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Archive for the ‘Short Ideas’ Category

Caterpillar (NYSE:CAT) : An Economic Bellwether

November 1, 2011 Leave a comment


Introduction

In the 1976 movie classic All the President’s Men, secret informant Deep Throat guides Washington Post reporter Bob Woodward by telling him to "follow the money."  After the past decade(s) of reckless credit expansion, Deep Throat’s message should be resonating in the minds of security analysts.

Future sales, earnings, and overall business valuations largely rely on the efficacy of continuous credit growth.  Credit availability and credit growth directly or indirectly affect all businesses.  However, the effects are not spread uniformly.  One company that serves as a bellwether for global economic activity and as a barometer for global credit growth is Caterpillar Inc. 

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Categories: Short Ideas

RightNow Technologies : Inside The Stock Repurchase Program

October 19, 2011 Leave a comment

 

Introduction

A more detailed description regarding the fundamentals of RightNow’s (RNOW) business are detailed here.

 

The following discussion pertains to the radical change in RightNow’s capital structure, the stock repurchase program, and the worrisome relationship of those two elements with the company’s CEO, Greg Gianforte. Additionally, this article offers an important perspective regarding the management team’s intentions and the integrity of the Board of Directors.

 

Every RightNow Technologies shareholder needs to read and understand the following discussion.

 

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Categories: Short Ideas

The Advisory Board Company (NASDAQ:ABCO) : Expanding Sales and Shrinking Cash Flow

October 12, 2011 Leave a comment

 

Introduction

Ultimately, the sole reason for making an investment is the belief that cash derived from the investment will exceed cash put into it.  Cash production is what matters.  Ben Graham opined on this subject when he stated the following:

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Categories: Short Ideas

American Eagle & Ralph Lauren: Buy Cheap, Sell Dear

September 14, 2011 1 comment

 

Introduction

Both American Eagle (NYSE:AEO) and Ralph Lauren (NYSE:RL) are in the apparel and accessories businesses. Descriptions of the companies are as follows:

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Categories: Long Ideas, Short Ideas

RightNow Technologies (NASDAQ:RNOW) : Sell & Sell Short

September 1, 2011 Leave a comment

 

Introduction

A business is worth, roughly, the present value of its future earnings plus the present value of its assets. Since business valuation is never a science, the approximation is just that – an approximation.

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Categories: Short Ideas