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Jack in the Box Inc. Message Board

alexalekhine 136 posts  |  Last Activity: Jul 14, 2016 9:38 AM Member since: Mar 22, 2000
  • alexalekhine alexalekhine Jul 5, 2016 1:09 PM Flag

    Talk about clueless.

    Your "cost basis" is the amount you paid for all of the shares.
    Since you now have two different stocks, your cost basis is split
    between them based on the allocation of value determined by the company.

    They will provide a percentage for each entity.

    Nothing changes your cost basis on the shares you purchased.

  • alexalekhine alexalekhine Jul 4, 2016 7:53 PM Flag

    This is a silly comment.

    The reverse split has no impact whatsoever on the size of your gain or loss.

    It avoids have shares that are trading in the low- to mid-single digits.

    it is a little confusing at first, but if you can't deal with it you should think of another hobby.

    aa

  • Reply to

    Why the reduced credit line?

    by citnitout Jun 29, 2016 8:31 AM
    alexalekhine alexalekhine Jul 4, 2016 7:45 PM Flag

    I think your multiparty deal may be correct. Not sure there has been much of a CEO search. I am available and have not heard from anyone.

    But I do not think things are as bad as you think.

    Let's go over the valuation again.

    Assume that the Contract manufacturing division is worth only as much as the company's total debt.

    Then consider the results of the Defense business. FY15 EBITA of $26 million. If you allocate $2 million of Depreciation to this segment, you get EBITDA of $28 million. At a 12x mutliple (reasonable in my view because of the segment's market position, margins ($28mm EBITDA on ~$136mm of FY15 revenue), and growth potential (still deploying the new platform which is largely incremental because the old platform is sold off to allies who then need more buoys), and you get $336 million, which is a takeout proce in excess of $32 a share, nearly 50% upside from here.

    Clearly, one can differ on the valuations of the two segments.

    Please be my guest and make counterarguments on those!

    aa

  • alexalekhine by alexalekhine Jul 4, 2016 1:07 PM Flag

    At 5.4%, VER yields 200bps more than the 3.4% if both NNN and O.

    But, with VER's much higher distribution coverage ratio, it should be able to grow the distribution faster than either of them.

    That leads me to think VER outperforms them once the divvy increases begin.

  • Reply to

    New 52 week High

    by catspaw33129 Jun 29, 2016 2:45 PM
    alexalekhine alexalekhine Jul 1, 2016 9:14 PM Flag

    Glad to be of service, as always.

  • Reply to

    Why the reduced credit line?

    by citnitout Jun 29, 2016 8:31 AM
    alexalekhine alexalekhine Jul 1, 2016 9:04 PM Flag

    Yes, it appears that
    1) Last year's large acquisition is not going well.
    2) That's why (we think) the CEO got sent packing in February.
    3) And why the company announced they were seeking a buyer in May.
    4) The poor performance was going to leave them in violation of their revolver covenants.
    5) So they got a waiver of some covenants for I think 5 quarters,
    6) in exchange for a reduction in availability.

    They waited literally until the day before the end of the quartger to reach the agreement with the banks, despite having talked about it quite some time ago. This indicates to me that the banks were not really on board with giving them the waiver..

    So now the risk of default is off the table and the stock price has started moving closer to the intrinsic value of the company in a sale process.

    At least that's how I am interpreting what is going on.

    From a TA perspective, the chart looks great, a nice cup-n'handle formation unless I am mistaken. Should lead to an excellent July stock performance.

    And I am guess there will be info on the sale process at the earnings report (right after Labor Day) for the end of the FY.

    aa

  • alexalekhine by alexalekhine Jul 1, 2016 8:37 AM Flag

    So, if someone held 1,500 shares of old hHTZ do I undersstand it correctly that they now have

    100 shares of Equipment Rental and
    300 shares of Car Rental?

  • Reply to

    New 52 week High

    by catspaw33129 Jun 29, 2016 2:45 PM
    alexalekhine alexalekhine Jun 29, 2016 9:57 PM Flag

    4% gain foreseen?

  • Eulav bought some new funds and renamed them "Value Line."

    Most of the profit flows thourgh to VL, right?

  • alexalekhine alexalekhine Jun 29, 2016 2:30 PM Flag

    Follow teh money?

    Who was the seller of that stake that EZPW purchased at a price that was apparently FAR abouve the real market value?

    Find the seller and probably you find the answer to that question.

    Who is the executive that was in charge of this decision?

    aa

  • Reply to

    Why up so much?

    by stillwater9999 Jun 16, 2016 10:11 AM
    alexalekhine alexalekhine Jun 29, 2016 1:06 PM Flag

    I saw ARKR was pitched in Barron's last weekend. it looked very, very cheap.

    It's pretty easy to figure by perusing my posting history but right now

    EZPW is my largest position and remains way undervalued awaiting the catalyst of selling a division. The message board here is very, very strong.

    Also long SPA, waiting to hear about the company's decision last quarter to put itself up for sale. Currently $20, I think it garners $28-$34 in a sale.

    Long GNC. Equity market cap of $1.65 billion, the company has LTM FCF of $331 million and (Bloomberg consensus) projected FCF this year of $240mm this year and $257mm next year. Yes, they have some problems, but they are also going to reap (I estimate based on GS research) at least $750mm of proceeds from selling company-owned stores to franchisees over the next tree years. FCF Yield here is absurd, and they bought back alot of stock the last couple of quarters.

    A bunch of Carl Icahn names:
    Waiting on split-ups at HTZ & XRX (Carl Icahn got into XRX after me).
    Also holding HLF (awaiting "MOAS" -- the Mother of All Short Squeezes).

    aa

  • Reply to

    Why up so much?

    by stillwater9999 Jun 16, 2016 10:11 AM
    alexalekhine alexalekhine Jun 28, 2016 6:22 PM Flag

    What other tickers are you into, Still?

    aa

  • Reply to

    Why up so much?

    by stillwater9999 Jun 16, 2016 10:11 AM
    alexalekhine alexalekhine Jun 28, 2016 6:21 PM Flag

    By law, the company cannot repurchase shares while it is in possession of material non-public information any more than the company's executives could do so.

  • Reply to

    Great performance in Brexit meltdown

    by alexalekhine Jun 25, 2016 3:49 PM
    alexalekhine alexalekhine Jun 27, 2016 1:57 PM Flag

    I spoke too soon.

  • Closing up a penny or two yesterday was a great achievement for the stock on a big, big down day.

    This is a "tell" that the stock likely is going MUCH higher.

    Essentially, what this means is that those who realize that EZPW is undervalued used the cover of the
    market selloff to scoop up as much of the stock as possible at cheaper levels than they otherwise would have been able to buy it.

    aa

  • Reply to

    10-K

    by p.faas Jun 24, 2016 7:34 AM
    alexalekhine alexalekhine Jun 25, 2016 3:47 PM Flag

    The claim that they have only enough money for two quarters does not seem to stand up to scrutiny.

    The company has continued to generate positive cash from operations every year.
    Last year they paid $600,000 apparently to bailey to go away. They also had expenses related to the accounting issues, and start-up expenses related to the extraction plant of $400K.

    Altogether that's $1.2 million. If you back that out and back out the deferred tax allowance, they did not lose money last year.

    With the extraction plant and related warehouse and production facility completed, they will begin throwing off greater depreciation expense, which benefits cash flow.

    Now, they do have a $600,000 short-term bank loan due on December 3, 2016, so that is the key issue to look toward.

    The onus is on the company to demonstrate that it can be a real business.

    Frankly, with an equity market capitalization of $28 million at present, someone like GNC should just scoop them up.

    aa

  • Reply to

    minimial increase

    by mikecphoa Jun 15, 2016 3:42 PM
    alexalekhine alexalekhine Jun 24, 2016 12:55 PM Flag

    I disagree. Many companies aspire to annual dividend increases.
    Annual dividend increases represent a part of the formula by which investors value a company.

    The company's management and board must decide what trade-off between growth and dividend income they think is optimal. Clearly, no dividend growth is not optimal.

    FWIW, JMHO

    aa

  • Reply to

    EZPW vs FCFS

    by ezpwjunky Jun 21, 2016 7:29 PM
    alexalekhine alexalekhine Jun 23, 2016 11:29 AM Flag

    Definitive numbers are impossible without intense number crunching due to the writedowns, charges, and other "non-recurring" items reported in recent reporting periods, combined with the "hybrid" nature of the company's financial statements (a combination of a financial company/lender and a retailer).

    I think the company has the ability to generate $100 million of "free cash flow" annually, and think that it should trade at an equity market capitalization of no less than 10x that amount after disposing of GF. That equates to a $1 billion equity market cap compared to just under $400 milliion at the (very happy to see) price of $7.30/share.

    Thus, a 150% increase from $7.30 is possible, meaning a possible price of up to $17/share.

    Given my position size, I will probably have to start selling in dribs and drabs when we get to the $9 area (though I could theoretically protect my position with put options or covered calls).

    aa

  • Reply to

    EZPW vs FCFS

    by ezpwjunky Jun 21, 2016 7:29 PM
    alexalekhine alexalekhine Jun 23, 2016 11:24 AM Flag

    Perhaps more to the point is that much of the debt is on the balance sheet of GF and is consolidated on EZPW's balance sheet despite the fact that it is not guaranteed by EZPW.

    Thus, we should view the sale price of GF as a combination of Cash n of cash recieved PLUS debt assumed by the buyer.

    Of note, some of the GF is cross-deefaulted tro the EXPW convertible notes.

    For the record the $230 million of these notes have a 2.125% coupon, mature on 6/15/2019, convert into equity at a price of $16.065/share, and currently trade at about $85 (per $100 of face value) up from under $60 in early March.

    aa

  • alexalekhine alexalekhine Jun 22, 2016 1:27 PM Flag

    Thanks

JACK
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