Comments for NOT AN ANALYST http://www.notananalyst.com From Chaos Comes Opportunity Mon, 15 Nov 2010 22:59:41 +0000 hourly 1 http://wordpress.org/?v=3.1.2 Comment on Citigroup preferred shares by Citigroup declares dividend on Non-Cum Equity Preferred Shares « NOT AN ANALYST http://www.notananalyst.com/2009/10/17/citigroup-preferred-shares/comment-page-1/#comment-37 Citigroup declares dividend on Non-Cum Equity Preferred Shares « NOT AN ANALYST Mon, 15 Nov 2010 22:59:41 +0000 http://www.notananalyst.com/?p=94#comment-37 [...] http://www.notananalyst.com/2009/10/17/citigroup-preferred-shares/ [...] [...] http://www.notananalyst.com/2009/10/17/citigroup-preferred-shares/ [...]

]]> Comment on Is LNET a bankruptcy candidate? by guest01 http://www.notananalyst.com/2010/07/28/is-lnet-a-bankruptcy-candidate/comment-page-1/#comment-36 guest01 Sat, 14 Aug 2010 03:29:33 +0000 http://www.notananalyst.com/?p=1259#comment-36 LNET is a media company like cable companies. They provide TV and entertainment service. Technology is a enabler much like it is for cable companies. True it has cut capex in the downturn to generate free cash flow but debt has stepped down below the 3.5x covenant level giving them plenty of opportunity to start deploying capex for HD upgrades. They have held back upgrades because they want hotels to share in the expense. Hotels are doing it because Lodgenet is the only game in town. The Company is generating $60M in FCF per year to continue paying down debt and keep upgrading the rooms as hotels start to open up the spigot on capex sharing. Upgrade costs have come down to one third of what they were a couple of years ago. The upgrade from HD to 3D does not need to be hardware upgrade (ask your local cable provider they can choose to provide it without upgrading your box. Thats how most cable companies did the 3D world cup soccer). Also look at the 2009 annual report filing. Their interest rate hedges roll off June 2011 which will provide an extra $20 million of free cash flow/yr (thats a 33% increase). Lastly, looking at the book value and saying it is full of goodwill is not the accurate way to value every company (a common example used by Buffett is Coke. The value is in the brand). LNET's value is in the moat they have built with relationships and contracts with the hotel industry and studios and a proven infrastructure to serve entertainment content to hotel guests . A upstart competitor will have to spend a lot of money and incur losses (resulting in negative book value) to starting putting together the elements needed to compete with Lodgenet. The bear thesis on this story has been driven by those who believe that ipad and laptops will kill their guest entertainment revenue (on demand movies and adult content which is a meaningful portion of their revenues and EBITDA). However, the movies they offer are not yet on DVD so it is generally not possible to get it elsewhere legally by downloading it or from DVD. Laptops have been around for a while and may not explain the softness that has accompanied the downturn. While there is likely cannibalization, revenue declines have abated and EBTIDA has already stabilized. They are not completely out of the woods but at 1.2x free cash flow valuation, and what I believe to be sustainable leverage, this thing will be a 2x-3x (stock is at $2.57) if revenue continues to decline modestly, 5x if revenue is stabilized. LNET is a media company like cable companies. They provide TV and entertainment service. Technology is a enabler much like it is for cable companies. True it has cut capex in the downturn to generate free cash flow but debt has stepped down below the 3.5x covenant level giving them plenty of opportunity to start deploying capex for HD upgrades. They have held back upgrades because they want hotels to share in the expense. Hotels are doing it because Lodgenet is the only game in town. The Company is generating $60M in FCF per year to continue paying down debt and keep upgrading the rooms as hotels start to open up the spigot on capex sharing. Upgrade costs have come down to one third of what they were a couple of years ago. The upgrade from HD to 3D does not need to be hardware upgrade (ask your local cable provider they can choose to provide it without upgrading your box. Thats how most cable companies did the 3D world cup soccer). Also look at the 2009 annual report filing. Their interest rate hedges roll off June 2011 which will provide an extra $20 million of free cash flow/yr (thats a 33% increase). Lastly, looking at the book value and saying it is full of goodwill is not the accurate way to value every company (a common example used by Buffett is Coke. The value is in the brand). LNET’s value is in the moat they have built with relationships and contracts with the hotel industry and studios and a proven infrastructure to serve entertainment content to hotel guests . A upstart competitor will have to spend a lot of money and incur losses (resulting in negative book value) to starting putting together the elements needed to compete with Lodgenet.
The bear thesis on this story has been driven by those who believe that ipad and laptops will kill their guest entertainment revenue (on demand movies and adult content which is a meaningful portion of their revenues and EBITDA). However, the movies they offer are not yet on DVD so it is generally not possible to get it elsewhere legally by downloading it or from DVD. Laptops have been around for a while and may not explain the softness that has accompanied the downturn. While there is likely cannibalization, revenue declines have abated and EBTIDA has already stabilized. They are not completely out of the woods but at 1.2x free cash flow valuation, and what I believe to be sustainable leverage, this thing will be a 2x-3x (stock is at $2.57) if revenue continues to decline modestly, 5x if revenue is stabilized.

]]> Comment on Analysis of Chemtura Corp bonds by michelangelo http://www.notananalyst.com/2010/04/02/analysis-of-chemtura-corp-bonds/comment-page-1/#comment-31 michelangelo Thu, 29 Apr 2010 18:16:03 +0000 http://www.notananalyst.com/?p=1227#comment-31 I have constructed a waterfall analysis with updated info, which I can send you on an e-mail, and I came up with a $2.01 a share with an EV of $2,509 (adding a multiple of 7.7 to $325 EBITDA). This assumes a Dyacetil litigation charge of $300mm. Maybe that's to conservative, but I'd rather be that than aggressive here. What multiple are you using for EBITDA? Thanks I have constructed a waterfall analysis with updated info, which I can send you on an e-mail, and I came up with a $2.01 a share with an EV of $2,509 (adding a multiple of 7.7 to $325 EBITDA). This assumes a Dyacetil litigation charge of $300mm. Maybe that’s to conservative, but I’d rather be that than aggressive here. What multiple are you using for EBITDA?

Thanks

]]> Comment on Analysis of Chemtura Corp bonds by ardeus http://www.notananalyst.com/2010/04/02/analysis-of-chemtura-corp-bonds/comment-page-1/#comment-29 ardeus Sat, 24 Apr 2010 03:11:58 +0000 http://www.notananalyst.com/?p=1227#comment-29 I haven't done a whole lot of work on this name yet, but how about the pre-petition equity? It sounds like if you conservatively value this pig at 6x on $285M EBITDA, you are getting significant value for the equity holders. I understand about the "adequate protection" laws and its exclusion to shareholders, but the equity committee may have a strong case here. After deducting all senior claims, I am getting about $675m - $795M equity value. Based on 254.1 million shares outstanding, thats worth about $2.65 - $3.13 a share. I am looking at this incorrectly? Thanks. I haven’t done a whole lot of work on this name yet, but how about the pre-petition equity? It sounds like if you conservatively value this pig at 6x on $285M EBITDA, you are getting significant value for the equity holders.

I understand about the “adequate protection” laws and its exclusion to shareholders, but the equity committee may have a strong case here. After deducting all senior claims, I am getting about $675m – $795M equity value. Based on 254.1 million shares outstanding, thats worth about $2.65 – $3.13 a share.

I am looking at this incorrectly? Thanks.

]]> Comment on Swap leveraged ETF by Quantum Fading » Leveraged ETF News 14 http://www.notananalyst.com/2009/11/09/swap-leveraged-etf/comment-page-1/#comment-17 Quantum Fading » Leveraged ETF News 14 Wed, 06 Jan 2010 04:00:34 +0000 http://www.notananalyst.com/?p=131#comment-17 [...] ETFs (indexuniverse.com) 11/17/2009 Leveraged ETFs: More Regulation (thestreet.com) 11/9/2009 (How leveraged ETFs work) (notananalyst.com) 11/5/2009 Confessions of a Leveraged ETF Junkie, Part 1 (thestreet.com) [...] [...] ETFs (indexuniverse.com) 11/17/2009 Leveraged ETFs: More Regulation (thestreet.com) 11/9/2009 (How leveraged ETFs work) (notananalyst.com) 11/5/2009 Confessions of a Leveraged ETF Junkie, Part 1 (thestreet.com) [...]

]]> Comment on CIT Group post re-org value by michelangelo http://www.notananalyst.com/2009/12/08/cit-group-post-re-org-value/comment-page-1/#comment-10 michelangelo Mon, 14 Dec 2009 22:06:20 +0000 http://www.notananalyst.com/?p=830#comment-10 The Plan of Reorganization was accepted therefore you will get the new note plus the new equity even if you didn't vote. Look at page 36 of the offering memorandum located on the investor relations of CIT Group website. You will also find a PDF file called "Planned securities distribution by CUSIP", which will tell you exactly what you are getting. E-mail me if you have more questions. The Plan of Reorganization was accepted therefore you will get the new note plus the new equity even if you didn’t vote. Look at page 36 of the offering memorandum located on the investor relations of CIT Group website. You will also find a PDF file called “Planned securities distribution by CUSIP”, which will tell you exactly what you are getting. E-mail me if you have more questions.

]]> Comment on CIT Group post re-org value by lgmcm@juno.com http://www.notananalyst.com/2009/12/08/cit-group-post-re-org-value/comment-page-1/#comment-9 lgmcm@juno.com Mon, 14 Dec 2009 17:34:39 +0000 http://www.notananalyst.com/?p=830#comment-9 I have a class 8 Long-Dated Senior Note and I failed to accept the cit reorganization plan in time and I also failed to elect impaired treatment prior to the election deadline. What happens to my bond under the reorganization plan? I have a class 8 Long-Dated Senior Note and I failed to accept the cit reorganization plan in time and I also failed to elect impaired treatment prior to the election deadline. What happens to my bond under the reorganization plan?

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