Comments for kelpiecapital

Comment on About the Blog…. by Paul Berry

Paul Berry — Sun, 05 May 2013 19:57:22 +0000

Hi
Just wondering how you are getting along with the new job ?
I followed you in on Third Point . Dan Loeb is one of the best and I tend to top up now if the discount hits 20% , not been there for a bit but 40% ish up overall so thanks for the article .
Lots more I could say on AIG , BAC and Apple but don’t want to bore you .
Anyway hope it’s all going well .

Kindest regards
Paul

Comment on About the Blog…. by Jochem van Dalfsen

Jochem van Dalfsen — Wed, 06 Feb 2013 13:31:23 +0000

Dear Kelpie,

My name is Jochem van Dalfsen, a Masters student in Finance at the University of Amsterdam.
The next several months I will have to write a Masters Thesis on a financial subject. I am really sure that I would like to write my thesis about a topic in the area of investing, since I have great interest in this area of finance (have been running investment club Heuristic Investments for the past four years) and I aim to pursuit a career in investing. In my studies, I’ve been strongly drawn to value investing. I believe it just suits me well. Straightforward, fundamental, probabilistic, disciplined, long-term-viewed, I love it. Therefore, I would like to write my Masters Thesis in the area of value investing.

I would like to ask you the following: Do you have any ideas on a specific research question in the area of value investing that you would like to have researched?
Any research question that has something to do with value investing would be great. If I like the question and decide to perform the research, then I will obviously send you a copy of the thesis when I’m finished.

Some requirements of the thesis are that it has to contribute to the existing academical research (new idea, extension of existing papers), the data needs to be available, the empirical method has to be strong and has to produce robust/reliable results (maybe add control variables, etc) and the research has to be done within three months.

Thank you very much for your time and with best regards,
Jochem van Dalfsen

Comment on AirCastle Ltd: Niche Lending – What happens when your competitors disappear? by Bartvp

Bartvp — Sun, 03 Feb 2013 14:47:15 +0000

Michaelsos,
I’m not an aircraft expert but am I correct that the difference between 4 and 11.1 years isn’t that big? New aircraft models don’t come out every 5 year or so … The capex AYR is up to might be identical to the capex others are up to, all lessors will have to add new and more fuel-efficient aircraft to their fleet.

Comment on Yukon Nevada Gold – “An Inflection Point?” by Al D'Andrea

Al D'Andrea — Sat, 26 Jan 2013 22:40:15 +0000

Thanks for your reply a couple weeks back about Veris/Yukon-Nevada. One thing I worry about with Veris Gold is that the largest shareholders — Orifers, Sprott, DB, Marland, etc. — together own close to a controlling interest. Why wouldn’t they come together/collude to take this grossly undervalued asset from the remaining shareholders? Is there any way to know what price they paid for their shares? Do you see this as a risk? I would appreciate any insight you have on the matter.

Thanks,
Al

Comment on Tesco plc – Does the “New Reality” Checkout? by Olivia

Olivia — Mon, 21 Jan 2013 22:59:39 +0000

Thank you for this analysis! Could you please specify, what types of multiples you use in sum-of-the-parts valuation (for retail sector and banking)

Thanks

Comment on About the Blog…. by kelpiecapital

kelpiecapital — Wed, 16 Jan 2013 20:24:46 +0000

Hi Victor

I have to confess that I have been slowly buying my position since around Christmas. I’m afraid the stock has moved a bit in the interim period. However, if you believe in the long term story this is still a very cheap equity.

Comment on About the Blog…. by Victor Goossens

Victor Goossens — Wed, 16 Jan 2013 10:43:07 +0000

i got hte story on radiant yesterday, when i look at the price of 1.4 it was on the 24th of december, now already 1.63 which is already 16% higher ?

Comment on Tesco plc – Does the “New Reality” Checkout? by Stevie S.

Stevie S. — Mon, 07 Jan 2013 02:58:24 +0000

Great analysis but you are definitely double counting the property value here. The problem is that the `trading profit` or EBIT disclosed by the management already includes rental income which is sizable compared to the overall EBIT.

The best case scenario would be a complete separation of the real estate portfolio through some form of tax free REIT spin-off which would necessarily involve a massive lease-back program that would dramatically reduce earnings potential in both the UK and Asia retail operations so the stand-alone earnings power of the retail arm is actually much less than the numbers advertised. This is the only way the real estate value can be fully realized which given the quality of the management is extremely unlikely.

What will likely be the case is that the company will continue to `plan`the sale of real estate on an annual basis the same way as before, so almost without consideration for valuation purely for the purpose of keeping property profits stable. Now this is plain bad management and not nearly as ideal as a larger spin off because the real estate management business doesn`t earn any returns near the cost of capital. It still creates some value anyhow so I think the base case assumption should be that the real estate value must take a rather sizable haircut. I agree that the business is undervalued but not nearly to the degree that you modelled out.

Just my 2 cents,

Comment on Yukon Nevada Gold – “An Inflection Point?” by kelpiecapital

kelpiecapital — Sat, 22 Dec 2012 00:46:32 +0000

Al, I was very disappointed with the tender – mostly because I thought the name change was supposed to be drawing a line under shareholder unfriendly behaviour. It would have been better had they done it BEFORE the change so they could start with a fresh slate.

I actually bought more this week into this decline (which seems utterly relentless). I think sellers aren’t even considering the fundamentals anymore and just throwing in the towel.

This new increased FD share count definitely reduces the long term upside. However what it does do I think is increase the likelihood/probability of the company being a fully functioning, self sufficient entity in the next 12 months. The market is saying the whole company is worth $195m on today’s prices. Remember they spent $200m on just a refurbishment of the plant 6 months ago!! I don’t think the FD share count is quite as bad as it seems, the warrants/options have varying strike prices (some are >100% above the current price) and they have varying maturities. If we are exercising options expiring in 2013 at $4.00 then we have a high class problem!

They made $0.09 in just Q3 – the market is saying they won’t make a profit ever again. Also, I have heard that current production is going well and that they are operating at basically the 150,000-200,000 oz rate and if they keep that up they’ll post a pretty good Q4 and Q1 again.

This valuation also ignores the gold they have in the ground (1m oz proven, 2m oz measured & indicated) and unexplored properties. The jewel in the crown is this potentially irreplaceable $1bn strategic asset in 1 of only 3 mills in the state (with the other 2 operating at full capacity) and everyone dying to produce more gold!

I’ve been saying it for a while and I’ve been wrong but I think the gold miners are extremely cheap and due for an explosive rally at some stage.

Comment on Yukon Nevada Gold – “An Inflection Point?” by Al D'Andrea

Al D'Andrea — Thu, 20 Dec 2012 00:21:40 +0000

Anyone have any insight into what is happening with Yukon / Veris? Weatherization is complete, had a cashflow positive quarter, raising more capital in a somewhat failed tender that brings more dilution. Some positive developments, certainly, but the stock has lost a lot of value.