Month: August 2012

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Imax: short thesis

The main reasons to short Imax (in my opinion):

  1. Overvalued.  The P/E ratio is roughly 50 (higher if you ignore profits from tax-related reasons).
  2. They are close to saturating their markets and therefore Imax’s profits will start dropping in the future.
  3. Historically, the company has not made money and still has negative retained earnings.  The economics of its niche is not good.
  4. Slightly aggressive accounting that inflates profits.

I don’t think that I am the only person with this idea as Google Finance shows that Imax has 65.89M shares outstanding and the short interest has shot up to 12.2M shares short (see NASDAQ site).  That’s roughly 18.5% of outstanding shares short.  The borrow is very cheap. Continue reading →

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Iron ore miners (mainly in the Labrador trough)

So right now I am going through the miners in the Labrador trough area:

  • Alderon (Altius Minerals owns a large stake in Alderon)
  • MFC Industrial (MIL) owns a royalty on Cliffs’ Wabush mine
  • Cliffs (CLF)
  • Champion Minerals (CHM.TO)
  • Labrador Iron Ore Royalty Corporation (LIF.UN)
  • New Millennium Iron Corp (NML)
  • Adriana Resources
  • Zone Resources
  • Oceanic Iron Ore Corp.

(I am obsessed with Altius Minerals ok?  See somebody else’s writeup on VIC.) Continue reading →