(Advance note: thanks again to all new and returning premium subscribers. I highly recommend all subscribers follow me on Twitter @puppyeh1 as I do endeavor to live-tweet key changes in my views/trading positions in any name I have written up.) This will be a bit of a ‘grab bag’ post, intended to catch up new … Continue reading Mark to market: catching up on GAN, WTE, AER, Gold, Tankers, BFAM, and more
I previously wrote up high-cost potash producer, K+S (SDF, listed on the DAX in Germany) last November, contending that the combination of a turn in the potash market; a structurally high-cost set of assets; and a terribly-levered balance sheet with near-term maturities all made for a potent short cocktail. The stock has since fallen ~55% … Continue reading K+S Update: Is it about to get medieval in the potash market?
Its close enough to year end to check in on how the ideas I've presented during the year have performed, and to update where we stand on the various theses presented. The below table summarizes the overall performance of each idea since publishing, along with benchmark performance, and alpha (outperformance vs the benchmark). Note, this … Continue reading Taking stock of 2019: idea performance and thesis updates
K+S (SDF, listed in Germany), is a great mid-term structural short, because it is the highest-cost producer of scale in a global commodity market (potash) that is likely entering a multi-year downturn, all while being saddled with an incredibly levered balance sheet (4.5x net/6.2x adjusted) and burning cash. The sources of its uncompetitiveness are largely … Continue reading K+S: how hard will the potash downcycle bite?