The Investing Edge: Recent Episodes
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The Investing Edge features shows from some of Seeking Alpha's top authors, focused on their unique investment strategies and styles. Authors will speak with CEOs and industry experts, break down key market stories and topics, and share insights on how they research new investments.
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One of the stranger dislocations in 2020 has been the behavior of stocks that are bound to or have already filed bankruptcy, with Hertz's offering of new equity this week as the biggest example of the phenomenon. We speak with Sam Zughayer, managing director of Berenson & Company, about what might explain this, what he's seeing, and where this may end up. Topics Covered
4:00 – Where Sam gets involved in the process normally
8:00 – What makes this time different
14:00 – What the government learned in 2009 and how that affects things
18:30 – Rule of contract law in the current climate
21:00 – The implication of the Hertz ruling
27:00 – The capital structure component and the structural effects for business
32:00 – The Hertz precedent and effect on other bankruptcies
35:00 – The longer-term legacies of this period
38:30 – The problem with shale oil
45:00 – Is this unhealthy? The Zombie element of sustaining firms.
47:00 – And the formerly healthy companies that fall, what of them?
50:00 – Looking back at stock buybacks
53:00 – Will behavior change?
We visit the software as a service sector for the third time in a row, as the earnings week we were waiting for came to pass. Zoom reported the so-called 'greatest quarter ever in software', and skewed expectations for peers like PagerDuty and Slack. So, does the market have the reaction right, and where do we go from here? Akram's Razor and Daniel Shvartsman break it down. Topics Covered
2:00 minute mark – Digging into Zoom's guidance
6:00 – The timing of PagerDuty and Slack's earnings (two days after Zoom's).
8:00 – What about the expansion in large clients for Zoom and potential new verticals
13:30 – How did Zoom's report affect PagerDuty/Slack's reports
18:00 – Why isn’t guidance going higher for some of these SaaS names?
28:00 – The longer onboarding cycle for Slack/PagerDuty
33:00 – The convergence of the attention economy
36:00 – The Dropbox angle
42:00 – Ramping up of adoption curves
48:00 – Macro and sector context to keep in mind
We continue to follow the software as a service sector and the impact of the work from home world, but this time with an outside perspective. Justen Stepka, the founder of Authentisoft and then a longtime product management executive at Atlassian and Docker, joined us to talk about his positions in Slack and Atlassian and what makes the companies stand out. Currently the co-CEO/co-founder of Enterprise Fund, a private equity firm, he also shares his views on the work from home environment we're in and its potential knock-on effects, as well as what he's seeing in private markets.
Topics Covered
2:30 minute mark - The importance of R&D in retention
6:00 - Product stickiness vs. ease of use
11:30 - Evaluating R&D as a competitive edge
15:00 - The importance of dogfooding
18:00 - Okta's position
23:30 - How can a software company really be on sale in this market?
28:45 - ServiceNow's position
30:00 - What's next in the industry, where is Justen watching, and what does the private market look like?
36:30 - The change in perspective from being an insider to an outside investor
41:00 - Work from Home and its broader effects
52:00 - Commercial real estate
With attention still focused on the tanker segment, J Mintzmyer speaks to underfollowed Torm PLC about what they're seeing in the wake of a solid Q1 earnings report and Q2 outlook. Topics Covered
1:15 minute mark - Overview of current product tanker markets:
3:15 - Differences between LR & MR markets?
7:00 - How many of your LR2s are trading dirty vs. clean?
9:15 - How long is the destocking period likely to last, impact to rates?
14:00 - Capital allocation priorities at this time?
17:00 - Nearly 25 ships aged 15+, how are these performing? Plans to sell?
21:15 - Any levers available to close NAV discount?
24:00 - Free float is very thin, is there an ability to boost this without dilution?
30:15 - Crew replacements ongoing or still stuck on water?
35:00 - Current newbuild environment: Shipyards aggressively discounting yet?
37:45 - What differentiates Torm from peers and competitors?
The software as a service sector has passed its first recession test in flying colors, as the nature of the coronavirus market has led to a increased business for these companies. With two of the most popular names - Slack and Zoom - due to report in a couple weeks, Akram's Razor and Daniel Shvartsman check in on the state of the sector and whether work from home is a benefit or a liability. Topics Covered:
3:00 minute mark – What explains a big move like Twilio's
7:00 - The broader valuation context
15:00 - The prevailing dynamic of competition
21:00 - Valuation pair mismatches – DDOG/NEWR, PD/EVBG, WORK/ZM
36:30 – Leaving the 10x EV/sales barrier in the past
46:00 – Where does Slack go when the light bulb turns on?
55:30 – the NFLX parallel for Zoom and the search for a pivot
1:03:00 – Slack earnings preview
J Mintzmyer speaks with Ardmore Shipping management about Q1 and the fast-moving product tanker section. Topics Covered 1:00 minute mark - What’s the underlying trade in the product tanker markets? 2:30 - Thoughts on broker rates versus actual ‘market levels?’ 5:30 - Difference in voyages in progress versus completed QTD? 6:30 - Thoughts on chemical side of the business, rates coming in lower? 8:45 - Shift in dividend policy, shift to deleveraging? 12:00 - Is Ardmore aligned? Can we trust you not to blow money on ships? 16:00 - At what point do you have to repurchase shares? 18:30 - Repurchases versus secondhand vessel acquisitions. 22:00 - Review of normalized ROA and ROE? 23:15 - Review of normal average MR product market? 27:00 - How do you communicate a ‘normalized value’? 30:15 - Visibility and thoughts on product floating storage volumes? 32:00 - Indications from customers/markets regarding terminal capacity? 34:30 - Parting thoughts for investors in Ardmore or product tankers?
In the most ambitious crossover event in Seeking Alpha podcast history, we turn the tables around. J Mintzmyer joins Akram's Razor and Daniel Shvartsman to talk the tanker trade, which is a hotly discussed topic in the markets these days. While the tanker rates and industry set up would seem to align with a generational shift, share prices have yet to pick up. Recorded at the beginning of a busy week for shipping sector earnings, it should provide some interesting background for people looking at this trade and the sector more generally.
Topics Covered
2:00 minute mark - The endurance of the shipping cycle
12:00 - Mean reversion for Value?
18:00 - The oil crash and commodity ETFs
22:00 - The abnormalities in this cycle
27:00 - How supply and demand have lined up
31:00 - Investor reactions
35:30 - The Macro context
46:00 - Dry bulk woes
49:30 - Talking the downside in the tanker trade
54:00 - The management and capital allocation question
58:00 - Getting down to some picks
J Mintzmyer spoke with Frontline's CEO, Robert Hvide Macleod, last week about how the tanker market is shaping up amidst a lot of commodity price moves and investor interest. Topics Covered
1:00 minute mark - What has changed in the market YTD compared to initial setups?
3:00 - Have we seen something like this in the market before?
4:30 - Preferable data source or metric for global storage balance?
6:30 - Discussion of ‘oil on water’ metric
10:30 - What is LR2 clean/dirty split? What is driving LR2 spike?
11:45 - What time charter offers are available in the markets?
15:00 - Fixtures available anywhere for FRO? Indexes accurate?
18:45 - Comments on Saudi flotilla? What happens if destinations change?
21:00 - How does cash payment flow work for spot vs. TC?
23:30 - Any concerns with CP risk? Precedent for this?
25:15 - Chance of shifting terms of spot market payment?
26:45 - Risk factor of ‘famine’ on the other side of the curve?
31:00 - IMO 2020: Spreads are down, will they come back?
36:30 - Capital allocation priorities now? Any newbuildings? Consolidation?
41:15 - Formally swearing off newbuilds? Yes!
42:30 - What is holding back the tanker stocks in these markets?
We break down Snap's upside earnings report and what it means for the internet advertising space, coronavirus plays, the effects of stimulus, and a lot more.
Topics Covered
2:30 minute mark: Setting the scene
7:30: Attention Costs
10:00: The Hollywood effect
14:00: Snap's international growth
18:00: The filter issue
23:00: Relative valuation
27:00: Amazon's perfect storm
30:00: Other advertisers' prospects
33:00: The demographic questions
37:00: Stimulus effects
53:00: Shifting spending
59:00: Differing audiences
1:01:00: Twitter digression
1:07:00: How to interpret this earnings season
1:12:00: The Tiktok threat
1:17:00: Recovery risks
1:24:00: Second level effects
Zoom (ZM) was a go-go momentum stock in its first year of trading, with revenue multiples and performance outpacing most of its SAAS (software as a service peers). That was to a degree deserved due to the company's profitable business model and competitive advantages as a smooth, easy-to use video communications platform. With the advent of lockdowns, quarantines, and social distancing to combat the spread of COVID-19, Zoom has transcended from growth stock favorite to widely known consumer brand and almost an inverse ETF of the bear market. While value investors like to grumble about the market getting irrational about growth stocks, there are some reasons to be optimistic about Zoom's prospects at least as compared to where they stood on January 1st. The increased usage of the product - while costing Zoom more to support - should both accelerate adoption for the long-term and potentially open up new avenues and use cases. On the other hand, the increased focus on Zoom has also highlighted issues the company has, most primarily with security, something hardwired into the company's fantastic success to date. We discussed the cross-currents at play here and where Zoom might be headed next. Topics Covered 2:30 minute mark - The Zoom setup
6:00 - Zoom's origin story and its advantage
14:15 - Zoom's killer app
16:30 - Questions that are beginning to arise
21:15 - The security issues
26:30 - Enterprise vs. consumer business model, and being thesocial distancing play
33:00 - Overall market description and Zoom's rise
38:15 - The competition
47:00 - Justifying the valuation?
55:00 - What sort of revenue upside is there
1:04:00 - Sorting out temporary from permanent
1:14:30 - The Zoom production studio angle
1:19:00 - China backlash
1:23:00 - Regulation
1:28:00 - A final macro note
J Mintzmyer speaks with Euronav Hugo de Stoop as part of Value Investor's Edge's COVID 19 / Oil Price War Forum. While shipping is in turmoil, oil tankers like Euronav are very nicely positioned. The two discuss the outlook for the months ahead. Topics Covered
2:15 minute mark - How is COVID-19 impacting the crude tanker markets and EURN?
4:45 -How has the oil price war shifted the market- How is EURN positioned?
8:00 - Is this market surge different than last fall with COSCO?
13:00 - Only a few fixtures so far this week, more expected soon?
14:00 - IMO 2020 update, any shift in strategy?
19:45 - Any plans to load up more VLSFO to hedge lower fuel costs?
23:00 -The other ULCC on a new storage contract? Other storage requests?
27:30 - How do the recent resales fit into your fleet and IMO strategy?
31:00 - Any near-term supply risks or overhang on orders?
36:00 - Has your capital allocation strategy shifted at all this year?
40:30 - How to differentiate between vessel acquisitions and repurchases?
43:30 - Clarification on lock-out timing- delay to 1 Apr? Annual meeting vote?
50:30 - Any shift to your views on leverage? Still ample capacity?
After the Disney podcast we recorded last Friday and posted yesterday, Akram's Razor and Daniel Shvartsman continued to discuss the macro environment and the strange place we're in.
Disney is considered as blue-chip as it gets, but when you break down its famous flywheel - different business lines that all flow together to create the greatest diversions in the world - there's a lot of trouble spread around. Theme parks, box office, live sports, advertising are all under pressure - is Disney + enough to make up for that? We discuss the outlook for the entertainment company. Topics covered:
2:30 minute mark -The Corona bear ETF
7:30 - The flywheel is stuck
12:30 - Long-term effect on consumer behavior in travel
17:00 - The significance of Bob Chapek's theme parks experience
25:00 - Cruise lines and international flags
28:00 - Whither (wither?) the box office?
36:00 - Box Office as marketing
41:00 - ESPN - the wild card
56:00 - Disney+ - the ace in the hole?
1:01:00 - The next WFH play
1:09:00 - The diversionary business model in a diversionless world
The last time J Mintzmyer and Value Investor's Edge hosted a virtual investor forum featuring industry analysts, management teams, and investors, all the way back in January 2020, it was like another world. IMO 2020 was still the buzzword, post New Year cyclicality was driving behavior, and coronavirus looked like it was a local issue in China. Meanwhile, a virtual investor forum proved to be quite ahead of the curve. A lot has changed in two months. So, last week Mintzmyer and team hosted 15 guests ranging from industry analysts to investors to management teams, with a look at how the shipping situation has changed. The second public episode features Teekay LNG Partners' (TGP) management team, namely CEO Mark Kremin and CFO Scott Gayton. They discuss how their capital allocation looks under the current climate and whether there are any counterparty risks investors should watch out for.
Topics Covered
2:00 minute mark - Direct Coronavirus impacts to current work environment?
5:00 - Any direct COVID-19 impacts to TGP itself?
7:15 - Any fundamental changes for LNG shipping? Oil price war impact?
9:00 - Any shift in longer-term growth projects yet? Qatar plans?
10:45 - Concern for counterparties? Force majeure risk?
14:30 - Any exposure left to non-investment grade counterparties?
18:30 - Additional ‘deep dive’ into contracts regarding force majeure?
21:00 - How has this market shifted capital allocation priorities?
24:00 - Reiterating full dividend stability at $0.25/qtr?
25:15 - Opportunistically repurchasing units here? Higher volumes?
27:00 - Is the NOK bond market still open? Revolver extension?
30:15 - Any interest in repurchasing the preferred equity?
33:45 - Any interest in consolidation or equity plays in other firms?
34:30 - Midsize LPG rates holding up?
36:00 - When do forward LNG rates start to matter?
38:00 - Asking for a ‘full pledge’ to keep the dividend regardless of price.
As the coronavirus bear market continues to roil investors, we talk about what effect its had on the tech sector in general. Is the bubble over? Will the Nasdaq be a safe haven and a future outperformer? We discuss the impact already felt in the market and where things might go. Topics Covered
3:00 minute mark - The seismic shift
6:00 - Change in valuation approach
12:00 - Can the Nasdaq continue to outperform
19:00 - Risk assessment
25:00 - Owning market performance and the loss of margin of safety
34:00 - How ot assess going forward
39:00 - Potential sectors to invest in
48:00 - Are we at a divergence?
56:00 - Does a safe haven now sacrifice future growth?
1:03:00 - The flattening of volatility and the natural reaction
1:09:00 - The longer-term impact
1:12:00 - Close the market?
The last time J Mintzmyer and Value Investor's Edge hosted a virtual investor forum featuring industry analysts, management teams, and investors, all the way back in January 2020, it was like another world. IMO 2020 was still the buzzword, post New Year cyclicality was driving behavior, and coronavirus looked like it was a local issue in China. A lot has changed in two months. As Mintzmyer and the VIE team gather a new round of participants for a COVID-19 and Oil Price War focused forum this week, one of the themes is how that situation has changed. And there's no better place to start than with International Seaways (INSW). CEO Lois Zabrocky and CFO Jeff Pribor took part in the first forum - it was our most recent VIE episode posted - so it offers an easy compare and contrast. Topics Covered
2:00 minute mark: What is the immediate impact of COVID-19 to your markets?
3:15 - How much follow-on activity is coming out of China?
4:45 - Any non-traditional routes developing due to the oil price war?
6:00 - How does INSW benefit from this market?
8:00 - Is the Suezmax market benefitting from this strength?
10:45 - How is the Panamax market performing now?
12:00 - MR product tanker market update?
13:45 - Any indications of potential product market storage?
14:45 - Have you adjusted your operations, shoreside and at-sea for COVID?
17:30 - IMO 2020 transition and scrubber update?
21:15 - Current timeline of scrubber installations in China (60 days!)
22:30 - Can you delay or back-out of scrubber installations?
25:00 - What is your current and target balance sheet leverage?
28:00 - Restrictive covenants in the current debt facility for repurchases?
29:45 - Commentary on dividends and share repurchases?
Elliott Management waged a short-lived and a successful activist campaign against Twitter, at least from the perspective of getting the company to respond. While the long-term results and the fate of Jack Dorsey as CEO are still unclear, we discuss whether Twitter's future is appealing for shareholders, what could actually be done to fix Twitter, and why this might not be the lay-up it seems. Topics Covered:
3:00 - Activist shareholders... Elliot's involvement.
4:30 - Is the goal solely to remove Dorsey?
9:30 - What's wrong with Twitter?
15:00 - Not growing fast enough given its exposure
23:30 - About Scott Galloway
26:30 - Should/shouldn't Twitter be more like Facebook?
29:30 - Strong user base that doesn't like change
33:45 - What do you think is going to happen with Twitter in the next weeks and months?
38:00 - What would you do in your first year as CEO of Twitter?
48:30 - Facebook excels at gaining attention, how can Twitter do this better?
53:00 - Twitter has a narrower appeal than Facebook.
1:01:30 - What can a full time CEO do?
1:05:00 - Who would buy Twitter? How to add revenue?
1:23:00 - Buy at this price?
Four different forces combined to create a big sell-off last week, and then a jagged but strong rebound this week. There's of course the spread of the coronavirus, COVID-19. There is the Democratic primary in the US and what it foretells for the Presidential election in November. There is the, ahem, healthy valuation of the stock market, poised at all-time highs before the 7-session sell-off. And there's the role of the Federal Reserve, both in setting interest rates and in providing liquidity to the markets. We try to break down what matters and what is transient here, while conceding that uncertainty is a big part of the overall outlook. Topics Covered 3:00 minute mark - How are you sizing the current market correction? Does this change your stance?
6:30 - Once you figure out your starting point how much does the virus matter?
11:00 - Is there a risk of market contagion?
20:00 - Was repo buying necessary?
21:30 - Has there been a fundamental change in the market such that it won't bounce back this time?
29:00 - NVDA as an example
31:45 - Have you made changes to your exposure?
40:00 - Does something like this week change people's perspectives?
47:00 - How do you evaluate a "drop" vs a recession?
1:00:00 - The election from a markets perspective... general politics.
J Mintzmyer of Value Investor's Edge Live spoke with Lois Zabrocky and Jeff Pribor, CEO and CFO of International Seaways (INSW), to discuss their views on the tanker markets and IMO 2020. This followed on INSW's investor day in January, and comes in advance of the company's Q4 earnings report. Topics Covered
1:15 minute mark - Any surprises or different impacts in the markets?
3:00 - Impact from the lightering business? Additional EBITDA?
5:00 - Rate and fixture guidance? Old VLs doing well, Aframaxes poor?
7:45 - Difference between spot and TC fixture guidance?
8:45 - How do today’s rates compare to last year’s levels?
10:00 - Anything else impacting the market? Just seasonality?
12:45 - How are the Suezmax and Aframax spot markets doing?
13:30 - Priorities for cash flow allocation post-refinancing?
16:30 - Plans for INSW-A baby bonds? Call this summer?
19:15 - How do you balance dividends and repurchases now?
23:30 - Thoughts on current NAV range? How far underneath?
27:00 - What are some of the top risk factors in this market?
31:00 - If China imports from US, what sources are they replacing?
36:45 - Current status of the scrubber program? Any additions?
40:00 - All 2020 capex ($70M) internally financed from cash?
40:45 - More risks in the market which aren’t getting reviewed?
42:30 - Willing to look for time-charters? Where are they at now?
49:15 - Viewpoints on FSO joint-venture? Core to business?
53:00 - Closing comments- MR market, any resilience there?
PagerDuty was a screaming short last summer, an example of SaaS's over-competitive landscape and trading at a high valuation to boot. But with half the valuation and a stronger competitive advantage than expected, has the page turned for this tech company? Akram's Razor explains why he's taken the other side of the trade, and why the moat for PD has held up versus new entrants. Topics Covered
3:00 minute mark - What does the competitive landscape look like?
5:30 - What is PD's space exactly?
9:15 - How wide a moat?
11:00 - Why are you long?
17:00 - Are they attracting new business?
20:00 - Pricing discussion
25:15 - Have competitors had any success at slowing down PD?
30:45 - Net dollar retention going in the wrong direction?
39:30 - What are you looking for in terms of the stock at this point?
42:00 - Acquisition candidate?
54:00 - Why own "value SAAS"?
On January 14th, Value Investor's Edge Live hosted Robert Hvide Macleod, CEO of Frontline (FRO), to discuss the crude tanker markets and their balance strategy to IMO 2020. Frontline is one of the largest tanker operators in the world and is backed by shipping legend John Fredriksen. FRO is set to pay large dividends in this market and they have maintained a premium valuation ahead of peers. Robert discusses the various tanker segments and his overall viewpoints and areas of focus into the new year. Topics covered:
0:50 minute mark - Start of discussion: How is IMO 2020 impacting tankers? Any surprises?
3:00 - What is your current scrubber uptake status? Global fleet percentage?
4:30 - What is the current spread dynamic? Any plans to expand scrubbers?
7:15 - Will the time charter markets follow the strength in the spot markets?
10:00 - What is driving Suezmax strength and Aframax strength?
13:45 - Will eco-vessels improve your TCE results? How much?
14:45 - Confirm fleet splits of scrubber installations?
15:45 - Any broad market concerns for tankers? Why are stocks stalling?
17:30 - What are your capital allocation priorities besides the dividend?
19:15 - FRO trades at a premium, why is that a potential benefit?
22:00 - What is your target leverage? Planned split between spot and TC?
25:45 - Why is LR2 weak compared to the strong Aframax market?
28:00 - What are some of the key risks and uncertainties in the market?
31:00 - If placing a newbuild order, what type of design? LNG? Scrubber?
34:00 - How long are yards backed up with scrubber conversion work?
35:15 - Any potential for consolidation in the tanker sector? Frontline role?
36:00 - How many ships are laid up for COSCO sanctions? Potential impact?
40:00 - What is the market missing right now?
Facebook entering an election year is about as hot-button a topic as there is in the market outside Tesla. Akram's Razor has called it a compelling buy on two previous podcasts this year, and after the company sold off on its earnings, it seemed good time to revisit the story in full. With comparisons to Amazon and Google, as well as news media and the inevitable diversion into the issue of political ads, we try to tease out the case for Facebook.
Topics Covered
1:30 minute mark - Is Facebook a consensus buy despite the sell off?
9:00 - Pulling in Amazon as a proxy
14:15 - Amazon, Facebook, Google and the tech conglomerate benefit or discount
18:30 - Facebook's PR challenge vs. their profit rush
26:30 - What is Facebook's "product"?
34:00 - Drilling into what's different about the modern tech companies vs. traditional media
44:00 - The actual effect of the scrutiny on Facebook's business - opportunity set and costs to overcome
52:30 - Finalizing the scrutiny arbitrage play, the e-commerce upside, and the $300 stock trading for $200
On January 17th, Value Investor's Edge Live spoke with Adrian Economakis, COO of VesselsValue, about the shipping markets and particular asset pricing cycles. Adrian reviewed some of the features of their research platform, which include trade analytics and a full database of all vessels and transactions. He also discussed some of the key observations from a review of asset cycle pricing across sectors. Tankers were on a run and not particularly cheap at the time, whereas there is some intriguing deep value opportunities in some ancillary shipping sectors such as Panamax Containerships and Offshore Support Vessels. Topics Covered
1:00 minute mark - Background of VesselsValue? What research features are available?
5:45 - How accurate have are the valuations compared to deals?
9:15 - Which asset classes are the most depressed? Deep value plays?
20:30 - Views on tanker asset values versus historical levels?
25:00 - Discussion on demand indications in the market.
30:00 - Vessel tracking models- storage impact?
31:30 - What are the COSCO ships doing? Laid up? Storage?
34:00 - IMO 2020 market impacts thus far? Scrubber installations?
39:30 - Specific scrubber metrics and valuations for IMO 2020?
44:10 - Any other risks or weird activity to watch out for?
46:00 - Commentary on the latest VLCC resale levels ($105-$107M)?
In a continuation of the first ever Virtual Investor Forum on Value Investor's Edge, J Mintzmyer hosted Svein Harfjeld and Trygve Munthe, co-CEOs of DHT Holdings (DHT), on January 16th, to discuss the VLCC markets and their current scrubber program and capital allocation priorities. They reiterated the strong prioritization of dividends while also ensuring the balance sheet remains very conservative- even targeting the potential for zero net debt in the future. Topics Covered 1:30 minute mark - How is IMO 2020 impacting the markets? Any surprises?
3:30 - What fuel spreads are you seeing? Expectations on forward moves?
5:00 - Current progress of the scrubber program? 6 ships still deferred?
8:00 - Any indications of a 2nd wave of installations? Doing more?
9:15 - How long will it take for you to install the last 6 scrubbers?
11:15 - Any pickup in HSFO storage? Are you participating in this market?
12:45 - Any indications of COSCO sanctions impact? Recent changes?
15:00 Why would the trade deal potentially be positive for DHT?
16:45 - With regards to the recent weakness, what are you seeing?
19:30 - Some of your top concerns in the market into 2020?
21:45 - Current capital allocation priorities?
24:00 - Target leverage? Down to zero net debt?
26:30 - How will the convertible notes factor into your structure?
27:45 - Are investors missing anything in these markets?
29:45 - Thoughts on the charter market? Willing to take cover?
31:45 - Standard reporting timing for Q4-19? Early February?
Pinterest has been one of the many 2019 IPOs to underwhelm in public markets to date, but there is an interesting growth story here. Filling a more specific user need, Pinterest could offer a more sustainable growth approach than other social media firms. The question is whether it can escape the example of Twitter's trajectory, and whether it can withstand the perennially looming juggernaut, Facebook. Topics Covered
4:00 minute mark - What's your gut take on Pinterest?
6:45 - The curse of Twitter
10:45 - How does the Twitter problem play out for Pinterest?
12:45 - Instagram as e-commerce vs social.
15:45 - PINS vs. SNAP in terms of targeted advertising
19:30 - What are investors waiting for with PINS?
25:00 - Don't the numbers show that they have room to grow?
34:00 - The threats of Instagram and Whatsapp and the cautionary tale of YELP
46:00 - Lack of engagement in Pinterest and its effect on investing
55:00 - The bear case
As part of the first ever Virtual Investor Forum on Value Investor's Edge, J Mintzmyer spoke with Anthony Gurnee and Paul Tivnan, CEO and CFO of Ardmore Shipping, about the MR product markets and IMO 2020 implementation. We discussed company specifics as well including earnings potential and capital allocation priorities. Topics Covered
2:10 minute mark - Start of discussion: Overall market impacts, any surprises?
3:35 - Are the markets topped out or room to rise further?
4:55 - What are the economics of an MR scrubber?
8:25 - Are your ships ‘eco’ specs? Fuel savings?
9:15 - Life expectancy of product tankers and your fleet?
10:55 - What sort of discount do older ships earn in today’s market?
12:10 - Are you seeing strong rates in handysize ships?
14:10 - Have you seen new routes developing?
16:40 - Any direct signs of fuel contamination?
20:55 - What sort of storage demand have you been seeing?
21: 55 - What indexes should investors be watching to gauge rates?
24:35 - Have you hedged any of your fuel costs?
25:55 - Current earnings and dividends at $20-$25k TCE?
27:10 - Impact of Middle East tensions?
29:35 - What are your current capital allocation priorities?
30:25 - Any newbuild or secondhand interest? Upside to assets?
34:25 - Any merger & acquisition opportunities in this market?
36:10 - Are investors missing anything in the market?
The market has seemed to be on an up and to the right path, but underneath there's been a surprising amount of churn. Large-cap growth stocks especially have moved suddenly on unclear reasoning, moves that seem skittish amidst a bull market. This may just be a sign of late-cycle behavior, or it may be a source of opportunity for the nimbly patient investor. We discuss several tech stocks and provide examples of what is going on. Topics Covered
2:00 minute mark - Setting the scene on this market
10:45 - The whiplash effect and how this affects relative valuation
13:15 - Is long term investing in trouble?
17:30 - ZOOM, WORK, DBX as long-term examples of this phenomenon
28:00 - Finding the right pair trade... harder in this market?
35:00 - The general risk climate in the market
49:00 - Apple (AAPL) and 5G
54:15 - Given the issues, how are you going to trade for the year?
1:00:00 - Streaming vs. SaaS in terms of valuation
1:09:00 - Will there be a rush back into growth stocks in 2020?
Oystein Kalleklev, CEO of Flex LNG (FLNG), joined Value Investor's Edge live to discuss the overall LNG shipping markets, US-China potential, and IMO 2020 impacts. We discussed the various types of vessel propulsion technology, reviewed their capital allocation priorities, and pressed their charter vs. spot strategy. This conversation is relevant for anyone with interests in the LNG sector including GasLog (GLOG), GasLog Partners (GLOP), Golar LNG (GLNG), Golar LNG Partners (GMLP), and Teekay LNG Partners (TGP). Some of the US-China information might also be relevant for those interested in LNG export infrastructure including Cheniere Energy (LNG), Energy Transfer (ET), and Tellurian (TELL). Topics Covered:
0:55 minute mark - Start of discussion- Market review: LNG sentiment now terrible?
3:25 - What market differentials exists between modern and older carriers?
7:15 - Precisely what sort of premium can investors expect to see?
8:45 - Any clear impacts or benefits from the US-China 'Phase 1 Deal'?
12:55 - Do steam propulsion LNG carriers have a future?
16:25 - Any major new technologies on the horizon? 2030 carbon reduction?
21:25 - What about TFDE propulsion? Is there a clear future for these?
25:10 - Are there any direct impacts coming from IMO 2020 regulations?
29:50 - Are you planning to increase your charter coverage into 2020?
34:45 - What are your capital allocation priorities with extra free cash?
39:15 - Will dividends be closely tied to earnings going forward?
Craig Stevenson, CEO of Diamond S Shipping (DSSI), and Kevin Kilcullen, CFO, joined Value Investor's Edge last Thursday, December 12th, to discuss the product tanker and Suezmax crude shipping markets ahead of pending IMO 2020 regulations. We reviewed capital allocation priorities and why they believe their stock price has been underperforming, and what they plan to do going forward. This conversation is relevant for anyone long the product tanker or the crude tanker sector, including Ardmore Shipping (ASC), DHT Holdings (DHT), Euronav (EURN), Frontline (FRO), Navios Maritime Acquisition (NNA), Nordic American Tankers (NAT), Scorpio Tankers (STNG), Teekay Tankers (TNK), Torm plc (TRMD) or Tsakos Energy Navigation (TNP). Topics Covered 0:45 minute mark - Start of discussion- Market review: any IMO 2020 impacts
2:25 - Product rates are lagging crude, what is driving this separation?
5:25 - Should we expect a significant spike in rates? Any disruptions yet?
7:55 - DSSI trades at a significant discount? How to address PE overhang?
11:20 - How is the market shaping up for product/crude versus Q3 guidance?
16:10 - Any new charters? Looking for cover here? Current 1-2y charter rates?
18:35 - Any desire to add additional scrubbers to the Suezmax fleet?
22:25 - What trade flows are we seeing with MGO and VLSFO? Sources?
27:15 - What efforts can DSSI take to reach to peer valuation levels?
29:45 - How do you view capital allocation priorities?
32:25 - Tackling 2021 maturities yet? Timing on those?
35:35 - How is management compensation structured? Fleet growth?
37:35 - Is DSSI available for sale at the right price?
Greg Zikos, CFO of Costamare (CMRE) joined Value Investor's Edge to discuss the containership markets and specific company prospects and capital allocation priorities. This interview and discussion is relevant for anyone with containership investments or interests, including Capital Product Partners (CPLP), Danaos Corp (DAC), Global Ship Lease (GSL), Navios Maritime Containers (NMCI), and Seaspan Corp (SSW). Topics covered
1:25 minute mark - Market review: Strong rates vs. Trade War Concern
5:45 - What is your scrubber plan for IMO 2020? Approach for capital spending?
9:45 - What are the biggest risks/concerns for this market?
12:15 - How does the supply-side look? Concerned about newbuilds?
14:15 - Have you seen any interest in LNG-fueled ship transactions?
16:10 - What is the most attractive area to invest in for containerships?
18:35 - What are your current leverage levels and long-term targets?
23:15 - What are your priorities for capital allocation? Dividends?
26:35 - Ready to raise the dividend yet, or need more growth?
28:55 - How are the longer-term charter markets shaping up?
Akram's Razor was a notable bear on Nvidia in 2018 before closing a short position. Recently, he switched from the sidelines to becoming an owner of shares and a bull. We discuss what changed with the company over the past year, how it's proven itself, and what may be ahead. Topics Covered
2:00 minute mark - revisiting the short case
12:30 - NVDA's competitive position in artificial intelligence
23:00 - Expanded advantage in artificial intelligence, with the USPS deal as an example
33:00 - How Nvidia's moat plays out for new potential entrants
38:00 - The change in the valuation picture
47:00 - How crypto wreaked havoc on understanding Nvidia's gaming segment
56:00 - The structural questions in the gaming segment
1:11:00 - Mellanox and its import/fit with Nvidia
1:19:00 - Has management regained its credibility?
1:34:00 - Applying a lens to management's views
Mark Kremin, CEO, and Scott Gayton, CFO, of Teekay LNG Partners (TGP) joined Value Investor's Edge live in New York City to discuss the current LNG markets and TGP's specific prospects. We discussed their Q4 guidance, 2020 expectations, overall deleveraging goals, future growth areas, how to balance growth versus deleveraging, sanctions risks, valuation comps, and their smaller LPG assets. Topics Covered
:45 minute mark - Start of discussion- Overall LNG market views?
3:15 - Fixed charters and performance versus spot players?
5:50 - Remarks on Q4-19 Guidance (see slide below)?
8:00 - Timeline for the final growth (Yamal #6 & Bahrain)?
10:45 - Deleveraging target? 5.5x versus 4.5x?
12:50 - Timing for future growth projects? 2023/2024?
14:55 - How to balance growth vs. stock repurchases?
19:35 - Is the COSCO-related risk fully resolved?
23:35 - TGP earnings multiple & comp discussion?
26:35 - Uses of $100M Awilco proceeds? NOK Bond plans?
32:35 - Are dividends driving your stock? When will payouts increase?
38:25 - What sort of forward growth is prioritized? Anything industrial?
41:05 - Final push! Confirm no growth unless the ROE is better than stock?
43:55 - LPG assets: Are these core? Multi-gas core?
Ted Young, CFO of Dorian LPG (LPG) joined us live this morning (1 November 2019) to discuss the LPG shipping markets and specific company prospects and capital allocation potentials. This interview and discussion is relevant for anyone with LPG sector investments including Avance Gas (OTCPK:AVACF), BWLPG (OTCPK:BWLLF), and Navigator Holdings (NVGS). Topics covered
1:00 minute mark - Overall VLGC market review
4:00 - Does the arbitrage curve and forward cycle still look strong?
7:40 - What sort of risks should investors look for?
10:40 - Leverage is away down, what are your targets now?
12:50 - Capital allocation priorities for Dorian? Enough cash reserved?
14:40 - Priority for dividends, repurchases, financing deals
20:00 - Repurchases low thus far? Any reason for this?
23:30 - Possibility for a buyback deal with BW Group? Any covenants?
26:40 - Scrubber update on timing? Delay with shipyard?
28:30 - Discussion on scrubber fuel spreads? Savings per day?
34:00 - LPG retrofit potential? Any expenses in 2021?
37:50 - Reviewing utilization numbers - expectations for Q4/Q1?
39:40 - Update on the 4x charters coming off Q4-19?
On this week's The Razor's Edge, we discussed Akram's Razor's recent short case on Invitae (NVTA). If you're following the stock, you're probably aware of the two articles the author of The Razor's Edge has posted on the company. There's a lot to cover, so we broke it down in a podcast recorded on Monday, November 4th, i.e. two days before yesterday's earnings came out. It also came out before Myriad Genetics (MYGN) earnings this week. We were joined by a colleague of Akram's, James, to have a little more color on the story. Topics Covered
2:00 minute mark - Why Invitae?
8:15 - Investment case of accumulating the world's genetic information
17:45 - Comparison to Amazon... gene testing as a product.
22:30 - Theranos's issues and the comparison to Invitae
34:00 - Could Invitae build a data business?
40:30 - The long case for Myriad
50:30 - Challenges for NVTA
58:00 - Where do we go from here? What's the measuring stick?
1:03:00 - Is there a path to profilitablity for NVTA?
1:21:30 - Disruption of the market, redirection of resources, fraud issues and "nobility".
1:34:30 - Difficulty of building a sustainable model in healthcare due to costs.
Hamish Norton, President of Star Bulk Carriers (SBLK), along with Simos Spyrou and Christos Begleris, Co-CFOs, and Constantinos Simantiras, Head of Market Research joined Value Investor's Edge Live on October 1 2019 to discuss the dry bulk shipping markets and disruptions ahead of pending IMO 2020 regulations. We reviewed their sizable scrubber program and expectations for slow steaming into 2020 along with capital allocation priorities as results turn strongly profitable. This conversation is relevant for anyone long dry bulk shipping names including Diana Shipping (DSX), Eagle Bulk (EGLE), Genco Shipping (GNK), Golden Ocean (GOGL), Navios Maritime Partners (NMM), Safe Bulkers (SB), Scorpio Bulkers (SALT), or Seanergy Maritime (SHIP).
Topics covered:
0:30 minute mark - Start of discussion / How is the overall dry bulk market developing?
4:15 - How is IMO 2020 developing so far? Any distortions in the markets?
5:15 - Have there been any delays to SBLK's scrubber installations?
8:20 - Where is your fleet positioned, Atlantic vs. Pacific? Rate differences?
10:20 - What is the impact of the US-China trade war? Meaningful impact?
13:45 - Are Chinese environmental initiatives impacting the markets?
16:00 - What is causing the recent Capesize rate decline?
18:20 - Can we expect dividends soon? End of year?
21:30 - Potential for more fleet acquisitions? Criteria?
22:45 - Impact of scrubbers on future earnings potential?
26:30 - Is there any charter activity for scrubber-equipped vessels?
30:30 - Star Bulk still trades at a huge discount to NAV, any plans to fix?
33:00 - Repurchases v. Dividends Discussion.
This week’s The Razor’s Edge looks at Domino’s Pizza (DPZ). You might be aware of the company’s turnaround in the 2010s, reinvigorating their brand and delivering steady and impressive stock market returns. You might also be aware that the company has been a target of short sellers over the back half of the decade, as they scaled to high multiples and a more levered balance sheet. And, if you’re following DPZ actively, you may have seen the stock sell off after missing its Q3 earnings numbers, and then rebound after CEO Ritch Allison’s commentary around the unsustainability of 3rd party order aggregators. We discuss Domino’s rise and whether it’s now poised for a fall. The comps have slowed and the stock has followed, flat for the last 15 months or so. Does that portend a change in direction? Topics Covered:
2:30 minute mark – What happened in the Q3 report with the miss but then positive returns?
6::30 – the food aggregators excuse?
8:30 – the simple Domino’s bull thesis
12:00 – The missed tech play for Domino’s and the changing economics around delivery
15:00 – How do the food aggregators change the game
17:30 – Domino’s temporary argument
19:00 – The fading Papa John’s tailwind
24:00 – Domino’s remedies to counter these headwinds
28:45 – The buyback problem
32:00 – Why Domino’s and not other related plays?
36:00 – The variety on the market now and the pricing tailwinds
43:00 – Gaming out the short thesis
49:00 – The short for boring shorts?
57:30 – The international angle
1:02:00 – The food aggregators aren’t going away
The third public episode of Value Investor's Edge Live is a bonus episode, following on Thursday's discussion with Euronav (EURN) CEO Hugo de Stoop. J Mintzmyer spoke a few days later with peer company International Seaways (INSW), specifically CEO Lois Zabrocky and CFO Jeffrey Pribor. The conversation touched on similar themes, including the recent disruption in Saudi Arabia's oil supply and the pending IMO 2020 regulations. Zabrocky and Pribor shared how they are thinking about capital allocation and their view on the stock's relative underperformance, compared to peers. This was recorded on the 20th of September, before the recent big move in the shares. Given recent attention on the sector and the forthright nature of the conversation, it should be an interesting listen for followers in the sector. Topics Covered
1:10 minute mark - Start of discussion / Initial commentary on Saudi disruption
3:50 - What sort of situation could hurt rates?
6:20 - How are US exports looking? Signs of capacity constraints?
11:30 - IMO 2020 discussion / What have you seen in the markets? Positioning?
14:40 - What's going on with product tanker markets? When will they move?
17:25 - What are the capital allocation priorities?
20:10 - Is fleet growth and renewal still a consideration?
21:00 - Scrubber commitment beyond 10 vessels?
22:00 - Scrubber savings expectation in TCE?
23:10 - What are futures showing for spreads between fuels?
26:00 - What is INSW underperforming peers? Why should investors buy now?
29:30 - Are you considering repurchases? Any constraints to implementation?
30:50 - Strategic vision of refinancing? Any relevant covenants?
32:50 - Are your joint-ventures considered 'core?' Economics & plan there?
34:45 - What's the potential timeline for LNG JV refinancing?
36:40 - Is the share float or liquidity a concern for repurchases?
38:00 - How is your performance compensation related to share prices?
Hugo De Stoop, CEO of Euronav (EURN), and Brian Gallagher, Head of IR, join Value Investor's Edge Live to discuss the crude tanker shipping markets specifically following the major Saudi disruption and pending IMO 2020 regulations. We also discussed the potential for floating storage, Euronav's capital allocation priorities, the prospect of LNG dual-fuel vessels, and overall market thoughts regarding the increased focus on Atlantic-sourced cargoes. This interview and discussion is relevant for anyone with crude tanker exposure including other firms such as Diamond S (DSSI), Frontline (FRO), International Seaways (INSW), Navios Maritime Acquisition (NNA), Nordic American Tankers (NAT), Teekay Tankers (TNK), and Tsakos Energy Navigation (TNP). Topics covered1:30 - What are the effects of the attack on the Saudi oil fields?4:30 - What's the outlook for US exports?7:30 - Scrubbers and use of compliant fuel.16:30 - What's the plan for the second ULCC and has the been movement in the sulfur spread?21:00 - Have you hedged against oil price fluctuations? How does this impact P&L?24:00 - How will the Saudi disruption affect your Suezmax fleet?26:00 - Are Suezmaxes being used for storage?29:00 - Will storage be drawn down now that there's backwardation? 30:30 - Priorities with current cash balance.36:00 - Are you adding to the fleet and will you be looking into "dual fuel" technology?41:00 - Overall take on the market: Are you more bullish or bearish with Saudi disruption?
The streaming video industry is changing by the week. Disney is preparing to make a big splash with Disney+'s launch in November, Apple just announced their entry, and AT&T is trying to supersize HBO's presence in the competitive arena. How will it all shake out, and who might be a big loser as a result? Akram's Razor and Daniel Shvartsman go back in time to Disney's Marvel purchase to figure out what has set Disney apart, and then discuss whether this threat is different from others that Netflix has faced. Topics covered: 2:00 minute mark - Introduction/background 7:00 - What brings you to Disney and Netflix? History of Marvel 20:30 - How can Disney succeed in streaming? 27:00 - What can go wrong? 30:00 - Potential effect on box office, cable, etc. 34:00 - Netflix in depth, background, transformation 40:30 - Wouldn't you bet on Netflix to solve the current issues? 44:00 - How much demand is there for content? 48:30 - How do you remain objective in investing with regard to some of these familiar brands? 54:30 - Problem of too much content. 57:00 - In terms of investing in these companies, what actual numbers matter? 1:00:45 - Is there a rebundling play here? 1:04 - Difficulty in finding "pure play" investments.
Robert Bugbee, President of both Scorpio Tankers (STNG) and Scorpio Bulkers (SALT) joined Value Investor's Edge Live's inaugural episode on Thursday morning (1 August 2019) along with James Doyle, Senior VP and Chief Financial Analyst for Scorpio Group to discuss the product tanker and midsize dry bulk markets. This interview and discussion is relevant for anyone with product tanker investments including Ardmore Shipping (ASC), Diamond S (DSSI), Navios Maritime Acquisition (NNA), Torm (TRMD), and Tsakos Energy Navigation (TNP). Topics covered Start of discussion / When will IMO 2020 show up? 2:45 minute mark
Increased interest from suppliers/customers: 6:45
How is the midsize bulk market looking? 9:00
What might SALT do with STNG holding? 15:15
IMO 2020 as a major catalyst: 22:30
Can installations of scrubbers be sped up? 24:30
Any surprises or dislocations with scrubber installations? 28:00
What sort of spreads are we expecting? 29:15
Discussion of particular blends/logistics (dirty/clean)? 32:00
Will VLCC deliveries hurt the product tanker market? 36:30
When will Scorpio Bulkers be comfortable repurchasing? 38:45
Timing of repurchase and 'game theory:' 41:00
This trailer previews our initial two shows on The Investing Edge, from Value Investor's Edge Live hosted by J Mintzmyer, and The Razor's Edge, hosted by Daniel Shvartsman and Akram's Razor. Our excerpt for Value Investor's Edge Live is from our first episode, where J Mintzmyer speaks with Robert Bugbee of Scorpio Tankers about the company's comfortable cash position and the pending catalyst of IMO 2020. Our excerpt from The Razor's Edge is from the first episode, which covers Disney, Netlfix, and the streaming universe. Daniel Shvartsman asks Akram's Razor about whether Netflix can solve a budding challenge - too much content on the service. The Investing Edge is a podcast channel on Seeking Alpha that features shows from different Seeking Alpha authors, with a focus on their unique investing style. Authors will speak with CEOs and industry experts, break down key market stories and topics, and share insights on how they research new investments. The first two shows on The Investing Edge are: Value Investor's Edge Live, hosted by J Mintzmyer of Value Investor's Edge. The show will feature J's conversations with publicly traded shipping company CEOs, sector experts, and fellow deep value investors about their companies and investing approaches. The Razor's Edge, hosted by SA podcast host Daniel Shvartsman and Seeking Alpha author Akram's Razor of The Razor's Edge.
The Investing Edge is a podcast channel on Seeking Alpha that features shows from different Seeking Alpha authors, with a focus on their unique investing style. Authors will speak with CEOs and industry experts, break down key market stories and topics, and share insights on how they research new investments. The first two shows on The Investing Edge are: Value Investor's Edge Live, hosted by J Mintzmyer of Value Investor's Edge. The show will feature J's conversations with publicly traded shipping company CEOs, sector experts, and fellow deep value investors about their companies and investing approaches. The Razor's Edge, hosted by SA podcast host Daniel Shvartsman and Seeking Alpha author Akram's Razor of The Razor's Edge.