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ModusLink Global Solutions, Inc. Message Board

belco_mc 8 posts  |  Last Activity: 13 hours ago Member since: Aug 15, 2012
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  • Very impressive earnings report this afternoon- good revenue growth and turning a small profit on a fairly low revenue level. This stock is very undervalued.

  • belco_mc belco_mc Sep 9, 2014 7:53 AM Flag

    Your point is valid in that SB has an incentive to make money.

    I'd like to see the average compensation for a CEO for other companies with a similar market cap. I'm guessing it's around $1 million a year. So, in a good year he makes 25x the average. In a bad year he makes the average. Long term, I'm not sure a common shareholder can make above average returns when giving up such a percentage of the returns. I guess the reality is that BH is primarily a hedge fund with similar fees. And, a hedge fund with 80%+ percentage of its assets in one stock where the big upside move has already occurred.

  • Reply to

    BH Valuation

    by belco_mc Sep 5, 2014 8:04 AM
    belco_mc belco_mc Sep 7, 2014 6:31 PM Flag

    I sold all my BH after he announced the rights offering so I can't participate. I like SB and how he thinks about business and investing. I also like how he takes concentrated positions.

    However, I feel like BH is a stock you can only trade rather than buy and hold. He seems too willing to do things that cause a lot of downside (rights offerings and creating 2 classes of shares) for me to live with the volatility. The offering memorandum tells you that he's going to try again to create 2 classes of shares again. And if he can't, he's going to do a rights offering again next year. All fine if you're a long term investor who wants to add to your position. But not so shareholder friendly if your holding period is 1-2 years.

    I'm very concerned about how he gets paid on both BH gains in book value and also hedge fund compensation on the BH portfolio. Seems like he is double dipping excessively.

    So, in the end I'm afraid I'll not make this a large core holding because of poor corporate governance.

  • belco_mc by belco_mc Sep 5, 2014 8:04 AM Flag

    Here's my back of the envelope:

    Investment portfolio: $675 million (my estimate; haven't taken the time to verify from recent 10Q)

    restaurants: let's assume normalized EBITDA of $40 million; an 8 multiple (you can argue that's high or low) gets you to $320 million. Back out the $200 million of debt for a net value of $120 million.

    First Guard/Maxim: guessing at $10 million total.

    new cash from rights offering: $80 million

    add 300k new shares from rights offering.

    Total value of around ~$885 million ($442/share based on 2 million shares OS)

    That's a 28% discount to today's price of $344. I'm buying.

    Thoughts?

  • Reply to

    The stock is down over 100 points

    by smaycs4 Sep 3, 2014 11:42 AM
    belco_mc belco_mc Sep 3, 2014 7:12 PM Flag

    I agree with you smaycs4. Surprising. There must be some arb trade funds are doing that bring the selling. I gotta believe this will bottom around here. But, SB doesn't help with his recent purchases of the magazine and insurance company that didn't fit with his stated strategy of either buying cash flowing companies or insurance companies with floats. Those were slight negatives, but nothing to cause this selloff. It has to be the rights offering and this should prove to be a good buying opportunity. It is annoying how much self dealing SB seems to do.

  • Reply to

    Value doesn't add up.

    by geotherm101 Aug 21, 2014 11:51 AM
    belco_mc belco_mc Aug 21, 2014 10:21 PM Flag

    The stock is very cheap now. Sardar has done a nice job overall. He doesn't miss an opportunity to take advantage of his power/control. That's the drawback. However, he is talented and has made overall good decisions since he took over SNS. Other than paying himself a very high amount, it's hard to be too critical with what he has done. In time, I think he will do well.

  • Reply to

    Still Cheap

    by allinalj Aug 16, 2014 11:19 AM
    belco_mc belco_mc Aug 18, 2014 10:23 PM Flag

    This management team has made all the right moves the last few years. Their last two acquisitions have proven to be very good. Now they are using excess cash to buy more shares. I think this stock goes much higher.

  • Reply to

    Earnings

    by baaadapple Aug 14, 2014 11:57 AM
    belco_mc belco_mc Aug 15, 2014 8:41 AM Flag

    They have earned .24 in the last two quarters. I'm not sure of the seasonality in their business but just annualizing, we're at .48 cents in earnings. If you believe the housing market and renovation market will continue to recover, then Carpets earnings will increase from here. A company earning 50 cents a share with good management and growth should be selling for north of $5 per share. I think it goes there. This management team has a great track record.

MLNK
3.78-0.07(-1.82%)Sep 18 4:00 PMEDT

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