Latest Expert Opinions

Signal
Opinion
Expert
BUY
BUY
August 2, 2016

A really smart operator in a really bad industry. Trucking is not a good business, but their ability to basically outsource the trucks and trailers from Saputo (SAP-T) about 20 years ago, turned it into the business that we see today. Management has done a phenomenal job by running a slightly better business than everybody else, in a terrible industry. Today it is about an 11% free cash flow yield on 2017, with M&A potential. Good management.

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A really smart operator in a really bad industry. Trucking is not a good business, but their ability to basically outsource the trucks and trailers from Saputo (SAP-T) about 20 years ago, turned it into the business that we see today. Management has done a phenomenal job by running a slightly better business than everybody else, in a terrible industry. Today it is about an 11% free cash flow yield on 2017, with M&A potential. Good management.

COMMENT
COMMENT
August 2, 2016

An interesting business. They have basically become a shadow lending bank. The challenge is that this requires a lot of CapX. The cheque that is written in exchange for the royalty has to be funded by shareholders. Prefers PrairieSky (PSK-T) instead, where you are essentially the government and you own the land and the mineral rights associated with it.

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An interesting business. They have basically become a shadow lending bank. The challenge is that this requires a lot of CapX. The cheque that is written in exchange for the royalty has to be funded by shareholders. Prefers PrairieSky (PSK-T) instead, where you are essentially the government and you own the land and the mineral rights associated with it.

COMMENT
COMMENT
August 2, 2016

The challenge is that they are lending to what he would deem as stressed companies. These companies would source bank financing if they could, so that puts it in a higher risk camp. He couldn’t understand what their value add was. When he went through their struggles through the years, there was no consistency to their mistakes. One loss could wipe away 3 or 4 potential strong underlying opportunities, which was not a ratio he was comfortable with.

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Alaris Royalty (AD-T)
August 2, 2016

The challenge is that they are lending to what he would deem as stressed companies. These companies would source bank financing if they could, so that puts it in a higher risk camp. He couldn’t understand what their value add was. When he went through their struggles through the years, there was no consistency to their mistakes. One loss could wipe away 3 or 4 potential strong underlying opportunities, which was not a ratio he was comfortable with.

COMMENT
COMMENT
August 2, 2016

An interesting retail concept in the US, sort of focused in between more apparel than dollar stores, but more on apparel and consumables. At one point this was your highflying, high growth type business. What attracted him was that as the multiple de-rated, some of the drivers that were leading to the slowdown were not permanent structural issues at the time. They are caught between where people want to shop today and where they wanted to shop 5 years ago. Not cheap enough for him to want to take a position.

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Five Below Inc (FIVE-Q)
August 2, 2016

An interesting retail concept in the US, sort of focused in between more apparel than dollar stores, but more on apparel and consumables. At one point this was your highflying, high growth type business. What attracted him was that as the multiple de-rated, some of the drivers that were leading to the slowdown were not permanent structural issues at the time. They are caught between where people want to shop today and where they wanted to shop 5 years ago. Not cheap enough for him to want to take a position.

COMMENT
COMMENT
August 2, 2016

Not the most compelling across the Brookfield complex. Has a big UK exposure, which on a headline base really doesn’t bother him. However, anyone claiming to know what will happen over the next 5 years in the office market, doesn’t have the full picture yet. It has a reasonable multiple today, but not as compelling as some of the other areas.

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Not the most compelling across the Brookfield complex. Has a big UK exposure, which on a headline base really doesn’t bother him. However, anyone claiming to know what will happen over the next 5 years in the office market, doesn’t have the full picture yet. It has a reasonable multiple today, but not as compelling as some of the other areas.

COMMENT
COMMENT
August 2, 2016

The Golden ticket within this company is ESPN. We have seen the peak of franchise values, and a lot of that has to do with cord cutters. The recent franchises are able to be as valuable as they are today, has predominantly been driven by TV money, and TV money has been coming from the $6-$7 a month that ESPN subs are kicking up to Disney. When you share half your revenues with your players, and wage inflation is going to be somewhat sticky, so Disney is on the hook to write these bigger checks to keep the ESPN franchise growing, but their attrition from customers is increasing. People are finding other ways to watch sports. He worries that the engine that has fuelled business growth over the past 10 years, won’t be there over the next 10.

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Walt Disney (DIS-N)
August 2, 2016

The Golden ticket within this company is ESPN. We have seen the peak of franchise values, and a lot of that has to do with cord cutters. The recent franchises are able to be as valuable as they are today, has predominantly been driven by TV money, and TV money has been coming from the $6-$7 a month that ESPN subs are kicking up to Disney. When you share half your revenues with your players, and wage inflation is going to be somewhat sticky, so Disney is on the hook to write these bigger checks to keep the ESPN franchise growing, but their attrition from customers is increasing. People are finding other ways to watch sports. He worries that the engine that has fuelled business growth over the past 10 years, won’t be there over the next 10.

Greg Dean

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Price
$95.010
Owned
Unknown
HOLD
HOLD
August 2, 2016

Has not been adding to his holdings. It has been expensive since it existed. Everyone has been focused on earnings, and not free cash flow. They started approving returns on CapX, and if the franchisees did not meet the return they were just not going to spend the money. This has been north of 20X earnings for the last 2 years, but as free cash flow it was 5%-6%.

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Has not been adding to his holdings. It has been expensive since it existed. Everyone has been focused on earnings, and not free cash flow. They started approving returns on CapX, and if the franchisees did not meet the return they were just not going to spend the money. This has been north of 20X earnings for the last 2 years, but as free cash flow it was 5%-6%.