Founder of Equities Research. Stockdiagnostics Specialist

Founder of Equities Research. Stockdiagnostics Specialist
click image above to visit home page

Monday, October 5, 2015

RateWatch was Acquired by TheStreet in 2007 for $25 Million

 Rate Watch can explode through servicing the DISRUPTIVE online lending business! 

If you break down the current value of the TheStreet (TST) $1.65  (6.2% dividend), you will find the underlying business is valued at $23 million.

Current Market Capitalization: $57 million
Cash: $34 million

Total Underlying Business : $23 million
Stock is valued at 1/3rd Sales

The Deal :

  • 2012 acquired for $5.8 million (cash). $11.5 million in sales. paid 1/2 Sales

  • 2014 acquired for $21 million (cash). $9.5 million in sales. paid 2X sales
Rate Watch
  • 2007 "$25 million, consisting of approximately $16.9 million in cash (net of $3.9 million in debt repayment) and 636,081 shares of unregistered common stock of" from TheStreet press release 2007
  • founded 1996

This Weekend Business Insider Article: 

Online lending is 'disruptive and could be very large' - that has the Fed worried

I believe Rate Watch can explode through servicing the DISRUPTIVE online lending business! 

Henry Blodget: Axel Springer is smart about digital

"Digital Media is where the Cable Network was in the late 80s , early 90s. Since 1981 , CNN has become a global powerhouse. " --- Henry Blodget

Friday, October 2, 2015

TheStreet Is for the Individual Investor Who Invests Like an Investment Banker and Venture Capitalist

Smart Businessmen (woman) are smart Investors because they invest like businessmen (women).. You buy the businesses for the long term, you don't trade tickers.

 Individual Investors who have an Investment Banking Mentality and a Venture Capitalist Vision can own TheStreet (NASDAQ: TST) for less than a $60 million Market Cap. 

 Company sits with $31million in cash and generates $5 million a month in sales.
 TheStreet is a pioneer in the Online Financial Sector and is a leading digital media company that :

  • trades publicly
  •   6.2% yield 
  • with the stock selling for a near 52 week low under $1.65. 
  •  The franchise value alone along with the brand media content and distribution it will continue to grow market share. 
  •  Recently Henry Blodget's Business Insider sold for 6 times fwd sales @ $422 million.)
  •  THeStreet at 6 times $60 million sales would equate to 600% return on your investment. 
  • B. Riley has a Price Target of $4.00 per share
  •  If the street was valued at $100 million it would be a near $3 price. With high dividend the bottom may have formed here in the stock.
  • Where else will you get 6% on your money

Wednesday, September 30, 2015

Carl Icahn ...... danger ahead

Institutions' Buys and Sells in Titan Machinery

Today is the last day of the 3rd Quarter and we will learn in the coming months the changes Mutual Funds and Institutions made during the July 1,2015 to September 30 period.

Today we will look at the changes made in the 2nd Quarter from April 1 thru June 30,2015.

Tuesday, September 29, 2015

Strong Buy TheStreet (Business Insider Acquired For $442 Million, )

TheStreet $TST NASDAQ: $1.68 ) 

We don't know fundamentals of Business Insider but we know they were acquired for SIX TIMES FWD SALES. TheStreet @ $60 million revenue times 6 would be $360 (High Teens)  million market cap. Beginning of Digital Media

TheStreet has just over 34 million shares outstanding @ $1,68 per share values the market capitalization @ $60 million

If TheStreet was valued in line with Business Insider , $442 million divided by 34 million shares would be $13 a share , 7.7 Times Higher than its current stock price
note TheStreet pays a dividend

The Street has 31 million cash

No Long term debt

Subtracting the $31 million cash from $60 million mkt cap values THeStreet underlying business @ $29 million


Monday, September 28, 2015

Titan Machinery Closed Week @ $11.42, Where is it Headed Next?

My opinion for the stock is that it heads down below the $5 range. 

The underlying business is shrinking dramatically. IN FY2013 they earned $42 million in net income and FY2015 they reported a loss of $31.5 million.

For the 1st 6 most of FY2016 they have loss ($0.29) , over $ 6 million loss.
Their credit lines were reduced by over $100 million and the covenants of their $150 million Indenture with Wells Fargo has had 6 amendment, the last being made earlier this year "After the company" was non compliant with the terms of the note.

The company faces tighter restrictions on the $WFC note and may be in jeopardy of violating the net income covenant for FY2016 Q3 when they report in December.

Aside from the weak fundamentals crippling the stock , the management has some very suspicious dealings.
Management entered into a long term $100 million contract with an outside entity that Management has an equity interest in. 

A year ago the company filed a 10Q and inflated their assets and understated losses and never deemed it necessary to re file that 10Q.
(by over 50%)

In May of this year the company filed a DEF 14A disclosing that the Founder would continue as President and asked the shareholders for the president to vote their shares via a proxy. After the DEF 14A filing, 4 days later, the founder resigned as President. No DEF 14A was re filed.

Of the 8 directors of the company in May 2015 , 3 have now resigned, including the CEO of CONN who resigned a week ago , effective immediately.

There has been suspicious trading in the stock, specifically around the resignation of the company's original auditor resigned over the 4th of July weekend in 2013.

The company has also had some personal selling (insider selling) after some hyped guidance that pumped up the stock price significantly up at the $29 level. (including an appearance on Jim Cramer's Mad Money.)

In June 2014, after the company reported FY2015Q2 , gave guidance that for the FY2015 ending in less than 6 months, that they would earn close to $1.00 a share in net income for the year ending Jan. 31,2015. Well less than 6 months later they reported a LOSS ($1.51) eps. A huge miss, 

The company is not a growth company any longer and is not profitable any more and should not be trading with a fwd PE 160.