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4/26/2024
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BSIG – Is anyone following the tender offer Brightsphere is doing for their own shares???? They are having a fixed price tender for up to 41.2% of their outstanding shares at $31.50. I noticed because they’ve also said “We also expect to fully deploy our excess capital in this fourth quarter which will likely involve paying down $125 million of our retail notes [aka BSA] and repurchasing more than $1 billion of our shares which will collectively generate significant earnings accretion while reducing leverage, The tender is somewhat complicated by the fact that in sense 25% of the shares they are going to buy are guaranteed to be tendered by Paulson & Co who owns 25% of the outstanding… With this tender ending on Dec 6, BSIG is still closed today 30.40….. Is that an opportunity or am I missing something? Buy BSIG and tender….. Worst case is you end up with shares after proration if any that should benefit greatly from the accretive effects of the tender itself….. Win win???
https://ir.bsig.com/investor-relations/news/news-details/2021/BrightSphere-Announces-Fixed-Price-Tender-Offer/default.aspx
BTW, the quote is from the quarterly CC
The question is what does the stock do once the tender offer is over? Does it fall back, or soar ahead? The only formula I can find for offering a fair price on a tender says that those who hold the stock after the offer will come out ahead given this particular tender price. But if you look at the option pricing, everyone is betting it falls back some afterwards.
I have zero experience at this so I looked at how to hedge my bets with option plays and they all come out about break even.
I made money on the XLRN acquisition, but not a lot because I overbought downside protection thinking if the deal fell through the potential gain was worth more than than if it went through — but in either case I was guaranteed to make money. So I ate into my profits a little with two downside options for each 100 upside shares. Can’t complain. But I don’t see an equivalent play here from just a quick look. I will have to think about it some more.
Southwest Gas (SWX). Icahn has offered to purchase shares for $75 and SWX management is against it. Stock is currently under $70 and my cost is in the $50’s. It sounds like Icahn can do better and he is fed up with mgt. Of course if I sell, I’m out but maybe that’s not a bad thing.
Any words of wisdom would be appreciated.
Kitti – Since I’m only here to help, I offer up these sage words of wisdom from Capt. Beefheart: “A carrot is as close as a rabbit gets to a diamond.” 😉
Kitti – I bought IEP (Icahn Enterprises) about 6 months ago as I figure Icahn (or his son who is likely to take over eventually) have more savvy than I do and privy to a lot more information.
Its pretty much impossible to find 5% IG (BBB+) on the street. Would ride it till you get taken out.
Liked the deep value digging recently within the telecom sector. Found this cigar butt laying in an ashtray country.
https://www.cablevisionholding.com/files/Comunicados-Prensa/2021/RNS%20-%20CVH%20announces%20payment%20of%20dividends%20in%20kind%20II.pdf
Yuck… Just your imagery, let alone the content in the article, makes me gag. It reminds me of that part of rush night for my fraternity in the 60’s that I feared the most….2 or 3 pledges were to be put in a toilet room (not a full bathroom – just a toilet and sink with room for one person), door closed, each with a cigar not to be let out of the room until the cigars were butts… I could handle everything else planned for the night, but I absolutely dreaded even the thought of doing that one… Fortunately, I was out of town with the track team that night and never had to go thru rush… I never would have made it.. lol
Its a stinker with fleas. Intentionally not trying to mislead people.
Anybody else involved with RIV’s rights offering???? I’m hearing shares showing up in broker accounts as early as 2 days ago at some firms, Has anyone had their shares alotted yet? I own RIV at TDA and so far, nothing except an isolated line identifying the awarded shares by a number.
Looking at OHI, Omega Healthcare Investors Inc. Trading at a 52 week low, yielding over 9.3%, 6.82 B Market. and makes $$$. I owned some shares years ago and sold. Have not followed the company in a long time. Anyone care to share their thoughts?
David, suggest you do a deep dive on OHI before buying. I owned it in the past, but sold all shares this summer. Covid issues have caused occupancy rates to drop to approximately 75%, several operators have stopped making payments, dividend not increased in 2021 (ended 18 year dividend increase streak). Unless things improve it will be difficult to maintain the current dividend and a reduction becomes a concern.
Like Medical Properties Trust, Inc. (MPW) much better wait until trading above 5.59% yield.
David — I agree with LarryL, the company has troubling issues: Guardian Healthcare makes up 3.7% of OHI’s portfolio, and has stopped paying rent; Agemo is 5.5% of the portfolio and didnt pay rent from August through October; Gulf Coast Healthcare, 3% of OHI’s total rent, hasn’t paid rent since June and has filed for bankruptcy. Verify that info for yourself but I’m avoiding this one right now.
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Does anyone here have thoughts on FIS or FISV? Both look attractive to me after their recent price drops. Now that IPLDP and every other reasonably attractive preferred I own got called, I guess I’m being forced to add more commons. Thanks!
Recent sell off in card / payment processors has occurred over the last month. Target price provided by Morningstar. Analyst Upside guestimates provided by yahoo finance.
FISV Fiserv Inc Target: $119.00 Discount: 16.85% Analyst Upside: 31.75%
FIS Fidelity National Information Servcs Target: $142.00 Discount: 22.76% Analyst Upside: 32.01%
GPN Global Payments Inc Target: $179.00 Discount: 35.82% Analyst Upside: 52.43%
V Visa Inc Target: $215.00 Discount: 1.27% Analyst Upside: 30.44%
MA Mastercard Inc Target: $337.00 Discount: -6.74% Analyst Upside: 21.61%
Major XLRN shareholder is not tendering shares for the buyout. They hold about 7% of the shares. >50% is needed to close the deal.
I bought when it was back closer to $170 and bought a Put at the same time in case the deal does not go through. The outcome seems binary here with either the deal going through at the offer price of $180, in which case I make a little even after the option cost, or the Put protects me on the low end and I will make a lot if I can dump the shares before they bottom. There is a lot of room there for it to fall back to $120 or so. But I don’t expect it to go all the way if there is still hope of a deal on different terms.
Anyone see a better way to play this?
Noticed ORI popped c. 9% today, some of us were discussing it when they paid a special dividend recently. Pretty impressive.
I made money around the special dividend time with the stock, dividend and some option plays. I still own my shares, but got caught carrying some covered calls when it popped today so I will not get the whole “pop” if it stays up until the strike date.
Not complaining though. I have made very good money on ORI this year.
DOW has hit a 5% Dividend Yield with the sell off today to 56. There is concern of natural gas supplies may hurt earnings. Seems like a good initial entry point. It goes ex-dividend 11/29.
I own a full position in Verizon, and am happy with the 4.7% dividend ($2.56 per year). Recently added to my position with the common dropped to $52.16. Trying to determine if I will add more as the price continues to drop–currently at $51.05. But concerned as to why the price is dropping. Anyone have any insight as why the price has dropped approximately 6.5% in recent weeks. Target price is in the $56 range.
Vz is a solid mature operation that is low growth ~1%. At $53-54 you should expect 15% return. It’s not a name I would expect anybody to pay up for given its predictable low growth.
Not of high interest in an equity portfolio.
If I expected a 15% return, I would consider the stock to be of very high interest in an equity portfolio.
Micahc….given that you have little interest in an expected 15% equity return…what return do you expect from the S&P 500?
S&P500 long term return has been ~10%. I’m expecting zero or negative real return on the S&P500 for the next year. Inside the 500 components are always bargains to be had.
For equity I’m looking for 20-30% return rates as you are exposed to the highest amount of risk.
For instance I really like (ATVI) Activision Blizzard, Inc. but at $65 based upon current 6% growth I will only receive 13% return (bit better than market). So I would need further discount of $48 (18% return) to purchase.
It looks like ATVI employees are not happy with the CEO.. What’s with that??
Activision CEO Bobby Kotick Knew for Years About Sexual-Misconduct Allegations at Videogame Giant. Dropped 11AM. Tech companies have a history of being run like fraternity houses.
https://www.wsj.com/articles/activision-videogames-bobby-kotick-sexual-misconduct-allegations-11637075680
Stock still too expensive.
Most of the investors on this website are looking for stable income. I have a portfolio mix of a variety of investment types, the vast majority of which provide a steady, recurring dividend (BB, preferreds, CEF’s, equity, MLP). A low growth, high quality stock (i.e. Vz), with a 4-5% dividend meets my criteria for investment. My target annual dividend return is 6 to 7%. As a retiree, I am not looking to hit 15% home runs. But, very satisfied with singles and doubles.
Doing some preliminary research on COMS common stock and stumbled on this
https://www.sec.gov/Archives/edgar/data/1178727/000121390021052168/f424b51021_comsovereign.htm
Not quite the point of being an alert but thought someone here might appreciate it.
Thanks Dufus–will get it in the database.
I think FPI has fallen far enough to play a bounce. I’m in at 11.10.
Bounced nicely in a down market. Sold half today at 11.53.
Sold the rest at 11.65…could go higher, but market is weak. Should be some go replacement candidates.
RB – You’ve been playing FPI one like a Stradivarius. lol
Z= Zillow
One more week in NYC and we are driving back to FL.
We were looking for a broker to cut his commission on our co-op sale.
So, me and the missus spoke to my brother and his “Eccentric Genius” kid.
The Genius said “Zillow will replace R.E Brokers in the future”
Then my wifes ear perked up. Should I buy it now? Everyone answered “YES”.
Does Genius own Z, yes at 30 something, Then my brother eviscerated his wife for letting Z go to the 200’s and not sell her shares.
So my bitter half picked up 100 shares at 89.20 yesterday.
What do you say?
Is Zillow going to be replacing RE Brokers?
Me, being cautious, hope to buy 500 shares on the next big drop in the market.
You may be on to something there Newman. I get the sense the real estate industry is undergoing a sea change. It first became noticeable when I was working as marketing manager for Sotheby’s Real Estate brokerage in Santa Fe back in the ’90s. It appears to have snowballed since then. Why hassle with RE agents when Zillow, Redfin, Offerpad, et. al. will make competitive, as-is purchase offers with very little negotiation in a short time frame? Simply based on the innate laziness of humans in general it seems like a sure-fire business model to me.
mikeo:
Yeah, every high margin service is targeted by technology.
Who remembers Travel Agents?
It will take 10 years or more till 75% of brokers are no longer needed.
In my case, our co-op is worth maybe 475, but with broker fees and co-op fees we would be losing 10-12%. Ouch.
Intuit is another disruptor that disrupted bookkeeping and tax software.
Electric cars and their components are obviously the future too.
Good luck.
Wall Street Journal had a good article on Sept. 20 about realtors fighting to protect their fees. I haven’t used a realtor in years to buy or sell. I use Redfin for my searches to buy and a real estate attorney for the contracts. If I’m buying and they’ve built in a partial commission the buyer has to pay (yes, that’s a thing now) I take that money as cash back from seller at closing or I don’t make the deal. You’d be amazed at home many realtors refuse to show you a home — or go to contract — unless you have a broker. (There’s a way around that, too). Realtors are obsolete. You can do your own research and hire an attorney for less than a grand and save a ton of money and hassle.
The way Z butchers the description of my house and the inability to get it straighten out with them, I sure hope not….They identify 3 separate houses as being located on my 10 acres. They’re almost as bad as the appraiser (sorry, Tim) who couldn’t even properly identify my house’s nearest cross road or which side of the Tennessee River we’re on…And how you call a French Country house a Cape Cod is beyond me. So much for my copper gutters too – they’re vinyl now according to the appraiser and the slate roof is composite shingles. I could go on but it’s all off topic venting..
Buyer beware, might be Zillow that my son and his wife just got scammed on. Person listed a rental that they said that they had to move out of state due to a job transfer, but wanted to keep the house as a rental. They went and looked and it was vacant and they got excited at seeing it as rentals are scarce around here. Person asked for a first, last and deposit to be sent to them and they would arrange to send the keys. Wife went to the bank to get the cashier’s check.
Only thing that saved them from a unhappy ending was teller refused to do it. After hearing wife’s story the teller said she just lost about $2000 00 in similar scam. They contacted Zillow to get fake ad taken down don’t know if they ever did
Zillow just started a home buying service in 2021. Why don’t you get them to buy your NYC co-op?
Checking Willow now
It says it can’t locate the home.
God Zillow has more work to do.
Two things I noticed about Zillow, at least in the area I live. 1. The estimated home values on my block are highly inaccurate. My neighborhood has houses small to large, very different styles, age and condition. A difficult task for a computer to analyze. 2. To buy one of the houses up for sale you are directed to a Real Estate agent in most cases. In my town at the moment 53 Zillow sales are through agents while 3 are sell by owner. So for now most sellers here prefer the convenience of using an agent. Typical of our culture now – convenience rules.
Also there are other services that do the same thing Zillow does like Homes.com, Trulia.com, Realtor.com and others.
RE market is typically very illiquid with some homes only getting bids every 90-100 days. With the introduction of iBuyer platforms (Zillow, Redfin, Offerpad) act as market makers providing liquidity. This creates a marketplace to bring in the flippers, agents, and eyeballs but it does not make profits with sub 2-3% margins.
Marketplace is tantamount to creating network effects (think facebook) bringing in advertisers (marketing), data selling, and bolt on acquisitions or cross selling (think instant mortgages) creates future flywheel effects.
Underlying this trend has been private equity which has been mopping up inventory and warehousing it since 2008. (American Homes for Rent, etc, etc)
Larger network effects generate larger profits while keeping the maintenance capital flat to down (software companies do not require higher maintenance costs as computers and automation perform the work of new employee).
Bullish Zillow.
Be careful on Zillow. They own a ton of houses in a bunch of overpriced markets that they are taking a pretty good loss on when they eventually sell them.
I picked up some shares of food branding giant Conagra (CAG) near the close yesterday ahead of their earnings announcement tomorrow morning. The current yield is 3.65% and the stock goes ex-div Oct 29th. The company raised its dividend last quarter and is expected to report good results. I’m playing the bounce up from earnings with the possibility of collecting a dividend payment if the momentum lasts and the market cooperates.
I see my FPI preferred shares are now converted to common as per the redemption notice (208 common per 100 pref)
Now question is do I keep common as inflation hedge (ie. higher farmland values) or look for another pref . Will likely do a little of both. Always remembered as a young banker a European farmer telling me that he only invested in farmland – reason being – Hitler’s tanks rolled thru his country and destroyed everything but at the end of the war farmland was still there.
Good days for Williams WMB. It paid its quarterly part of 6.2% last week and today it is up 5%. News has been good recently but I don’t see anything regarding today’s jump in price
NG up 5+%, oil 2+%. That could do it.
IEP – 16% yield. What uniquely jumps out on this one is that Icahn owns 95% of the float and he takes his distribution in stock; so cash-wise, they have more than enough to cover the other 5%.
If you look at technicals; thought I’d add some context:
Stock price though interestingly telling a potential different story as it hovers near 52 week lows.
Stock had two double tops in $77 handle; one in 2018 and one in 2019.
The stock made a double bottom; one in 2016 and one in 2017 that lead to a big run. The current test here of the 52 week low could effectively be a double bottom being completed.
Dutch Bros Coffee (BROS) opened at $32.50 this morning after being priced at $23. Its currently trading near $38. I tried placing a pre-market order with Merrill at $23 but didn’t get filled…their IPO club is small and I’m not even on the guest list.
… and SBUX fell 3.55% for the day.
Step right up and pay 10 million per location. Even if they double in size next year that is 5 mil per! Starbucks is only approx 4 mil in 2020. Insanity. Wait 12 months and buy bros for 10.
Citadel West: Not sure what they put in their coffee, but one opened up near me (Calif. coast) and the lines of cars are really long still. There is a Starbucks across the street with about 1/4 of the business. Lost on me though, I like Peet’s Coffee and sticking to it 🙂
Dutch Bros sells a lot of energy drinks as well as coffee, and their drive thru business model has popular appeal. Their stock has energy as well, up 18%+ today alone.
Peet’s is a good brand and it trades on the Amsterdam exchange.
PCF – High Income Securities Fund announced Rights Offering – https://finance.yahoo.com/news/high-income-securities-fund-announces-174900885.html dated Sept 10th
I suppose this should be in the CEF category but since it looks as though there hasn’t been a post there in 2 years, I’ll give a try here instead – anyone involved in this one??? They just announced the terms on a previously announced Rights Offering The rights are non-transferable and the ratio is 1 right for each share owned…. That means if all rights are executed the fund will double in size AND the day after the rights offering closes, they’ll essentially could have a fund that will be 50% in cash…. Owning the rights give you the ability to put in for an unlimited amount of additional shares if available from others not executing theirs. And if that’s not enough to cover all the demand, well, no problem, PCF has the right to issue up to 200% more shares above what”s offered in the RO….
PCF is a Bulldog Investors, Phil Goldstein, managed fund… They do SPE as well…. Right now, PCF is trading at about a 6.50% PREMIUM to NAV. The subscription price for the shares to be issued will be equal to the LESSER [emphasis added] of 95% of (1) the net asset value per share (“NAV”) on the trading day after the Expiration Date or (2) the volume weighted average market price per share for the three consecutive trading days ending on the trading day after the Expiration Date, provided, however that such amount shall not be less than 85% of the NAV as of the close on the trading day after the Expiration Date.
My question is shouldn’t PCF, in reaction to the RO trade down from here dramatically? When the RO has the potential to make the fund 50% cash when the post offering NAV is calculated, how can this one stay trading at such a high premium to NAV? They do offer a high managed income dividend that gets recalculated annually at end of the year based on its then NAV, but that’s going to be happening shortly after the rights offering closes (October 22) so the fund is almost guaranteed to have a high percentage of cash as part of its NAV…..
I’m surprised the price held up today…. I feel like I have a full position on PCF right now, so I sold about half of what I own to make room for shares I expect to buy back thru the rights offering…. We’ll see how that works out…. In the meantime, I’ll lose 2 dividends of .078/share I think (maybe 3?) for the time I’ll be out – Any opinions anyone???
Great plan. rights offerings are a way for the fund manager to shore up or grow the NAV but are often dilutive.
Expect a share price decline after dust settles.
Would say it’s also a warning sign if done too often in the case nhf or riv.
Micahc:
Seeing many rights offerings in the closed end fund space lately. Looks like closed end fund managers want their piece of the pie by increasing fund sizes and generating higher management fees, no matter how much it hurts current shareholders.
I owned one (ticker FINS) from Angel Oak that was a great little fund that mostly invested in community bank debt that paid a 7%+ yield.
FINS recently announced a dilutive rights offering and the fund’s price has already been hit by 7% in a week. Sold much of it before the hit. If it is a quality CEF, they usually bounce back after all the dust settles.
They are broadening their charter to include a wide range of investable options also. Possible manager overreach just when the game is already a spec? More bang for the leverage?? See their site/announcement.
I rarely venture into the IPO market, but the upcoming public offering of Dutch Bros Coffee has gotten me excited. As Peter Lynch famously said ‘invest in what you know’, and this Oregon based company has got great products, great service, an easily expandable drive-thru business model, and legions of hard core fans (known as the Dutch Mafia). Their offering date is Sept. 15th and they will trade under the symbol BROS on the NYSE.
https://www.oregonlive.com/business/2021/09/dutch-bros-sets-date-for-ipo-poised-to-be-oregons-biggest.html
Their coffee isn’t very good, but the drones out here love the Dutch regardless. Kind of a Ben n Jerry’s thing before they got sold. They have a small drive up model like the really old In n’ Outs that had no dine in service. This is really annoying because the cars stack up and block access to the street and other stores. The land lots they operate on are too small for the number of cars that are waiting. It causes traffic problems and angry drivers.
This isn’t the first coffee place around here to go public. The other one that had WAY better coffee was Coffee People. They went banko after going public. The founders still have a coffee shop in NE and still still sell the Black Tiger coffee. They make a milkshake with the Black Tiger beans that is soooo good.
The other coffee franchises have been popular were Seattle’s Best that got bought by Starbucks. Another local yokel coffee company, Boyds, was recently sold to some conglomerate (terrible coffee).
Lines of cars waiting to get served at Dutch Bros is a fairly common sight in the Portland metro area. They must be doing something right because they have a huge base of loyal customers, and the drive thru model seems to be quite popular.
CW:
Not to go too far off the topic of investing, but I will never underestimate the devotion of the citizenship to lousy coffee. Starbucks, Dutch Bros, Dunkin Donuts, etc. is all crap.
I switched to an organic roaster many years ago that has dedicated his life to finding organically-grown beans in all parts of the world that support small family farms. Sells his product at very competitive prices. Check it out…incredible coffee.
http://www.deansbeans.com
Rob…with all the extra stuff people put in their coffee nowadays I’m not sure the quality of the coffee even matters. But those added flavors and toppings turn a $1 dollar beverage into a $5 dollar beverage, so as an investor I’m not complaining. Dutch Bros has 13 locations currently in Las Vegas, and I’d expect that number to grow after they go public.
What did you think of the coffee CW?
Dutch Bros coffee is ok…my wife likes their flavored teas and chais. I’m not their best demographic (too old, too cheap) but I like their business model.
Ha ha. Yeah, I’m too cheap too. You can buy Seattle’s Best and brew it yourself for $3.98 for 12/oz bag. It’ll last a week and I drink the stuff every day.
Sisters Coffee from Eastern Oregon sells their product at Grocery Outlet for $5/lb when they have it in. They make an excellent product, but retail is over $10 lb!
Selling coffee is BRUTAL in the NW. Many many many competitors with high quality product. There is a Bikini Barista right down the street from me. It’s kind of a Hooters of coffee, but I have never went or lOOked. Well maybe a quick lOOk. Ha ha.
Franchises from around here haven’t done so well going public. I mentioned Coffee People, but another favorite was Macheesmo Mouse. This was a Chipotle style fast food that was ten years ahead of it’s time. Lines out the door every time I went for lunch, but alas they want BANKO as well.
I love Dutch Brothers, discovered first at a kiosk in a parking lot near my motel in Eugene some 20+ years ago. I am eternally grateful to Dutch Bros. for cluing me in on how to make good coffee at home. (I grew up on diner coffee.)
My home brewing has been in crisis since Seattle’s Best Decaf Organic Twilight disappeared after the merger, with Whole Foods decaf Sumatra whole bean a current favorite. No more Starbucks, too burny. Seattle’s Best Portside 3 and Cafe Bustelo, with its Cuban / Miami flair, are my budget choices. When I sample, I cut with chicory if a coffee is so so.
FWIW, I found some really good coffee in Portland around ’92, heard of an IPO and got the prospectus. It popped and I skipped thinking they’d drop. And so I missed Starbucks.
For a more sublime experience, I use Celestial Seasonings decaf Green Tea softened with a delicate White tea, but this is a coffee post, isn’t it?
BearNJ:
Forget about those decafs you are consuming. Very harsh chemicals used to create those products.
Dean’s Beans does it the right way. Their decafs are incredibly robust.
Remember, drink deep!
Decaf Coffees at Dean’s Beans:
A note on Natural Water-Process Decaffeination.
Instead of using harsh chemicals to remove the caffeine from the coffee beans, our coffee is decaffeinated simply using water, in a gentle eco-friendly process called the Natural Water Process. The beans are soaked in hot water for a designated period of time, and the caffeine leaches out.
Then the solution is passed through a carbon filter that catches the caffeine particles, but leaves the water, oils, and flavors to be reabsorbed into the beans. You are left with a 99.9% caffeine free bean, without sacrificing great taste or adding unneeded chemicals to the environment and your body!
Bear…its been a long time since I drank any diner coffee, but I still remember those blue and white to go cups with the Greek columns on them…back when a cup of coffee to go was .50 cents and they fixed it for you.
-btw if you’re interested in the Dutch Bros IPO, here is a link to the amended S1 they filed yesterday with SEC.
https://www.sec.gov/Archives/edgar/data/0001866581/000162828021018412/dutchbross-1a2.htm
Thanks for the link. I may take a bite if only because I missed Starbucks.
A few observations. Nothing really alarming.
– This is a kiosk-type retail business so it may be difficult to increase same-store sales. There is just so much demand for coffee to go in a trade area.
— Over half their sales are in the 9 am to 4 pm time slot, which surprised me. Customer demographics: 72% age 16-35; 67% female.
— A lot of DB’s growth seems to be coming from adding new stores.
— Same store sales held up well in 2020, but can they hold on to that business post-pandemic. i.e., if you’re going to DB because its outdoors and safe like the bank drive up window what happens when the local Starbucks / bagel shop / pancake house opens up indoors full blast.
— Coffee prices are volatile and currently up. Price / margin issues.
— Their decaf is whole bean, making them a virtuous company.
– – Adding stores in more densely populated states may be difficult. Nothing drives the local zoning board crazy like traffic stacking.
— Mostly franchised, 264 to 200, but moving to company owned. Pretty weird looking numbers because of this, apples to oranges. More revenue out of the owned stores, but franchised stores look more profitable. (Owned stores have overhead. Franchise stores produce franchise fees. ) Franchisees are required to buy official supplies, like napkins and cups, a potential area for future disputes.
— Company owned stores leased rather than owned,
— Offering is dilutive, existing shareholders are in at ~$2.50, new buyers are in at ~19. They paid out a $200 million pre-IPO dividend and expect to get $140-190 million from the IPO. Nice work if you can get it, IMHO.
— Multiple classes of stock. One has to swim through the family business verbiage to find this: “Our Sponsor is a leading private equity firm focused exclusively on the branded consumer sector.” And will own a chunk of our stock after the IPO.
— Like every retailer, much talk about “Our people are our business.” There was one college kid in the kiosk I visited long ago. I suspect he’s long gone. IMHO, employee turnover is a big problem in retail. Great service is not unique to big chains with training programs. FWIW, the local bagel shop knows my order too. Sometimes they tease me by having my order ready on the counter before I park.
Just my opinion.
Thank you for confirming what I had thought. This is literally Coffee People 2.0. I found some articles about Coffee People when they thought they were going to be #2 behind Starbucks and they actually had GOOD A** coffee.
“Jim and Patty Roberts founded Coffee People in 1983 in an old house on Westover Street in Northwest Portland—it was Coffee Man for 8 years before that—living upstairs above the cafe they founded.
At its peak, Coffee People had more than 40 locations in town, serving up Black Tiger shakes and Velvet Hammer mochas, going public in 1996 with the goal of being No. 2 to Starbucks. But the business crumbled instead, and they were forced to sell.”
“The Robertses sold their caffeine kingdom in 1997, after nearly 20 years of stoking Portland’s java junkies with Black Tiger Espresso and Jimbo’s Hippie Cookies. They made their coffee strong and kept their business mantra simple: “Good coffee. No backtalk.”
At the top of their game, they were minority owners of 40 Coffee People stores and Motor Mokas in the Portland area. In their quest to become No. 2 to Starbucks, the Robertses went public with their company in 1996 (after a local offering in 1995), then expanded to Denver, Chicago and southern California. According to Jim, the empire collapsed when “business just didn’t ramp up fast enough.”
https://www.wweek.com/restaurants/2016/06/16/one-of-the-oldest-names-in-portland-coffee-is-closing-all-locations-this-month/
https://www.wweek.com/portland/article-1514-return-of-the-coffee-people.html
frg or wina
Enbridge (ENB) stock and it’s preferred shares are a frequent topic on this board. and I’m very long the company. They made a significant acquisition yesterday and RBN Energy has a very nice blog note on it.
https://rbnenergy.com/you-send-me-moda-ingleside-deal-propels-enbridge-to-leading-role-in-crude-exports
The company will be a major exporter of hydrocarbons from the US.
Me like ENB and their staggered reset prefs. Then USD denominated CN prefs (four) are all below par and yielding well until reset, the V issue resets right after the midterm elections, 01-23, as a spec on a higher reset rate from today? Either way let it ride or called?
The options stay cheap though. They have managed thru some recent issues well.
Take a look at their foray into European wind. They are NOT thinking or a small start, but using their large scale expertise on large scale projects. Euro energy costs are already high. My niece in Italy will not even roast a turkey or run the dryer because of energy costs. That leaves a lot more room to compete with new, long lived wholesale projects. It nicks many green checkboxes too.
I think 9 billion people are going to want electrons, even if it is just to get to their wallets,
Joes, A – which are these CN Preferreds you mention for ENB? Are these Canadian preferreds? If so, what is tax implication for US taxpayers?
I only see ENBA a fix to float 6.375% coup that is first callable Apr 2023.
Any thoughts on QPFF American Century Quality Preferred ETF? Actively managed, 4.8% SEC yield, about seven months old but only 540,000 shares issued, low trading volume and only $22 million in investments. You can see the dilemma…is this ETF going to survive or be closed down eventually for lack of interest? Top ten holdings are reasonably good but like any ETF contains some holdings I wouldn’t personally buy. As an income investor this would be a buy and hold for me.
Current share price is $41.69
Preferred market typically has large mispricing which can be captured by an active manager more effectively. (FFC/FLC/PFD) One of the best managers has been Flaherty & Crumrine.
ETF/Index wrapper is about purchasing the lowest fee. (PFFD)
Own none of these products.
I agree with micahc. FLC is my largest holding in both my trust account and my Roth Ira. It has a long history of being well managed. It is currently selling at a premium (+3%). But, current price is the lowest it has been in the last 3 months. FFC is pretty much a mirror image of FLC.
On the plus side QPFF has a decent expense ratio (.32%), and holds a number of issues not readily available to retail investors. However, the ETF was just launched in 2021 and doesn’t have a market selloff track record to examine. If your objective is income, I’d say there are other choices including some term dated new issues.
Richard, I like the research you have done here. Find out how much of that Dividend is return of capitol. If they are not able to invest the capitol to make the dividend then its basically the snake eating its tail.
The capitol goes down then the dividend gets reduced. read some of the older articles by Stanford Chemist over on SA
Thanks Charles I will check that out
FAT Brands decides to buy Twin Peaks. This sports bar restaurant is much better known for its scantily-clad waitresses that all look like models instead of its “scratch-made food and signature beers.”
Anyway, looks like $50 million more FATBP 8.25% preferred is going to be issued to close this deal. FAT seems to consistently issue new shares of this preferred – they treat it like a never-ending bank account.
https://seekingalpha.com/news/3735930-fat-brands-to-buy-twin-peaks-restaurant-chain-for-300-million
Sold FATBP. Maybe buy back when the new shares come in lower.
Hurricane Ida has affected the oil industry in the gulf causing major production shut downs, Any monkey throwing darts can pick a company that may profit from this.
But considering Holly Frontier’s refineries are located farther inland they will not be affected. HEP
Course 2 edged sword, higher crude prices affect margin but people need fuel and are willing to pay higher prices
Clear Secure, Inc. (YOU) – re-opening speculative vaccine passports.
No high conviction investment thesis developed.
Government has an overwhelming need to put a vaccine passport system in place forcing the hand of the fence sitters and anti-vaxers.
The government has an overwhelming need to fulfill its totalitarian agenda/mission.
I think ticker (YOU) should focus on their work related to picking out the bad apples scurrying through the airports or deployments of buses in the cover of darkness, but that would counter the narrative and likely harm their eligibility for NIH grants.
FEYE (software)and OSCR(health insurance) re: Insider buys
I mentioned FEYE on 8-11 after an insider buy at 16.92.
I made a bit and got out. FEYE dropped down again.
Then more Insider buy on 8-20 at 16.94. I bought at 17.27 and got out near 18.00.
Now there’s another insider buy on 8-27 at 18.64.
I may sit this one out.
The one that got away is OSCR. Huge insider buys ($7 million dollars worth) on the 24th. It had closed at 12.40 the day before but opened at 13.10 and didn’t move much higher.
Another buy was filed 8-27 for $6 million
Joshua Kushner was a big buyer,
Something is in the wind.
Insidercow.com is where I get the info.
I hope to buy OSCR pre market Monday.
Newman, you might be making something on OSCR but I read past articles on SA and what I read didn’t sound good. It had backers like Google and Fidelity management Research etc. But I wonder if the lockup period for the original investors and employees ends or has ended.
OSCR – If the largest (UNH/ANTM) most efficient operators are experiencing mid single digit operating margins. Technology does not fix industry profitability.
Easier money riding the CVS price rollercoaster.
In reply to Charles M. and micahc,
I rarely get into due diligence on these companies.
The Insider Buyer (officers only) knows more than we do.
The buyer expects to be rewarded at a later time.
My posting of Insider buys is to let you guys watch how I trade.
Picking the wrong Insider Buy would upset me.
But, I have my filters set up to determine candidates.
I just bought 400 shs of each stock
OSCR 14.60 and FEYE 18.80.
I don’t like my buy in price, but it’s done.
thank you Newman for your postings and continuing to post. Good luck to everyone this week
GPN – global payments network
Recently has had a fall from grace after ripping the cover off the earnings ball.
Questions remain can the company grow revenue/cash flow without issuing debt and shares like it was 1999. Even in the ever crowded automatic payments marketplace.
With an extremely high 20%+ long term growth rate you will be betting on this road runner out accelerating Wile E Coyote of the debt market.
I’ve always like plumb crazy purple adding to my existing position.
Redbox “IPO”
Completely flying under the radar here but Redbox is going public again imminently via SPAC merger. You can buy in now at trust value “par” for $10 under ticker SGAM.
Apparently they also launched Redbox TV with a whole bunch of streaming content that is retro programming and new.
Theta…the only reference I’ve found to Redbox at SA shows its ticker will be RDBX. Does owning the spac SGAM give you rights to purchase Redbox at IPO?
no, purchasing SGAM is the equivalent of owning RDBX shares when/if the merger is complete. Read up on SPACs to get an idea of how the mechanics work.
Citadel – Upon merger completion / post-SPAC if you held an existing position in SGAM beforehand, the symbol will change to RDBX in your account. Same concept/logistics as to when you buy a newly issued preferred via OTC and then it gets listed shortly down the road under a different symbol.
Theta, I see backers in the spac are LionsGate and Legendary Entertainment, and Thunder road films. All good production companies in the film business. A Lot Better than Chicken Soup for the Soul. Last picture they were part of had Bruce Willis and even with him it was a stinker.
Used to rent a lot from Redbox but their content went downhill, always a bunch of slasher and horror flicks for rent,. Think of them as the Papa John’s or Papa Murphy’s of the rental business. Lot of discounts and 2 for 1 to get you to rent. Might be good for a quick flip, but I see its already dropped a couple times below IPO price in trading
Started a position on Friday for BABA (alibaba) which is the Amazon of China after its precipitous drop. High regulatory risk exists as recent drop caused by new rules introduced just this week. This company firmly belongs in the high risk bucket as another 15-30% drop is not unthinkable.
Have wanted to own Alibaba for a very long time its very hard to find companies with 30% annualized growth rates trading at over 25%+ return rates
In my view it was inevitable for the industry to become regulated to protect consumers. Worst case scenario is nationalization. Reasons against it would kill the Chinese growth narrative (American dream equivalent) and the source of national pride it feeds.
Instead of a single stock risk you can buy the industry under ETF KWEB.
Not advice to buy or sell just my personal opinion own shares in BABA.
I did as well. IMO, it’s worth $300 or $0.
Provided an employee an advance. She admittedly went long TSLA 700 calls.
Box or Buggatti.
CIO common is up ~ 30% in the after hours, based on news they are selling a large holding. They have one preferred outstanding CIO-A which is callable on 10/4/21. I assume this large infusion of cash increases the odds the preferred is called then. Possible action if you own the common and/or preferred. The preferred is trading with a negative yield to first call. If you owned it @ today’s close of 25.76, you would receive about 25.41, thus lose about 35 cents a share. Since the first infusion of cash does not occur until December, the preferred might not be called until then in which case it trades at close to break even. We do not own the common or preferred, but if we did I would be hitting the sell button ASAP.
News release:
City Office REIT, Inc. (NYSE: CIO) (“City Office” or the “Company”) announced today that it has entered into definitive agreements to sell all of its holdings in the Sorrento Mesa submarket of San Diego for $576 million. The transactions are expected to generate net proceeds, after estimated closing and transaction costs, of approximately $546 million, which equates to $12.38 per common share. The properties to be sold are unencumbered by debt.
The sales will be completed pursuant to two separate agreements. The northern portion of the portfolio is scheduled to close in December 2021 for $395 million. The southern portion of the portfolio is scheduled to close in February 2023 for $181 million. City Office has the ability to accelerate either closing date to align with redeployment opportunities. Both sales are subject to customary closing conditions.
On second thought, I just bought a few shares of the common. CIO claims their NAV is ~ 24.00, which if correct, it is a screaming buy @ 16.80-17.00. I am betting it will op higher Monday morning.