November 2012
1 post
Diamond Foods Cap-ex Still Does Not Make Sense
In May I wrote my first tumblr post on Diamond Foods’ Cap-ex (http://max0205.tumblr.com/post/23050278690/diamond-foods-cap-ex). In the post I suggested that Diamond had capitalized operating expenses and used three announced plant expansions at its Kettle subsidiary ($38 million in Beloit, WI; $8.4 million in Salem, Oregon and $10 million in Norwich, UK) as the vehicle for the accounting...
October 2012
1 post
What is the true cost of RealPage's Yardi...
RealPage announced the settlement of its litigation with Yardi on July 2nd, 2012. RealPage’s 8-k on the settlement stated that:
“We expect second quarter earnings before income taxes to be reduced by $8-10 million (this amount will be added back for purposes of adjusted EBITDA) due to the litigation, plus we will make a net payment of $2 million for a perpetual license fee for certain interfaces...
September 2012
1 post
RealPage: Shares Outstanding
A Heard on the Street article today in the Wall Street Journal (http://online.wsj.com/article/SB10000872396390443890304578006694063312014.html?mod=ITP_moneyandinvesting_5) addressed the issue that is often ignored by investors – the true share count for publicly traded companies.
Given the article, I thought I would provide my calculation for RealPage’s shares outstanding.
Google Finance,...
July 2012
2 posts
Why did RealPage (Nasdaq: RP) acquire AptBudget?...
On June 10, 2008 Georgianna Oliver officially became the Democratic candidate for the U.S. House of Representatives from the First District of Oklahoma. In order to finance her campaign, Ms. Oliver loaned $441,548.62 to her authorized committee, Oliver for Congress.
The first loan was taken out on July 11th, 2008 for $51,000. Ms. Oliver went on to make eighteen more personal loans to her...
The Curious Settlement of Yardi v. RealPage
On July 2nd RealPage (“RP”) and Yardi announced the settlement of their litigation.
First things first, my tail risk thesis has been rendered null and void by the settlement. I argued, in my last post, that the litigation could result in large monetary damages, which RealPage had not reserved for and could not afford to pay without taking a large hit to its future earnings. This...
June 2012
2 posts
The Curious Case of RealPage (Nasdaq: RP)
RealPage (NASDAQ: RP), a real estate software company, is a work of valuation fiction that can only be created by Wall Street.
RP sells software to property managers. In the trailing twelve months, RP generated, on a GAAP basis: $1.14 million of net income, EBIT of $4.6 million and EBITDA of $33.67 million, which produced a whopping .87% ROA, .44% ROIC, .55% ROE and a 12.9% EBITDA margin.
Of...
Diamond Foods' Strange Valuation
It has been an interesting week for Diamond Foods. They missed the 180-day NASDAQ deadline to file their delayed financials. NASDAQ will likely issue a delisting letter and Diamond will ask for a review hearing.
Market participants appear to be speculating on the severity of the fraud given the delay in filing the restatement. It is hard to know, however, what to make of the delay. I had a...
May 2012
5 posts
Diamond Foods' Minsky Moment
Diamond Foods is about to have a large data dump. By June 11th in order to avoid being delisted by NASDAQ, Diamond will have to release its financials restatements for the last two fiscal years, plus the financial results for the first nine months of FY2012. That’s a great deal of info to digest.
One piece of data, however, that will likely be missing is the size of the final payment...
Diamond Foods' Recap: How do you define EBITDA?
There is a great deal I could say about the announced recapitalization of Diamond yesterday by Oaktree. But in this post I will focus solely on one part of the deal that has not been discussed by anyone to my knowledge.
Diamond put together a helpful slideshow on the deal - http://investor.diamondfoods.com/phoenix.zhtml?c=189398&p=irol-presentations - but did not mention in the slides what...
Diamond Foods' New CEO Executive Compensation
On May 6th, Diamond Foods announced they hired Brian Driscoll, the former CEO of Hostess Brands, as their new CEO. In the 8-K announcing the hire, Diamond disclosed that Driscoll would receive both $1.5 million worth of restricted stock units and options on the “Grant Date.” The “Grant Date” just happens to be three business days after the financial restatements are...
My Diamond Foods Obsession Caused Me To Make...
During my short investment career, I have tried to avoid writing or commenting about stocks in any public forum. I have, however, made an exception for Diamond Foods - and now going forward I have decided to post on my tumblr account thoughts about my investments, if I truly have something unique to say. Whitney Tilson, I hope you are reading this.
Diamond Foods has been an obsession of mine now...
Diamond Foods' Cap-ex
Diamond Foods is currently in the process of restating the last two fiscal years of its financial statements. The focus of the restatement is the shifting of Diamond’s grower expenses to future years. (http://investor.diamondfoods.com/phoenix.zhtml?c=189398&p=irol-newsArticle&ID=1658627&highlight=).
In this post, I would like to focus on Diamond Foods’ capital expenditures as...
