Hitting The Century (III)

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Argo Group, Avangardco, dividend coverage, dividend yield, EIIB, Ex-Cash Ratios, FBD Holdings, Net LTV, P/E ratio, Petroneft Resources, portfolio allocation, portfolio performance, Price/Book, Price/Sales, TGISVP, Total Produce, Trinity Biotech, Wordpress

Damn WordPress! If you viewed/received a similar Century (Part III) post (since deleted), please ignore it – it was just a draft & I’ve updated/revised figures across the board since. Not quite sure how WordPress managed to publish it for me..!

Right, continued from here. In my last post I promised: ‘OK, next I’ll take you through each of my investment allocations – and try to give a flavour of my thinking, and some underlying stocks/funds, in each instance‘. However, I’ve just completed a detailed quarter-end portfolio update/review, so let’s flip things ’round – perhaps you’d be interested in a timely look at some portfolio metrics¹, and we’ll return to investment allocations in my next post?

Yes, really? So you like the pretty panties, but you still want to know the damn cost..?! Sigh, value investors..! OK:

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Asset Managers – OK, Time to Storm the Castle!

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% of AUM, absolute return, Ally Financial, asset managers, carried interest, catalyst, Colony Financial, de-leveraging, distressed assets, Fortress Investment Group, KKR, mortgage servicing rights, MSRs, Nationstar, Newcastle, Nomura, Oaktree Capital, Och-Ziff, Ocwen Financial, pension funds, PHH Corp, Price/Sales, private equity funds, special situations

Continued from here. As I’ve highlighted, (alternative) asset managers have an attractive business model, strong balance sheets, and are generally undervalued. On the other hand, they’re a geared market play. I see 2 ways to alleviate this risk:

i) Ration asset manager allocation in your portfolio. As I’ve discussed,  analyzing, ranking & selecting from the broadest universe of listed managers is the best way to achieve this.

ii) Look for a great story, a great stock, AND a great price. This can significantly transform your risk/reward. Make a poor decision on one attribute, and hopefully the others bail you out. Get them all right, and accelerate & increase your returns…

Asset Managers – Another Look at Valuation

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% of AUM, activist investors, alternative assets, asset managers, catalyst, earnings growth, Goldman Sachs, hedge funds, P/B Ratio, P/E ratio, P/S Ratio, Price/Sales, REIT/MLP sector, short sellers, takeover offers

Continued from here. I was glad to see some comments/debate come back to me re my previous asset manager valuation statement:

‘Obviously each manager has their own unique story/valuation, but big picture these metrics really work: 2.25%-3.25% of AUM for traditional managers and 7.5%+ of AUM for alternative managers.‘

‘Big picture‘, of course, just means on average & over time, there will be plenty of exceptions to the rule..! Actually, readers were really just (smartly) anticipating something I wanted to highlight in my Part 2: I’ve highlighted the benefits/logic of using a % of AUM valuation approach, but how about related risks & questions? Like:

Trinity Biotech, Be My Valentine… <3

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Adriana Lima, Clearstream Technologies, Ex-Cash Ratios, FBD Holdings, intrinsic value, Owner-Operator, Price/Sales, relative value, Richland Resources, Trinity Biotech, Valentine's Day, value investing

To celebrate Valentine’s Day, I thought it was only fitting that I write about my favourite stock… For some of us, Valentine’s is still about love and constancy. (Not that the Valentine’s ‘industry’ agrees – much as I enjoyed this ad, among others, the increasingly strident commercial ‘come-on’ that a gift guarantees sex seems far too crass for all concerned). So, I’m not going to fall for some hot young tramp like Richland Resources (RLD:LN)…

Instead, I wanted to revisit my fondest love, Trinity Biotech (TRIB:US). How did she win my heart? Well, she’s never let me down, about 40% of her market cap consists of cash, I currently have a 265% gain on my average entry price, I see 30% upside from the current price (with a secondary price target that offers 68% upside), and it’s my largest portfolio position at 7.6%!

Total Produce – Eat More Fruit!

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Capespan, Net Interest/EBITA, Price/Sales, Total Produce, value investing

Total Produce (TOT:ID)

• Mkt Price:  EUR 0.38
• Mkt Cap:  EUR 125.4 mio
• Net Int/EBITA%:  8.7%
• P/E:  5.3
• P/S:  0.05
• Yield:  4.7%      

With two recent deal announcements, I decided to take another look at my TOT valuation, following on from here and here.

Total Produce – So, What You Buy Down The Market?

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Bidvest, Capespan, IFG Group, Net Interest/EBITA, pdosullivan, Price/Sales, PSG Group, share buyback, Total Produce, Zeder

Total Produce (TOT:ID)

• Mkt Price:  EUR 0.39
• Mkt Cap:  EUR 128.7 mio
• Net Int/EBITA%:  9.0%
• P/E:  5.6
• P/S:  0.05
• Div Yield:  4.6%      

Time to update my recent Total Produce post. First, a shout out to Philip at pdosullivan who emailed me to highlight Total’s increased stake in Capespan Group Ltd. There are some good follow-up comments here also. A good spot – I looked some years back, and somehow concluded Total’s shareholding was in a Capespan sub. rather than the parent company?! Based on this, I mistakenly decided not to revisit this as a component of my TOT investment analysis. Then again, the lack of transparency and disclosure from Total regarding this shareholding is rather infuriating.

Trinity Biotech – Cheap Diagnostics

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Clearstream Technologies, ELG Scheme, Ex-Cash Ratios, FBD Holdings, intrinsic value, Owner-Operator, Price/Sales, relative value, Trinity Biotech, value investing

Trinity Biotech (TRIB:US)

• Mkt Price:  $9.57
• Mkt Cap:  $203.1 mio
• P/E Ratio:  13.5
• Ex-Cash P/E:  9.1
• P/S Ratio:  2.6
• Ex-Cash P/S:  1.5

Trinity Biotech specializes in the development, manufacture and marketing of diagnostic test kits. These kits are used in the clinical laboratory and point-of-care segments of the diagnostic market to detect infectious diseases, sexually transmitted diseases, autoimmune and hemoglobin disorders, and to detect, monitor and control diabetes. It’s also a significant provider of raw materials to the life sciences industry. TRIB is headquartered in Ireland, with Irish and US manufacturing facilities, and quoted on NASDAQ. Through R&D and acquisitions, the company’s assembled a portfolio of over 400 products to date. It has a direct sales force in the US and UK, and sells in 75 other countries via a network of distributors.

Psst! Feeling Good? Wanna Do A Share Buyback?!

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intrinsic value, Margin of Safety, NAV, Price/Sales, share buyback, Total Produce, Treasury Shares, valuestockinquisition

Btw Happy 11.11 11-11-11! I’m amused to see the media highlighting all the weddings today, more romantic than induced labor I guess…! Yes, lots of babies being born today – and if you’re born in Korea today your SS number begins with 111111… It’s also Nigel Tufnel Day – c’mon turn up your stereo/ipod to 11!!

valuestockinquisition highlighted his distaste for share buybacks here and here. Ideally, I’m a supporter of share buybacks, but in reality I have very mixed feelings about them… The quality of stock/share buyback analysis in most companies is atrocious – throw away your corporate finance textbooks! I don’t think I’ve ever met anybody in a corporate environment who could come up with (or discuss coherently) a fundamental Intrinsic Value for their company stock. This is a tremendous handicap for any strategic decision making, and of course for share buybacks. In most companies, the analysis goes something like this: Do we have spare Cash/Debt for a buyback? Are we feeling good about the company, the share price, ourselves? What’s the EPS impact? This is the final trigger for any share buyback, let’s take a look at the math: