[CF] GLOBAL N FERTILIZER SUPPLY TIGHTENING BUT PRICING RECOVERY PRICED IN

(1,627 words) 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 […]
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QUICK BLURBS [DIS, EMR, FOXA, JLL, KORS, NLSN, NWL, SPSC, TWX, WD]

(2,906 words) [WD: 2/8] Pressing the accelerator pretty hard.  This company is a non-balance sheet multifamily real estate lender with > 5% of total lending share on multifamily properties in the US, which is big for a non-bank lender.  In 2016, WD was Fannie’s 2nd largest lender, Freddie’s 3rd largest seller servicer, and a top 10 […]
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[DLTR, DG] DOLLA DOLLA BILL Y’ALL

(1,672 words) Punchline: I like DG and prefer it to DLTR.  A confluence of uglies – food deflation, welfare cuts, and pronounced competition – have resulted in slight same store sale contraction at DG (the first negative in at least a decade) and deceleration at DLTR, catalyzing 20%-25% sell-offs in both stocks since Summer 2016. Here’s […]
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[CHUBA/K] A SKEPTICAL TAKE

(970 words) 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 […]
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QUICK BLURBS [WETF, ALLY, HBI, ANTM, AMZN, LUV, URI, WNC]

(1,641 words) [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 […]
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[SAP] THE GREAT MIGRATION

(1,533 words) SAP carries the dubious distinction as perhaps the least technically progressive software incumbent, feasting for years on a steady stream of high-margin maintenance revenue while starving innovation and reactively buying its way into cloud participation.  One of the critical advantages that on-premise incumbents had pre-cloud is that a cumbersome and costly upfront integration process […]
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[EBAY] DILEMMA AND OPPORTUNITY

(1,413 words) 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, […]
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[LEN] SUM-OF-THE-PARTS VALUATION

(982 words) 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 […]
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