The Salad Oil Scandal of 1963 was a crucial event in the career of Warren Buffett. In the aftermath of massive fraud, Buffett concentrated a large part of his portfolio in the stock of American Express (the victim of the scam) after its market value had dropped by more than half. For Buffett, the scandal … Continue reading XL Media’s Salad Oil Scandal
UpWork Inc. (NASDAQ:UPWK) recently appointed Jeff McCombs as its new Chief Financial Officer. Now imagine that you are Jeff. You want to get a solid understanding of the business model, the drivers of value creation and profitability. A good place to start is to look at the income statement over the last few years. UpWork … Continue reading Is UpWork Profitable?
From most value investing metrics, the stock of Gamco Investors (NYSE:GBL) looks dirt cheap. Based on the trailing twelve-month earnings per share, GBL trades at a Price-to-Earnings ratio of about 5.3: 2Q20$0.421Q20$0.424Q19$0.913Q19$0.50EPS (TTM)$2.25Share Price12.11P/E Ratio5.38 If we use the 2019 Earnings per Share, the trailing P/E is about 4: 4Q190.913Q190.502Q190.881Q190.70EPS (TTM)2.99Share Price12.11P/E Ratio4.05 The operative … Continue reading Is Gamco Investors a Value Trap?
Liberty TripAdvisor (NASDAQ:LTRPA) is a publicly trading holding company that is effectively the controlling shareholder of TripAdvisor, Inc. (NASDAQ: TRIP). Since the TripAdvisor stake is the company’s main asset, its fairly easy to track whether LTRPA stock is trading at a discount or premium to the current market value of TripAdvisor. Since 2018, Liberty TripAdvisor … Continue reading About that LTRPA NAV-discount
The companies that operate exchanges for securities, commodities and other financial instruments robust institutions. These companies are extremely profitable, with operating margins usually in the high teens. Extreme market turbulence has been caused by the coronavirus. As a result, stock markets globally have taken big hits since the beginning of the year. That the damage … Continue reading How did the Exchanges do in the Financial Crisis of 2008?
Hudson Global, Inc. (HSON) is a company that specializes in recruitment services. The company is listed on the Nasdaq, after being spun out of Monster.com in 2003. In 2013, Jeff Eberwein started building a position in Hudson through his fund Lone Star Value. In 2014, Eberwein was elected CEO. Entities affiliated with Eberwein own about … Continue reading Hudson (HSON) is Officially a Net-Net Stock
Imagine the following: You get a call from an investment banker you are acquainted with. He chirpily informs you that you are in for a treat. It just so happens that due to circumstances, he is in the know of two companies that are in play. He goes on to tell you, that not only … Continue reading On Goodwill Hunting & Hidden Value
The great thing about thinking about investing is that it allows you to become a bit of a couch philosopher from time to time. I’m not sure where it originates from, but I love the story about the two young fish swimming in a lake. They swim by an old fish who casually greets them … Continue reading The Cost of Capital Twilight Zone | Exor Case Study
When people talk about the Quality of Earnings, what they usually mean is how well do current earnings predict future earnings. This is, literally, the textbook definition of earnings quality. The problem with this definition, however, is that it favours the stability of earnings above anything else. What if, as an example, a future stream … Continue reading Embedded Optionality | FRMO Case Study
TripAdvisor will announce its 2019 fourth quarter and full-year results in a couple of days. The company began its life as a publicly-traded company on December 21, 2011, when it was spun-off from its parent Expedia (which itself had been spun-off Barry Diller’s IAC in 2005). Under the ticker symbol TRIP, TripAdvisor shares opened trading … Continue reading Return on (re)Invested Capital | TripAdvisor Case Study