Liberty SiriusXM Group (LSXMA/B/K) is trading at roughly a 27% discount to its NAV. The latest investor presentation discusses the discount:
As LSXMA is actively taking advantage of the discount by buying back shares, the discount should resolve in due time. In the past, LMCA traded at a discount to the DTV (DirectTV) shares that it owned and that trade worked out well.
My Google Sheets calculations are here (it is updated with LSXMA/B/K’s latest share prices). Use File –> Make a copy to edit it. I own LSXMA shares. This is a bet on the NAV discount narrowing as well as a bet on Sirius XM (SIRI) itself.
While I don’t think that Dollarama is extremely compelling at the current P/E of 26.5, I do own the stock because I am trying to diversify. The company’s earnings growth is impressive and I like the new CEO, even though his father passed on the family business in 2016. And while the related party transactions continue under Neil Rossy, they haven’t meaningfully impacted shareholder returns in the past two decades.
Ocwen has gotten killed in the past few days, falling from $6.15 to today’s close of $2.27 (-63%). I actually have no idea why it fell so much. Things don’t seem as ugly as last year when it had issues with the NY DFS, CA DBO, and was in danger of losing MSRs due to its servicer ratings.
However, while Ocwen may potentially be quite cheap relative to liquidation value, it has not been very well managed lately.
- The commercial auto lending business is likely a mistake.
- They have lost their way and are wasting money on dumb things like $25M for strategic advisors.
- In my opinion, management is trying to hide #2 from investors. This is why their 10-K has unnecessary re-classifications of expenses.
Kinder Morgan does have some problems:
- Under its new CEO, Kinder Morgan has been stretching its numbers slightly.
- The big drop in oil prices will hurt the CO2 business.
- The big drop in commodity prices will lower infrastructure demand in the short term.
However, I think that the 60%+ drop in the share price YTD is a little overdone. Kinder Morgan’s problems don’t seem that bad compared to other companies.
Live Nation has various business lines associated with live music and live events. They are pursuing a strategy of vertical integration, trying to find synergies between the various parts of their business. On the concerts business side, the vertical integration strategy has been tried multiple times with little success. Will this time be any different? John Malone seems to think so. Liberty Media has been buying more Live Nation shares.
Let’s start with an overview of the ticketing industry.
(KXM is an illiquid Canadian stock with a market cap of $26M.)
Kobex’s liquidation value is in the ballpark of 70 cents/share and currently trades at 55 cents/share.
Kingsway Financial Services is going activist on Kobex Capital. This makes me like the stock a little more as the catalyst of activism should raise the internal rate of return on a position in the stock. However, I’m a little wary of activist investing mainly because management teams often like to fight activists with shareholder money. The legal fees and any severance payments will likely reduce the value that’s left for shareholders.
I previously described AAMC as a “royalty on yield chasing“. AAMC’s economics can potentially be extremely attractive because asset managers can generate extremely high returns on capital. Currently, the stock is trading at very depressed levels. Two explanations for the share price:
- Luxor capital and other major shareholders may be liquidating. Luxor suffered a lot of losses on the Bill Erbey family of stocks.
- AAMC generated close to no fees in the past quarter. Either you think that management screwed up or that there is a temporary hiccup in revenue recognition. Rental revenue, selling the home/mortgage, and marking the asset to BPO value all generate GAAP profits. There is a time period after a BPO (broker price opinion) and before a home is rented out (or sold) where the home will not generate any GAAP profits, which can result in less fees for AAMC.