Friday File: Quarterly Miscellany, including GAN, PSTH, NVDA, SE, KEYS and BOMN

by Travis Johnson, Stock Gumshoe | August 20, 2021 7:54 am

Earnings Updates for the Real Money Portfolio... plus a first look at coming-public Hagerty

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Source URL: https://www.stockgumshoe.com/2021/08/friday-file-quarterly-miscellany-including-gan-psth-nvda-se-keys-and-bomn/


29 responses to “Friday File: Quarterly Miscellany, including GAN, PSTH, NVDA, SE, KEYS and BOMN”

  1. hollis1859 says:

    Thanks Travis great info!!

  2. jmama1 says:

    Do you ever decide to rest your brain?

  3. Travis Johnson, Stock Gumshoe says:

    FYI, another potential IIPR competitor starts trading today — NewLake Capital Partners (NLCP), trading OTC.

    I skimmed the offering, this is a new company built from two smaller cannabis real estate portfolios. They have some good tenants as a base, and intend to pay a dividend right away, but I haven’t done the work to figure out what kind of valuation they’re carrying — I suspect that at the IPO price ($26) it’s cheaper than IIPR on a FFO/cash flow basis, and more expensive than PW. They’re aiming for essentially the same market as IIPR, larger deals ($20+ million) with established multi state operators, but I don’t know how they’re pricing the deals — presumably they’re getting cap rates something close to the 12-16% IIPR typically gets, but we’ll see. They will also need to raise a bunch of capital to scale up, they have less than $100m in cash and some of it is already committed to existing deals.

    Worth watching because I’m pretty sure it will be cheaper than IIPR, and they have established real estate folks running the show and a decent foundation of a portfolio already, but I haven’t spent enough time on the filings yet to have a real opinion.

  4. robsacco says:

    Thanks Travis! What do you think of SAND dropping below $7?

  5. Shaun says:

    Thanks Travis great as always. I own Gan but keep looking at fltr . I know you’ve mentioned it a few times so what do you think of it as a stand alone investment. Paddy power is extremely popular here in the uk and if they can spin out fan duel on the us markets I imagine it would do really well.
    Also as someone who usually just buys and holds what are your thoughts on selling options or setting up credit spreads,? do you think as a starter this is this a safer way to play options?

  6. beachwind says:

    I saw a graph! I think every Friday File should include, at a minimum, one interesting graph.

  7. ironmac says:

    I just wish I had backed up the truck a few months ago when I got into SE. When the Singapore gov’t awarded them a digital banking license you know that they are a serious player. Their Shopee ads are crazy annoying though.

  8. wayne holmes says:

    Wow Travis, what wonderful detailed reporting. You have to be the best investor’s investor. Thanks for all the good work you do. It’s amazing.

  9. wayne holmes says:

    Travis, any thoughts on Berkshire-B’s up and down now and not going, seemingly, anywhere?

  10. Travis Johnson, Stock Gumshoe says:

    Trade Note: You Had Me at 5%

    Camping World Holdings (CWH) is a giant in its industry, the largest chain of RV centers in the US, and one that’s still on an acquisition spree to build out a broader presence, but it’s also still, with a market cap of about $3.5 billion, a pretty small stock in the context of the broader world. I’ve had my eye on this one for a while, dabbling in call options at least once (unsuccessfully) as I try to figure out whether the last year’s boom in RV sales is even close to being sustainable… and today I came down on the “yes” answer.

    That doesn’t mean I’m certain, and part of the challenge is that the stock has been one of the best performers in the world over the past year and a half, and it’s emotionally hard to buy into a stock that far from the “bottom,” admitting that you missed something earlier (which is silly, of course, we all miss hundreds of great stock runs a year — but still, it weighs on the psyche). What pushed me over the edge was the combination of insider buying from the CEO and a massive increase in the dividend, announced yesterday, which, combined with the improvement in the balance sheet over the past year and some share buybacks, even as they’ve continued to invest in their national brand through more acquisitions and new retail RV dealerships, gives me some increased confidence in their future growth prospects (even if this year represents peak earnings for a while). Part of this investment requires believing in the changes they’ve made at the company to expand and improve their margins over the past few years, and believing that the RV industry will continue to be robust post-pandemic, that the general push for experiential vacations and outdoor adventure is likely to continue to boost the industry, and therefore boost the only real national brand when it comes to retail, service and support for RV owners.

    Recreational vehicles have been a real boom and bust industry over the past few decades, and there are both demographic trends (retirees buy a lot of RVs) and macroeconomic trends (low interest rates and easy borrowing terms drive sales, with stimulus payments helping a lot of people make down payments), so it’s entirely possible that there will be meaningful legs down in this business as well — it’s been around for a long time, and has had many bad years, but the long-term trend has certainly been for growth in the business… and my current thesis is that the boom from the pandemic obscured the fact that they were improving the underlying business before that.

    The huge dividend increase (doubling to $2/year now, so a 5% yield at $40) is a really big management bet that their improvements and new strategies are going to continue to bear fruit. It’s likely that they won’t top this year’s earnings (forecasted to be over $6/share) in the near future, but the stock price doesn’t represent a bet that earnings will immediately grow from this level (it’s trading at less than 7X current-year earnings, about 7X analyst estimates for next year’s earnings, so the stock price right now represents an assumption that the business will decline). I’m willing to follow that bet with a small investment here, and we’ll see how it goes — this is a small enough stake that I’m willing to hold off on a stop loss, since the company would likely be more appealing if it fell by 30-40%, and I’d be likely to buy more. Earnings have been very volatile over the past decade, but the average is about $2.10 in earnings per share since 2013, so even if we think the business has not improved over that time (I think it has, partly with some meaningful nationwide expansion), we’re paying about 20X average earnings and getting a 5% yield. It’s possible things could get ugly at some point, rising rates would hurt and a recession would hurt and maybe the return of the cruise and resort industries hurts RVs, too, but it’s also possible that the good times will continue. Certainly the demand for RVs is huge now, they can’t get enough inventory to satisfy customer demand, and the community of members for their Good Sam Club of RV owners is growing nicely.

    I’ve gone in with a small position of about 0.25% at about $39, and I’ll let you know how it goes — the next meaningful news should come out of their investor day meeting on September 14, and they’ve also announced that on the following day, Sept. 15, they will hold some sort of product introduction or showcase related to electrification in the RV world. I wouldn’t bet on that becoming meaningful anytime soon, and they’ve already had two EV partnerships that seem unlikely to go anywhere (Lordstown and Nikola), but you never know what will capture the attention of investors. Their most natural partner among EV makers in the “outdoorsy” world would be Rivian, which is trying to sell itself as the Tesla of the trail, and Rivian could also use a service center network for their consumer EVs, but that’s probably just wishful thinking… all of the big RV makers are also exploring electric vehicles, and, probably more important in the near term, battery-powered alternatives to gas and diesel generators for RVs, so there are a lot of possible things they could focus on next month.

  11. bunion132 says:

    There’s a nice gap in price between 8/23 & 8/24 in the range of $37.42 to 38.62. It’s an ideal entry point if one is not in a hurry and if price comes down a bit.

  12. terrytwoutes says:

    Just updating this discussion to add that Hagerty HGTY went public today on NASDAQ exchange.

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