Saber Capital 2016 Investor Letter

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I recently wrote my annual investor letter to my clients at Saber Capital Management. I thought I’d share that letter with readers, since I posted it to my firm’s website. If you’re interested, you can view the letter here: Saber Capital Investor Letter – 2016 Review I am also in the process of updating my firm’s website. This page will occasionally be updated with investor letters and other write-ups, notes, and commentary: Saber Capital Letters and Commentary If you’re interested in […]

Buffett’s Three Categories of Returns on Capital

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“A truly great business must have an enduring “moat” that protects excellent returns on invested capital.” –Warren Buffett, 2007 Shareholder Letter A reader recently sent me the following clips from the 2007 Shareholder Letter that pertains to a topic that we’ve discussed quite a bit here: the concept of return on capital, why it’s important, and how to think about it. For those interested, you could review all the previous posts on the concept of ROIC here. Basically, I just […]

Barnes and Noble–A Bargain Hiding in Plain Sight?

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Joel Greenblatt, in one of my favorite books on investing, said the following: “The reason why major corporate restructurings may be a fruitful place to seek out investment opportunities is that oftentimes the division being sold or liquidated has actually served to hide the value inherent in the company’s other businesses.” It was with this basic scenario in mind that I began studying Barnes and Noble a few months ago. The Case For BKS I think Barnes and Noble is […]

Some Notes on Strayer’s Cost Cutting Plans

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Strayer had their quarterly earnings announcement yesterday morning and there were a couple interesting announcements. Someone asked me for a comment on the report. I listened to the call this morning and here are some notes along with my basic comment in reply… Here are some notes: Enrollments for fall term 2013 decreased 17% to 43,192 (last year it was 51,727) Continuing student enrollment decreased 14% New student enrollment decreased 23% Revenues continue to fall—down 11% in Q3 2013 Earnings […]

Strayer Education (STRA): A Bright Spot in a Dark Industry

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Last week I bought Strayer Education (STRA). I think the stock is unduly cheap. The company has a market cap around $475 million, but has generated $71 million in free cash flow in the last 12 months (a 15% FCF yield). In the last six months alone, the company has generated $46.6 million of free cash flow. It’s a good business with high returns on capital, low fixed costs, high free cash flow yield, and even some growth potential that’s […]

I Like Cheap Stocks-Gold Miners Thoughts Part 3

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I didn’t think I’d be writing three posts about mining stocks (I never thought I’d write one post about them actually), but I’ve spent some time looking at them, and have invested small positions in a bunch of them, so here we are… They are cheap stocks, and I love cheap stocks. In part 1 I talked about how hated the mining stocks are (always a good thing), and in part 2 I described some general thoughts on investing in […]

Investing in Undervalued Themes-Gold Miners Thesis Part 1

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A few weeks back I wrote a post discussing some general areas where you might be able to find some undervalued ideas. I always approach investing from a bottom up perspective, meaning I’m looking for businesses that have undervalued assets or high free cash flow relative to the stock price. I’m trying to find ideas where if I were buying the whole company, I would be satisfied that the assets and/or free cash flow (i.e. owner earnings) would provide me […]

EBIX: Better Timely Than Good

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“It’s better to be timely than good.”  –Shane Battier, in a post game interview last Thursday after hitting six 3-pointers to help the Heat win game 7 over the Spurs to take their second straight NBA title. Battier used that tongue-in-cheek quote to respond to a question from Doris Burke on how he was able to turn around his performance. He was benched in numerous games during the post season in large part because of his poor performance. That changed […]

DELL and EBIX, Heads, I Win Now; Tails, I Win Later

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Yesterday I wrote a piece where I listed the three categories that my investments typically fall into: Franchises, Cheap and Good Stocks, and Cheap Asset Stocks. I also described a 4th category called Special Situations that I occasionally participate in when I find an interesting idea. The vast majority of my investments fall into the first three categories, but recently, I’ve looked at two interesting special situations that have a few similarities. Dell and Ebix are two stocks that I’ve […]

Notes on Thrifts and 4 Stocks to Watch

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Last week I went through the Value Line section on thrifts and wrote down some notes and thoughts I have on the industry. Thrifts and small community banks have had a rough few years, but many have survived and repositioned themselves to prosper going forward. Many of them have cleaned up their balance sheets. Many of the bad loans that were written in 2005-2007 were 5-7 year balloons. Time will help heal these banks. More importantly, the residential real estate […]