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Outerwall Inc. Message Board

  • earnings_man earnings_man Apr 25, 2013 4:19 PM Flag

    Reasons for AH pop

    Results were within guidance, factoring in special items and dilution. None of the accounting hanky panky that the highfliers constant engage in.

    The underlying business remains healthy, and the company is still adding new kiosks.

    The decision to rename the company Outerwall. At first blush, it seems silly, but a name change draws attention. It freshens the company image and I doubt that shorts really want that much attention, it just makes more people aware of the intrinsic value of the business, low valuation, and long term potential.

    They bought back near a million shares, bringing the total down below 27.5 million, which makes the short interest and risk of a squeeze even higher. They still have $340 million more authorized for repurchases.

    Sentiment: Buy

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • doesn't short covering explain it?
      half the float is short!
      may buy just to ride their capitulation train of pain!

    • Did the buyback artificially inflate the earnings per share? Did they borrow money to buy back shares to inflate the PE? Question I'd like to answer before reinvesting.

      • 1 Reply to siteobserver2012
      • Pretty sure they weight the shares, so the buyback would have some impact. The money wasn't borrowed solely to buy back shares. If the market insists on undervaluing the shares, heck yes they should keep buying. It drives up the EPS and will eventually drive the stock price higher. I'm happy with them buying back shares under $50.

        In reading their notes and guidance, I'm impressed. They are running a huge business, and still provide tons of detail and visibility for the curious. Makes evaluating the business much easier than many, many other businesses I've looked at. The only thing we don't know is the rate at which folks will shift away from DVDs. My bet is that it will take far longer than most imagine, especially since most homes simply won't be able to get Blu-Ray quality streaming for another long time (decade or more?).

        Sentiment: Buy

58.93-0.12(-0.20%)Aug 29 4:00 PMEDT

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