Fire sale going on

[brewer12345]

Brewer

Time will tell which of us called it right.   I'll check back in a few months.  Mail-order DVD is super super hot.   

Want a plug you guys?  Give it a try, its freakin awesome.

Check back in 5 years. BBI will be out of the mail-order business, NFLX will still be a niche company, and MOVI will have paid off most of their debt and continue to spew free cash flow.

 

[Nords]

Curse you, Brewer, I'm almost sure that I have better things to do all day than to sit around analyzing small-caps with such great fundamentals and such ugly technicals.

I'm drooling. Tomorrow's open promises to be quite interesting.

 

[brewer12345]

Curse you, Brewer, I'm almost sure that I have better things to do all day than to sit around analyzing small-caps with such great fundamentals and such ugly technicals.

I'm drooling.  Tomorrow's open promises to be quite interesting.

Aw c'mon, Nords. Admit it, its fun. Mybe not as much fun as surfing (wouldn't know personally) but at least you can't get eaten by a shark.

 

[JPatrick]

Call me boring, but it seems like another fine day to be holding the "black gold."

 

[brewer12345]

Not exactly a terrible day for PCRIX/DX either.

 

[saluki9]

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.

I'm in the industry too. Just curious, your employer lets you talk about personal holdings on the net? Around here I'd get chucked in a hurry for that.

 

[brewer12345]

Talk about personal holdings would get you canned? Wow.

I am in a tiny shop (just hired our 7th employee) and we don't deal with the public. So long as I'm not font running or anything like that, its not really a problem.

 

[Brat]

From what little I know, Brewer12345's group isn't in the same segment of the industry as the firm he was discussing. 

As different as a muni bond analyst talking about a small consumer good company.  Completely different beasts.

 

[wildcat]

Time will tell which of us called it right. I'll check back in a few months. Mail-order DVD is super super hot

I think it is a fad and only appeals to a small population

 

[MJ]

Aw c'mon, Nords. Admit it, its fun. Mybe not as much fun as surfing (wouldn't know personally) but at least you can't get eaten by a shark.

I don't know about that. I think the wall street sharks did a pretty nice job on many a portfolio since 2000.

 

[saluki9]

From what little I know, Brewer12345's group isn't in the same segment of the industry as the firm he was discussing.

As different as a muni bond analyst talking about a small consumer good company. Completely different beasts.

For my company it doesn't matter. I'm in the asset allocation / strategy group (so I don't even deal with specific issues) and we have been told many times that we can get pink slipped for discussing a specific issue on any bbs / discussion site.

 

[Nords]

Check back in 5 years.  BBI will be out of the mail-order business, NFLX will still be a niche company, and MOVI will have paid off most of their debt and continue to spew free cash flow.

Dunno about five years from now, Brewer, but there doesn't seem to be much Thursday-afternoon excitement about Friday's earnings release.  Either the news hasn't leaked and nobody cares... or the news HAS leaked and is reflected in new lows.  $20.75 seems to be a consensus value as of 1:30 EDT.

Berkshire Hathaway textile mills were a heckuva bargain at this price.  So were World Book & Dexter Shoes...

OTOH MOVI's current price is outside a Bollinger, which presumably predicts a Friday bounce.

We'll see how things look around 3-3:45 EDT today...

EDIT: 3:30 PM-- Well, someone thinks they know something. Tomorrow's news should be interesting, but I think I'll sleep in.

 

[preben]

I dumpled 5k of gambling money into it! Might be me who pushed the price higher! Already up 3% and getting ready to dump after the good news - he,he - day trader me!

 

[JPatrick]

I owned this stock a few years back when it was in the 14-16 range. At the time you could sell an otm call and make 5-6% in 30 days. Did that several times and lost the stock. Moved on with a smile.
This should be an interesting earnings call tomorrow. 
I have no dog in this fight, but I wouldn't touch this stock til their cards are on the table.  Far to much risk for this chicken.  OTOH, if the $$ and outlook are dynamite there may be a few dollars to be made in the runup, if you are nimble.
Damn sure has an interesting chart.
The Bollinger Bands almost qualify as artwork

 

[Nords]

I dumpled 5k of gambling money into it! Might be me who pushed the price higher!

Thanks a lot, bud, I could tell when you got back from lunch... next time post here first!

If you looked at the last 30 minutes' volume there was a tremendous rush to either get in the door or to cover & get the heck out. Both were great for the price.

 

[brewer12345]

Q2 results are out. Not exactly a beautiful piece of artwork, but this was kind of a throwaway quarter anyway, what with all of the merer & integration noise. I also think that HLYW used far less conservative accounting than MOVI, so some of Q2's results reflect further tightening up now that MOVI is in charge. Having said that, it looks like they did eke out a touch over $8 million in free cash flow for the quarter (excluding the purchase price of HLYW).

Based on what is in the PR and what BBI said earlier this week, it looks very much to me like most of the merger integration in the back office is done. I suspect that Q3 will be soft, but its not a big quarter for the industry anyway, and resumably mgmt will use the time to complete integration/optimization. The entire industry appears to be salivating at the prospects of the movies that will be released to rental in Q4. I suspect that MOV will be well positioned to capitalize on it in Q4 and Q1.

 

[JPatrick]

Q2 results are out.  Not exactly a beautiful piece of artwork, but this was kind of a throwaway quarter anyway, what with all of the merer & integration noise.  I also think that HLYW used far less conservative accounting than MOVI, so some of Q2's results reflect further tightening up now that MOVI is in charge.  Having said that, it looks like they did eke out a touch over $8 million in free cash flow for the quarter (excluding the purchase price of HLYW).

Based on what is in the PR and what BBI said earlier this week, it looks very much to me like most of the merger integration in  the back office is done.  I suspect that Q3 will be soft, but its not a big quarter for the industry anyway, and resumably mgmt will use the time to complete integration/optimization.  The entire industry appears to be salivating at the prospects of the movies that will be released to rental in Q4.  I suspect that MOV will be well positioned to capitalize on it in Q4 and Q1.

MOVI is a textbook example of the perils of investing just before earnings in a market that expects perfection. 
For the traders there may be the fabeled "dead cat bounce" to play, but this is no place for serious money.
This stock is one of hundreds that fit the old saw:::
Got great future potential, but not worth a damn today.

 

[wildcat]

I would like to see DVD purchases.  Consumers have been buying DVDs on release and skipping rentals but if consumption slows (i.e. high gas prices and other) people may return to rentals.  Bodes well for small ticket entertainment.    

Brew I think it is the 3 or 4 inning on the MOVI story and time is on its side.  Despite the small drop in price margin of safety is still high.  

 

[brewer12345]

I would like to see DVD purchases.  Consumers have been buying DVDs on release and skipping rentals but if consumption slows (i.e. high gas prices and other) people may return to rentals.  Bodes well for small ticket entertainment.    

Brew I think it is the 3 or 4 inning on the MOVI story and time is on its side.  Despite the small drop in price margin of safety is still high.  

I'm inclined to agree that the margin of safety is ample here. I have a long investment horizon and the stomach for volatility, so I could care less what the stock does in the next 6 months unless it is absurdly low or absurdly high. The business appears to be weathering a couple of crappy quarters, but is otherwise sound and fully capable of generating mounds of cash. In the meantime, the shorts will have their fun, but ultimately they have to cover. I expect MOVI to be a home run in the next few years.

 

[Nords]

Not exactly a beautiful piece of artwork...

... to put it mildly. Those schmucks seem to think Reg FD means that everyone should be surprised at the same time.

I used to feel this way about Nortel & Sun. Well, time to buy more!

 

[preben]

Down 7% or $350 as we speak! The pain.....

 

[brewer12345]

You pays your money and you takes your chances, I guess. This sort of thing is why I always say: do your own due diligence.

 

[wildcat]

Just one day my friends 8)

 

[vinhmen]

Wow, ugly.  Earnings missed completely and stock is down 9%.  

This quote by the CEO makes me suspicious:

"The company said its same-store revenue in both rural and urban markets declined more than expected due to what it termed "the worst box-office slump in more than two decades,"

The Hollywood box-office slump happening now is at *theaters*.  One of the reasons for this movie-going slump is the explosion in home theater technology, i.e., wide-screen TVs, surround sound systems, etc.  People enjoy simulating the theater environment at home. And what do people watch at ome?  Yep, rentals!  Based on this, you'd think a Hollywood box-office slump would be good for the industry!  

And think about how you go about renting.  I might decide on a Friday night, "I want to watch a movie at home", and then me and DW go to the video store to check out what's available.  Isn't that what most people do?

Bottom line - B&M video rental is not necessarily a place I'd want to be for the long-term.  

 

[brewer12345]

I listened to the call.  I have always been impressed with management: no nonsense, down to earth, and never get their heads turned away from the business by some newfangled business school notion.  This still holds, IMO.

They said that they simply think this is due to a boxoffice/rental release slump and expect the wave of big rreleases in Q4 and the new DVD format and game platform releases to drive business next year.  In the meantime, they are hunkering down, tending to business, and that's it.  The CEO expressed clear perplexity at BBI's actions over the past year and reiterated that they see the online rental thing as 5% of the market at most, and have no interest in it at this time.  Interestingly, they will be testing some DVD rental vending machines that can hold 1000 titles.

Bottom line: Looks like a cheap asset run by smart people.  I bought last year in the teens with the intention of holding for years.  There will no doubt be ups and downs in the short term, but I think this company is a winner over time.