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05_never_again

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Probably not another person who did more for the average, retail investor than him. He came up with the idea and made it a "thing," which totally transformed the entire industry. And it wasn't even all that long ago. Made himself fabulously wealthy and while making it cheaper for everyone else too.
 
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I had First Data (FDC) on my financial sector (kind of overlaps with the tech sector) watch list. FDC had seen a nice pull back. But now Fiserv is taking them out. I really liked the $20B market cap and 10x ish multiple. The combination with FISV will be more like $50B and 20x. There are several other similar companies that interest me more that could be defined as a large cap. SalesForce and Workday perhaps.

Still considering Exela, but the tiny $500M mkt cap and no trailing earnings are turn offs.
 

BAJAvol

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What are you guys thinking on Uber when it goes public? I have a feeling it will be stupid expensive for an IPO. They have competition with Lyft, but Uber is also in other markets too, such as UberEats. Also considering pinterest when it goes public if its cheap (Cold Brew Labs).
 
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What are you guys thinking on Uber when it goes public? I have a feeling it will be stupid expensive for an IPO. They have competition with Lyft, but Uber is also in other markets too, such as UberEats. Also considering pinterest when it goes public if its cheap (Cold Brew Labs).
It seems like when well branded companies go public the prices always soar on opening day. Facebook bounced around after the opening pop and then exploded after many months.

The quality of management, competition and barriers to entry, and as always, revenues are very important considerations. Earnings probably not so much initially.

Uber seems to have some hurdles. Many of their drivers are fed up with their cut. A big initiative is going to be how they fit in with driverless cars. Uber and Lyft have gained experience dealing with municipalities. The question is how and who will they partner with. Apple? Google? Tesla? Ford? GM? Toyota? Is it something that would interest Amazon? Right now, other than their info system infrastructure, Uber isn't capital intensive. With autonomous vehicles that changes their business model. Who will maintain and own their fleet? Unless they really screw up, seems like they should be around for a long time. But how big will the premium be at the IPO?
 

BAJAvol

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It seems like when well branded companies go public the prices always soar on opening day. Facebook bounced around after the opening pop and then exploded after many months.

The quality of management, competition and barriers to entry, and as always, revenues are very important considerations. Earnings probably not so much initially.

Uber seems to have some hurdles. Many of their drivers are fed up with their cut. A big initiative is going to be how they fit in with driverless cars. Uber and Lyft have gained experience dealing with municipalities. The question is how and who will they partner with. Apple? Google? Tesla? Ford? GM? Toyota? Is it something that would interest Amazon? Right now, other than their info system infrastructure, Uber isn't capital intensive. With autonomous vehicles that changes their business model. Who will maintain and own their fleet? Unless they really screw up, seems like they should be around for a long time. But how big will the premium be at the IPO?
Good points Thunder. I have had my eye on their IPO for a while, I just think it's going to open at an absurd price. Now I will say, one company that has generated my interest the most (to the point I am about to purchase stock) is Carvana. They seem to be doing extremely well. Growth is there. No current competition. Ally is buying their financed principal on vehicles, so that's a strong partner to have invested in you.. etc. Check this out when you have a chance and tell me your thoughts. https://investors.carvana.com/~/med...nts/events/q3-2018-letter-to-shareholders.pdf
Stock price is currently $35/share. The CEO awarded all employees recently with 165 shares of stock since they sold their 100,000th vehicle. I believe that is what caused the stock to dip from $75/share to $35/share.
 
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Good points Thunder. I have had my eye on their IPO for a while, I just think it's going to open at an absurd price. Now I will say, one company that has generated my interest the most (to the point I am about to purchase stock) is Carvana. They seem to be doing extremely well. Growth is there. No current competition. Ally is buying their financed principal on vehicles, so that's a strong partner to have invested in you.. etc. Check this out when you have a chance and tell me your thoughts. https://investors.carvana.com/~/med...nts/events/q3-2018-letter-to-shareholders.pdf
Stock price is currently $35/share. The CEO awarded all employees recently with 165 shares of stock since they sold their 100,000th vehicle. I believe that is what caused the stock to dip from $75/share to $35/share.
I won't be much help. I don't know a lot about the business. And they're very different even from CarMax which kind of took the industry in a different direction. I'd want to know how CM and the traditional retailers react.

Their unusual vending machine towers are probably creating a lot of buzz... which can add a premium to the stock price. I guess there are about 13 of them. If you're near one certainly go check them out.

A couple of things that I'd be concerned with and/or want more details:

It's a father/son operation. Personally I don't really care for that with public companies. BUT, check and see who the stockholders are. Do large established Wall Street institutions own most of the shares (Morgan Stanley, VanGuard, Bk of America, JP Morgan, Goldman Sachs. Wells Fargo, etc) or is it controlled by lesser known institutions and/or hedge fund companies? Once the big, well known fund managers start piling in it creates a higher level of comfort.

As far as some of the numbers, about $2B in revenue (which has been growing very quickly) and a market cap of about $6B, it doesn't look crazy expensive. But check that price/sales ratio relative to CarMax, AutoNation, and other retailers. Also the debt. Obviously debt at car dealerships should be pretty high as an industry norm. It is increasing rapidly, but so is everything else.

Other concerns or questions... what was up with the spin off from the predecessor? Was it just to go public? Maybe nothing to be concerned with.

Are they pushing the technology narrative so much because they're really different or is it just a scheme to promote the company and it's stock. Same deal with the vending towers. Are they more than a gimmick? Bottom line, are they actually innovative or are they really just car dealerships?

Along those same lines they publicize that they are in about 75 markets. But they seem to only have about a dozen physical locations. Is an individual dealership worth about ($6B divided by 12) a half billion or so per store? Seems rich. I assume that they claim 75 markets simply because they advertise in them and will deliver a vehicle to them.

I don't think the 100,000 unit bonus is much more than publicity. What is it... about $1,000 per employee? Best that I could figure out, it was about $8 million. Not nearly enough to chop the stock price in half of a $6B company with $2B in sales.

They are losing money. When do they expect to turn a profit?

My biggest question is... how much equity is owned by the father-son used car dealers. I'd maybe google them and see if anything shady hits. Do they own super voting rights through separate class shares?

Also, are the big name financial institutions grabbing control? Possible multi-year momentum play if the big boys on Wall Street are fighting for big chunks of equity.

I really can't tell if it's an early stage Netflix, Chipotle, Tesla, Intuitive Surgical or just a pets dot com type of investment. It is a pretty interesting company. Kind of scary though without knowing more details.
 

Vol8188

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Also: Here's 3 companies I'm looking at. Anyone willing to give me opinions on which you'd prefer and why? I know my reasons for liking each, but I'd like to get the input of others on why you would or wouldn't pull the trigger on these.

BTI-British American Tobacco
HMC-Honda Motor Company
ARI- Apollo Commercial Real Estate
 

BAJAvol

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I won't be much help. I don't know a lot about the business. And they're very different even from CarMax which kind of took the industry in a different direction. I'd want to know how CM and the traditional retailers react.

Their unusual vending machine towers are probably creating a lot of buzz... which can add a premium to the stock price. I guess there are about 13 of them. If you're near one certainly go check them out.

A couple of things that I'd be concerned with and/or want more details:

It's a father/son operation. Personally I don't really care for that with public companies. BUT, check and see who the stockholders are. Do large established Wall Street institutions own most of the shares (Morgan Stanley, VanGuard, Bk of America, JP Morgan, Goldman Sachs. Wells Fargo, etc) or is it controlled by lesser known institutions and/or hedge fund companies? Once the big, well known fund managers start piling in it creates a higher level of comfort.

As far as some of the numbers, about $2B in revenue (which has been growing very quickly) and a market cap of about $6B, it doesn't look crazy expensive. But check that price/sales ratio relative to CarMax, AutoNation, and other retailers. Also the debt. Obviously debt at car dealerships should be pretty high as an industry norm. It is increasing rapidly, but so is everything else.

Other concerns or questions... what was up with the spin off from the predecessor? Was it just to go public? Maybe nothing to be concerned with.

Are they pushing the technology narrative so much because they're really different or is it just a scheme to promote the company and it's stock. Same deal with the vending towers. Are they more than a gimmick? Bottom line, are they actually innovative or are they really just car dealerships?

Along those same lines they publicize that they are in about 75 markets. But they seem to only have about a dozen physical locations. Is an individual dealership worth about ($6B divided by 12) a half billion or so per store? Seems rich. I assume that they claim 75 markets simply because they advertise in them and will deliver a vehicle to them.

I don't think the 100,000 unit bonus is much more than publicity. What is it... about $1,000 per employee? Best that I could figure out, it was about $8 million. Not nearly enough to chop the stock price in half of a $6B company with $2B in sales.

They are losing money. When do they expect to turn a profit?

My biggest question is... how much equity is owned by the father-son used car dealers. I'd maybe google them and see if anything shady hits. Do they own super voting rights through separate class shares?

Also, are the big name financial institutions grabbing control? Possible multi-year momentum play if the big boys on Wall Street are fighting for big chunks of equity.

I really can't tell if it's an early stage Netflix, Chipotle, Tesla, Intuitive Surgical or just a pets dot com type of investment. It is a pretty interesting company. Kind of scary though without knowing more details.
This is really good stuff Thunder. I appreciate the feedback and will look into your concerns. I'm new to stock buying, other than my 401K of course. Looks like Spruce House and Vanguard own a chunk of the company.
 
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Also: Here's 3 companies I'm looking at. Anyone willing to give me opinions on which you'd prefer and why? I know my reasons for liking each, but I'd like to get the input of others on why you would or wouldn't pull the trigger on these.

BTI-British American Tobacco
HMC-Honda Motor Company
ARI- Apollo Commercial Real Estate
I don't pay much attention to REITs, but I do like Tower, Castle (not sure if they're organized as a REIT), Simon Property Group, the mini-storage warehouse company (name escapes me), and a healthcare REIT or 3.

I'd rather own Constellation Brands instead of British Tobacco. Exposure to cannibus plus many solid brands. Maybe Diagio also. I just don't like anything tobacco.

I'd rather own Toyota, Ford, or GM instead of Honda. Maybe even Ferrari, but I haven't looked at RACE for a while.
 

1972 Grad

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I don't pay much attention to REITs, but I do like Tower, Castle (not sure if they're organized as a REIT), Simon Property Group, the mini-storage warehouse company (name escapes me), and a healthcare REIT or 3.

I'd rather own Constellation Brands instead of British Tobacco. Exposure to cannibus plus many solid brands. Maybe Diagio also. I just don't like anything tobacco.

I'd rather own Toyota, Ford, or GM instead of Honda. Maybe even Ferrari, but I haven't looked at RACE for a while.
PSA?
 
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P/E and P/B is too high. I do like their low debt though
Too high for a REIT or in general? A 27x multiple isn't necessarily cra-cra if there's a ton of not fully depreciated property on the books. Regardless, I don't expect to buy any PSA. Tower possibly, but because demand for places to stick antennas doesn't seem like it would decrease anytime soon. At least for data and wireless streaming.
 

1972 Grad

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Too high for a REIT or in general? A 27x multiple isn't necessarily cra-cra if there's a ton of not fully depreciated property on the books. Regardless, I don't expect to buy any PSA. Tower possibly, but because demand for places to stick antennas doesn't seem like it would decrease anytime soon. At least for data and wireless streaming.
I own it for the 4% dividend.
 

GoVolsDR

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VolNation Wealth Management: The Thread

I've been buying XLV over the last month to reduce my cost basis. I'm super bullish over the role that Managed Care Organizations are going to play in the healthcare space moving forward. I'm also adding to my holdings in UnitedHealth Group. They're at the forefront of the transition to value based care that's taking place across the entire care continuum, and the other MCOs and payers are catching up.
 

1972 Grad

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VolNation Wealth Management: The Thread

I've been buying XLV over the last month to reduce my cost basis. I'm super bullish over the role that Managed Care Organizations are going to play in the healthcare space moving forward. I'm also adding to my holdings in UnitedHealth Group. They're at the forefront of the transition to value based care that's taking place across the entire care continuum, and the other MCOs and payers are catching up.
I have a small position in United Health also.
 

Vol8188

revolUTion in the air!
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Too high for a REIT or in general? A 27x multiple isn't necessarily cra-cra if there's a ton of not fully depreciated property on the books. Regardless, I don't expect to buy any PSA. Tower possibly, but because demand for places to stick antennas doesn't seem like it would decrease anytime soon. At least for data and wireless streaming.
In general. I stick to the Buffet/Graham rules of <15 and <1.5
 

Ernest T. Vol

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Also: Here's 3 companies I'm looking at. Anyone willing to give me opinions on which you'd prefer and why? I know my reasons for liking each, but I'd like to get the input of others on why you would or wouldn't pull the trigger on these.

BTI-British American Tobacco
HMC-Honda Motor Company
ARI- Apollo Commercial Real Estate
8,
I don't like any of these (just my opinion). I can go through a list of reasons for myself...but how do these come up as a potential buy for you?
 

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