In some States, the freeway system generates significant toll fee revenue for the State. Ignoring that much of that status today is legacy and subject to additional fallout over time, in many other States, including our beloved California, there is no toll collection; highway access and use is "free" for the user.
Understood that Keurig is today the dominant brewer system for ss but that the k cups licensing revenue growth capture is let us euphemistically call it "a challenge" going forward, GMCR's monopoly is now gone. In your analogy, KO has huge new markets to open incl internationally, juices, sports drinks and good old water. continuing that vein, GMCR has new worlds to conquer, too... but it has lost the key edge it had over would be competitors in SS and margins have only begun to be eroded from monopoly power. Additionally, data points and comments from several companies, incl gmcr's kelley, indicate that gmcr now realizes it needs to try to protect share here, especially in the premium piece as players like SBUX, DNKN, and PEET and Whole Foods are all rapidly making share progress to the detriment of the historically fat gross and operating margins enjoyed by gmcr.
I could go on, but KO has said Holy S we need to protect share and find new business over time and will continue to do so. The same is true of gmcr -- right from kelley's mouth on premium coffee ss, soup, juice, sport drinks, carbonation, blocking unauthorized use on next gen brewers if they can without killing the goose, etc. GMCR's problem is that all of those factors are going to continue to compress revenue growth and gross and operating margins. if you haven't go back and listen to kelley's tone on the last cc... gone is the early swagger, replaced by seriousness and furled eyebrow concern. Remember, he iis a reasonably smart guy with years of experience distributing KO products...
"What kind of investor"? Consistent with what kind of investor would be in this stock long and unhedged at $70 today, it takes all kinds -- myopic cheerleaders and naysayers, the unsophisticated lot who don't really do any work but think they have a surefire winner or loser here; and sophisticated, critical thinkers who actually study serious allocations and know the potential outcomes here are varied on the SS coffee part, and, at this point, the carbonation hopefulness as well. The end game is also two headed. Might say KO pay a big boy price for the brewer, licensing, proprietary brand margin and carbo businesses in a couple years? Sure! But those businesses may also have a lot less value than some think.
Other than Einhorn and his birds of a feather, who assuredly have some offset longs/other SI offsets pending further playout here, the bulk of short interest is no doubt box hedges of long positions of players who understand the channel is stuffed for at least two Q and are also unwilling to ride this down if the revenue growth stall extends further or harder (mgmt has guided to high single digits for the next two quarters, not your "safe growth in double digits for 5 years") and margins get compressed on the same dynamics. Mgmt's comments on the "many new competitors" and "confident" more than only "several" will sign up to voluntarily pay GMCR licensing fees were also telling -- the company has several challenges with less than thrilling prospective outcomes these days.
You've been around this board a while (maybe longer than us when we came on at $18 just over a year ago now) might know we understand this story well, but we don't see any "short squeeze", perhaps ever, unless they plan to crush their single digits growth guidance combined with margins taking a let's say counterintuitive and sustained jump and or they come with a very strong carbonation product say 2-3 years ahead of what Kelley detailed as the 2-3 year timeline for that on Sep 10th.
This "whartonmba" guy is a moron, there is no way he even got in to penn, not even the undergrad program... i doubt he went to college anywhere. No one who attended there would even think of such a tool alia, let alone write ideas that demonstrate market ignorance and unsupported nonsense.
This dufus has showed up on a few boards with his brilliant shorting ideas, and in every case, we were long or getting longer on those names (e.g., BAC at $11 this year, HLF which we own heavy at $38, and he was wetting himself on this last year when we owned it from $18 to 61 and then again from $73 to $88).
It wil be interesting to see what happens with GMCR from here, and we currently have no position, but suggesting it is a black and white short or long is for cheerleaders who do not understand the game.
As for EM, that has been controversial from the start and largely discredited since the early days.
They cite favorable momentum topics going into 2014. Simila comments issued for DAL but not LCC.
To recap, we have a slightly different perspective. We certainly agree the stock is likely to continue moving higher in 2014, but that result will be more about outperforming existing ebitda growth expectations than the SA summary of footprint/resort development schedule. In other words, the SA recap issued in early November is a good summary of why the stock outperformed in 2013 (stock just today getting back to late October highs)-- not so much about what will drive the shares toward $50 next year.
On that point, as impressive as ebitda growth has been here (best in class relative to footprint) and baseline modeling is for 2014, from $12 to $37/share the ebitda multiple has expanded even faster meaning that the growth curve needs to steepen FASTER than street expectations to move the shares substantially higher. GS report yesterday backing down from the screaming buy was a precursor on this challenge -- even some of the marginal work published on this company is suddenly gripping this b school math.
Meant to add that even this guy from SA, who has made some good calls on this along the way, still does not have a meaningful bump from the table and machine doubling for Manila -- a reality consistent with the company not saying much about this dynamic yet... but other than this SA guy, most of the street is pretty much worthless to the core pm holders here anyway, and as they raise estimates on beat and raise Qs next year, that will be good for the stock.
fun to read it again... the stock drifted since that report and only bumped hard over the last two days. We see it all as consistent with year end sell outs and hedging of the huge gains (more than 2 bagger!) during 2013 as part and parcel of lockdown on 2013 incentive comp for pm and associates.
As for why the stock is rising over the last two days? LVS news has helped the group to be sure, but that rolled over again today. Additionally, perhaps the remaining trading club putzes and perhaps a couple more hedge funds net short decided to cover in while the group has been running... but the stock is winded and could use a rest near term, so it will be interesting to see.
As reflected in our shared PT (40 by january call and $50+ next year), we certainly agree with drjack that the stock will go higher... but it is also likely to be up and down in the choppy tape over the next few weeks.
As we noted two months ago the ceo buy was a signal to own this but then we bailed as the stock stalled vs DAL and LCC post approval. Then, as noted right here a couple weeks ago, we suggested selling out UAL as this stock was showing topping action and now the stock has caved almost 9% from the $40+ top. But now, with the visible hedges about done going on and those who wanted to bail off the plane, it's time to own this stock again as the hedges are unneeded down here.
So as we lightened and then bailed on our long run up in both DAL and LCC, we love the relative underperformance of UAL this week and initiated a new position here today.
Watch for a solid lift into EOY. Likely more will be pulling hedges and getting long than just Bill Miller (UAL is his top sector pick on relative valuation and conclusion that mgmt will be doing better than sukin going forward) and us starting about tomorrow morning, especially once the recent oil pricing (jet A fuel) blip gets back in line with the reality that higher rates = stronger dollar should be driving LOWER oil prices (as seen with Brent vs WTI last two days) since oil is US$ denominated.
Chances to buy cheap when the story fundamentals are better than ever before are rare... this is one of those times.
fwiw, incentive hedging revisited...
We are on our biggest long ever here, but the frothy tape is inconsistent with quality accumulation over the last few days in a down market. The group is also showing some topping action again, and this stock looks a lot like panicky short covering to us (again)... volume there today so we hedged out half (again) just above $37.25.
Every comment you have made here reflects comprhensive lack of understanding of the markets, the company and basic technical analysis. You bs chart service is a donkey suk too.
Cover your 50 shares already before you have to move out of your trailer rental and back in with your momma across the trailer park. LOL
I would not kill anyone, let alone a moron with the mind of an 8 year old holding out useless comments as if TPX is in deep trouble. LOL Yours are stupid comments, just perfectly ironic for calling me an idiot and reflecting the thoughts of a mindless dufus short from $36.
Laurence (not his dad Stanley) was pretty clear that he thinks japan will be a victory for the well connected, but getting resorts built and running is at least 5 years away, and hard to think anyone is discounting that... as said prior here, the street isn't even discounting that the increase in tables andmachines in Manila is as if MPEL will have two resorts coming on line there next year.
But at $37, back to the all time high, the stock is now breathing a little bit hard as is LVS given the uncertainties associated with Spain... we are on our biggest allocation and ready to put some box hedge back on into some likely chop before EOY.
As for WYNN? Love Steve and we've been on that several times in recent years, but his stated intent to develop resorts in rust belt cities in the U.S. harkens back to yesteryear ideas as we see it... we like the idea of rapid growth arenas such as the known in Asian venues
As Hertz ads would say, "Not exactly"...
The HK shares trade in HK$, which currency is significantly less value per "$" than USD (aa with all currencies, that differential changes daily, but one US$ is worth roughly $2.60 HK$).
The HK exchange shares, as noted a few times here, tend to trade in call it generally irrelevant volume vs the ADR listed here in the US, closed at $94.50 today, up that $2.20 you referenced, but that was only 2.28% in HK$.
Here in the US, the ADR closed at $36.44 yesterday, up 1.93% or $.69. One doesn't need a currency converter to get to the math that if the U.S. shares trade up $36.57 (a "whopping" $.13), they will be pari passu with the HD exchange close.
Again, the correlation is tight between the ADR and the HK shares over time, but the HK shares are definitely not driving the valuation of the ADR over time... that is all about franchise power, management execution, and growth of ebitda/share.
Our PT remains $40 near term (our EOY 2013 PT was $30 when the stock was $12 a year ago, raised to $35 when the stock hit $25 on better than even we expected performance, and again to $40 as the stock ripped past $30 several weeks ago, but given the lockdowns (sell outs or box short hedges now) for 2013 incentive calcs in place now, the stock may drift sideways until the Dec results are reported. If not clear, we think $40 is still possible by EOY, but not "likely" until next month.
The bottom is in here... only thing left is upside into the real guidance update, pricing increase, and incremental store openings on top of the sandbagged guidance.
Nice to see the institutional buying today resulted in one of Woody Allen's socks stuffed full of horse dung being shoved down the moronic short bashers' throats here today.
Shorts are roadkill as my partner loves to quip.
Looks like a few hedge funds decided to get long with us here. How are those unhedged short trades from yesterday working out for the chumps here? LOL