Updated thoughts on Barnes & Noble (BKS)

Please see the below article for my updated thoughts on Barnes & Noble. Quick summary: business performed well in most-significant 3Q, valuation remains compelling at <5x EV/EBITDA, and spin-off of the College business in August provides a hard catalyst to unlock value. I still think the stock is worth $30+ (vs current px $23.3), with … Continue reading Updated thoughts on Barnes & Noble (BKS)

When it comes to oil prices, ‘nobody knows anything’

Back in mid-November, when oil prices had fallen 'just' 25% from ~$100/barrel to the still-palatable level of $83/barrel, Harold Hamm, the CEO of Continental Resources (one of the largest North American oil + natural gas companies, focused on North Dakotan shale plays), shocked the market by selling all his company's oil hedges - effectively betting … Continue reading When it comes to oil prices, ‘nobody knows anything’

Guilty or not, Lumber Liquidators just can’t win

The latest 'battleground' stock de jour is Lumber Liquidators (NYSE: LL), a hardwood flooring retailer based in Virginia. Shorts had historically targeted the company for its seemingly too-good-to-be-true margin profile (much higher than competitors), large inventory build, and questionable supply sources in China; nevertheless the company belied the skeptics, for a time, rising from $20 … Continue reading Guilty or not, Lumber Liquidators just can’t win

What’s in the Box? Nothing good, apparently

It's pretty interesting to follow the first earnings release/conference call for a newly-listed public company: oftentimes you see the first published numbers for a new listing well and truly 'scrubbed up' so as to paint the best picture possible to the analyst community. Frankly, Wall Street is as much about marketing and telling a story … Continue reading What’s in the Box? Nothing good, apparently

How to destroy shareholder value – Brother Industries edition

What is the number one destroyer of corporate value? Most people would say not knowing your customer, missing a secular change in the environment, or something like that. The real answer: bad acquisitions. A poorly-conceived large acquisition is the easiest way for empire-building executives to blow mountains of shareholder capital in a heartbeat. Combining two … Continue reading How to destroy shareholder value – Brother Industries edition