[CF – CF Industries] Global N Fertilizer Supply But Pricing Recovery Priced In

I was pitched this stock recently and thought it sounded interesting enough to write about (I like industries where supply and demand curves are shifting in big ways), although I think upside from a recovery in nitrogen fertilizer prices is largely baked into the current valuation. Substantial new capacity from China, lower freight costs (to […]

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[CHUBA/K – CommerceHub] A Skeptical Take

Investors are once again genuflecting before the altar of Malone.  Here’s the bull case: to combat Amazon, traditional retailers are increasingly pursuing omnichannel strategies (selling their products online for delivery or customer pickup + bric & mortar) and adopting drop-shipping solutions as part of their online fulfillment process.  Drop-shipping allows products ordered by a retailer’s […]

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Quick Blurbs [WisdomTree, Ally, Hanesbrands, Anthem, Wabash]

[WETF] After a killer few years from 2012-2015 on the success of its currency hedged Japanese (DXJ) and European equity funds (HEDJ), the stock lost 2/3s of its value from peak (Aug. 2015) to trough (early Nov. 2016) on heavy fund outflows before rallying 40% after the Trump election.  WETF experienced a huge inflow in […]

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[EBAY – eBay] Dilemma and Opportunity

After having not followed eBay for a long while, I tuned into eBay’s Seller Summit in late 2015 where the company laid out its structured data agenda, intensifying its strategic move away from the messy, spectrum-of-value bazaar of an earlier .com era – when, in the absence of 2-day shipping and consumer experience, broad selection […]

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[LEN – Lennar] Sum-of-the-Parts Valuation

Conservatively, the US needs to build about 1.3mn homes annually (MF and single-family) to keep pace with household formation (population growth + “headship” rates) and secondary home demand, and replace destroyed housing stock.  Based on Census Bureau data, it looks like we overbuilt by around 3.5mn units from 2000 to 2007 and underbuilt by 4.1mn […]

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Quickblurb [AXP – American Express; SAP – SAP SE]

[AXP] Mounting pressure on multiple fronts could collectively confound the Street’s expectations of low double digit EPS growth in 2018 and 2019.  [As you’re likely aware, AXP primarily differs from Visa and Mastercard in that the company, in addition to running a payment processing network like its peers, also: 1) issues credit cards (i.e. makes loans) […]

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[DAL – Delta Airlines, UAL – United Continental] So You’re Saying There’s a Chance?

Call me a sucker, but I’m tentatively a believer.  With both stocks priced at under 10x trailing earnings (and 11x forward earnings assuming 1%-2% guided margin compression in 2017 at DAL), the market is skeptical about margin sustainability.  Given the industry’s ignominious legacy of undisciplined competition, where the dumbest competitor has historically set the price […]

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[IBKR – Interactive Brokers] Low Volatility Weighing on Commissions; Valuation Still Attractive

IBKR began as an electronic market making platform for professional traders at a time when market making was still mostly being conducted via open outcry.  Its foundation of technology and automation ensured transactions at the lowest cost and fulfillment at the best possible price, core capabilities that it later brought to bear in launching its brokerage […]

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