This is a fundamental short....and i fully expect to make a killing. It's really quite simple. xmas couldnt POSSIBLY be good enough to justify thia stock price, AND, Becker Drapkin would not be selling as aggressively as they are, if this thing were anything remotely close to an impending turnaround.
I fully expect the stock to see $8-9 within 3 months.
Sentiment: Strong Sell
There's no reason to be long TUES. There are better things to be long, with less risk. But I do agree that Best Buy is overvalued. (I assume that's what you meant by BBBB.)
Spent 2+ hours, going thoroughly through the entire store. I don't suggest that there is anything scientific about my analysis....especially since i haven't been in one of their stores for probably several years prior. I did spend $375 (yes, even though i'm short the stock!), including $200 on a 7x9 foot carpet.
I don't have very many observations, except to say that the store was well stocked, and well organized. They told me that they sweep like 1/3 of the aisles, on a rolling basis, every day.....but it seems clear that they never WASH the floor, which was quite dingy, dirty, and unsightly in spots. I'm not making a big deal out of that, nor the fact that the store only had a handful of customers, at any time while i was there.
I do question the ability of Rouleau and company to dramatically transform the business model, when certain key departments, likde bedding and linens, kitchen/dining, luggage, etc., seem pretty "fixed" in their nature.
I can't say i was particularly compelled by ANY of the "bargains" i saw, which is probably the biggest problem i see for them....with the exception of one $10 decorative xmas glass piece that was a well priced impulse item. But nothing else reallly "screamed" at me. (I bought the things i did because i don't like to shop, and since this was a systematic shopping trip, i figured i would "reward" myself for the effort involved.
I guess i was looking for the possibility, in making my trip to the store, that i would feel the "irresistible" need to cover my short. I was certainly open to that possibility......but that is not a feeling i felt. I wish i would have seen what the "old" stores looked like 6, and 12, and 18 months ago, so i would have a basis for comparison, but i do not.
Have any of you TUES old timers out there noticed any dramatic differences between this xmas and last xmas, in terms of the assortments, merchandising, breadth, pricing, etc.? Are you filling up your baskets more/less?
And lower interest expenses massively. The stock is heading for $4.50-6.00, easy. Probably within 6 months.
You're grabbing that 1/10 of BBBY market cap thing out of a hat. Why don't you project future potential eps for TUES in a turnaround, and stick a multiple on that, rather than babbling about BBBY? I think in a major turnaroun, you could see $20-30 in TUES......but that is NOT an overnight affair, and the current stock price discounts considerably more than they can achieve for xmas alone. A retracement to $10-11, or even $8-9, is the most likely scenario.
They are SET UP to disappoint. No one is going to want to BUY this thing after the earnings release....and a lot of people are going to want to sell it....because of the coming disappointment.
This short position is now nearly 3% of my portfolio.
comparing an electronics/appliance retailer with closeout gifts seems close to useless to me. you might as well grab any other retailer.....from soup to nuts.
I'm trusting Becker Drapkin's recent selling....the terrible previous earnings report.....and the ASSUMPTION that Rouleau is the 2nd coming of Christ....with a turnaround a virtual "slam dunk." Such assumptions are reckless and silly. As i say, there is too much built into the current stock price.
I apologize. I thought you were comparing it to Best Buy. BBBY is a better comparison....but still, BBBY is a retail "darling," and i think your comparison is rather arbitrary.
Based on the rates Cumulus got, ROIAK should be able to refinance ITS debt, and maybesave something on the order of $20 million a year!
This stock is going higher...probably a beeline to $4.50-5.25, when (not if) they get a refi.
The Cumulus deal coming off means it's pretty much a slam dunk for ROIAK.
Remember that idiot a year ago, who was saying this was a short at 75 cents?
Of course it's a retail darling. BBBY is preeminent in its field. They enjoy mammoth 9% net profit margins, currently...when even in the best years of the mid 2000's, TUES's margins never exceeded 7%. You would have done better to use the other "comp" Yahoo gives for TUES, which is Target. Target is selling at a .5x p/s ratio, and TUES is at .75x right now. Target is quite successful, so there is no reason a TUES that is currently losing money should sell at a better p\s than Target. If TUES merely drops to Target's level, it will lose 1/3 of its value. I fully that, and have a 4-8 week target of $10-11 on TUES. If support at $10 breaks, i think it goes to $8...or even $7.
Keep in mind that they sold their last chunk at $12.59-13.23 in early November. The stock is now trading for $2-3 higher than that range.
I am not clear, with their indicating in their filing that their reporting obligations have now terminated, whether or not they were required to file additional reports, if they had SOLD OUT TOTALLY. Is it possible that they have since totally unloaded their position in TUES??
In any case, I feel more secure shorting at prices considerably HIGHER than B-D was last reported as selling at. (It is also possible that their window for selling more is closed now, since they are insiders, and they want to sell more, but have been precluded.)
I fully expect this stock to drop to $10-11, when sales guidance is released, next month. Even in a best case scenario, i see the stock staying "stuck" in the current $14-16 range.
Actually, B-D sold more shares in late November, reported on Form 4's. They are down to under 4% ownership, which i consider very damning. I imagine the window for any further insider selling locked up, right after Thanksgiving, which, not so coincidentally, the day of their last sale was 11/29.....the day after Thanksgiving. (They probably found out how Thanksgiving sales were, over the weekend after the holiday, had inside info at that point, so were not allowed to sell any more stock, from that point onwards.)
I fully expect the 17% owner to be dumping this stock, after a poor Christmas sales report. This thing is going to be a disaster, for the longs. Most significantly, the company has said it is going for lower initial markups, in order to boost turnover....but i didn't see any particularly compelling bargains in my visit. Consequently, I fully expect the net effect to be LOWER overall margins, lower profits, and LOWER same store sales. Rouleau is going to rue the day he took on this job. This is a $10, or even an $8, stock. Becker Drapkin knows more than ANYONE here, about the underlying value, and they have reduced their overall position by roughly 60%, from their peak.
Agree. This whole outfit reeks of pure unmitigated shameless sleaze. That goes for the entire managment team and board of directors. TA is nothing more than HPT's #$%$.
I hope this drivel drives TUES up to $20. It'll make it collapse even more, when the holiday sales come out.
I don't think that is going to cut the mustard in the least.
if it goes to $17 or higher, i'm putting it on strong sell.