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VMware, Inc. Message Board

equityrich 1687 posts  |  Last Activity: May 21, 2015 12:14 PM Member since: Apr 16, 1998
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  • Reply to

    Forward PE of 12

    by highflier2go May 13, 2015 12:16 PM
    equityrich equityrich May 21, 2015 12:14 PM Flag

    There is no retailer putting up SSS as strong as KORS

  • Reply to

    Forward PE of 12

    by highflier2go May 13, 2015 12:16 PM
    equityrich equityrich May 20, 2015 10:25 AM Flag

    Look at the profit margin difference between UA and KORS. Also the SSS. KORS has every retailer beat, bar none. Yet it trades for multiples less than even Coach which has had over 2 years of HEAVY declines in revenue, profit and SSS.

    This is just market inefficiency at work. Nothing new. It corrects eventually whether it be directly in the market or via going private LBO or somebody acquiring.

    KORS Is now Closing in on just 10 times next years net profit and under 7 times EBiTDA. Typical takeouts are between 7 and 10 times EBITDA. If the market gives you no credit and your are printing cash as KORS is it usually doesn't take long for things to get fixed.

    The $1B in cash and no debt make it a prime LBO target as well. LBO operators look for lots of cash in the company and little debt. We shall see. I'm loading up on call options. KORS may be my biggest homerun before 2015 ends. Stock will be somewhere between 75 and 100

  • Reply to

    A simple way to understand why apple is so undervalued

    by ditzil May 19, 2015 12:46 PM
    equityrich equityrich May 19, 2015 1:07 PM Flag

    LOL. Good luck with that

  • Reply to

    Forward PE of 12

    by highflier2go May 13, 2015 12:16 PM
    equityrich equityrich May 18, 2015 10:02 PM Flag

    SSS stores are slowing because 40% was not sustainable. IT had to slow. Show me any retailer putting up the revenue, profit or SSS growth as KORS is right now. Good luck. There aren't any. Nobody is comping like KORS

  • Reply to

    Forward PE of 12

    by highflier2go May 13, 2015 12:16 PM
    equityrich equityrich May 18, 2015 3:54 PM Flag

    there is now chatter of a leveraged buyout. I suspect a takeout price would be in the 80 to 90 range now based on multiple of EBITDA to Enterprise Value typical in LBO's. I won't be surprised if I wake up any morning now with the news should KORS continue to trade at this multiple and their pristine balance sheet with almost $1B in cash and zero debt.

  • Usually crazy calls like Carl's are signs of a top. Could this be peak apple? DId Carl just nail it?

  • Reply to

    Trading below book value now

    by bagholderbob Apr 28, 2015 9:43 AM
    equityrich equityrich Apr 28, 2015 5:06 PM Flag

    HP should just buy them here for the patent portfolio

  • equityrich equityrich Apr 28, 2015 5:06 PM Flag

    It could. but it could also go to 60 or higher on a short squeeze for no other reason other than trading mechanics.

  • I just ran the chart of S&P 500 index to see how apple fared over the last 3 years compared to it. I was shocked that apple not only didn't beat the index but is just barely tie to it now. I'm going to bet the next 3 years it underperforms. Go check it out on the 3 year compare. Mindblowing that you could have had the same returns in the index over 3 years and not had to worry about timig your apple top exit and take the tax hit.

  • equityrich equityrich Apr 23, 2015 10:58 AM Flag

    There are some very nervous KORS shorts downvoting here hoping and praying I am wrong. I'm never wrong.

  • equityrich equityrich Apr 22, 2015 8:15 PM Flag

    A buyout or go private would be well above 80/share. closer to 90 just gets them to fair value. KORS will earn $4.80 next year and a 20 multiple on that (still a discount to its growth rate keep in mind) would be a 96/share take out price.

    This is why KORS will start to see action in the buyout or go private if wall street doesn't recognize the value soon. PE firms always do and are more than happy to scoop up massive cash flow machines that are growing like KORS. KORS comps beat every retailer out there every single quarter for 2 years now including last quarter. This includes luxury, affordable luxury and casual.

    The stock is merely down because at the moment it wasn't "working" and the charts failed. Chart traders and momentum traders can always blowout stocks well under their fair value since valuation is not relevant to them. This is why PE firms have billionaires who get richer because the market gives gifts. Even at $100 a share any PE firm would be lucky to get this one.

  • equityrich equityrich Apr 22, 2015 8:10 PM Flag

    How do you figure that? double digit growth comps, revenue, profits, same store sales and beating estimates every single quarter as public company? they can't control their stock price but they sure doing a fine job growing the business and proving analysts wrong each quarter.

    Shareholders will be rewarded when the market either wakes up (and it always does at some point) or they get taken private or acquired for a premium.

  • equityrich equityrich Apr 22, 2015 11:35 AM Flag

    Lots of people at the cash register walking out with KORS shopping bags stuffed with product. Stock prices and company performance are often not correlated on wall street over short periods of time.

    Witness KORS who has double digit comps every quarter, positive double digit growth top and bottom line, raised guidance every quarter since going public. Proved negative analysts wrong 3 quarters in a row who were claiming they were discounting. Turns out they were all wrong. But for now the stock has not paid attention to reality but it will or some PE firm will take it private soon at a nice number in the 80's or 90's and that will be that.

    KORS now trades well under 10x EBITDA so it is firmly a takeout target and if that happens every short will be crushed before they can press the cover trigger

  • At a multiple ex-cash well under 10 now and Wall Street showing zero love and respect for KORS it could be taken out by Private Equity or simply go private. At this point there is little reason for KORS to be a public company anymore and is very attractive either as a takeover target or as I said by PE and go private.

    I think shareholders will see a takeout price should it occur, around 80 to 90/share and at that price whoever gets it steals it as the cash on the balance sheet, growth and cash flow even if it went to zero tomorrow provides a 10% rate of return. Any growth at all to the bottom line just takes it up from there.

    Keep in mind (and PE firms will) that KORS has had double digit comps every quarter since going public, revenue and EPS growth in double digits every quarter, beat estimates top and bottom line every single quarter since going public and raised numbers every single quarter since going public. Makes little sense with these facts where the stock price is but Wall Street isn't always rational. It's times like this when PE firms take full advantage of the gifts of Wall Street. You heard it here first.

  • equityrich equityrich Apr 22, 2015 11:29 AM Flag

    Just got back from Vegas. KORS store in Cesars was packed. Significantly more people (at least 2x to 6x more) than the other luxury or affordable luxury brand stores in there.

  • Reply to

    Why the jump?

    by goldenheart1956 Apr 10, 2015 9:57 PM
    equityrich equityrich Apr 13, 2015 10:17 AM Flag

    I think with the J&J/Google announcement on robotic surgery and ISRG's technology, patents, etc there is a strong possibility of an acquisition at a substantial premium for ISRG this year. If those guys want to get in the game they have to buy ISRG otherwise patent hurdles and time for FDA approval and doctor acceptance will be at least 7 to 10 years. That's too long. Buy vs build.

  • Reply to

    Market Insiders seem to be selling

    by spectracide Mar 27, 2015 1:20 PM
    equityrich equityrich Mar 27, 2015 1:37 PM Flag

    Sorry but nobody knows anything. This is a technical selloff. Weak hands also giving up. The chart guys selling as it falls through whatever imaginary X day line it broke through. At some point it stops. Builds "support" and then heads up. then they all buy back in as it heads back up.

    There is no news on the stock. Just technical trading mechanics

  • Reply to

    MIDD would be a perfect Buffett investment

    by renmanaz Mar 9, 2015 6:43 PM
    equityrich equityrich Mar 26, 2015 10:53 AM Flag

    They have some great innovation too in the pipeline with Viking's zero preheat feature which is completely disruptive to the industry.

    Also wunder-bar acquisition which has a new product for restaurants and bars serving liquor. Basically a pour spout connected to the cloud that meters and reports every pour from every wine/liquor bottle. This eliminates all those over poured drinks, freebies and helps quality control as it meters a perfect "shot" each time. All the pours transmitted via wifi up to the cloud where management can view and monitor in realtime their liquor sales and inventory across a chain. This is a big profit booster for chains so a no brainer for them to purchase it.

  • Reply to

    MIDD would be a perfect Buffett investment

    by renmanaz Mar 9, 2015 6:43 PM
    equityrich equityrich Mar 25, 2015 9:51 PM Flag

    MIDD is a textbook Buffett target. Great company, culture, product and the CEO is all Buffett. The only hurdle would not be price but whether Selim would want to be acquired by Berkshire or not.

    I think there would be advantages for Middleby as some of the corporate functions and costs could be shared/offloaded to Berkshire which is nice. More than that is they can wipe out their debt and have as much access to low cost capital as they need to grow the business further.

    Ovens and these types of durable goods are the exact kind of "boring" businesses Buffett seeks out. He would get a leading CEO into Berkshire organizatiion as well.

    I just have no idea whether Selim would have an interest in it. I'm sure Buffett would and as you said it would be in the 8B range if not a little higher. We'll see if it ever happens. As a shareholder I am mixed on it. Alone MIDD is likely to outperform over the haul as long as Selim is running it. If swallowed by Berkshire we would get a one time pop now on it but then its done. No more gain after that. Let this run and it doubles every 3 to 5 years perhaps for another decade or two.

  • Reply to


    by redshirtsophomore Mar 24, 2015 8:09 PM
    equityrich equityrich Mar 25, 2015 12:16 PM Flag

    If it makes you more comfortable sell 1/3 or 1/2 and let the rest ride.

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