run now.

not sure how it made it in as trance over tranche, but I like that. my first trance

I think right now the energy and industrial sector have some great deals out there (CVX, XOM, BP, UNP, MMM, etc). APPL is looking pretty cheap right now too.

SNOW is an odd lot opportunity. Range of 9-10. Free $40+

guys Best Buy (BBY) is dirt cheap here at $26.25. They probably generated around 1b of FCF during Q4 here. They should be around $2.5b net cash

mk cap: 9b
cash (ballpark estimate): 4.15b
debt: 1.64b
Enterprise value: 6.5b
EV/EBITDA: 2.95x

company is buying back lots of stock at these levels as well, mgmt is very good, BBY is the market leader in consumer electronics. CE trends have been weak but BBY has been bucking the trends consistently over the last year as their competition has struggled big time in CE. This is a complete overreaction to (1.5%) holiday sales comp. I think Best Buy is a steady 1b - 1.1b FCF company, give or take .1-.2b.

An energy idea i found interesting:

http://seekingalpha.com/article/3772...-the-bathwater

usually best to just keep these to yourself.

This article seems quite biased as it basically hand-waves away the risks involved. Granted I don't have the knowledge to accurately assess those risks, so he could be right but tread carefully imo.

Instead of buying a rental property a couple years ago, I dropped the money into an assortment of REITS. They have done wonderfully. What I think has super value right now though is UHAL. It is not a REIT, but I own all the storage facility REITS which are holding near all time highs. UHAL is down maybe 20% off it's highs and is into self storage and also has it's monopoly on the self moving business. They are a thinly traded stock and insiders own most of it. So if someone wants to exist a large position, it's going to move the stock quite a bit. I feel like that may be why it's taken a hit as a sympathy play to the market.

What I love about UHAL is they create value. All of these REIT storage places EXR, CUBE, SSS, PSA for example, tend to just go around and buy up existing storage facilities for hundreds of millions. Honestly I don't get how they pay so much for the facilites. Doesn't seem like there's much to them. I hope they aren't overpaying. Anyhow, what UHAL does is it takes abandoned buildings in good locations and turns them into storage/ self moving businesses.

People are accumulating crap that they don't want to throw away. Humans just seem to have some sort of sentimental attachment to things. The long term outlook for the need to move and store this crap is good. Especially at a 20% discount off the highs when the company is growing at a good click.

It has also started to pay and increase it's dividend.

What exactly is the thesis on ACW?

The short summary is:

Activist investor buys up roughly 25% of the shares and installs new management. That activist investor specializes in parts manufacturing, in particular with turning around auto parts manufacturers.

New management turns out to be hyper competent, akin to Gordon Ramsay buying into a failing restaurant with his own money and turning it around personally. Within the span of three years, the new management turns the company around from failing manufacturing plants, bad products, loss of customers, and rapidly bleeding cash to number 1 or 2 in their respective products despite the current bad macro economic situation involving oil and gas and agriculture. Poised to have positive FCF for year end 2015 for the first time in over a decade despite the bad macro and terrible debt situation, and with current prices are slated to be at 4x FCF and 5x EBITDA - Debt.

They have a three pronged approach to double revenue and EBITDA with two very unique products slated to attract both current customers and new customers without cannibalizing their current market, as well as an expansion into Europe which allows them to access and sell directly to their customer base there. Time frame for the execution is mid 2017, wherein by 2018-2020 they expect to complete the execution of their plans.

Unfortunately, their massive debt is due in September 2018 and it is unclear with the current conditions as to whether or not they will successfully refi. Further, the present macro situation is looking to become even worse, with class 8 builds and trailer builds slated to drop by 20% for 2016 as they drop out of the replacement cycle, while the iron castings for oil and gas/agriculture are predicted to go to zero in 2016 due to the collapse of both industries. Market clearly thinks they cannot survive even to execute their stated plans, thus leading to the 80% exodus over the past 6 months.

If they can execute and survive through to 2018, it's a massive multi-bagger, if not it is a zero and they go bankrupt. Given the management's track record and that the management and the activist shareholders are not dumping any shares despite the exodus, I say the chances of management turning it around are much higher than the market predicts while still accepting the rather high possibility that it just falls to zero.

Interesting, thanks for the detailed response. I'll take a look at it.

Standard play for a company in ACW's situation is to offer preferred shares or convertible bonds, no? More a question of how badly they dilute rather than bankruptcy.

how much do you guys take into account ROIC vs WACC when evaluating a company for value?

i think ROIC is very important. Problem is high ROIC businesses are normally very expensive, so i try to find high ROIC businesses that are not currently producing high ROIC or are being hidden within a company composed of other low ROIC businesses.

Just bought some WTW. With Oprah in the mix it's a no brainer.

Any thoughts on WDC as they go through this SanDisk acquisition?

The market action in WTW the past couple days is a clear example of irrationality. WTW jumped quite a lot several months ago when Oprah bought a big chunk of the company and joined the board. It should have been obvious at that point that she would be promoting it. She's already been featured in ads. Now she tweets once and the thing goes up 20%??

Not a fan of WTW overall. The science behind the program is wrong, revenues down 20%, earnings down 40%. The Oprah factor has been fully priced in. PE of 16 not that cheap. $2B debt against a $900M market cap.

That Instagram acquisition is looking like a steal right now.
http://recode.net/2016/01/25/instagr...an-it-used-to/
Whatsapp is another story.

I get your argument and I appreciate you challenging my thesis, but I think you're thinking about this the wrong way. You're looking at historical financials, which are not relevant in this case. What matters is the potential that Weight Watchers has now that they've partnered with Oprah, not what they've done historically.

Oprah has an enormous influence over a certain segment of the population: Middle age women with kids, not very bright, a few extra pounds, disposable income, emotional decision makers. There are millions of these people. She's a trendsetter who influences their spending habits. Look at what Oprah used to do with Oprah's book club: She would recommend a book, and it would shoot to the top of the best seller lists. People would buy it just because Oprah said it was a good book.

Think about the potential for revenue growth here. She announced the other day that she's lost 26 pounds thanks to Weight Watchers. I just saw an article in People Magazine about how she's lost a whole bunch of weight, and she's talking a good game about how she's "Tried everything else but she just couldn't keep the weight off, but now she's on Weight Watchers and it's finally working for her." You think that there aren't millions of women who will read that, identify with it, and think maybe they should give Weight Watchers a try too?

I think if a marketing campaign with Oprah is done right (and she's a very good marketer), the potential for revenue growth (and corresponding P/E Expansion) here is massive. So this could turn out to be a very good investment.

What happens if Oprah puts the pounds back on? I'm guessing that would be a disaster for the stock. She has a long history of not being able to lose weight, no amount of marketing will help the stock if she ends up gaining.

Really feels like you're just betting on a super-rich woman motivating herself to lose a bunch of weight which she's failed at many times. Seems like far from a no-brainer to me.