by Travis Johnson, Stock Gumshoe | February 8, 2019 4:54 pm
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Source URL: https://www.stockgumshoe.com/2019/02/friday-file-annual-review-completed-plus-a-new-special-situation/
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Wow !! Travis, over these years I’ve been totally impressed on the amount of work and research you do. Very much appreciated by me and I know other irregulars are grateful too for your thoughtful and thorough analysis.
I love Fridays and the Friday File! Thank you, Travis, for offering an invaluable service at a bargain price.
Thank you for the handy list I can print out and put under my pillow.
You have a very well-chosen and interesting portfolio, Travis. Congratulations! And thank you for always sharing.
I ditto Blackie, great research and many good new ideas to pursue.
Thank you, Gumshoe, you da man.
William Robinson
Irregular.
Hello, Travis. Your Friday File is, as continues to be, thought-provoking. If I can be allowed to ask two questions: Regarding Zayo, you wrote that private equity takeover only makes sense if it (the private equity entity) puts more debt on the balance sheet. Why is this so? And then (pending your answer) why doesn’t the takeover target itself take on more debt instead of the private equity entity? I hope I asked the questions clearly.
Private equity generally intends to make some substantial changes at a target company, providing reorganization expertise, but they have historically gotten a lot of their returns by leveraging their relatively minor improvements with debt.
That’s not always the case, but leveraged buyouts (LBO) are what most people think of when private equity comes calling — its hard for them to make the huge returns that justify their big fees if they don’t lever up.
A large private equity firm has more access to cheaper debt, usually, then a smallish and highly levered company, so there’s a limit to how much more debt Zayo could add on its own without substantially increasing their cost of borrowing or putting equity holders at more perceived risk.
Travis, thanks for your solid analysis In your gold mining discussion have you considered the new find in Russia?
Just joined the premium bc I enjoy reading your content. Researching your portfolio now for some pick ups. Already in Arista pretty heavily and SAND, which the later is a pick I got from your regular member content before upgrading. Will see…
Welcome aboard, Braulio — hope you find it worthwhile, thanks for helping make our work possible!
Thanks Travis fantastic review as always. Once the initial realisation dawns that most of the teasers are not going to make you a overnight millionaire its the Friday file I look forward to most.
Quick question, you mention the Dodge and Cox fund that you are invested in, do you give your funds similar periodic inspection depending on where you feel the market is heading?( you mentioned previously that you have 60% of your capital invested in them and 40% in shares). I have some capital invested in a couple of passive and active funds but find picking a decent one is as difficult as finding that millionaire stock particularly with some of the fees they charge. I’d be interested in what you look for when selecting on, is there certain fund management firms that you favour?
Thanks Travis, very informative. I had shares of SBUX called away which made me sick. Now I will put in a put sell order at or below $65. Thank you for your work.
As a new member, i’m really impressed with your analysis and write-ups. Did you ever consider offering any paid training seminar to help newbies like me to better understand some of this stock analysis?
No, but thanks for the kind words and the suggestion!
Interest in buyout by private equity just as Gumshoe spoke of. I bought some yesterday a bit too high and added today. Small position. Will see
https://finance.yahoo.com/m/1837d3bb-5485-392b-ac0f-9586ca9dc191/private-equity-firms-revise.html
What do you guys think about TEUM? Small cloud company that’s growing.
Anyone own this? I’m thinking about taking a small position.
Has the Friday File for 2/15 been posted, but I’m just not finding it?
Thanks for the update on ZAYO. I picked up a small position last May ’18 at almost $34/sh; hasn’t been that successful yet, but always good to get additional perspective on my holdings from others, especially you!
Just noticed that IIPR is above $77/share today. Any thoughts about taking some profits at these levels? You had noted the possibility of doing so if it were to reach $65-70. I got in at $41/share just 4 months ago; that’s a quick rise; was curious about your take on its sustainability.
I’ve been looking at cloud services, and guess that China is starting to play catch up – and Amazon, Microsoft et al are effectively excluded from the Chinese market. So I think Alibaba could be a good way to play the Chinese cloud.