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Posts from the ‘Yellow Media (Y)’ Category

Week 149: Earnings Update on a few companies

This isn’t a complete portfolio update. I won’t be posting my performance or trades; I will leave that for another week.  I just want to give a short update on some of the earnings reports that have come out or are still to come out while the thoughts are still fresh in my mind.  Here is a quick snapshot of the top positions in my portfolio as of Friday’s close.

05-10-14 topholdings

MagicJack

MagicJack earnings come out Monday after the market close.  I’m nervous about them, because the stocks action has been poor, it is a large position for me and because I’m not convinced the numbers will be great.

The company lowered advertising spend significantly in the quarter in anticipation of the release of the new version of the device and the app.  That will help costs, but it will also probably hurt revenue. On the fourth quarter call the company said that they expected the first half of the year to be “soft”. Read more

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Another Leveraged Play: Dex Media

I’ve had a position in Yellow Media (Y.to), for a number of months, but until this week I had not dived into its American counterpart Dex Media (DXM).  The reason was timing; I didn’t get the chance to look seriously at the company until the middle of April and shortly after I looked Kyle Bass recommended the stock at Ira Sohn, the stock price took off, and I was reluctant to chase it.

I’ve waited patiently since then thinking that the stock would come down once the shine wore off.  This week I was rewarded and able to pull the trigger in the $14’s.

Before I go any further on this one let me just give a hat tip to Glen Bradford for all the work that he has done.  Glen has discussed Dex Media and its predecessor companies Dex One and SuperMedia in detail on his website and on Seeking Alpha, and much of my own research started by reading his work.

The story at Dex Media is, of course, not unlike Yellow Media, but its also quite similar to YRC Worldwide, and fits in with my big idea for the year of investing in leveraged companies while the sun still shines.  To illustrate the comparison to YRC Worldwide, when I bought the stock it was a $50 million dollar equity with over $1.3 billion in debt.  You had a tiny sliver of equity that stood to act in a highly leveraged way if things played out right.  Same thing with Dex Media. The equity currently sits at a little over $150 million.  The company has debt of over $3 billion. Read more

Projecting Yellow Media

Because of my work situation I am faced with a limited amount of time to analyze my investments.This precipitates the need for efficiency and a focus on the questions that matter most.

Thus I spend a good deal of time thinking before I spend any time analyzing. This is particularly true when I am just introducing myself to an opportunity. I think about how I can distill it down to one or two questions that I can focus on. Rather than taking the approach that I need to understand every aspect of the company (something that I simply don’t have the time to do) I look for the lynch pins and focus on understanding their mechanics in great detail.

To give a few examples; this was my strategy for the mortgage insurers, where I focused strictly on whether or not they would pushed into run-off or bankruptcy by the regulators. With Arkansas Best I focused on what the upside might be if the company negotiates a union contract similar to that of YRC Worldwide. With YRC Worldwide I focused on their leverage to the upside. When I initially bought PHH I focused strictly on the value of Fleet, which allowed me to view the mortgage operations as an upside option.

With Yellow Media, I narrowed it down to two questions. They are:

  1. When and at what level is the online business going to grow enough to offset the declines in the print business.
  2. What assumptions should be used to answer question 1 Read more

Could my Next Big Play be Leveraged Companies? (Y, NXST, HOV)

Early last year  I warmed up to the idea that housing was in the early stages of recovery and this single idea generated a number of successful investments for me (NCT, NSM, IMH, MTG, RDN, HOV…).  With many of these housing investments having now played out I have been trying to think of what big idea might drive my strategy in the next 9-12 months.

What occurred to me rather suddenly this week was that perhaps I had already figured that out, had even been acting on the idea, though I had not articulated it consciously.

Companies with excessive leverage have been shunned for the past 5 years. Many have lagged as questions about their ability to continue as a going-concern have superseded any potential out-performance to the upside if things take off.

I think that this might be the year that changes. Read more

Week 85: Some Short Thoughts on Nam Tai, Yellow Media, Radian Group and Atna Resources

Portfolio Performance

week-85-Performance

Update

I finished a post over the weekend giving some thoughts about the macro-environment and how it pertains to my portfolio.  As a consequence of the conclusions drawn, my portfolio has been growing and my cash level decreasing, to the point where I have now been on margin for the last month and a half.  Right now I have about 11% margin.  While I am typically wary of using margin, when I look at what I own there are no stocks that I feel compelled to reduce.  We’ll see if this turns out to be folly.  This is, however, about as much risk as I’m comfortable with, so any stocks added hereon will have to be balanced by equivalent removals.  And as per the strategy I profess, I will sell without remorse if the market turns abruptly.

On to some of the moves I made over the past 3 weeks. Read more