[SVU – Supervalu] Opportunity Post Save-A-Lot Divestiture?

(959 words) Ugly few years for this poor grocer, but the implied valuation of the core wholesale business looks like it could be interesting post recent Save-A-Lot divestiture (discount grocer). The company used most of its $1.3bn in gross proceeds ($1.24bn after taxes) to significantly reduce its debt load by $1.1bn (total PF net secured/net […]

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[ADS – Alliance Data] Form vs. Function

In form, ADS is a bank.  In function, it is a loyalty company that helps retailers drive customer engagement and top-line growth.  The Citron short report from Aug. 2016 fails to recognize this distinction, essentially arguing that because ADS’ private label business literally makes money like a bank, it should trade like one.  But it […]

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[GBX – Greenbrier] Valuation About Fair on Normalized Railcar Shipments

(862 words) GBX (1/6/17) The industry’s long-term average railcar deliveries are around 45k-50k units/year, so even after the decline from ~82k deliveries in 2015 (tank cars for crude and railcars for coal got smoked as commodities cracked), 2016’s 60k units are still running above normalized levels as units have been since 2012.  GBX’s own backlog […]

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Quick Blurbs [Accenture, Adobe, Oracle, Paychex, Red Hat, Workday]

12/21/16: ACN (Earnings Call) [ACN has been aggressively investing in its digital/cloud/security-related services, which have been growing +dd% vs. +msd for everything else.  There was some concern years ago by some about ACN’s relevance in an increasingly turn-key cloud solutions environment, but they seem to be navigating this shift to cloud pretty well and taking […]

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Quick Blurbs [Fedex]

12/20/16: FDX (Earnings Call) [FDX made heavy investments in its Ground segment (e-commerce growth presenting challenges during “peak” demand), which resulted in dd operating income contraction at Ground despite hsd revenue growth; they should start leveraging this investment later this fy.  Freight segment profits also weaker y/y on lower weight per shipment and increased investments.  […]

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Quick Blurbs [Moody’s, Blackstone, Oaktree, Wells Fargo]

12/6/2016-12/7/2016: GS US Financial Services Conference BX Stephen Schwarzman – “we’re in the product invention business.  We’re not like Magellan fund where you just keep making something bigger and bigger until performance dies and then it gets smaller and smaller.”  The changes in the business sector from the election will be significant, w/ a very […]

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Quick Blurbs [Caterpillar, Fastenal, WW Grainger]

(1,739 words) 11/30: GWW (GWW is a distributor of MRO products (tools, cleaning products, safety supplies, pumps, electrical supplies, etc.) primarily in North America.  $10bn revenue.  Well over 1mn products, 500k in stock.  Over 3mn customers and does business in small chunks – $300 average order size, 100k transactions / day) Broadline MRO is very […]

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[DF – Dean Foods] Levered Commodity Processor, Impending Challenges

Dean is a levered commodity processor sandwiched between fragmented but price-protected dairy producers and consolidated retailers, donating market share in a secularly declining market to undisciplined, subscale peers.  Its stock trades for 16x management’s charitably adjusted EPS,[1] a full market multiple for a narrow-moat business. The environment in recent years beckons 2007-2010: 1) a period of rapidly […]

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