consumerguy

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    • Wed Aug 27th 17:41 PM | Rating: 0 0
      Commented on:
      Hedge Fund Tracking: Blue Ridge Capital (John Griffin)
      Keep in mind that many hedgies have "boxed" positions, meaning that reading the reported filings can send copycats in the wrong direction entirely. Take a position like BARE, NTRI or CROX. Most hedgies have been short these names - openly so in some cases. Just because Blue Ridge shows a long position in BARE doesn't mean it is net long. It could have an equal or larger short position in BARE. Sounds silly to many retail investors to be simultaneously long and short the same stock. Here's some reasons why to box a position: 1) show a long position; get better access to management, though you're really only researching a short. 2) getting stock borrow can be difficult for big short positions in heavily shorted names. Let's say you're short BARE and it plummets in value. You think it may rise again (to where you'd short it again) before going to even lower levels. You buy BARE long after the first decline while maintaining your short position (not "covering," but mathematically pretty similar, with the "carry" being the differentiator). When the stock rises again, you sell your long shares, effectively re-opening your short position. Back the old days of the Uptick Rule for shorting (only short sell on an uptick to avoid freefalls), this strategy also allowed hedgies to short by selling the long shares (no uptick rule) instead of struggling to short in a declining tape.
      I think the holdings still can give you a feel for what firms like Blue Ridge are involved in, but don't bet the filings are telling you in which direction they're betting.
      View article »
    • Thu Aug 7th 11:43 AM | Rating: 0 0
      Commented on:
      Build-A-Bear On Its Deathbed?
      I'm pulling for BBW. The company almost looks like a private equity wet-dream: tons of potential cash flow (once store building is curtailed and advertising is pared back), a solid balance sheet, and a unique brand proposition. I think BBW could actually renegotiate store leases too, given the sorry state of the American mall.
      That said, that comp trend is terrifying. Labor and leases are the same, so assume a store loses a third of its business in 3 years - it's tough to make any money.
      Your point on initial sales per store is a bit of a stretch. I agree that BBW still does nice sales/foot, but comparing that to HD, WMT, LOW, ODP doesn't work. Those stores are off the mall and have rents (or rent equivalents) far, far lower than that of BBW, which is in plenty of upscale malls.
      I'd love to own it, but the results just continue to worsen.
      View article »
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