Friday File: Par-ty Time, or a World in Decline?
by Travis Johnson, Stock Gumshoe | April 9, 2021 3:28 pm
Big news from PAR, plus some big-picture blatheration and a new crypto buy (and a sell), plus a new watchlist stock
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Source URL: https://www.stockgumshoe.com/2021/04/friday-file-par-ty-time-or-a-world-in-decline/
Great rant, Travis! Thanks again for your perspective.
Thank you so much, Travis! What do you think is a reasonable buy in into AcuityAds (AT.TO, ACUIF)?
Those are both serious dogs. Dogs with fleas. They’ll be penny stocks soon. Beware…
Don’t have one. I’m looking into the base revenues and the Illumin revenue growth and trying to make a judgement. I’m not very likely to make a call before the quarter is reported (probably first week of May) unless I am struck by some kind of lightning bolt of insight.
Great write up, Travis. Thank you. I had a question about 20x price/sales for PAR. when I looked up online, it was something like 7 (https://www.macrotrends.net/stocks/charts/PAR/par-technology/price-sales). How did you get the 20x factor?
I’m just using the cloud business, Brink and now punchh… the majority of their revenue is still in the hardware business, selling point of sale terminals and drive-through headset systems, which is a fine business but not growing fast and with a pretty low profit margin. You definitely don’t want to pay 20x sales for the hardware part of the business.
How did you find that number or calculate it? Is there something similar for AcuityAds? The Price to Sales ratio for it is 6.77
They disclose the number in their filings and presentations and Cleary consider it a KPI (key performance indicator).
AvuityAds does not disclose anything I’m detail about Illumin revenue, since it’s only a few months old. I expect they will in future filings.
Enjoyed your weekly update. From the more general beginning to the very focused update on PAR, lots of great stuff that resonates with my thinking and experiences.
As I was reading your HBR article I kept thinking it sounded so familiar to something I had read earlier in my career; the 1992 date was not that big of a surprise. I remember when I graduated (Go Vols!) in 1983 the idea of a long time career at a single company was becoming a thing of the past and none of us graduating that year should expect to enjoy that kind of stability.
I bounced around For my first 2 years after college before landing in the pharmaceutical industry. I ended up spending close to 30 years changing companies just once, at the 18 year mark, growing up from an entry-level analyst to a global Executive Director before an accident sent me into an early retirement/disability. Even survived, and thrived, during the Ciba/Sandoz merger equals Novartis… And again at Schering as we acquired the Bayer US business, Organon and then were purchased by Merck.
When you talk about some of the challenges that PAR faces with its acquisition I think back on the hours and days spent planning and executing large corporate mergers. It’s not an easy thing to do and things can fall apart quickly; conversely they are a great way to take a hard look at the way things operate, break what needs to be broken and emerge with a much stronger business. It’s very much a function of the guy/gal at the top and how they approach the integration and reward the risk takers.
I’ve been following PAR ever since you started talking about them.I’ve also turned a small initial investment, $11.49@ on 3/16/20 and many small purchases over the last year, the last on 3/29/21 $62.99@, into something that popped very nicely this week and now represents a bit larger part of my portfolio. Thanks for that! I am also looking forward to see how they manage the merger!
Enjoy your weekend and I look forward to next weeks update as well as to your insights into some of the nonsense that fills my inbox trying to scare me into giving money to people that think they know what’s coming next! As if……
Interesting read — never gets old hearing how hard it is to beat the market. I guess when you couple that an average holding period of 6 mo. it makes sense. Still, seems to me that some are successful. I don’t know what your annualized gain is over your career but as far as the Real Money Port is concerned, I’d say you do quite well. Not sure why actively managed funds struggle so much. Many of them have smart people talent. Sometimes it makes my head hurt thinking about it. I mean, take any profession in the world (whether that be football, filmmaking, or farming) and the professionals do it the best. These “lowly” indexes somehow outthink even the pros. — perhaps by simply not thinking at all I suppose. Regardless, whenever I hear things like “75% of actively managed funds don’t beat the market” I say, well, I’ll just choose the ones that do. I’m not throwing darts at a board — finding such funds is achievable if you pay attention to their processes and key people.
As for my individual stocks, I have no delusions about my abilities. That’s why part of my strategy is hitching my wagon (to some degree — never fully, never blindly) to smart people with long-term proven ability. I can’t tell you how many hours I spend filtering through all the chaff on the internet of self-proclaimed expert investors to find the chosen few who really do know what they’re doing. I think the fact that Warren Buffet even exists shows that there is some sort of science to this. Just need to find those voices, filter out the noise, and show a little discipline (for crying out loud!) in what I buy (quality), when I buy (valuation), and how much I buy (position sizing).
Managing your emotional response to market fluctuations is a big part of it — and probably a major factor in Buffett’s success over the long term. Everyone has good and bad periods of performance, but investors tend to underperform because they chase good performance. That has worked spectacularly over the past few years, but it’s the bad years that really put the teeth in those “underperform” statistics.
I could be wrong, but I don’t think we’ve even started climbing the wall of worry yet. Plus, there’s all the stimulus money . . . so the bull market has a long way to go.
That’s how we should each start our macro thoughts, I expect, “I could be wrong”. I tend to agree with you, but I’m trying to be ready for a variety of possible outcomes.
Thanks for the update Travis. I joined you in a small way with Galaxy Digital. As you say could be a wild ride with Mike Novogratz!
I’m very guilty of being in the “America is done for” crowd after everything that has transpired in 2020, but thankfully I’m also in the “stocks only go up” crowd. Thank you for the ol bait and switch with that Harvard article and your wisdom.
I should probably specify, stocks only go up = long-term bullish and optimistic
Dear Travis,
So you are now a BRPHF share holder, welcome to the club. I become a share holder
about two years ago. Now I look back, most of the stocks I own , one way or other, have to do with Bitcoin, or other crytos but I am first. TSLA, SQ, GROW.
I also have VYGVF, ETHE, GBTC (still adding, it will change to ETF, what the hack that means, I do not care, all I know it is a good buy now).
Lately I added more BBKCF to my portfolio. I am either a hero or zero.
On April 14th, 2021, Coinbase will IPO, for those Bitcoin haters, Watch out.
One more thing, MSTR has 91,000 Bitcoins , what a guy, Mr. Saylor.
Long.
Hi Travis, as a novice I can’t thank you enough for all this info..However I’m a bit confused, what is the difference between GLXY:TO n BRPHF?
The company is listed in Toronto, so the .TO is their home listing. The other ticker is their OTC ticker in the US, used by many US traders who don’t have direct access to trade in Canada. The price should usually be close to identical, after currency conversion.
Thank you!
of course! Now that i’m reading the fine print….eyes are open…took awile
awhile
Travis. Epic rant! Best I have heard in a very long time. Thank you
Galaxy Digital just reported its assets under management (AUM) for March, and the only surprise, if you’re looking for one, is that they were pretty flat in bitcoin terms and therefore Galaxy probably actually had some net losses in assets — Bitcoin prices were up about 25% on the month, Ethereum was up 35%, and AUM was up only 21%.
No need to read much into a month, Galaxy has been growing very fast and there will be ups and downs, but that means we’re overpaying for Galaxy a little bit relative to a month ago, since the share price is up about 50% in that period of time. Probably not worth overthinking, this is a speculation that Bitcoin gets more rapid adoption in the corporate sphere as an asset, and that Galaxy’s early leadership in that niche will hold, and we won’t really know if that’s true for a while. We won’t get the quarterly update for about six weeks, and the major catalyst I have in mind is still a potential NY listing later in the year, so I’m resolved to sit back and see how it goes for a spell here.
Still a nice pop today which prevented me from getting my order in at $25…Ugghh. Probably too rich at these prices, or??
Same here!
I’m going to wait.
Like I said in the comment section of ” 6th Cryto 10 Bagger….” On 4-5-21, for NFT play, no company does better job than PLBY! Why? It has the about 70 years archive of goods
to show off.
Long this one from SPAC to PLBY.
Just read from the news, Hedgeye states that PLBY has a potential 900% upside! I am bullish but not that bullish! Its reason? ” Ideas like this come along once every few years.” Thank GOD, I did this right from the very beginning.
Travis, you mentioned the ballpark 3% figure for your portfolio in crypto-related investments. I am now “accidentally” up to about 20%. I invested about 2% directly into cryptos (btc, eth, altcoins) and another 2% into crypto-related shares (mstr, mara, hive, arb.l etc). I’m fortunate these have done very well in the last 12 months, so I’ve ended up with about 20% of my portfolio being crypto-related. I do feel optimistic about these investments (inclined to hodl). At the same time, I am aware that my asset allocations and my risks have changed. I haven’t sold anything crypto-related yet partly because I am not sure what I’d invest in instead!
How would you think about this?
I’d make sure to think of that 20% as a block, and work out a scenario for what your plan will be if Bitcoin lost 75% of its value in a market rout or panic. How you’d feel about that, and what the real risk would be, depends a lot on your situation in life and the rest of your portfolio… and, of course, on how you handle an emotional response to volatility and loss.
And when you think about the risk/reward and the possibility of selling some to book profits or rebalance, don’t forget about taxes. I’m no tax expert, but cryptos have different tax obligations than stocks so it might be worthwhile to sell leveraged plays with lower capital gains taxes rather than actual cryptos at higher taxes, depending on your situation.
Hey Travis, Did you get a chance to review the recent short report on INTZ? Any views?
Hello Travis, Will there be any difference buying BRPHF from OTC or buying form NYSE or later after moving to NYSE? Will there be any changes in price and/or ticker will remain the same?
The company and a share of the company are the same, whether traded in NY or in Toronto. We don’t know for sure if Galaxy will get a NY listing, only that they say they plan to try to do that later this year.
Typically, when a company that has OTC traded shares and they move up to a “real” listing, those OTC shares just change ticker symbols to become the new listed shares. That’s how it has worked with past Canadian stocks that have added a NY listing, in my experience — companies like Sprott or Sandstorm Gold come to mind immediately but I’m sure I’ve owned others. It should not matter whether you buy before or after a new listing in NY, you would own the same share of the same company, and the price in NY or Toronto should almost always be close to identical (accounting for exchange rates). The ticker will not remain the same, I assume they would try to get GLXY in the US, too, but we won’t know for a while what the ticker ends up being on the Nasdaq or NYSE.
Thank you very much