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Fire sale going on
Old 08-09-2005, 02:36 PM   #1
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Fire sale going on

You want cheap assets? MOVI is now selling for about 6 times next year's consensus earnings. Announcing earnings on Friday and with a big short interest, so at some point there is likely to be a big spike as the shorts get squeezed.

Disclosure: As you might guess, I own a bunch of this stock.
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Re: Fire sale going on
Old 08-09-2005, 03:08 PM   #2
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Re: Fire sale going on

Don't think we have enough $$ to support a pump and dump on a liquid stock such as MOVI. You can make money by investing in short squeeze situations.
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Re: Fire sale going on
Old 08-09-2005, 03:20 PM   #3
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Re: Fire sale going on

Quote:
Originally Posted by maddythebeagle
I smell a "pump and dump".*
I don't think of myself as a petty person, but I take offense at that accusation. You all know that I occasionally post about individual investments that I think are worth looking at. Some I own or eventually buy, others I do not. I don't think I have given anyone cause to believe that I am trying to manipulate a stock.

If you guys don't want to hear my ideas, then I won't share them.
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Re: Fire sale going on
Old 08-09-2005, 03:22 PM   #4
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Re: Fire sale going on

Sell while you can still get some money back brewer.

That company is going to hell because people like me are now members of netflix (walmart, amazon, etc), mail order dvd rentals. * Movie gallery, inc.'s business focus was on the smaller towns, and these are exactly the markets that appeal most to those that would consider netflix *(cause you dont have to drive ump-teen gillion miles to go pick up a dvd, it just comes in the mail, also cause most people dont like paying late fees).

Mail-order movie rental is in (with second being buying them a-la-carte off your directtv). * Physically driving to rent a movie is out.

Strong Sell.
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Re: Fire sale going on
Old 08-09-2005, 03:28 PM   #5
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Re: Fire sale going on

Brewer, keep the ideas coming. I for one don't want you to stop.
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Re: Fire sale going on
Old 08-09-2005, 03:32 PM   #6
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Re: Fire sale going on

Quote:
Originally Posted by brewer12345
If you guys don't want to hear my ideas, then I won't share them.
Brewer, one thing I've learned about posting here is you gotta' have pretty thick skin...

REW
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Re: Fire sale going on
Old 08-09-2005, 03:34 PM   #7
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Re: Fire sale going on

Quote:
Originally Posted by REWahoo!
Brewer, one thing I've learned about posting here is you gotta' have pretty thick skin...

REW
Agreed. However, I am an investment professional in the real world so I take great offense at being lumped in with the boiler-room crowd.
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Re: Fire sale going on
Old 08-09-2005, 04:11 PM   #8
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Re: Fire sale going on

Brewer....

Keep posting. I don't think Maddybeagle has been around long enough to know the value you offer this forum.
BTW....how's the pup doing?
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Re: Fire sale going on
Old 08-09-2005, 04:18 PM   #9
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Re: Fire sale going on

Quote:
Originally Posted by KB
BTW....how's the pup doing?
Better. They thought it was masticatory myositis, which is normally associated with large breeds (he is a 25 pound beagle), since the swelling was in the right place and it went down with prednisone. However, the very expensive blood test they did for this condition came out negative. It still might have been the myositis because the test gives up to 15% false negatives. Since he is back to normal, I don't care what it was as long as it doesn't come back.

Unfortunately, my mother had to "let go" a mixed breed that was 17 years old yesterday. I can still remember the day we got her as a wriggly puppy; growing up with her as a beautiful, muscular playmate (part pitbull); seeing her later as a faithful companion & sweetie who was also a FIERCE protectress ofthe family (including the other dogs); and as a sweet, gentle, slightly batty old lady in the last couple of years. I know we were lucky to get 17 years with Sylvia and I knew the day would be coming, but its still sad. I will always remember her.
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Re: Fire sale going on
Old 08-09-2005, 04:24 PM   #10
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Re: Fire sale going on

Quote:
Originally Posted by azanon
Sell while you can still get some money back brewer.

That company is going to hell because people like me are now members of netflix (walmart, amazon, etc), mail order dvd rentals. * Movie gallery, inc.'s business focus was on the smaller towns, and these are exactly the markets that appeal most to those that would consider netflix *(cause you dont have to drive ump-teen gillion miles to go pick up a dvd, it just comes in the mail, also cause most people dont like paying late fees).

Mail-order movie rental is in (with second being buying them a-la-carte off your directtv). * Physically driving to rent a movie is out.

Strong Sell.
I know this is a popular point of view, which is exactly why one can buy the stock so cheaply. Do some due diligence. The company has consistently made money hand over fist even while the rental market has been softening. They bought Hollywood Entertainment and I fully expect that they will running the new operation as well as the old one. No, this isn't a glamor growth business, but for a smart management team willing to be contrarians, there is a lot of money to be made in the industry.

I did some financial modelling of the company where I basically took the historical results of HLYW and MOVI and squashed them together, using the pro formas MOVI recently put out where I could. Even with the increased debt load, it looks to me like MOVI will be gushing cash flow in the next few years.

Ain't no way the rental business is going away, and the vast majority of it will be done at storefronts.
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Re: Fire sale going on
Old 08-09-2005, 04:36 PM   #11
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Re: Fire sale going on

Glad he's back to normal...and so sorry about Sylvia. *

We were out of state for 5 days and just got back to home and my cat. *He's a 10 year old siamese and he and I pal around much of the time since I ER'd. *I can't imagine not having him, though since he's only 10....I have a lot of time. *
Or at least i hope so.....
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Re: Fire sale going on
Old 08-09-2005, 05:16 PM   #12
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Re: Fire sale going on

Quote:
Originally Posted by maddythebeagle
I smell a "pump and dump".*
Maddy's sniffing up the wrong tree, Brewer. Keep 'em coming.

Just closed out a short on Abercrombie & Fitch (ANF) so I have margin to burn. Buying MOVI doesn't look any more risky than shorting Martha Stewart (MSO)...
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Re: Fire sale going on
Old 08-09-2005, 05:33 PM   #13
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Re: Fire sale going on

Hmm, at $20 per share it's too rich for my blood. I don't mean that in a P/E way, I mean I have didly squat to play with so I look for shares at 20%-40% of that price so that I can get enough volume. I doubled my money once with AVR, but that was a nerve wracking ride.
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Re: Fire sale going on
Old 08-09-2005, 05:45 PM   #14
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Re: Fire sale going on

Quote:
Originally Posted by brewer12345
I don't think of myself as a petty person, but I take offense at that accusation.*
I think she may have been kidding. At least that is how I took it.

haha
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Re: Fire sale going on
Old 08-09-2005, 09:54 PM   #15
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Re: Fire sale going on

I for one enjoy stock ideas.* Nice to read about stocks every now and then.* Investors can make nice short-term pops off short squeezes.* Had to do a stock/portfolio simulation project for a finance class and it only lasted a semester (not very long).* Most of my stock picks had high shorts in anticipation of a squeeze.* I am a believer.

MOVI 30+% short interest ...now that is what I call a candidate for a short squeeze
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Re: Fire sale going on
Old 08-09-2005, 11:22 PM   #16
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Re: Fire sale going on

Well as long as you are talking short squeezes, check out NFI. Large short play from a hedgefund several years ago which refuses to unwind it, resulting in a dividend yield now in the range of 15%.

This is a mortgage-REIT which does sub-prime lending and sells off its loans as high quality bonds, locking in an interest rate spread which earns them their cash. I don't pretend to fully understand it but check it out if interested at nfi-info.net.

Disclaimer, yes I own this stock and in no way am I trying to push it here. Just hoping that huge dividend yield gets me to ER a little earlier !

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Re: Fire sale going on
Old 08-10-2005, 07:05 AM   #17
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Re: Fire sale going on

Quote:
Originally Posted by runchman
Well as long as you are talking short squeezes, check out NFI. Large short play from a hedgefund several years ago which refuses to unwind it, resulting in a dividend yield now in the range of 15%.

This is a mortgage-REIT which does sub-prime lending and sells off its loans as high quality bonds, locking in an interest rate spread which earns them their cash. I don't pretend to fully understand it but check it out if interested at nfi-info.net.

Disclaimer, yes I own this stock and in no way am I trying to push it here. Just hoping that huge dividend yield gets me to ER a little earlier !

I looked at several mortgage REITs a couple of months ago, most of which focused on subprime borrowers. I found pretty much all of them to be scary and likely to end up with much lower stock prices. By far, the spookiest looking ones were IMH and NFI. IMH is spooky because it is so extremely highly leveraged and makes a ton of interest-only floating rate loans to subprime borrowers in CA (shudder).

NFI is a special case. Mortgage REITs work like other lenders: borrow cheap, lend rich, collect the difference. The added distinction is that MREITs have to pay out all of their taxable income as dividends to maintain their tax status. Most MREITs pay out the income (difference between lending rate vs. borrowing rate less expenses) over the ife of the pool of loans, so there is a nice match between when they receive the cash and when they pay it out. NFI "sells" the loans it makes for accounting and tax purposes, although they don't actually get all of the cash to match the up-front recognition of income. That cash mismatch means that they are constantly scrambling to keep up with the cash hole, and much do ever greater loan volume. In a cyclical industry like mortgage lending, this is a very risky proposition. Economically, the sale didn't really happen; they borrow like everyone else to fund the loans.

The huge dividend makes these guys too expensive to short IMO, and the extreme risks they run makes me leery of going long. YMMV, of course, but I am not overly interested in having anything to do with NFI. There are other quality mortgage REITs out there, but I am waiting for prices to drop. TMA and SFI looks attractive if they are available at lower prices.
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Re: Fire sale going on
Old 08-10-2005, 07:19 AM   #18
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Re: Fire sale going on

Brewer:

yours posts are the highlight of my thread reads; please keep posting.

To hijack your thread, what do you think of WFMI? I shoulda bought >5 years ago when it was $20 and when I started paying chunks for organic cabbage and the like. Or at least a few months ago, since it's gone up $30 since.
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Re: Fire sale going on
Old 08-10-2005, 07:28 AM   #19
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Re: Fire sale going on

Good company/good concept but pricey stock
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Re: Fire sale going on
Old 08-10-2005, 07:34 AM   #20
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Re: Fire sale going on

I agree with wildcat. Yet another company that I looked at and thought "it's great, but I won't pay that much for it", "that much" being like a third of the current price. I don't like missing out, but one os bound to do so, especially those of us who only buy on the cheap.
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