Have you seen the incredible drop of Home Capital since yesterday? It's been pretty spectacular: about 23% down since monday morning.
Why? The company has announced that the earnings would be flat since last quarter and would be a little down since same quarter a year ago. About 2% down which is not too scary. The sales are a little more scary because, even if earnings look flat, the sales are down a lot.
The growth at Home Capital seems to have stopped. When will it resumes? Surely not at short term. It worries the market and it worries me a bit, but it's still a great company and the metrics are good.
What do we have now? A company for which:
Average ROE last 5 years: 25
Actual PE ratio: 7,6
Bottom PE ratio last 5 years: 9
Actual Dividend: 2,7%
Price to book value: 1,6 times (which is very low for such a great business)
It looks a bit like IBM: High ratio PE/ROE, high dividend (on a relative point of view), very well managed business that has a long history of rewarding shareholders. And I don't see how it could get much lower from here. Few large companies have such a low PE ratio.
It may be the time for the company to buy back massive amount of stocks or to be bought.
Should you buy? I don't know (I never really know). For the short term, forget it. For the long term, it may be an excellent moment to get some shares and a nice dividend which may grow along the way (your 2,7% dividend may easily become a 4% dividend in about 5 years).
The company still aims at about a 10% earning growth each year which is a nice growth for such a low price.
Check it out.
mardi 14 juillet 2015
dimanche 12 juillet 2015
The nightmare is over
Did you ever have a boss who disliked you and most of the people with whom he worked?
That was my case until recently and I was so upset that I thought very seriously about retirement or any kind of reorientation. I didn't feel safe at all because that guy moved everyone around him. In about a year, he moved about 50 people and he said some nasty things to me about others and some other nasty things about myself to me directly.
Like: "Out of ten, I'd give you 4/10 for your intellectual capacities or 3/10 for your team management. "
That was pretty fucked up: the guy who didn't know what was the name of the members of The Beatles saying to me that I lack intelligence (OK, knowledge and intelligence aren't the same) or the guy who couldn't get along with anybody telling me that I couldn't manage a team.
I'm pretty happy to have gotten a better job with nice people. I'm still a little upset about all the things he said to me. But well, I'm back to a more normal attitude: I still want to retire as soon as possible, but my mind is way lighter now. In other words, I can breathe easier now.
That was my case until recently and I was so upset that I thought very seriously about retirement or any kind of reorientation. I didn't feel safe at all because that guy moved everyone around him. In about a year, he moved about 50 people and he said some nasty things to me about others and some other nasty things about myself to me directly.
Like: "Out of ten, I'd give you 4/10 for your intellectual capacities or 3/10 for your team management. "
That was pretty fucked up: the guy who didn't know what was the name of the members of The Beatles saying to me that I lack intelligence (OK, knowledge and intelligence aren't the same) or the guy who couldn't get along with anybody telling me that I couldn't manage a team.
I'm pretty happy to have gotten a better job with nice people. I'm still a little upset about all the things he said to me. But well, I'm back to a more normal attitude: I still want to retire as soon as possible, but my mind is way lighter now. In other words, I can breathe easier now.
mardi 30 juin 2015
Jason Donville on BNN (june 30th, 2015)
Happy Canada day, you capitalists out there. I have some great information to offer you if you're too lazy to watch all this online, on BNN website.
We all know that canadians are lazy. The government takes care of everything for us, so why not let Penetrator take care of you by vomiting directly in your throat in a few seconds what Jason Donville has said in about an hour? Why should you waste a precious time that you could spend playing Angry Birds?
So, Jason Donville was on BNN today.
First of all, one of the most valuable information that you could get to reproduce great performance is a portfolio review. Here's the top 5 of Jason Donville's fund which has been published on Market Call:
1- Concordia Healthcare: 12,1%
2- Constellation Software: 10,8%
3- CGI: 8,2%
4- Enghouse: 6%
5- Patient Home Monitoring: 4,6%
Where is Valeant?
And now, here's some of Jason's recommandations (not all of his opinions, but the most interesting to me):
TOP PICK 1: Constellation Software (CSU.TO)
TOP PICK 2: CRH Medical (CRH.TO)
TOP PICK 3: Tucows (TC.TO)
Buy recommandation: Couche-Tard
Buy recommandation: CGI
Buy recommandation: Patient Home Monitoring
Buy recommandation: Nobilis Health
Don't buy: Callidus Capital
Don't buy: Knight Therapeutics
Don't buy: Amaya Gaming Group
Don't buy: Directcash payment
Watch list : Ten peaks coffee (TPK.TO)
My comments: Even if it had a correction, I don't feel that Constellation Software should be a top pick. It's still pretty expensive (about 26 times next year earnings) I don't think either that Couche-Tard is a buy at current level because it's expensive too. However, I think that CGI and Nobilis Health deserve a buy rating.
I also believe that Callidus Capital is worth a look. It's pretty cheap these days and the last results were pretty good in my opinion. I don't understand Jason comments about it ("too much of he said or she said and a little too like Amaya..."). I also believe that Knight Therapeutics deserves some attention. I don't know if it's a buy or a hold, but they got a shitload of money and their CEO (previously Paladin's CEO) is a great manager. All in all, I own a small position of both these companies and believe that they should be on anybody's watch list.
Finally, Ten Peaks Coffee is very interesting but it's very small and as said before, I'm less and less interested in very small caps. But it still looks very good. You should take a look at it too and I would be interested to get some comments about it.
We all know that canadians are lazy. The government takes care of everything for us, so why not let Penetrator take care of you by vomiting directly in your throat in a few seconds what Jason Donville has said in about an hour? Why should you waste a precious time that you could spend playing Angry Birds?
So, Jason Donville was on BNN today.
First of all, one of the most valuable information that you could get to reproduce great performance is a portfolio review. Here's the top 5 of Jason Donville's fund which has been published on Market Call:
1- Concordia Healthcare: 12,1%
2- Constellation Software: 10,8%
3- CGI: 8,2%
4- Enghouse: 6%
5- Patient Home Monitoring: 4,6%
Where is Valeant?
And now, here's some of Jason's recommandations (not all of his opinions, but the most interesting to me):
TOP PICK 1: Constellation Software (CSU.TO)
TOP PICK 2: CRH Medical (CRH.TO)
TOP PICK 3: Tucows (TC.TO)
Buy recommandation: Couche-Tard
Buy recommandation: CGI
Buy recommandation: Patient Home Monitoring
Buy recommandation: Nobilis Health
Don't buy: Callidus Capital
Don't buy: Knight Therapeutics
Don't buy: Amaya Gaming Group
Don't buy: Directcash payment
Watch list : Ten peaks coffee (TPK.TO)
My comments: Even if it had a correction, I don't feel that Constellation Software should be a top pick. It's still pretty expensive (about 26 times next year earnings) I don't think either that Couche-Tard is a buy at current level because it's expensive too. However, I think that CGI and Nobilis Health deserve a buy rating.
I also believe that Callidus Capital is worth a look. It's pretty cheap these days and the last results were pretty good in my opinion. I don't understand Jason comments about it ("too much of he said or she said and a little too like Amaya..."). I also believe that Knight Therapeutics deserves some attention. I don't know if it's a buy or a hold, but they got a shitload of money and their CEO (previously Paladin's CEO) is a great manager. All in all, I own a small position of both these companies and believe that they should be on anybody's watch list.
Finally, Ten Peaks Coffee is very interesting but it's very small and as said before, I'm less and less interested in very small caps. But it still looks very good. You should take a look at it too and I would be interested to get some comments about it.
samedi 20 juin 2015
Some reasons to buy more shares of Valeant
Once in a while, people ask me what they should do with their portfolio. For example: Should they reduce their positions with title A to buy more title B?
The answer is that I know sweet fuck all about your portfolio (how much money you have, how many companies you own, what are your goals, etc) so I don't really know what to answer. I'm not a fucking genius. I doubt about my own choices so imagine how would I feel about my recommandations to people I don't know who own portfolios about which I know absolutely nothing.
You may find it stupid, but as time passes, I attribute more and more importance to the proverb: "The trend is your friend" (for non cyclical stocks of course) and about choices of insiders and superinvestors. I still take a look at metrics before investing, but sometimes, the analysis is hard with conventional metrics. Like it is with Valeant.
Jason Donville once said that Valeant is a great company with complex accounting. It's absolutely true. Few companies use leverage that much. But few companies create this amount of value for their investors.
Recently, I've been buying more shares of Valeant for these reasons:
With these guys beside me, I feel pretty safe. It's one of my advice to you: sometimes, it may be a good idea to select an investment in which you'll have great companions. These guys had excellent returns in the last few years and if they have so much money invested in Valeant, it's surely because they believe that it's one of the best companies to contribute to their returns.
The answer is that I know sweet fuck all about your portfolio (how much money you have, how many companies you own, what are your goals, etc) so I don't really know what to answer. I'm not a fucking genius. I doubt about my own choices so imagine how would I feel about my recommandations to people I don't know who own portfolios about which I know absolutely nothing.
You may find it stupid, but as time passes, I attribute more and more importance to the proverb: "The trend is your friend" (for non cyclical stocks of course) and about choices of insiders and superinvestors. I still take a look at metrics before investing, but sometimes, the analysis is hard with conventional metrics. Like it is with Valeant.
Jason Donville once said that Valeant is a great company with complex accounting. It's absolutely true. Few companies use leverage that much. But few companies create this amount of value for their investors.
Recently, I've been buying more shares of Valeant for these reasons:
- Of course, Valeant operates in healthcare which is my favorite field of investment (non cyclical);
- Forward PE ratio is about 18 which is reasonable;
- Michael Pearson (CEO) has said recently that the stock was still undervalued;
- Three insiders have been buying the stock since may 27th 2015 (1,7M$, 260 000$ and 3M$);
- Jason Donville recently said that the stock was still one of his top picks;
- Three of my favorite superinvestors (that achieve great returns year over year as said in a recent post on this blog) own big positions of their portfolio in Valeant;
- Robert Goldfarb (Sequoia Fund): 30%
- Bill Ackman: 26%
- Lou Simpson: 13%
With these guys beside me, I feel pretty safe. It's one of my advice to you: sometimes, it may be a good idea to select an investment in which you'll have great companions. These guys had excellent returns in the last few years and if they have so much money invested in Valeant, it's surely because they believe that it's one of the best companies to contribute to their returns.
mardi 16 juin 2015
The strange case of Precision Castparts (PCP)
Recently, I've been a shareholder of Precision Castparts, this big company (29B$) which is a manufacturer of metal components for various industries (most notably aeronautics).
After a few months, I sold my shares (before the big drop of price in january after the disapointing earnings). I simply couldn't see what was so good about this company. I should have done it before buying you may tell me. Stupid fucker you may add.
Yeah, you're right. I still act like a stupid fucker sometimes (less and less as years go by, however).
But it's a superinvestor darling stock, so I guess, I acted like a stupid lemming, following the group (to the cliff).
In fact, Precision Castparts is not a bad company, but I don't think it's a superb company either. It's a medium company. Look at these metrics for yourself:
Actual PE ratio: 19,7
Actual ROE: 14
Average ROE last 5 years: 15,5
EPS 5 years growth rate: 11% per year
Dividend yield: A very funny 0,06%
Payout ratio: A ridiculous 1%
And recently, via www.dataroma, I've seen that a lot of superinvestors have been buyers of the stock:
Fuck all those superinvestors!
After a few months, I sold my shares (before the big drop of price in january after the disapointing earnings). I simply couldn't see what was so good about this company. I should have done it before buying you may tell me. Stupid fucker you may add.
Yeah, you're right. I still act like a stupid fucker sometimes (less and less as years go by, however).
But it's a superinvestor darling stock, so I guess, I acted like a stupid lemming, following the group (to the cliff).
In fact, Precision Castparts is not a bad company, but I don't think it's a superb company either. It's a medium company. Look at these metrics for yourself:
Actual PE ratio: 19,7
Actual ROE: 14
Average ROE last 5 years: 15,5
EPS 5 years growth rate: 11% per year
Dividend yield: A very funny 0,06%
Payout ratio: A ridiculous 1%
And recently, via www.dataroma, I've seen that a lot of superinvestors have been buyers of the stock:
- Lou Simpson (very big buyer because the stock went from 0% of his portfolio to 9,75% in the last quarter);
- Robert Goldfarb (Sequoia Fund);
- Wallace Weitz (don't know who the fuck this is);
- Daniel Leob (don't give a fuck about him too);
- Warren Buffett (prostate cancer but still able to invest better than many healthy prostates out there)
Fuck all those superinvestors!
vendredi 12 juin 2015
Models to follow
Almost
everybody on earth wants to have a model to follow. For some people,
it’s Jesus. For others, it’s Barak Obama, Adolf Hitler or even Bon Jovi.
And
for us, investors, who is it? We don’t believe in religion, we’re too
rational for that. We don’t give a fuck about god, about Wayne Gretzky
or about Bob Marley. Our only god is money. We jerk off in our bed
thinking about money. When we fuck a girl, we think about money. Nothing
else matters, like would sing Metallica.
If
you’re on this website, the probability that Jason Donville is one of
your model is high. But what about other investors? There's not only Jason Donville out there. There’s also some other excellent
fuckers that have the capacity to turn 1 cent into 2 cents in a couple
of years. With that ability, they could become millionaires in a couple of centuries. Holy fuck, I'm such a clown.
On the website www.dataroma.com,
we can see the portfolio value of many superinvestors over a period of
time. I’ve completed a list of 6 investors who deserve
attention and 3 other investors who deserve inattention.
I’ve never
cared about value investing and the results of these three investors
confirm me that value investing isn’t as powerful as growth investing.
Investors to follow (growth investors)
Carl Icahn
Portfolio value 2013 : 21,5 billion dollars
Portfolio value 2015 : 32,1 billion dollars
Bill Ackman
Portfolio value 2010 : 3,32 billion dollars
Portfolio value 2015 : 15 billion dollars
David Einhorn
Portfolio value 2010 : 2,93 billion dollars
Portfolio value 2015 : 7,5 billion dollars
Robert Goldfarb (Sequoia Fund)
Portfolio value 2010 : 2,26 billion dollars
Portfolio value 2015 : 7,5 billion dollars
Seth Klarman
Portfolio value 2010 : 1,64 billion dollars
Portfolio value 2015 : 5,81 billion dollars
Lou Simpson
Portfolio value 2012 : 1 billion dollars
Portfolio value 2015 : 2,91 billion dollars
Investors to avoid (value investors)
Bruce Berkowitz
Portfolio value 2010 : 8,34 billion dollars
Portfolio value 2015 : 4 billion dollars
Eddie Lampert (Sears)
Portfolio value 2010 : 12,3 billion dollars
Portfolio value 2015 : 2,24 billion dollars
Prem Watsa (Fairfax)
Portfolio value 2010 : 3,24 billion dollars
Portfolio value 2015 : 1,42 billion dollars
Information is knowledge, knowledge is power. You’ve got the power.
Just remember the first 6 names and Jason Donville and you’ll have great models to follow.
mardi 26 mai 2015
David's Tea initial public abusive offering (IPAO)
The IPO of David's Tea sounded to me as great news.
Do you know the business? No? It's pretty simple. They sell a wide variety of tea and many people are crazy about this business because they feel so healthy, drinking tea. If you ask me, I'd tell you that they are just poor mofos trying to elevate themselves above the masses with their drinking habits. Fuck off. If I want flavour in my glass of hot water, i'll pour a few drops of lemon and that'll taste the same fucking shit, and that'll cost NOTHING.
The business has a very high CAGR (compound annual growth rate) of it's earnings (69% per year since 2009!). The product is bought at high frequency, it's a synonym of health, the business could be exported in many places and the margins seem high. All the qualities of a great investment (even if I don't drink tea except when I don't have the choice).
But fuck, they want to sell their shares at 50 times earnings. I know it's always like that with initial public offerings, but come on, I won't fucking pay that much, even for a business which seems great.
You know, there's three interesting IPO in Quebec for now:
1- David's tea (very soon);
2- GDI cleaning services (a very recent IPO);
3- Chocolats favoris (everybody in the area of Quebec City knows this, and more and more people know this in the Montreal area: they sell chocolate and, mostly, chocolate dipped ice cream). The valuation of the IPO should be high as fuck...
You should closely follow these three companies. I'm pretty sure that at least one of them is gonna be a multiple bagger in the next few years. Even if the price of the IPO is fucking abusive.
All in all, follow them, but don't buy them in the short term.
Do you know the business? No? It's pretty simple. They sell a wide variety of tea and many people are crazy about this business because they feel so healthy, drinking tea. If you ask me, I'd tell you that they are just poor mofos trying to elevate themselves above the masses with their drinking habits. Fuck off. If I want flavour in my glass of hot water, i'll pour a few drops of lemon and that'll taste the same fucking shit, and that'll cost NOTHING.
The business has a very high CAGR (compound annual growth rate) of it's earnings (69% per year since 2009!). The product is bought at high frequency, it's a synonym of health, the business could be exported in many places and the margins seem high. All the qualities of a great investment (even if I don't drink tea except when I don't have the choice).
But fuck, they want to sell their shares at 50 times earnings. I know it's always like that with initial public offerings, but come on, I won't fucking pay that much, even for a business which seems great.
You know, there's three interesting IPO in Quebec for now:
1- David's tea (very soon);
2- GDI cleaning services (a very recent IPO);
3- Chocolats favoris (everybody in the area of Quebec City knows this, and more and more people know this in the Montreal area: they sell chocolate and, mostly, chocolate dipped ice cream). The valuation of the IPO should be high as fuck...
You should closely follow these three companies. I'm pretty sure that at least one of them is gonna be a multiple bagger in the next few years. Even if the price of the IPO is fucking abusive.
All in all, follow them, but don't buy them in the short term.
Inscription à :
Articles (Atom)