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Aspen Insurance Holdings Ltd. Message Board

jamessmarson7 53 posts  |  Last Activity: Apr 27, 2016 8:47 AM Member since: Dec 2, 2011
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  • Reply to

    I'm worried about Terex but

    by jamessmarson7 Apr 20, 2016 1:22 PM
    jamessmarson7 jamessmarson7 Apr 27, 2016 8:47 AM Flag

    I don't think Terex is a good buy regardless of how dumb MTW and ASTE is trading it doesn't change certain things about Terex.

    The whole value of Terex is now based on merging with Zoomlion which is kind of scary because if it doesn't happen there have been many negative developments in the actual Terex story.

    1) Kone just annouced that the inversion part of the deal will no longer happen. If we had assumed Terex could grow earnings by a few % a year the tax rate savings growth would increase the exact same as earnings. So they just said $36M in tax savings is gone. As a perpetuity that is about $600M of value just gone.

    2) MHPS has another restructuring. What a freaking joke. How many restructurings can one division have?

    3) operating margins for AWP dropped into single digits again and below prior results.

    Having said that MTW is now at $6 based solely on their crane we will see their results. But their business is similar to terex in size and operating profits.

    The only way you look at Terex favorably now is by comparing it to idiocy. Which is why you shouldn't buy Terex.

  • jamessmarson7 by jamessmarson7 Apr 20, 2016 1:22 PM Flag

    Kind of incredible the valuation MTW trades at.

    If we consider the fact their crane business is essentially the same as Terex's with a bit more debt and less profitability. It has a valuation of $724 M!

    Genie which made close to $300 M in operating earnings last year should have a valuation of at least $2B.

    ASTE which made essentially the same amount of money as MP last year has a value of $1.1 B.

    So far now we're at a 3.8 B valuation for Terex and fine you can say construction is worth $0 but MHPS was bought for $1.5 B 4 years ago. It's results have deteriorated and was a very bad purchase as of now. However their value is clearly at least $1B so in total we have a value of $4.8 B or $43 a share.

    Now into reality. Terex is worth about $20 given their guide down but MTW is worth $1-2, ASTE is worth 1/3 the current price

    This isn't a recommendation for Terex it's a warning to holders of MTW and ASTE

  • Reply to

    Manitowoc downsizing Cranes

    by rayonman11 Mar 19, 2016 12:16 AM
    jamessmarson7 jamessmarson7 Mar 28, 2016 2:03 PM Flag

    mtw has always been overvalued. Who cares

  • Reply to

    Sycamore Partners

    by endoptions Mar 17, 2016 6:08 PM
    jamessmarson7 jamessmarson7 Mar 28, 2016 9:51 AM Flag

    it does appear to be sinister especially considering Tranche B could be accelerated repayment for $50M if this sourcing collapses.

    I highly doubt ARO would want to have sourcing problems at this point in time. It is hard to trust MGF saying they are not in violation.

  • Reply to

    Honest comments only

    by stockmonster100 Mar 18, 2016 12:00 AM
    jamessmarson7 jamessmarson7 Mar 18, 2016 9:44 AM Flag

    yes it's pretty clear this is an over reaction. See my post below. This quarter was excellent from comp sales. Cash burn is rapidly slowing. Comp sales could begin to be positive next quarter and next year which is excellent in terms of being able to improve GM and SG&A % rapidly.

  • Reply to

    James!

    by masonpennysmith Mar 4, 2016 11:52 AM
    jamessmarson7 jamessmarson7 Mar 18, 2016 9:34 AM Flag

    Here was my post from March 15

    "jamessmarson7 • Mar 15, 2016 3:55 PM Remove 0users liked this postsusers disliked this posts0Reply
    Also let me tell you I am aware tomorrow ARO could swing violently either way based on their earnings report. ARO is .66% of my portfolio so don't come here laughing at me if their stock drops 80% tomorrow.

    However I am expecting it to rise signficantly. I think they will guide somewhere close to breakeven for next year and people will realize bankruptcy isn't imminent and the stock will jump to $2. If it jumps to $2 then it would be a very nice gain. So I felt there was a big mispricing in ARO. Given that I think the stock could rebound huge on very moderate news given that it sells at bankruptcy prices.

    And if it drops to $0 well I won't be losing sleep over it. Less"

    So guys don't think I am not a good. Also I was in at 33 cents so 25 cents isn't really hurting me.

  • jamessmarson7 by jamessmarson7 Mar 18, 2016 9:26 AM Flag

    I am trying to tap into questions regarding the revolver but I forecast a cash loss of $27 M in Q1, $20 M Q2, Break even in Q3, Positive $16 M in Q4.

    I expect sales flat in Q1 (AMAZING given where they are coming from). Sales to grow 3% Q2, 5% Q3 and 7% Q4.

    SG&A has done a terrific job getting into line.

    Cash payment on long term debt is only $5M a year. Aro can defer the rest and it gets added to debt.

    At the end of Q2 ARO should have $25 M of cash and then they can start growing cash again. That assumes no change in inventory but given their results they should have less inventory as less stores.

    I think Q4 came out exactly as forecasts. Q1 is better than forecast. And I am excited for this year. Geiger seems to be pulling out all the stops.

  • Reply to

    James!

    by masonpennysmith Mar 4, 2016 11:52 AM
    jamessmarson7 jamessmarson7 Mar 17, 2016 5:00 PM Flag

    i wouldn't say I was wrong yet but theres a reason it was such a small position for me.

  • Reply to

    James............

    by masonpennysmith Mar 15, 2016 3:37 PM
    jamessmarson7 jamessmarson7 Mar 15, 2016 3:55 PM Flag

    Also let me tell you I am aware tomorrow ARO could swing violently either way based on their earnings report. ARO is .66% of my portfolio so don't come here laughing at me if their stock drops 80% tomorrow.

    However I am expecting it to rise signficantly. I think they will guide somewhere close to breakeven for next year and people will realize bankruptcy isn't imminent and the stock will jump to $2. If it jumps to $2 then it would be a very nice gain. So I felt there was a big mispricing in ARO. Given that I think the stock could rebound huge on very moderate news given that it sells at bankruptcy prices.

    And if it drops to $0 well I won't be losing sleep over it.

  • Reply to

    James............

    by masonpennysmith Mar 15, 2016 3:37 PM
    jamessmarson7 jamessmarson7 Mar 15, 2016 3:50 PM Flag

    whats your email?

    Essentially valeant has about -$95 of tangible book value per share. And I estimate another $10 on top from lawsuits or $-105 tangible book value. It's cash earnings stripping out amortization and other charges will be $10 this year. However I am dubious of their excluding certain expenses in their non gaap such as restructuring and their adding back in process R&D costs which I find weird and contradictory if they are also adding back amortization. Like they are saying this R&D should be capitalized and therefore amortized and this other part shouldn't. Also they have a small stock expense they addback.

    Anyways with all this said and done EPS excluding intangible charges are like 7-8 normalized. So if we assume they don't pay dividends for 8-9 years as they fix their balance sheet and earnings were to grow like 5% a year. you would get a valuation of $46 or so.

    So yeah it is still interesting given the huge call volume. But I didn't get in because yeah their tangible book value is super negative and its possible growth is 0% or even negative making intrinsic value closer to $20 or $10.

    But given the 32 stock and the calls at $14. It is still a very interesting play. Given that you can play a swing that people will over value it and not risk so much capital. Like it's very likely the stock is abvoe $32 in 2 years from now even if their metrics aren't as good.

    Given this is a "play" not a buy and hold and would take up a small portion of my portfolio say 1.5%. I would still consider doing it.

  • Reply to

    James............

    by masonpennysmith Mar 15, 2016 3:37 PM
    jamessmarson7 jamessmarson7 Mar 15, 2016 3:43 PM Flag

    yeah lol I invested $0. I can send you my valeant valuation sheet if you want. I am still thinking about selling calls though

  • Reply to

    Aro isn't bankrupt

    by jamessmarson7 Mar 7, 2016 11:32 AM
    jamessmarson7 jamessmarson7 Mar 7, 2016 3:32 PM Flag

    I don't think its wise to set a PT because if ARO can do a turnaround I would think the 3-4 PT would be $10-15 if they can turn it around. The shares to Sycamore arent even that dilutive . I owned this stock in 2010 and sold in 2010 from $21 to $31 and havent bought back until this month. And right now they have 20% less shares outstanding then at that time.

    But of course the PT could also be $0 if they don't turn it around. However I think its a pretty reasonable gamble to own a stock with a high chance of a turnaround.

    I would think the stock jumps to $2-3 if they show next year will be close to break-even.

    I merely think ARO is excellent reward to risk. But this isn't a huge positon for me. But I see it as one that could have tremendous returns.

  • jamessmarson7 by jamessmarson7 Mar 7, 2016 11:32 AM Flag

    I have done the calculations and I see the following:

    Cash balance $41 M. Inventory will drop in Q4 so ending quarter cash should be around $90M

    The company has slowed substantially their cash burn. I think they can lose 10-20 M of cash next year at midpoint and maybe 40-50 at worst and breakeven to positive at best.

    Furthermore they have a $215 M revolver untapped.

    Furthermore their results have been exponentially improving since Geiger returned. I assume PS is what sort of bankrupted ARO. I was not a fan of it when it was created in 2010 or so. Since Geiger returned PS has gone from 150 stores to mid 20 90% reduction. Now they have 799 ARO stores when he joined it was 931 14% reduction

    2015 they planned 50-75 closures but they only expect to close 50 the low end
    2016 they plan to close 20-40 I am sure a lot of this is PS

    GM have improved substantially since Geiger returned.

    Dare I say Geiger is a clothing god? I think ARO is the best pick for anyone to buy in 2016

  • Reply to

    TEX or ASTE?

    by bridgejumper08 Mar 4, 2016 10:18 AM
    jamessmarson7 jamessmarson7 Mar 4, 2016 2:27 PM Flag

    ASTE has a much large premium. Just dont buy MTW

    I am more closely monitoring MTW now that they split off their cranes. But their cranes division will lose money this year and trades at $600M. Terex which is profitable trades at $2.4 B.

    T

  • Reply to

    James!

    by masonpennysmith Mar 4, 2016 11:52 AM
    jamessmarson7 jamessmarson7 Mar 4, 2016 2:24 PM Flag

    lol yeah I don't necessarily care to much about timing but yeah my projections are ARO may be close to breakeven next year and have really turned around their business with Geiger coming back in Q2 2014. They also have a decent revolver which is untapped. Furthermore Cash is at 44 and inventory will come down this Q making Cash around 90-100. With net income next year probably around break even they shouldn't be bankrupt.

    And the stock trades as if its already bankrupt.

    I will await until March 17 to buy a bigger position but I don't mind the gamble here.

  • Reply to

    Merger with Konecranes halted

    by long_tex Feb 19, 2016 11:30 AM
    jamessmarson7 jamessmarson7 Mar 3, 2016 1:07 PM Flag

    yeah and you have also helped me a bit. I have started considering pursuing some more agressive strategies.

    For instance I want to buy Valeant at $66 and short 2018 calls at $80 and get $20 back and can make a 50-60% return if the stock goes to $80. i might need to do a bit more research first

    Other investment I just put .25% of my portfolio in Aerpostale. I originally owned it at $18 and sold at $31 many years ago. I didn't like their management of mindy Meads and Tom whatever. But I like this Geiger dude.

    Also the company does seem to have some liquidity. I think they can sustain another 1.5 year of losses if not more with their revolver. The company isn't bankrupt yet it trades as if it is.

    Anyways I would perhaps build a bigger position over time but I sometimes just buy a taste. if I lose on ARO well it wouldn't put a dent in my yearly return. But if it hits! o wow could ARO hit big.

  • Reply to

    Merger with Konecranes halted

    by long_tex Feb 19, 2016 11:30 AM
    jamessmarson7 jamessmarson7 Mar 3, 2016 9:50 AM Flag

    lol the key thing Mason is this.

    I could return 100% a year on a levered account investing 1% of my money where I can take unmitigated risk.

    I understand what you're saying but your risky strategy sounds like you have 10-20% of your money invested by yourself.

    I have 100%. So if you have $500K and have 10% invested or $50K and made 40% that is $20 K. If I have $500K invested and earned 5% that would be $25K

    So you can see pretty quickly my strategy will grow my wealth more quickly because ure strategy and returns are fake because only like 10% of your money is earning big returns cuz of ure strategy.

    Adopt my strategy and u can invest all ure money at once.

  • Reply to

    Merger with Konecranes halted

    by long_tex Feb 19, 2016 11:30 AM
    jamessmarson7 jamessmarson7 Mar 2, 2016 4:28 PM Flag

    Well here is the thing. I have 100% of my money invested in equities. Based on what you're saying, it sounds like this "play account" is a small proportion of your total wealth.

    I have a feeling your portfolio will blow up on you 1 day though. The difference between us, is I take very little risk and you take excessive risk.

    As Buffett says and me too. I could make 100% a year using leverage but why risk that one year of zeros? Even if its a 1% chance?

  • Reply to

    Merger with Konecranes halted

    by long_tex Feb 19, 2016 11:30 AM
    jamessmarson7 jamessmarson7 Mar 1, 2016 3:24 PM Flag

    The key to investing and what my minions of followers forget when buying MNTX and BCEI. Is that 20% a year for 5 years is still a 0% return when you lose 100%

    This is why you don't see me make any really stupid decisions that can blow up my portfolio. The put one is a bit different. To me that is excessive risk because once in a while you get a 2008 meltdown where everything drops and you see with AIG and other companies. You don't really want to risk a margin call.

    Anyways I am more talking about investments in BCEI and others. They put probably 20-30K in this investment that is now worth close to zero.

    Meanwhile James here returned over 20% last year and is up 7% so far this year. The key is never lose a lot. Making 5% a year is better than losing 100% one year.

    However I typically do make 20%+ a year. I am just saying never put yourself in a situation where you can lose 100%.

    My portfolio
    COF 31% COF
    DE 16%
    XSP 53%
    Short SH 4%
    Cash 4%

    Long Portfolio 104%
    Short Portfolio 4%
    Net Portfolio 100%

  • Reply to

    Merger with Konecranes halted

    by long_tex Feb 19, 2016 11:30 AM
    jamessmarson7 jamessmarson7 Mar 1, 2016 3:11 PM Flag

    yeah I guess we will never know how well you do vs myself but I will say I am up 7% on the year.

    Who knows what you're up but I doub't your performance has beaten mine. I have over 6 X my money since I started investing in July 2008

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