Congrats to All of Us! Go Badgers!
The highest ranking in school history the year that we leave....unbelievable. I don't understand why OSU is #1 in the other pole when we have already beat them, but it doesn't matter b/c it will all be settled next sunday. Cheer hard! Craig, you are in a good position here...hopefully the bball team doesn't finish the way the football team did.
BTW, anyone got any good PA ideas? No cap limits, no sector limits, I am interested in hearing everyone's best idea.
BTW, anyone got any good PA ideas? No cap limits, no sector limits, I am interested in hearing everyone's best idea.
posted by Not Sure if Al Gore or Global Warming is a Bigger Joke at
7:56 PM
12 Comments:
CPSI looks pretty solid.
This may be very difficult for the PA, but buy CDS on CFC. At 25-30 BPS is like a free call option on interest rates. If rates go down the MSRs are bought out. If rates go up the sub prime piece is crap. Look at the acceleration of negative amort, and REO, and defaults. People are saying this will stop. I have never heard anyone come with any data on why that will stop, but I have heard lots of data on why it will get worse. But the simplest and most logical reason is that there is a feedback loop going on, that has just begun. Only one portion of the feedback loop is: Loans go bad, banks tighten credit, demand for housing goes down, housing pricing goes down, More loans go bad. So buy CFC cds. 3000 per year for 5 years on every million notional. So 15,000 not discounted per million.
MK
JMBA - I would not call it my best pick but certainly my most speculative. They went public when they were bought by a special purpose acquistion company in November. I freely admit this is a "buy what you know lite" purchase - meaning I did no research other than consume a lot of their beverages. For all I know they will fold up next week. On the other hand they have been a pretty hot franchise on the west coast for a number of years. I can pretty much guarantee you the only thing I have in common with George Soros is that we are both owners of the stock.
toppe- I looked at this pretty closely. I am a Jamba fan also. Keep in mind the huge warrant position when calculating EV.
Also, if you buy warrants pre-acquisition in these companies, it is the last great arbitrage. There is a guy on VIC that writes up everyone of these.
Sorry. But on sec.gov they have a great Jamba presentation.
I met with Lin-TV at the JP Morgan High Yield Conference on 1/23 and would've told you it was a buy then... of course, now it is up some 30%.
I am feeling starved for ideas. Maybe it is because many of my sectors have already run (Airlines, Defense, Aero).
CXW is a great business model, but the multiple is a little bit difficult to swallow.
I thought of one immediately after I posted that... how about Radio One (ROIAK)?
Radio One is a radio company specifically targeting African Americans. They own 70 stations in 22 markets; many of which are in the top Black markets by population including Atlanta, DC, Philly, Detroit, LA, Miami, Houston, Dallas, Baltimore, etc. Format is typically Urban, Urban Contemporary, Jazz, or Talk.
The African American population is growing faster than the general population, their buying power will grow close to 29% by 2010, they are largely ignored by the advertising community (though this is changing as advertisers spent 2.5 bn targeting blacks in 2005 vs. 1.8 bn in 2000), they generally live in centralized areas (64% live in the top 25 metro areas), they listen to more radio than average, and they like different fashion, food, and entertainment than the average consumer.
Quite simply, if I am McDonald's and I find that my product really resonates with African Americans (it does), the easiest way for me to advertise to large numbers of African Americans is to buy ad space from Radio One. Likewise for Chevy, Nike, etc.
My pick is Aflac (AFL), which is really a function of work considering I only look at financials. I can provide more details if wanted...Super solid co' w/ 75% of earnings from Japan with 95% persistency, which is huge with improving benefit ratio of say 50-100 bps annually. Japan has a 30% co-pay, thus supplemental life insurance is critical and cancer is the #1 killer, which AFL primarily sells supplemental cancer products. Japan new sales are weak of late, which has caused margin contraction and provided a great entry pt. for patient investors. Weak sales are more of a function of regulators investigating the entire 3rd sector life insurance in Japan. Investigations will conclude by 2Q07. The main point is new sales do not equal premium rev!! With a 1 trillion Yen inforce block of business and 95% persistency, quarterly new sales of say 29M Yen do not move the dial for many quarters yet investors have inappropriately belabored this figure. Renewals far outweigh new sales in terms of driving premium rev. I can say with a high degree of confidence that AFL grows its bottom line at 15%-16% annually over the next 3-4 yrs trading at a 13X-14X multiple (hist. avg 16X-17X) and low 20% ROE. At $43 I recommended to increase our position as it was my #1 pick, still is at $48. I see $60 in 12-18 months. This is really more of a consumer/marketing stock than a life insurance stock.
I literally went to click to buy AFLAC, but forgot that I need to get OK from compliance.
UBS has a buy rating and a $59 PT; and UBS is always right.
Compliance sucks, it is really hard for me to buy stocks in my PA. I usually end up buying fairly small caps, DUCK, CRI etc.
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