Behind The Idea

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Behind The Idea #14: Landmark and Beating The High Yield Trap May 01, 2018

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Landmark's model came under scrutiny in an article by new SA contributor Alacran Investments (https://seekingalpha.com/article/4164640-beware-landmark-infrastructure-partners-lp). A lot of high-yield models may come up for scrutiny as the interest rate cycle turns. What does that mean for income investors? We look at how to avoid the high yield trap this week. Topics covered: What is Landmark's model, exactly? (1:45 minute mark) Definition of terms - MLPs vs. REITs vs. triple-net-leases (4:10) Mike explain

Behind the Idea # 13: Cracking The Book Open On Barnes & Noble Apr 24, 2018

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Barnes & Noble: Value trap or value play? We take a research report from Westpeak Research Association - https://seekingalpha.com/article/4163135-barnes-and-noble-new-page-evolving-history - as a launchpad to consider the bookseller's future and what that means for investors. Topics covered: Looking at Westpeak's Research (1:45 minute mark) The tradeoffs between a research report and an actionable long/short idea (5:00) Inverting this article to find the short case (12:20) But look at that value! (19:00) T

Behind the Idea #12: Facebook And How To Update Your Facts Apr 17, 2018

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When the facts change on a stock that 'everybody knows', how do you change your mind? Professor Aswath Damodaran wrote an article about why Facebook is worth considering - https://seekingalpha.com/article/4162285-facebook-feeding-frenzy-time-pause - and provided a framework for how someone could update their views on a company. We take a look at that framework to see how it can be an example for investors, and where it might fall short. Topics covered: A summary of the professor's thesis and our three top

Behind The Idea #11: Google - Quality, But At What Price? Apr 10, 2018

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Google is a great company. Is it a good investment? How much should you pay up for quality? That's the topic of this week's Behind The Idea, as we look at David Trainer's argument - https://seekingalpha.com/article/4160296-nows-time-buy-discounted-tech-giant - that the recent dip is a buying opportunity. Topics covered include: The ups and downs of the buy the dips strategy (1:20) The quality of Google as a company (8:15) Potential threats to Google's moat (13:00) Risks David Trainer brings up and whether a

Behind The Idea #10: What's Going On With General Electric? Apr 03, 2018

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General Electric has fallen on hard times, to the point where the mere rumor that Warren Buffett could get involved has perked up the stock. What happened, and what happens next? Mike and Daniel take an article by WG Investment Research on the good, the bad, and the ugly with GE and see whether there's anything redeeming in the company's prospects or shares. Topics discussed on this episode: The backdrop of GE's situation (1:55 minute mark) Buffett's interest and the principle of coattail riding (3:00) Cove

Behind The Idea #9: Proteostasis, Or How Clinical Data Is In The Eye Of The Beholder Mar 26, 2018

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Data is accepted as hard currency in this day and age, but can it always be believed? We look at Kerrisdale Capital Management's short idea on Proteostasis and the different ways they and other investors have looked at the data for PTI's key phase II trial. Topics covered - Proteostasis background and biotech company name portmanteaus* (1:40 minute mark); Breaking down Kerrisdale's argument, centering on the placebo group (7:00); Venturing into biotech as a non-scientist (12:25); The need for capital in bio

Behind The Idea #8: Thor And The Cycle: An Investing Fable Mar 20, 2018

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Investing in a cyclical stock at peak earnings can lead to a bumpy ride. What road will Thor Industries follow? We speak with DoctoRx (https://seekingalpha.com/author/doctorx/articles#regular_articles) about his thesis on the RV maker and why he thinks the bull case has miles in front of it. Topics covered: How to deal with THO's cyclical nature? (2:45 minute mark); Looking at the RV cycle specifically (4:55); What about oil prices and rising rates? (9:40); Millennials as RV Buyers (12:15); Tariffs as a he

Behind The Idea #7: Halcón Resources Learning To Fly Mar 12, 2018

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Has anything changed for oil companies, and for Halcón Resources specifically? That's the topic of this week's Behind The Idea, as we look at Laurentian Research's three-part series - https://seekingalpha.com/author/laurentian-research/articles#regular_articles&ticker=hk - to see if the shale-oil company can turn it around. Items covered (with times in the podcast in parentheses) - Halcón's background (1:25), Laurentian Research's case (2:40), How to value HK's land (5:25), The true base rate and second-

Behind The Idea # 6: The Tile Shop Hits The Floor Mar 05, 2018

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Everyone loves a comeback story, but do they actually work in investing? Behind The Idea looks at Michael Rogus's argument (https://seekingalpha.com/article/4151019-tile-shop-value-left-shares) that The Tile Shop can turn things around, as well as why retail turnarounds can be such a graveyard for investors. Topics covered: A review of TTS's unhappy 2017 (1:30) Breaking down Rogus's TTS article (4:30) The elephant in the room (Amazon (AMZN)) and a potential fence against it (14:40) Are the gross margins su

Behind The Idea #5: Gilead's Hunt And The Crispr Crapshoot Feb 26, 2018

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Mergers & Acquisitions (M&A) garner headlines and lead to big returns for the right investors, but they can often be a bit of a crapshoot, especially in the Pharmaceutical industry. SA author Biosci Capital Partners makes the case in two articles that Crispr Therapeutics, a pioneer of gene editing technologies, might be a target for Gilead Sciences. Behind The Idea breaks down the case and discusses how to deal with the hope of a big payout and the risk that it won't happen.

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