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ModusLink Global Solutions, Inc. Message Board

belco_mc 10 posts  |  Last Activity: Nov 17, 2014 8:51 PM Member since: Aug 15, 2012
  • Reply to

    Chairman's letter next week

    by belco_mc Nov 15, 2014 1:11 PM
    belco_mc belco_mc Nov 17, 2014 8:51 PM Flag

    This is his one chance for the next 52 weeks to 'tell his story.' I'm interested in seeing how he addresses Maxim and how he positions the valuation.

  • BH is publishing the 10-K this coming Friday. I wonder if the Chairman's letter will be published then as well. Anyone know?

  • Reply to

    BH needs to sell some CBRL

    by smaycs4 Nov 11, 2014 4:39 PM
    belco_mc belco_mc Nov 11, 2014 8:21 PM Flag

    Not sure I agree with you. If he sold and paid taxes on the gains, he'd have to reinvest the money and earn an approx 20% return just to make up for the taxes paid. He's better off just letting it ride and collecting the dividends and building out his company around owning 100% of SNS and 20% of CBRL. Those are two nice assets.

  • belco_mc belco_mc Nov 10, 2014 10:36 PM Flag

    picture on Heinz ketchup- really funny!

  • Reply to

    SB capital allocation in the last 5 years

    by belco_mc Nov 3, 2014 8:46 PM
    belco_mc belco_mc Nov 9, 2014 10:33 PM Flag

    I agree with your point, smaycs4. However, he's done 2 rights offerings since he has bought CBRL. The rights offerings are weighing heavily on the stock. They are good only for those investors with a very long time horizon and those that want to invest more in the company. His capital allocation has been good. I also don't mind him raising money because he makes good decisions with the capital. In the end, I think he produces above average returns with BH. But, I'm not sure because he does continue to do the rights offerings, talk about A and B shares, and also puts BH money into the hedge fund structure paying high returns to SB, himself.

    I guess, I want to believe in him. But, not sure that's the right move long term.

  • Reply to

    SB capital allocation in the last 5 years

    by belco_mc Nov 3, 2014 8:46 PM
    belco_mc belco_mc Nov 5, 2014 7:40 AM Flag

    good point- Maxim may be a mistake

  • Hate on SB all you want. I understand the criticism and disagree with some of his corporate governance policies.

    However, can anyone identify a major capital allocation mistake in the last 5 years? I can't.

    CAW is as close as you're going to get. And really, who cares. It's a small investment that he made before he changed his strategy and went big into CBRL.

    The last 5 years has been very challenging given all the cross-currents after the melt down. SB has made relatively few major investment decisions, which I view as a positive. And those that he has made have been very good.

    Hate him all you want. His corporate governance decisions has pushed the stock to levels that make it compelling. He now has cash again.

    I'm betting that he'll make another solid decision with the capital he has.

    So, can any of you SB haters come up with a poor capital allocation decision?

  • Reply to

    Current BH Valuation

    by belco_mc Oct 23, 2014 7:48 AM
    belco_mc belco_mc Nov 3, 2014 8:40 PM Flag

    Whatever you thought the intrinsic value was on Oct 23rd, add $20 million to that. Or $10 a BH share.

    Just due to CBRL.

  • Any thoughts on this valuation?

    $635 million Portfolio Value as of September 2013
    $35 million CBRL gain since Sept 2013
    $10 million Value of First Guard and Maxim combined
    $75 million Cash raised in recent Rights Offering
    $125 million Value of Steak n Shake net of debt

    $880 million Total Value

    20 million Current shares outstanding

    $440 per share in value

  • Just a casual observation- looking back at the first rights offering, the stock performed in a similar manner when compared to today.

    SB buy a cash-using company like Maxim was a curious move, along with another rights offering isn't doing any favors for the stock. But, in the grand scheme, I like the company he is building and the valuation is good now. I still have concerns with his compensation and weak Board.

    Add up the value of the stock holdings and SNS and you get a compelling risk/reward, imo.

MLNK
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