Margin vs Markup Top 6 Differences (with Infographics)

$PSTG: PURE STORAGE for them, PURE TENDIES for you

$PSTG: PURE STORAGE for them, PURE TENDIES for you
This is actually my first DD I've ever posted so fuck you and forgive me if this doesn't work out for you.I've been looking at $PSTG for a while now and if my buying power didn't get so fucked from my decision to buy 8/7 UBER puts, I would have been already all over this play.
What had got me looking into Pure Storage was an unusual options activity alert. I've looked into this company before but didn't entirely understand what they do. Now after looking at them again, I'm still not exactly sure wtf they do....BUT I've gotten a better clue. Basically what I got from my research is that these guys fuck with "all-FLASH data storage solutions (enabling cloud solutions and other low-latency applications where tape/disk storage does not meet the needs)."......and ultimately what this all means to me is that these are the motherfuckers making those stupid fast laser money printers with the rocket ships attached. And that's something I'm interested in.
Now, here is the DailyDick you all degenerates have all been fiending for:
Fundamentally: PureStorage remains one of the few hardware companies in tech that is consistently growing double motherfucking digits, yet remains constantly cucked and neglected by investors (trading at 1.9x EV/Sales).
https://preview.redd.it/ek7ugjsewnf51.png?width=1118&format=png&auto=webp&s=f9c7e72c95e450a105e44223937422d896eeeb21
The 36 Months beta value for PSTG stock is at 1.62. 74% Buy Rating on RH. PSTG has a short float of 7.28% and public float of 243.36M with average trading volume of 3.16M shares. This was trading at around $18 on Wednesday 8/5 when I started writing this and as of right now, it's about $17.33 💸
The company has a market capitalization of ~$4.6 billion. In the last quarter, PSTG reported a ballin'-ass profit of $256.82 million. Pure Storage also saw revenues increase to $367.12 million. IMO, they should rename themselves PURE PROFIT. As of 04-2020, they got the cash monies flowing at $11.32 million . The company’s EBITDA came in at -$62.81 million which compares very fucking well among its dinosaur ass peers like HPE, Dell, IBM and NetApp. Pure Storage keeps taking market share from them old farts while growing the chad-like revenue #s of 33% in F2019, 21% in F2020, and 12% in F1Q21.
Chart of their financial growth since IPO in 2015:
https://preview.redd.it/gwlmy82v4nf51.png?width=640&format=png&auto=webp&s=b6508cd5f641da4086b70d8b8007da034e982fd7
At the end of last quarter, Pure Storage had cash, cash equivalents and marketable securities of $1.274B, compared with $1.299B as of Feb 2, 2020. The total Debt to Equity ratio for PSTG is recording at 0.64 and as of 8/6, Long term Debt to Equity ratio is at 0.64.Earning highlights from last quarter:
  • Revenue $367.1 million, up 12% year-over-year
  • Subscription Services revenue $120.2 million, up 37% year-over-year
  • GAAP gross margin 70.0%; non-GAAP gross margin 71.9%
  • GAAP operating loss $(84.9) million; non-GAAP operating loss $(5.4) million
  • Operating cash flow was $35.1 million, up $28.5 million year-over-year
  • Free cash flow was $11.3 million, up $29.0 million year-over-year
  • Total cash and investments of $1.3 billion
I bolded the Subscription Services Revenue bullet because to me that's a big deal. Pure Storage keeps them coming back with products such as Pure-as-a-service and Cloud Block Store and everybody knows that the recurring revenue model is best model. Big ass enterprises buy storage from vendors such as Pure Storage in the cloud to prevent vendor lock-in by the cloud providers. $$$ >!💰<
What are Pure Storage's other revenue drivers? Well these motherfuckers also have the products to address the growth of Cloud storage as well as the products to drive the growth of on-prem storage. For on-prem data center, Pure sells Flash Array to address block storage workloads (for databases and other mission-critical workloads) and FlashBlade for unstructured or file data workloads. On-prem storage revenue is mainly driven by legacy storage array replacement cycle.
https://preview.redd.it/01su6chrwnf51.png?width=1129&format=png&auto=webp&s=16e6a705f9392291bc0c3932c815802d9101365e
So far, it seems like Pure Storage's obviously passionate and smart as fuck CEO has been spot on with his prediction of the flash storage sector's direction. Also seems like he's not camera shy either. Pure Storage's "Pure-as-a-Service and Cloud Block Store" unified subscription offerings is fo sho gaining momentum it. This shit is catching on with enterprises, both big and small. COVID-19 increased the acceleration of our digital transformation and the subsequent shift to the cloud. This increased demand in data-centers is going to drastically help Pure Storage's future top and bottom line. To top it off, NAND prices are recovering! (inferred from MU earnings). I expect Pure Storage to get some relief on the pricing front because of this which obviously in turn should improve revenues.
PSTG's numbers look pretty good to me so far but are they a good company overall? Even when scalping and trading, I don't like to fuck with overall shitty companies so I always check for basic things like customer satisfaction, analyst ratings/targets, broad-view industry trends, and hedge fund positioning.. that sort of thing.Pure Storage stands out in all of these fields for me.
https://preview.redd.it/4n0e5nve5of51.png?width=373&format=png&auto=webp&s=495416bb6f5a2dab77f3ac483ca4d9510b39037c
Customers like Dominos Pizza and many others all seem to be happy AF with no issues. I can hardly even find a negative review online. Their products seems to be universally applauded. Gartner and other third party independent analysts also consider Pure Storage's product line-up some of the best in the industry.
The industry average for this sector is a piss poor 65.Pure Storage has a 2020 Net Promoter Score of 86
https://preview.redd.it/3w51io8yvmf51.png?width=698&format=png&auto=webp&s=4f7d06825d0ad9d126216e5069af2f9c3636f86a
Enterprises are upgrading their existing storage infrastructure with newer and more modern data arrays, based on NAND flash. They do this because they're forced to keep up with the increasing speed of business inter-connectivity. This shit is the 5g revolution sort to speak of the corporate business world. Storage demands and needs aren't changing because of the pandemic and isn't changing in the future. The newer storage arrays are smaller, consume less power, are less noisy and do not generate excess heat in the data center and hence do not need to be cooled like the fat fucks at IBM need to be. Flash storage arrays in general are cheaper to operate and are extremely fast, speeding up applications. Pure Storage by all accounts makes the best storage arrays in the industry and continues to grow faster than the old school storage vendors like bitchass NetApp, Dell, HPE and IBM.
Pure Storage’s market share was 12.7% in C1Q20 and was up from 10.1% in the prior year - LIKE A PROPER HIGH GROWTH COMPANY.HPE, NetApp and IBM, like the losers they are, lost market share.According to blocksandfiles.com, AFA vendor market share sizes and shifts are paraphrased below:
  • “Dell EMC – 34.8% (calculated $766m) vs. 33.7% a year ago
  • NetApp – 19.3% at $425m vs. 26.7% a year ago
  • Pure Storage – 12.7% at calculated $279.7m vs. 10.1% a year ago
  • HPE – 8.4% – $185m vs. 10% a year ago"
Pure has been gaining marketshare almost every year since it began selling storage arrays in 2011. Pure Storage is consistently rated the highest for the completeness of vision as this chart shows:
https://preview.redd.it/5agj17gcgnf51.png?width=428&format=png&auto=webp&s=da9c6389baccab85261d6e0f71b3474e84b90d3c
Hedge Funds are on this like flies on shit.
Alliancebernstein L.P. grew its position in Pure Storage by 0.5% in the 4th quarter. Alliancebernstein L.P. now owns 104,390 shares of the technology company’s stock worth $1,786,000 after purchasing an additional 560 shares during the last quarter.
Legal & General Group Plc grew its position in Pure Storage by 0.3% in the 1st quarter. Legal & General Group Plc now owns 258,791 shares of the technology company’s stock worth $3,213,000 after purchasing an additional 753 shares during the last quarter.
Sunbelt Securities Inc. acquired a new stake in Pure Storage in the 4th quarter worth $4,106,000.
CENTRAL TRUST Co grew its position in Pure Storage by 79.8% in the 2nd quarter. CENTRAL TRUST Co now owns 3,226 shares of the technology company’s stock worth $56,000 after purchasing an additional 1,432 shares during the last quarter.
Northwestern Mutual Wealth Management Co. grew its position in Pure Storage by 203.0% in the 1st quarter. Northwestern Mutual Wealth Management Co. now owns 2,312 shares of the technology company’s stock worth $28,000 after purchasing an additional 1,549 shares during the last quarter.
Also, everybody's favorite wall street TSLA bull, Cathie Wood has been busy steadily purchasing big lots of PSTG for her ARK ETF funds for a while now...Even going as far as selling TSLA in order to re-balance!
https://preview.redd.it/zjxuakjosnf51.png?width=1125&format=png&auto=webp&s=f34abdd3b35791eb207d31d72ea0f6fb11beec30
https://preview.redd.it/bkf1uzb2tmf51.png?width=2048&format=png&auto=webp&s=a9870ec41cfb4ce468ba61d83f2f8a4151927a4e
Hedge funds and other institutional investors own 78.93% of the company’s stock and it seems like more are piling in every day.
Tons of active options, too -Pretty good volume lately with the spreads looking decent.
Over 5,000 September $20 Calls added just on 8/3 alone 🤔
Order flow helps my thesis here, showing a recent influx of big dick money moving into PSTG.
https://preview.redd.it/liychuhblnf51.png?width=592&format=png&auto=webp&s=ca6a60d54a9eb8bd9e32e0ef70992b8282c29e70
Google Search Trends showing uptick in interest: SPY420 baby
https://preview.redd.it/joo0b9wxinf51.png?width=1710&format=png&auto=webp&s=24eb18f18be18b9b771ff1911c09c5479ba2f1a0
Robinhood Trends showing the YOLO is trending up
https://preview.redd.it/4gk5yjdxmnf51.png?width=1538&format=png&auto=webp&s=76c4b114c133c493c84386d1705f85229f5f7d44
Increased job postings on LinkedIn all across the globe, further supporting the idea that Pure Cloud Adoption is looking strong.
https://preview.redd.it/5zenasprznf51.png?width=1092&format=png&auto=webp&s=a492e227e2208fe89925c9b7fe365634f7ffde6a
Technically: This broke out through down-trend line a couple of days ago and as of right now looks to be pretty oversold. Looks like its found support at the 50 DMA and zooming out , the chart just looks like to me that it's coiling up for a big breakout.
https://preview.redd.it/wxtz8minmnf51.png?width=1208&format=png&auto=webp&s=7baabbd3e8f97dfc8bd0d5bfa512613c2eea4921
These fucking shorts are going to get squeezed out hard. Potential short squeeze coming?
https://preview.redd.it/lh8lp08funf51.png?width=1533&format=png&auto=webp&s=921b6684369e25e94f00ed96a404458028e540c8
**So what's the play?**I'd like to see RSI break out of the downtrend and the divergence between price & momentum ends at some point. If/when RSI breaks out, I want to play this thing aggressively with bullish call calendar spreads....THAT IS IF I HAD SOME FUCKING BUYING POWER (FUCK YOU UBER)....Soooo really what I'll be doing is asking my wife's boyfriend sometime this weekend for a loan. That way on Monday I can buy some $PSTG 9/18 $17.5 & $20 calls at open and YOLO my saddness away for a week.God forbid, I might even buy of those things called "shares" I heard about from /investing if at all possible because in all honesty, I really do feel like this is a good company to hold in a long term growth portfolio.Pure Storage is NOT looking like your average KODK prostitute to flip or scalp and actually more like someone you'd bring home to your dads.
EARNING DATE: 8/25
Pure Storage has a history of beating estimates and rocketing up. Over the last 20 quarters, the company beat revenue 17 quarters by an average of $4.9 million or about 3%. Out of the three times that the company missed on revenues, once was due to supply fuck-ups at one of its distributors and the other two times were due to Average Selling Prices declining faster than the company forecasted. Higher-than-expected ASP declines (due to NAND oversupply) is one of the risks of the storage business...but then again NAND prices look to be recovering now if MU's earning isn't fucking with us and telling us fibs. Big money is forecasting revenue to be around $396 million, essentially flat year-over-year, and EPS of a disrespectful ass penny....Fuck that conservative ass guidance! I think PSTG is going to blow that shit out the water. This chart shows Pure Storage’s past performance and we all know for sure that past performance = future results.....right?
https://preview.redd.it/4xflpezdhnf51.png?width=623&format=png&auto=webp&s=c1660a80a1a1821ef8098791a8cee632e25f1445
My Prediction: After ER8/25, Pure Storage will hit new 52 week highs.$20.50 - $23.50 is my guess. Bold prediction, $27.50+ by the EOY and $50 by December 2021.
tldr: PSTG 9/18 $17.5 & $20 calls

edit: for those that bought into this, I'm in this with you!
Let's pray for a rebound next week. also, Fuck Cisco!
submitted by OnYourSide to wallstreetbets [link] [comments]

What if I told you OPERATION 10 BAGS is actually OPERATION 20 BAGS - Courtesy of Albertsons (ACI)

Edit 1: I wouldn't rush to get in immediately with how poor SPY/QQQ look at open. Waiting until later in the day when they've maybe bottomed out is likely a better move
Edit 2: Broader market looks to have stabilized. Congrats if you bought the dip. But now is time to get balls deep - I'm in the process of tripling my position
u/trumpdiego 's post from a few days ago on ACI inspired me to do some research of my own, and it seems operation 10 bags may actually be a 20 bagger
Post for reference: https://new.reddit.com/wallstreetbets/comments/huq9eq/operation\10_bags_brought_to_you_by_albertsons/)
TL;DR: ACI is a leader in multiple sub-sectors that the market has been pumping lately. Their stock hasn’t increased as much as competitors in the last month, and it is cheaper than all of them on a P/E basis. Grocery prices have been rising faster than ever before. ACI is driving customers to their stores at a rate higher than anyone else in the industry. Online grocery sales were likely close to a record $19B in Q2. ACI’s online grocery sales were up +243% in April, and close to +220% this last quarter. Both of those last two facts suggest over $36B in quarterly revenue, compared to a street consensus of ~$23B.
TL;DR for the TL;DR: Albertons Companies (ACI) 8/21 $20C’s are going to the moon when they report earnings before market open on Monday 7/27, but potentially sooner if any other online grocers report what you’re about to read below. And I'll show you exactly why referencing the data that the big bois use to evaluate investments.
Primer for the type of autist who likes to know what he’s YOLOing options on:
ACI is a food and drug retailer that offers grocery products, general merchandise, health and beauty care products, pharmacy, and fuel in the United States, with local presence and national scale. They also own Safeway, Tom Thumb , Acme, Shaw’s, Star Market, United Supermarkets, Vons, Jewel-Osco, Randalls, Market Street, Pavilions, Carrs, and Haggen as well as meal kit company Plated based in New York City. Additionally, ACI is the #1 or #2 grocer by market share in 68% of the 121 MSAs (Metropolitan Statistical Area) they operate in.
And here’s the good part:
ACI is a leader in the online grocery shopping/delivery marketplace. They offer home delivery services in ~65% of their 2,200 stores, and have partnerships with Instacart, Uber Eats, and Grubhub to facilitate 1-2 hour delivery in 90% of their locations. Guess whose stock is up 75% this quarter? Grubhub. Think the market likes food delivery?
Besides online grocery shopping, what else is surging due to COVID-19? Meal kits. And guess what, ACI is one of the only grocers with a meal kit offering. Demand is surging so much that Blue Apron (APRN) decided to go public on June 24th, and is already up 22.47% since then. Think the market likes meal kits?
Now back to your regularly scheduled programming:
Before I get into the industry and ACI specific numbers that make me TSLA levels of bullish on ACI – let me tell you what the market thinks.
Q: “Why do I care what the market thinks? I’m smarter than it!” – Probably most of you.
A: “Because it doesn’t matter how right you are if the market doesn’t agree, especially when YOLOing short term options.
Market Trends:
Over the last 30 days, ACI shares are up a meager 3.43%, currently trading at a 7.3x P/E multiple of consensus 2020 earnings. Check out what the most comparable companies to ACI have done over the last 30 days, and associated 2020 expected earnings P/E they are trading at:
Grocery Outlet (GO): +11.30% (39.7x)
Kroger (KR): +9.16% (11.9x)
Sprouts Farmers Market (SFM): +15.71% (15.1x)
So what does that tell you?
The market loves grocery stores right now in corona times (no shit), and ACI is relatively the cheapest stock out of all of them. The performance of Grubhub (+75% in Q2), Blue Apron (+22.47% since 6/24/20 IPO), and literally every single online retailer tell you the market’s opinion on online shopping, food delivery, and meal kits as well. If ACI were to trade at KR’s 11.9x P/E, that would make the stock worth $26.15, +63% from close today. Wonder what that means for option tendies…
Oh what’s that? You’re asking why ACI could start trading on par with KR at a 11.9x P/E? Great question! Let me get into why this sexy boi will print:
Starting from a macro perspective, CPI: Food at Home (NSA) is the consumer price metric that tracks inflation in food prices as grocery stores and related establishments. After deflating -.16% in 2018 and inflating just .03% in 2019, CPI: Food at Home (NSA) is +4.74% thus far in 2020. Why is this? Food prices are historically correlated with Disposable Personal Income, which also increased at its highest rate ever through Q2’2020. So as long as big daddy Powell has the money printer going brrrrrr, Albertsons will be making more and more money on each sale.
Now, this food price inflation does benefit every grocer. However, let’s take a look at the ID Sales (which is the grocer equivalent of same-store-sales) trends recently for ACI and its main competitors that I was able to find data on:

ACI KR SFM
Q1 +23.5% +19% +10%
March +47% +30% +26%
April +21% +20% +7%

So through at least April, ACI has been in a class of their own when it comes to generating repeated traffic at their locations. Courtesy of the fine people at Morgan Stanley, we also know ID Sales were +16% in June (so you can deduce they were in the +17% to +20% range in May), and still up “double-digit percentage” thus far in July.
So far we’re established that ACI is selling their products for the most they ever have, and generating more traffic at identical stores than all their competitors. This data is affirmed by JP Morgan’s foot traffic index which shows ACI taking customer from Kroger.
But wait – here’s the sexy part:
Time to forecast ACI’s online sales this quarter using published industry data:
According to new research released 7/6/20 by Brick Meets Click and Mercatus, U.S. online grocery sales hit a record $7.2 billion in June, up 9% over May. Let’s do some quick maths and deduce that online grocery sales were $6.61B in May. Now let’s be super conservative and say May was a 20% increase over April (realistically I would guess closer to +5-10%), and that gives us $5.51B in online grocery sales in April. This means we likely had ~$19B in online grocery sales in Q2.
As ACI represented 1.60% of the online grocery marketplace in 2019, that would imply $304M in online revenue this past quarter. This is very conservative though, as even after assuming a 20% drop in April relative to May, we also assumed their market share stayed at 1.60%. Remember those nice people at JPM who’s foot traffic tracker told us that ACI was stealing customers from KR? Well they also estimate ACI’s 1.60% market share in online groceries to reach 2.50%-2.80% in 2025, with a CAGR (cumulative average growth rate) of ~9% in market share per year. That means their 1.60% market share is likely 1.744% now. Take 1.744% of $19B, and:

!!!!That means $331.36M of online sales!!!!

Remember this number
Now that we have an estimate for ACI’s online sales based on the broader industry trends, lets come up with an estimate using only company data:
On their last earnings call, management noted that online sales had grown 83% in 2018, 39% in 2019, +278% in the first 12-weeks of 2020, and +243% in April (Remember this number too!). Can you hear your Robinhood account balance going brrrrr? If not, the oven is about to get turned up faster Jerome can print a milli:
Math time!
· ACI did ~$265.4M in online sales in 2018.
Source: https://www.digitalcommerce360.com/2019/11/04/albertsons-embraces-omnichannel-retail/#:~:text=Albertsons%20does%20not%20break%20out,%2461%20billion%20in%20total%20revenue.
· That means they did ~370M in online sales in 2019.
· ACI had $62.455B in 2019 revenue.
· Which means 0.59% of their sales were online.
· Working backwards off their Q2’19 revenue of $18.738B, we arrive at $111M in online revenue.
· Let’s be conservative and assume some sequential decline from their April online sales growth (the second number you should have remembered) and put Q2 online sales at +220%.

!!!!That means $355M in online sales!!!!

Remember that first number I told you to keep in mind? $331.36M. Considering entirely different data sets were used to find each number, it may not be so crazy to think it could be a pretty accurate forecast of the online sales when they report earnings.
But since you’re so smart I know you’re on the edge of your seat wondering what that would mean for their total revenue
Let’s take the average of both forecasts, and use $343.18M as our forecast for online revenue. Given online sales were 0.59% of 2019 revenue, it would imply $58.166B in revenue this quarter, compared to the $22.78B street consensus estimate.
Admittedly, online sales staying at .59% is unrealistic due to how many consumers would shop online instead of in the store. Here’s some more math to deduce the new percentage:
· In 2018, 0.44% of their sales were online
· When online sales rose 39% in 2019, the proportion went up to 0.59%
· So a 39% increase in online sales led to a 0.15% greater contribution of online sales to total revenue
· Therefore a 220% increase would mean a 0.345% increase in proportion of online sales, putting them at .935% of total sales

!!!!!That gives us $36.704B in revenue for this past quarter vs a consensus of just under $22.78B. A beat by over 60%!!!!!

If you’re one of the rare autists to realize that revenue is only one half of the earnings equation, and your costs are the equally as important second half:
Let’s go back to our friends at JPM, in a recent research note, after mentioning the foot traffic ACI was taking from KR, they also noted that ACI has superior gross margins to KR, as their stores are strategically located further from aggressively low priced competitors such as Aldi and WalMart. Additionally, they praised ACI’s recent cost savings initiatives that have been underway for some time now, and believe they would lead to some of the best margins in the industry.
So you’re telling me ACI is going to make way more money than anyone expects this quarter, while also having lower costs? That must mean call options are crazy expensive, right?? Wrong. The aforementioned option is trading at just $0.50. That means after earnings when the stock rips to $30, they could be worth $11, does a 2,100% return sound good to you too? And for you especially literate autists, the IV is only 91.61%.

ACI 8/21 $20C

Let’s ride this fucker to the moon

Happy to respond to any questions/comments on sources for some of the data I presented or anything else your autistic brain comes up with regarding ACI
submitted by HumanHorseshoe to wallstreetbets [link] [comments]

Baseball Card Flipping Project - Part 16

Hey guys!
It has been FOREVER since my last update and a ton has happened. Sorry for the long post, but hopefully some people appreciate a detailed dive into everything.
A really really really brief recap of the past fifteen parts
I started in December of 2018 with $1,165 with the goal of making $10,000 in one year. In 2019, I had bought and sold over $40k in baseball, football and various sports trading cards. I had a few great successes ($1,165 into $3,085 before fees - $2,771.20 into $6,200.10 before fees - $1,086.68 into $3,190.54 before fees) and a few duds. I generally sell my cards on ebay, but utilize auction houses every now and then. The biggest bottleneck I face is submitting cards to PSA (a third party grading company), a card might have a 2-4 month turnaround time. To successfully "flip" you need to balance some of these purchases with shorter flips. In 2019, I ended with a final profit of $9,262.28 – a tad bit short of my goal. In 2020, my goal is $20,000 (fitting). Using my margins from 2019, I would need to sell around $85k in cards.
You can find the previous installment here
PERSONAL UPDATE
First, I hope everyone is doing well and staying sane. It has been an absolutely wild three months for me, I found out I’m going to be an uncle, I got a cat and I decided I was going to propose to my girlfriend this weekend! I have still been keeping up with this project, the prices for baseball cards have absolutely skyrocketed over the past couple months, so there hasn’t been the same amount of buying as usual. I am going insane with working from home and trying to keep my head above water with everything, but flipping has been (at times) a nice escape. I am fortunate enough to be flipping something that I am passionate about, baseball cards, so I am able to enjoy this and see a lot of neat cards along the way.
In that spirit I have decided to begin keeping some cards for my personal collection as I go along. I read somewhere an interesting method of collecting, reducing your collection to 25 cards. I wanted to give it a shot with a bit of a twist, I want to keep a collection of 25 cards, but still make a profit along the way. So a couple ground rules I set for myself: * The collection is limited to vintage baseball cards (generally 1980’s and older). This was my first collecting passion and I’d like to try to keep to it.
So, without further ado, here are the first four cards in this project. The 1949 Berra came from the Yogi Berra lot I bought from SCP in January. The grades finally came back last week and I did very well on a few cards, so I felt that I deserved to spoil myself a bit. The 1949 Bowman set holds a special spot in my heart for me, my best flip ever was a group of 1949 Bowman cards I purchased for $300 which included a Jackie Robinson rookie that graded PSA 8! I sold it for over $10k. This Yogi Berra card is well centered, nice registration and a great mid-grade example of a baseball icon. I love it. The Ted Williams card and the Willie Mays both came from the December Heritage lot that I had purchased. PSA took FOREVER on this order. I was a little disappointed in the overall grades, but am confident I will turn a profit. The 1956 Topps Ted Williams is such a cool card and a staple in post-war collecting. The Mays I always liked – it’s a little beat up, but the centering is near perfect and the color looks sharp. Finally, I nabbed the 1969 Yaz. This was mostly done because I love the set. 1969 Topps was the last set to feature Mickey Mantle, something that I think goes underappreciated. The set design has always been pretty crisp, it has a couple great rookies and great all-star rookie cards. I’m a fan. Anyways! None of these cards are permanent, I can sell them at any time, but I’d imagine they will be in the collection a while.
Purchased
What Sold
PSA Update
Here is a link to the Google Doc with the status of all of my PSA cards. The spreadsheet also includes a summary of where the project is.
PSA is still extremely backlogged. For this project, I have 276 items with them. Luckily I was able to get quite a few cards back from them recently! As I previously mentioned, I received back the Yogi Berra cards I sent them in January and the Heritage cards I sent in December. Overall I am happy enough with the grades. I think they were fair on the Berra cards and they were rough on the Heritage cards (they were separate orders). I already listed or consigned these cards, so I will have updates next month on these.
Below is an updated summary:
For items purchased in 2019 (denoted with a “*”), the “cost” column represents the ending 2019 inventory valuation. For items purchased in 2020, the cost column is the cost. In the Google Sheet I included an in-depth P&L with full results and 2019 details.
Item Cost* Sold Fees Inventory^ Profit
1936 Goudey Lot (8) 50.00 56.50 (8.48) - (1.98)
Hank Aaron "Odd-Ball" Collection 150.00 777.29 (116.59) - 510.70
(16) Pre-WWII card lot w/ Cobb 1,300.00 1,708.52 (256.28) - 152.24
(23) Sandy Koufax 1950's and 1960's lot 250.00 299.50 (44.93) - 4.57
1977-1979 Topps Baseball Rack & Cello Packs (6) 250.00 380.00 (57.00) - 73.00
1957 Swift Meats Game Complete Set (18) 800.00 680.00 (102.00) (222.00)
(36) 1950s-2000s Multi-Sports Collection 500.00 1,528.51 (229.28) - 799.23
1933-1989 Wax Pack Wrapper Hoard (650+) 400.00 1,918.01 (287.70) - 1,230.31
1941-2004 Multi-Sport Group (33) 800.00 2,859.83 (428.97) 100.00 1,730.86
1912 B18 Blanket Find (100) 1,270.80 1,136.24 (170.44) 500.00 195.00
1962-63 Parkhurst Hockey Lot (45+) 500.00 287.26 (43.09) 400.00 144.17
1953 to 1969 Mickey Mantle Group (16) 1,000.00 2,747.85 (412.18) 150.00 1,485.67
1956-1959 Baseball Star Collection (48) 1,130.00 322.04 (48.31) 900.00 43.73
1961-1969 Baseball Star Collection (61) 804.95 257.78 (38.67) 600.00 14.16
1948-1965 Yogi Berra Collection (26) 1,400.00 399.50 (59.93) 1,050.00 (10.43)
Lot of (4) Signed Perez-Steele Postcards 676.59 - 676.59 -
1950's-1980's Football Wrapper Lot (42) 920.00 1,944.23 (291.63) 732.60
1953 Topps Partial Set (208) 1,472.00 2,855.13 (428.27) 100.00 1,054.86
1953-55 Dormand Postcard Set (47/52) 685.00 804.85 (120.73) 250.00 249.12
1959 & 1960 Venezuela Topps Lot (34) 216.00 58.66 (8.80) 200.00 33.86
1959 Topps Baseball High Grade Set 1,557.30 1,132.80 (169.92) 1,000.00 405.58
1970 Topps Super Proofs Lot (12) 405.41 493.75 (74.06) 200.00 214.28
1887 Allen & Ginter Boxing Lot (14) 403.40 403.40 -
1954 Topps Starter Set (119/250) 662.22 707.50 (106.13) 500.00 439.16
1947 Bond Bread Jackie Robinson Lot (6) 2,220.00 2,125.00 (318.75) 1,480.00 1,066.25
1934 R310 Butterfinger Ruth & Gehrig Lot (2) 720.00 720.00 -
1959 Topps Baseball Near Set (571/572) 3,620.00 3,620.00 -
1973 Topps Complete Set 2,512.40 6,347.41 (952.11) 600.00 3,482.90
1961 Topps PSA Graded Set 5,791.60 11,445.51 (1,716.83) 100.00 4,037.08
2013 Bowman Chrome Judge Black Wave Auto 1,940.00 1,940.00 -
1961-1982 Signed Card Lot (19) 1,364.40 1,120.00 (168.00) 800.00 387.60
35,772.07 44,393.67 (6,659.05) 16,289.99 18,252.54
*-denotes inventory purchased in 2019 valued at 2019 y/e figures. ^ -inventory on hand is valued at a conservative estimate of fair market value for remaining items. `-grading fees are expensed when the card is sent to PSA, fees are not paid until PSA has completed the order. Fees that are expensed, but not paid are sitting in Accounts Payable below.
2020 Grading Fees`: $2,944.79
Current On Hand
Cash: $5,588.15
Inventory See the Google sheet
ALSO! If anyone is interested in what the financials for this project would look like, see below. With 2019 officially in the book, I moved the final 2019 financial statement over for a year-over-year comparison:
As of 8/25/2020 2020 YTD 2019 Final
Cash $5,588.15 $1,680.15
Accounts Receivable $6,743.43 $-
Inventory^ 16,289.99 $10,605.75
Accounts Payable` ($2,886.54) ($1,858.62)
Retained Earnings ($9,262.28) $-
Initial Capital ($1,165.00) ($1,165.00)
Revenue ($44,393.67) ($40,163.15)
Cost of Goods Sold $19,482.08 $22,582.96
Fees (15% of Rev.) $6,659.05 $5,956.97
Grading Fees $2,944.79 $2,360.93
FORECAST
My goal is $20,000 profit for the year. Right now I’m $15,307.75 – PSA has dramatically slowed turnover, but I am definitely on pace to hit my goal, gross margins are up in 2020 compared to 2019 (56.1% vs. 43.8%) and net margins are also up (34.5% vs 23.1%). Sales more than doubled since the last installment and with orders finally coming back from PSA, I should continue to see steady sales.
I look forward to continuing to update everyone on this. Hope you enjoy as much as I do.
Jason
submitted by MachiavellianFuck to Flipping [link] [comments]

Rey Rivera, Foul Play, Murder, note is a code

Not claiming to be an expert on anything.
My opinion: Rey Rivera did not commit suicide, foul play was involved, and his note may be a code trying to implicate those who may be involved.
I believe there is much more circumstantial and direct evidence that points towards a homicide rather than a suicide. I try to give credit where it is due and if I am repeating things that have already been posted, I apologize.
Please, since it has already been discussed so much in many other posts, if you are going to insist on speculating about his mental state on this post too, include a diagnostic criteria for the condition/diagnosis you are claiming and evidence of how Rey fits each criteria. You cannot make conclusions on anyone's mental state simply based off reading a book, articles and Netflix. Either Stansberry’s crisis management team has people on Reddit, or a very large amount of people believe they became overnight experts in mental health. Neither of these will hold up in court. Unless you are a psychiatrist or psychologist, you are not qualified to make assumptions about his mental health that would be permissible as evidence in a court of law so let's leave that to them.
I believe there were real reasons behind Rey’s paranoia, and I believe the note is code for the corruption he was dragged into. The note has been hypothesized to be a coded message or a tone reel for a movie, there is no evidence to prove it was or wasn't that, vs. being considered ramblings during a psychotic break as others have speculated (there is no direct evidence to support this). There is also no evidence to prove that it wasn’t planted there, considering he had two attempted break-ins at his house right before his death and the house was left vacant for hours after his death until Allison returned back to Baltimore. My opinion is that Rey wrote it as a coded message in the form of a tone reel since he was a writer and filmmaker first and I’ll state what I believe to be proof of this below.
Facts :
  1. He had 2 recent alarms triggered at his house the days before his death which could have been possible break-in attempts
  2. Someone form the Stansberry & Associates building was the last person reported to talk to him before his death. He worked for a very shady company (some evidence at the bottom of this post), that placed a call to him around 6:30pm the night he went missing, causing him to run out of his house.
Both of the facts above warranted a better investigation by the Baltimore Police Department that did not happen. The last reported person to talk to a victim is often the first POI to investigative authorities. to him was someone that called him around 6:30 from the Stansberry and Associates building.
  1. Before this, the last reported person to talk to him at 4pm stated nothing out of the usual with Rey AND that he was intent on renting video equipment to complete a work deadline for that very weekend. This does not sound like someone planning to commit suicide to me. https://www.reddit.com/UnsolvedMysteries/comments/hkdsmo/apparently_i_was_one_of_the_last_people_to_talk/ This man was cited in news articles and talked to the police right after Rey's death too.
  2. Rey’s death is currently classified as a homicide
  3. Stansberry and Associates either put a gag order on the company (and a recent memo released stating they didnt is a lie) OR all Stansberry and Agora employees were instructed to not talk to anyone about Rey’s death as proven and reported by law enforcement, many reporters, family members, and the author of the book An Unexplained Death when they received that answer while attempting to reach out to the company and to Porter.
  4. Stansberry & Associates hired a Crisis management team for the firm 6 months ago after their cease and desist letter aimed at stopping the airing of the Netflix documentary regarding Rey's death did not work.
  5. There were 0 witnesses that saw Rey enter or in the building previously known as the Belvedere that night, which law enforcement reported he frequented. You would have thought at least one employee or concierge for the condominium would have seen him come in if he did jump from there, considering it is part of their job to greet and provide assistance to those entering.
? looking to confirm: There were no signs of Rey's shirt being torn when his body was found.
  1. The coroner also reported the cause of death as undetermined and could not conclude it was a suicide. We should start another post to discuss the autopsy results in detail.
  2. The FBI report on the note states that overall themes and language are “consistent with someone who suffers from a delusional disorder” It describes delusional disorders, how they are relatively rare affecting 24-30 out of every 100,000 people and that the onset is relatively late with average age being 40-49. It does not appear that they looked into connections it had to any code, or that they knew what a tone reel was.
The report also states “BAU is unable to confirm the identity of the author of the letter without further analysis.” There is then a full page of “Investigative Suggestions" for the BPD to investigate: (There is also question as to what, if any, from that list of suggestions was actually investigated after the report.)
* BAU suggests [redacted] several meetings/interviews. [full sentence redacted]. The purpose of these interviews to develop additional leads…[>2 lines redacted]. As mentioned by BPD, [redacted]. These interviews should take place in a non-threatening environment. [2 lines redacted] In an effort to generate further leads, investigators should carefully review [2 lines redacted]. Rivera’s family members (brothers, sisters, parents) should also be re-interviewed regarding his health. (per the Netflix documentary, we know the family does not believe he was suffering from mental delusions.)
* BAU recommends [>3 lines redacted]. FBI Baltimore may be able to assist BPD…[>3 lines redacted].* BAU recommends determining [redacted].* BAU recommends requesting forensic testing [redacted]. BAU understands that [redacted] during the investigation [> 2 lines redacted]. BPD should also determine [redacted]. * BAU recommends requesting forensic analysis of the computer printer where the letter was found. [>3 lines redacted]. FBI Baltimore’s Computer Analysis Response Team can assist with the analysis of Rivera’s computer [>3 lines redacted]. * BAU offered to [redacted]. It is recommended that BPD provide BAU with [redacted]. * BAU recommends that BPD [>2lines redacted].
-------------
Things being used to defend this deteriorating mental health theory are:
  1. his wife noticed him paranoid and stressed the weeks leading up to his death.
  2. The note that he allegedly left - more details below at 2a
  1. Recent Researching of Freemasons
1a. paranoia - Rey had real reasons behind his paranoia. Rey Rivera was working for a shady financial firm and making millions of dollars. These firms are notorious for having connections to powerful underground criminals. He was hired by this firm to “clean up their image” and write the Rebound Report one year after the SEC had filed a complaint against Stansberry & Associates for giving false advice on stocks that later tanked. So, a filmmaker with no finance experience was hired to write about suggesting cheap stocks that were supposedly going to make a quick turnaround. People were angry and had lost millions of dollars after the SEC filing. There is an article about the exact details below. Additionally, Rey's friend who also worked for Agora - Hickling- had died just a couple months before Rey’s death allegedly in a car accident in Zambia. Rey had two tripped alarms in his house (suggesting attempted break-ins) in the nights leading up to his death. He had valid reasons to be paranoid. There were valid reasons for people to be after him, and there were valid reasons for him to be concerned and protective of his wife as many times these criminals will come after the person closest to them instead of the individual themself.
2a. The note- Many film creators have said the note looks not similar, but exactly like a tone reel. Also hypothesized are that it could have been a code for something or that it could have also been planted there, since there were 2 tripped alarms at his house. Many who have attempted to piece together the note from screenshots also point out that there are multiple versions of it, suggesting that if he did write it, it was written over a longer period of time than a day. In my opinion, all these theories have the same validity/amount of evidence as the delusional theory.
Some theories and opinions on the note: many made by Reddit users under the google doc that TrueCrime Pyrex started (https://docs.google.com/document/d/1CUynVxK37ReWqJ2r3jyue0hUMh36GfiRAzYXG-Q8IE8/edit#)
According to https://www.investopedia.com/financial-edge/0911/how-september-11-affected-the-u.s.-stock-market.aspx):Some sectors, however, prospered as a result of the attacks. Certain technology companies, as well as defense and weaponry contractors, saw prices for their shares increase substantially... Stock prices also spiked upward for communications and pharmaceutical firms. On the nation's options exchanges, including the Chicago Board Options Exchange (the world's largest), put and call volume increased correspondingly. Put options, which allow an investor to profit if a specific stock declines in price, were purchased in large numbers on airline, banking, and insurance shares.

3a. Freemasons. The act alone of researching Freemasons does not indicate a psychotic state. In the book, An Unexplained Death, Mikita Brottman writes:
"Stein learns from a Master Mason that Fred Bealefield, who was the chief of detectives during the Rivera case and later police commissioner, is also a Master Mason. This news does not surprise me. Many policemen are members of the Freemasons; it does not make either the police of the Freemasons especially sinister. I often invite Master Masons to speak to my classes about the history of their organization, which I have come to see as a benevolent fraternal charity with an archaic structure and hierarchy, not a malevolent force running the universe, or even the city. In other words, I think the Masonic angle is a red herring. I believe Rey's interest in the group was part of his research for something new he was writing."
----
Per those close to Rey, their theory is that has something to do with the Rebound Report, and the fact that the company had just come out of being fined 1.x millions dollars for misleading investors. (Also The Rebound Report may not have been accurate?) I believe looking into these reports would provide further information. Also mentioned, If Rey were to go meet someone at the condominium he allegedly jumped from, he would not have worn flip-flops and track pants. He was going to go see someone he knew.
----
Circumstantial and direct indicators of foul play/cover-up:
- In An Unexplained Death, Mikita Brottman writes:
'An anonymous comment on an article about the case by Stephen Janis posted at the Baltimore Examiner website puts this theory in a nutshell. "Rey was a very inquisitive man, a truth-seeker. He had information that threatened something larger than himself and was murdered for it." '
'Others have suggested that Rey's death may have been connected to developments in Nicaragua, where Agora owns a large stretch of coastline. Those who have studied the case often refer to "Nicaragua" in cryptic terms.'
"Bizarre is also how Allison Rivera describe the obstacles she encountered trying to help police search for clues. Confident that her husband’s death was foul play, she hired a private detective who accompanied her to The Belvedere to review the video surveillance. But Allison soon discovered that the surveillance system malfunctioned on the day her husband disappeared. “Somebody put 'protect' on the day of the 15th that consumed about 85 percent of the hard drive,” she recalled learning. “Somebody hit 'protect' on the system; there is button on the key board in the concierge areas, and there is a computer in the back.” The timing of the erasure is troubling, Allison said.“If it was on May 1, that's an accident but if it's on May 15, that is a totally different story.”An employee of the former hotel who has knowledge of the camera system but asked to remain anonymous could not confirm Allison's allegations. The employee said that police had confiscated the hard drives."
-------------------------------------------------------
Below here are a few news article links and old posts from disgruntled investors regarding the shady practices of Agora and possible motives for killing. Many article links have since been removed from the internet. Please bear in mind I am not citing below things as facts, although many have since proven to be. I find it interesting and possibly relevant to Rey Rivera's death
From the desk of Porter Stansberry:
When my best friend, Rey Rivera, disappeared last year, we had to find his car (and then his .... Porter Stansberry Baltimore, Maryland December 21, 2006 ...
Porter Comments:'The Baltimore sheriff is after me…'-Porter Stansberry

If I ever had any doubts whatsoever about your corruption and cover up and disinformation propaganda re 9/11…your promotion of Agora Inc.'s stock fraudster and murder suspect,(in the case of his 'friend' Rey Rivera of Agora Inc Rebound Report fraud,etc.),has ended all that. Fannie Mae and Freddie Mac were also part of Agora Inc.'s fraud that helped send the housing market and government subsidized housing loans crashing as well.Also when it did ex SEC Chairman Christopher 'WMDS' Cox lied about Fannie Mae and Freddie Mac shares being 'naked shorted',a term that can be tracked back to Agora Inc.'s and National Taxpayers Union founder James Dale Davidson himself. Both Stansberry, Davidson and Agora scumbag Bill Bonner have a UK connection and their association with with the U.K.'s Lord or Lard William Rees-Mogg guarantees a Rothschild connection…I no longer have any doubt even an idiot such as yourself, with your far right women's rights denier Ron Paul connections, that you know you are in cahoots with the CIA because his and your pals at Agora Inc have CIA and George Tenet connections…Sincerely, Tony Ryals
Corrupt SEC attorney Karen Martinez who along with SEC attorney Brent Baker removed all charges against Stansberry and James Dale Davidson regarding their illegal pumps and dumps of biotech penny stock frauds **Endovasc and Genemax in 2003 tries to blame or insinuate the probable murder of Rey Rivera was done by defrauded investors such as myself mno doubt.**And I myself suspect that Stansberry's and Lila Rajiva's invitation to me to visit his office in 2005 was either as a set up or to murder me as well .Shortly after removal of all charges against James Dale Davidson and Porter Stansberry regarding their promotion of worthless Endovasc and Genmax shares Brent Baker 'retired' from his SEC job and was rewarded or bribed by Patrick Byrne of Overstock.com and himself began to openly promote the lie that Overstock shares were like the other penny stocks a victim of 'naked shorting' or naked short selling by some unknown entity. Byrne even claimed it was a or the 'Sith Lord' !
Davidson's NAANSS or National Association Against Naked Short Selling' was disapeared from the internet in 2005 and replaced with NCANS or National Coalition Against Naked Shorting with a number of lieing websites claiming a huge amount of stock frauds were really victims of 'naked shorting' ! In 2008 even the ex SEC Chairman lied on the sec.goc website about Fannie Mae,Freddie Mac,AIG,UBS and even Goldman Sachs shares collpsed in value due to 'naked short selling' ! -Tony Ryals
Missing Baltimore Man Getting National Attention - wjz.com23 May 2006 ... It's been a week since a Northeast Baltimore man was last seen, and police say there is still no sign of 32-year old Rey Rivera. http://www.wjz.com/topstories/Rey.Rivera.Missing.2.422531.html
Suicide Or Murder? Evidence Reviewed - Baltimore, Maryland News ...BALTIMORE -- The mystery behind a Baltimore businessman who fell to his ... http://www.wbaltv.com/13334811/detail.html
http://washingtonexaminer.com/local/man-found-dead-belvedere-worked-comp
Man found dead at Belvedere worked at company that had SEC complaint By: Stephen Janis 06/01/06 2:00 AM Examiner Staff Writer
Karen Martinez, one of the SEC attorneys who filed the complaint against Stansberry, said investors who paid for the tip are angry. "Many investors testified in discovery that they lost substantial amounts of money based on the investment advice of the company," Martinez said. "Investors said they were very unhappy," she added.
An official speaking on behalf of Stansberry Associates said they had no comment on the SEC complaint. Martinez said Stansberry denied the allegations in court and that the case was pending, awaiting the judge?s decision, she said.
Who killed Rey Rivera? | What's Inside Our Brains6 Feb 2010 ... suicide of Rey Rivera, whose body was found on a roof of the Belvedere building in Mt. Vernon in 2006. As I recall from the original ... http://www.whatsinsideourbrains.com/?p=292
LAND OF THE UNSOLVED - The last days of Rey Rivera10 Aug 2009 ... But the patch over the bituminous paving atop a second-floor office at The Belvedere hides a secret the widow of filmaker Rey Rivera thinks ... http://www.investigativevoice.com/index.php?option=com_content&view=article&id=:the-land-of-the-unsolved-the-last-days-of-rey-rivera&catid=25:the-project&Itemid=44
Working links:
Baltimore Crime: Rey Rivera10 Aug 2009 ... can see Rey Rivera's 'friend' and employer Porter Stansberry invited me to visit Agora Inc. and Baltimore in 2005. ... http://www.baltimorecrime.blogspot.com/2009/08/rey-rivera.html
“I briefly quote and provide link from Bill Bonner's Baltimore co-author Lila Rajiva herself who wrote an article about her employers' Goldcor connection and the strange 'suicide' of Goldcor President Richard Brown who was found with a bullet in his head in November 1991 as Goldcor began to unravel.
http://baltimore.indymedia.org/newswire/display/11382/index.php …link no longer works either
http://neworleans.indymedia.org/news/2010/03/14797.phpDeath In Baltimore:Agora Inc.,Rey Rivera,Porter Stansberry,James Dale Davidson,Bill Bonner “This post has to do with the mysterious death of Agora Inc employee Rey Rivera in 2006 who was committing stock fraud for his own personal gain and more so for the profits of his bosses at Agora Inc that included his evil 'friend' of years past,Porter Stansberry, as well as Bill Bonner,James Dale Davidson and the evil Lord William Rees-Mogg of UK who founded or who have been behind Agora Inc stock fraud and money laundering operation for decades. .”
submitted by BoriOno to UnsolvedMysteries [link] [comments]

SWK - Insanely Cheap Mining Adjacency

SWK - Insanely Cheap Mining Adjacency
*** Updated Research

SWK provides an amazing opportunity to take advantage of the bull market in precious metals at an undemanding valuation with excellent operational momentum.
Environment:
Precious metals have had a phenomenal ride lately; both due to fear arising from COVID-19, and coordinated monetary policy stimulating economies at an unprecedented level. The graphic below shows the recent parabolic move in GLD (overshadowed by SLV) and reflecting upon the 08 crisis and the numerous QE policies that followed, this upward trajectory may continue further.

GLD vs DJIA (2006-Present)

With rises in commodity prices, the logical next step is to get some operating leverage and purchase the gold miners. No doubt, this second level thinking has been handsomely rewarded albeit encountering the sovereign and FX risks with many of the global miners domiciled in South Africa and Russia:

DRDGold, Polyus and Polymetal (April 20 - Present)
Since many of these miners are in the process of expanding production, cash flow won't be realised for several years and operating margins may not improve as much as managements' forecast (i.e. ASX: DAC). Further, since the market has drawn the logical connection between commodity prices and miners, these companies have run a very long way in the last few months.

Company Overview:
This is where SWK provides us with a cheaper and lower risk opportunity to gain access to this thematic. SWK provides drilling services to large miners of metals (i.e. nickel, silver, gold etc.) in US, Canada, Europe and Australia. Specifically, they use specialised drills to extract samples, which they analyse to then assess to the viability of a site. Increasing demand for mining exploration will, intuitively, increase drilling utilisation and drilling rates. SWK also entirely owns Orexplore, which provides mobile sample analysis to determine the characteristics of extracted cores. This improves the efficiency of examining the quality of a site by removing cost (transportation and storage), timing (it can be conducted on-site), and operational risk (damage in transit) all of which further benefit the mining co. and embed SWK into the exploration process.

Competitive Advantage:
SWK’s competitive advantage is being able to a world class cost effective and efficient underground drilling. For example, their development of DeepEX allows for longer hole from underground that are cheaper than many shorter surface holes. Their recent contract extension from BHP at Olympic Dam despite competitors (i.e. MSV and BLY) rigs being used onsite is testament to their value proposition.
SWK has also invested heavily (~$25mn) into their Orexplore technology in an attempt to move up the value chain away from high-capital intensive drilling into a higher margin business. This technology removes significant operating expenses (employees and equipment), reduces lead time (can be built and shipped globally within 2 weeks), is very simple to use (technical training is not required), and most importantly, is currently being purchased for free and is the main catalyst in this investment (more on this later).
Furthermore, SWK has made a concerted effort to increasingly diversify their product offering to different miners (with exposure to various commodities), and geographically. Their global and diversified footprint has provided them with a world-wide footprint, with costs to build their global business already incurred (most recently in Pogo – Alaska), further encouraging a buyout (more on this later).
FY19 Financial Report
H1 2020 Financial Report


Catalyst and Valuation:
Exit Options:
The primary catalyst for a revaluation in SWK is a huge macroeconomic tailwind providing momentum that might facilitate a sale of the drilling business to a strategic buyer. Without doing too much crystal ball gazing, I view the exit opportunities as follows:
5% - Amazing sale of drilling business = >100%+ returns;
65% - Solid sale of drilling business = 50-100% returns;
20% - No sale and general re-rate = 25-50% returns;
10% - Languishing business and capital destruction = -25%-0% returns.
Given management’s firm guidance towards the sale (https://www.openbriefing.com/OB/Swick-Mining-Services-Ltd/2020/2/25/Swick-HY20-Results-Conference-Call/3716.aspx at ~08:00) I will focus on our base case that entails: (i) selling or closing surface drilling business as it’s the lowest margin / weakest vertical; (ii) selling underground drilling business; and (iii) refocus towards Orexplore either through taking the business private, IPOing a new entity or rebranding SWK.
Given shareholders have been frustrated with SWKs delay in progressing the business towards a sale and having difficulty commercialising Orexplore it has been important to wait for a noticeable inflexion point in the business to attempt to “time” entry as much as possible. Let’s see how the inflexion point is here beyond the macroeconomic environment above.
Miners around the world are aggressively looking to expand their operations due to increasing commodity prices and SWK's services become front of mind. Recent news is ticking all the boxes and adding huge momentum in the stock to catalyse a re-rating.
  1. Reinstatement of dividend payment and share buyback program showing prudential capital management and a positive outlook relating to future financial position. This is a double-edged sword as management raised capital at 23c and bought back shares from 12.5c through to 17.5. By buying now, we have avoided this dilution although acknowledge this was not the best form of capital management. On the other hand, it does suggest management are flush with cash and happy to redistribute to existing shareholders before a possible sale; that is, we get paid to wait:

ASX Announcement 1
ASX Announcement 1

ASX Announcement 2

  1. Contracts are being extended, new contracts being won, and guidance on FY21 figures. Management are highlighting clear intention to demerge and growth is providing EBITDA growth for a better sale price:

https://preview.redd.it/06fxmos33dh51.png?width=563&format=png&auto=webp&s=70367dc6c623a4bb16c434f7f0f9892cd2a2f20b

  1. Large contracts with key miners and commercialisation of Orexplore. This is increasing utilisation rates and improving margins by expanding work at existing sites:
ASX Announcement 3a

ASX Announcement 3b

  1. Upcoming earnings call to catalyse re-rating:
ASX Announcement 4


  1. The Orexplore website (https://orexplore.com/the-orexplore-review/) has received increased attention with far more activity within their “Review Blog” section leading towards commercialisation. Posts are being made almost weekly increasing its awareness:
https://preview.redd.it/snsbk0vz2dh51.png?width=602&format=png&auto=webp&s=bb5a68c362a20c900c127dd53357ac5bf46dbbd5
https://preview.redd.it/1a80klgz2dh51.png?width=602&format=png&auto=webp&s=ab1f81609e06fc30683de45a4de778bb2838bb80

  1. MSV as the strategic buyer for the drilling business has shown intent to inorganically expand their operations. Deepcore had an EV of ~$44m (excl. additional earnout payments), revenues of ~$50m p.a., and an EBITDA of ~$12m with approximately half the rig number of SWK. This purchase confirms the “fair value” multiple for a drilling business is ~4x EV/EBITDA, even for a significantly weaker private business due to utilisation, profitability, scale and contractual certainty.
https://preview.redd.it/jumpn58y2dh51.png?width=602&format=png&auto=webp&s=ad650e7b63b341e06ddd0a8bff88121249a03925
Valuation:
Ok, so let’s turn our attention to the forward guidance and conservative estimates for SWK. SWK against mostly all metrics is very cheap. Management have forecast EBITDA to be ~$25mn in FY20. Although I think we can conservatively estimate this to grow significantly throughout FY21.
The improvements to EBITDA will come from the following: (i) commercialisation of Orexplore = $0.5-1mn, (ii) ~$3-4mn in reaching steady state (20%) margin from the Pogo contract as costs normalise and backdated earnings flow through; (iii) ~$2mn in operating expense reduction during COVID-19; (iv) the $120m increase in the order book between 30 July and 14 August implies $120/5 = $24m p.a. at a slight discount to target margin of ~15% gives another $3.5mn EBITDA. Putting this all together FY21 EBITDA might be ~$35mn.
In addition to the purchase of Deepcore, we can use the current valuation ratios of MSV and CAPD as a guide. Currently competitors trade between 3.5x (CAPD) and 4.5x (MSV) EV/EBITDA multiples. If we use 4x as a reasonable multiple on current EBITDA, this would imply an enterprise value of ~$100mn (or a 30% upside) whilst paying nothing for Orexplore. Upon conservative forward FY21 EBITDA figures, the enterprise value could easily reach ~$150 (or a 100% upside) again paying almost nothing (only $1mn / $35mn in EBITDA) for Orexplore.
By way of reference, SWK with similar metrics in 2011/12 was trading at a ~100% premium (i.e. ~40c (market cap $90-110mn) whereas now it is ~$20 (market cap $50mn). A decade ago, it also did not have the same existing clientele and large-scale contract wins (see 3a above with a forward order book of $363mn (relative to current revenues of ~$150mn).
The cherry on top of this investment is Orexplore, which we buy for free. None of the revenue and earnings multiples above include any real impact from Orexplore. On 14th August the commercial viability of Orexplore was been partially validated with their first contract win. Although its value is only $700,000 over 6 months this call option like payoff comes entirely for free. Further, the true profit margins of SWK has been hidden due to the losses incurred from Orexplore, which has to date cost $25mn in R&D (or equal to almost 10yrs of earnings), the amortisation of associated software development, and continued global expansion (Portugal and Europe before North America) each requiring initial costs prior to achieving target margins. Even better we get a first glimpse at how attractive Orexplore might be. Combining discussion in the latest conference call (https://www.openbriefing.com/OB/Swick-Mining-Services-Ltd/2020/2/25/Swick-HY20-Results-Conference-Call/3716.aspx 04:30 - 06:30) with the recent contract we can conclude the following: (i) 3 machines at Sandfire will generate ~$3.6mn in revenue covering approx. 50% of cash flow with nearly no operating expenses; (ii) $700,000 for 6months scanning 1500m of core per month implies ~$75/m (against an estimated $100m from guidance). As per guidance, if we assume Orexplore machines can scan ~$4m/hr ($300hr) and total costs may include one unskilled technician and minimal overheads ~$50mn this provides a gross margin of ~75% (or almost 4x undergrounding drilling). Due to the profitability of Orexplore, 15-20 operational machines on yearly contracts would provide greater earnings than SWK’s entire business. Hopefully the publicity of Orexplore at Sandfire can attract some attention, and in turn some additional contracts.

Risks:
No investment is without its risks, and for SWK they fall into: (i) capital mismanagement; and (ii) poor communication / delays. Firstly, the recent capital raise at ~23c followed by aggressive buybacks at ~12.5-14c-17c seems unwise. Although buying now avoids this dilution, it is unclear why excess capital was required if dividends and buybacks were announced shortly thereafter. Secondly, the share price has historically languished due to a lack of publicity and detail on the transformational Orexplore. It is likely that management were unwilling to oversell the Orexplore narrative before genuine contracts were won and the technology was established. Now that these are in place, hopefully the corporate restructure can take place and the upcoming strategic review can provide a clearer picture for the near term.
submitted by Bruticus91 to ASX_Bets [link] [comments]

AEF - A Misunderstood Superannuation Fund

AEF - A Misunderstood Superannuation Fund
Although AEF uniquely benefits from the structural tailwinds of both superannuation and ethical investing, we believe it remains misunderstood as an expensive traditional fund manager.

The Opportunity
Australian Ethical Funds (ASX.AEF) is a public market superannuation fund manager. The perception of the company itself vs. the industry is nicely summarised by the two figures below. Herein lies the opportunity.

https://preview.redd.it/jhvvua1t5oj51.png?width=680&format=png&auto=webp&s=e511deb4411e81840ffcf8b635e1d8f7b78eeb6e
AEF is a renowned Australian fund manager that fits within the ESG trend. It represents one of the only pure play superannuation investments in the Australian public market, with 67% of funds under management (FUM) coming from superannuation. The stock bounced exceptionally from a low of $2 in March, reaching a high of $9 in June, and has since retraced towards the low $4s. Previously, the business traded at $6+ following its announcement of end of year FUM and expected earnings figures. On 8th August IOOF Holdings (ASX.IFL) – 19.9% shareholder – announced it was divesting 15% of its stake in AEF. IOOF is a peer and platform provider which offers AEF products to its clients. The investment was sold at $5.24 vs. market price of $5.90. IOOF disclosed it was selling its AEF investment (at a gain) to raise much needed liquidity. The block trade was viewed negatively by the market, with AEF immediately re-rating to below $5.24 and trending downwards (towards low $4s) ever since. The current share price of $4.17 (24 August close) implies the stock is trading at ~51x FY20 earnings guidance, which is slightly above historical levels despite substantially improved performance and outlook. We suspect that the FY20 results will be aligned with guidance (as demonstrated historically) provided in the quarterly FUM update and guided earnings figures. Results have also been positive across its peers throughout mid to late August (see ‘Roadmap’).

https://preview.redd.it/t4oy3ksu5oj51.png?width=478&format=png&auto=webp&s=e2a88ef0bf70fba2e85d36bc71a1df2994217dcf
Company History
AEF began as Australian Ethical Investments (AEI) in 1986 and was owned by 600 insider shareholders before listing. It is a superannuation fund – so revenue is derived from fees on managing invested funds. By 2005, the business managed four unit trusts and a superannuation fund:
· Australian Ethical Balanced Trust (est. 1989)
· Australian Ethical Equities Trust (est. 1994)
· Australian Ethical Income Trust (est. 1997)
· Australian Ethical Large Companies Share Trust (est. 1997)
· Parent of Australian Ethical Superannuation (est. 1998)
The investments of the trust and super fund are guided by ‘The Charter’ – a series of positive and negative investment screens that must be taken into account when selecting securities for inclusion.

https://preview.redd.it/cye711106oj51.png?width=680&format=png&auto=webp&s=60c149549d7d752c26108c662ec319b56ebf371a
In July 2005, the government enacted policy that afforded more choice to individual employees with regards to their superannuation provider (marking the beginning of a positive era for the superannuation industry). In that same year, AEF registered for a superannuation license which it was granted in 2006. Back in 2005/06 the company did not split out superannuation FUM, but FUM increased from $311m in Jun-05 to $380m in September-05 following this policy shift – suggesting there was an existing demand for ethical investment products in superannuation.
From 2005 to 2011, AEF grew total FUM from $311m to $644m, despite muted FUM growth through the GFC-era. In 2012, the business began separating out its superannuation FUM-growth to improve its visibility. This era saw FUM increasing from $617m in 2012 to $4.05bn as at 30 June 2020.
From 2016-19 reduction in FUM-based fees has seen suppressed revenue growth vs. FUM growth. This has resulted in several step changes in FUM-based revenue margins (revenue / FUM) as a result of lower overall fees earned on products. We view this shift as a positive in the long-run since AEF has competitively priced its funds, entrenching their competitive advantages (discussed below) and reducing the temptation that fee-conscious members switch funds. Since AEF has ratcheted the cost of their funds downwards (often ahead of their peers and industry averages), we believe fee compression improves the durability of AEFs revenue compared to peers who are yet to compress their margins.

https://preview.redd.it/fcq5jog26oj51.png?width=453&format=png&auto=webp&s=d194c8778727e9adf1ebc162e6b181d8207cc292
Business Model
AEF has a relatively simple business model – revenue is derived from fees on managing invested funds. The funds it manages includes retail, institutional and wholesale (non-super) funds, as well as superannuation funds. We are most interested in the superannuation business although the direct and indirect benefits associated with the funds management business are a noteworthy component to the brand and investment management infrastructure (i.e. ideation / performance fee generating / high performing ESG). Until 2012, AEF did not explicitly separate its super vs. non-super FUM. We believe this contributed to its (mis)perception as a traditional fund manager rather than a superannuation fund. Thankfully, since 2012 AEF has provided details relating to the composition of its FUM (below), and noticeably the growth in its superannuation FUM has been the driving force of the business.

https://preview.redd.it/6ccbtqm36oj51.png?width=680&format=png&auto=webp&s=6fb4e11064313ca9ab7b57186b2eddc6be62b928
Competitive Advantage
1. Superannuation Exposure: Superannuation FUM is higher growth and lower risk than traditional managed funds. Superannuation funds are regulated to grow at 9.5% due to the Superannuation Guarantee (the Australian Government mandated superannuation contribution). The regulatory framework could see this increase up to 12% in the medium-term and 14% in the long-term. For the purpose of our analysis, we have assumed a constant 9.5% contribution – so any increase would be additional upside. More importantly, excluding fulfilling conditions of release (i.e. death) an individual's superannuation cannot be withdrawn until retirement. Much like the Superannuation Guarantee, withdrawals are also mandated on a schedule that increases as a percentage of FUM with age (beginning at 4% and increasing to 14%). Consequently, the minimum inflows and withdrawals are predictable (and we note the vast majority of individuals do not deviate from these minimum levels due to inertia). Because of this mandated growth, Australia has the fourth largest pension sector in absolute terms and second largest relative to GDP (below). In 2020, the total superannuation pool is ~$2.1trn and growing. It is estimated that by 2040 superannuation assets could be as much as $9trn according to the Australian Treasury.

https://preview.redd.it/wenevil56oj51.png?width=680&format=png&auto=webp&s=c2210a8e26816af1ebf798d82c414c61760c5d5e
Alternatively, traditional managed funds are subject to redemption risk, caused (typically) by performance and myopic investor behaviour associated with general market movements. Therefore, FUM growth for traditional managed funds must be attracted through marketing and distribution channels. This inextricably links fund inflows and outflows to performance and marketing efforts, which in turn causes a clientele that is more expensive to acquire and retain, and a more volatile pool of assets. Alternatively, traditional managed funds may access capital through secondary capital raisings and the reinvestment of distributions; both of which are a country mile from a 9.5% government mandated contribution.
Logically, we wondered which (listed) asset could provide us with exposure to the exceptionally robust superannuation tailwind. We will not spend too much time detailing the industry dynamics and public market players as there is a lot of information to be found in various prospectus’ (see Raiz or OneVue prospectus). The main thing to understand is that superannuation funds can be separated into five buckets:

https://preview.redd.it/jyykix976oj51.png?width=680&format=png&auto=webp&s=07e96ebc246a565546e400ef87018d3d3360cd48
After screening for diversified financials and financials businesses on the ASX there were 53 players with at least some revenue linked to superannuation. The revenue exposure desired is revenue linked to superannuation FUM (explained further in the ‘Valuation’). However, it is important to understand that gaining access to this lucrative industry is difficult for several reasons:
· Private industry funds – the gems of the industry have been private superannuation funds such as CBUS, Hostplus, and ESTA. We cannot access them as public market investors.
· Conglomerate financials – it is possible to gain some retail superannuation exposure within the banking majors such as CBA, WBC, ANZ and NAB. However, they represent insignificant exposure by revenue and profit and the stocks are driven by other risk and growth factors.
· Fund managers – fund managers may directly manage retail superfunds or SMSF funds such as Magellan, Platinum and Perpetual. However, there is limited visibility over superannuation FUM exposure.
· Superannuation adjacency businesses – superannuation exposure can also be housed within wealth / platform advisers such as like HUB24, Netwealth and OneVue. However, to varying degrees, these businesses are not purely exposed to superannuation-FUM linked revenue.
· Pure play sub-scale – the final example can be found in Raiz, which is a sub-scale business that has ~$450m in FUM of which 85% is funds management. It is possible to envisage this business as an AEF in 10-15 years with larger superannuation FUM exposure. Although the superannuation exposure representing $70m in FUM currently (vs. AEF $2.72bn) is vastly inferior to AEF.
For this reason, AEF is the closest to a pure play (at scale) superannuation player.
Putting this together, we believe AEF is likely to continue to grow its FUM at 20% p.a. YoY. This is principally due to AEF's ability to acquire new members and retain existing members. Therefore, to monitor this continued FUM growth going forward we encourage readers to look out of the number of superannuation members added in these upcoming results and beyond. AEF has grown its member base YoY consistently in an industry which has, on average, been relatively flat in terms of member growth. In 2019 AEF was the highest growing superannuation business in Australia across the previous 5-years.

https://preview.redd.it/c4t7jx596oj51.png?width=226&format=png&auto=webp&s=51e47aa607470ce6482ed30352183a6cf6043bff
1. Ethical, Social and Governance (ESG): Beyond the obvious tailwinds in superannuation, AEF is also exposed to another important trend: ESG. Needless to say, ESG investing is becoming not only popular but almost mandatory for corporate money managers. Younger demographic investors are increasingly concerned with the ethical and social impacts of corporate activity. This report by Harvard and another by State Street provide some interesting commentary on the issue. ESG ETFs have been growing at a CAGR of >30%, and State Street forecasts that the global ESG ETF market will increase from US$170bn in 2020 to US$1.3trn in 2030. Momentum for ESG ETFs has been building specifically in Australia, where AUM surged almost 300% — from A$554.1m in 2017 to A$2.2bn in 2019.
Whilst the ESG-shift has been occurring since the 2010s, State Street argue that COVID-19 will only further catalyse this shift by highlighting the inherent inequalities in society and health care systems, in turn, spurring social conscience. We note the following data points as indicators of this more recent catalyst:
· Perpetual’s recent acquisition of Trillium, a US-based ESG fund, shows the desire of traditional asset managers to become exposed to this space.
· BlackRock has started publishing more frequently and consistently on ESG trends and continued rolling out ESG products.
· Forager’s investment blog received frequent commentary from investors talking about negative screening on their gambling holdings which has never been the case in the past.
The key insight is that a growing proportion of the investment community through time is becoming concerned with ESG issues and this will drive fund flow. Industry data is pointing to the fact that this is a prolonged structural shift rather than a short-term trend.
2. Performance: AEF has improved upon their exposure to structural industry trends in superannuation and ESG through excellent fund performance. AEF's performance (below) has been consistently strong across all of their strategies (we highly recommend reading page 4 of Sequoia's June 15, 2020 "Investor Day Transcript" to highlight how governance and performance are complimentary). Such strong performance not only disincentivises members from switching to competitors and assists member acquisition, but also significantly enhances earnings at the group level. For instance, FY20 guidance provided on 7 July 2020 vs. 22 June had a midpoint difference of ~$2m. Given the long track record of the managers it is expected performance will remain strong.

https://preview.redd.it/p6shg5nc6oj51.png?width=680&format=png&auto=webp&s=e65acb553371c6bc7c1f70ddfdf153e9e625117a

https://preview.redd.it/mtn23k7d6oj51.png?width=680&format=png&auto=webp&s=9a7ba471248070f9f05216cdf5bbcab2a1f9102b
Valuation
Key:
· FUM = funds under management
· FUA = funds under administration
· MA = managed accounts
· FU\ = total funds (FUM + FUA + MA)*
Valuing a Superannuation Member: Our valuation technique here will be somewhat unconventional. We will attempt to value the lifetime revenue per member (LRM) for AEF and for a traditional fund and then highlight the incongruity of their relative valuations.
The long-term nature of lifecycle retirement saving (and by virtue the true value of a superannuation fund) demands a long term perspective. Fortunately, the mandated nature of AEFs cash flows facilitates evaluating the lifetime value of a superannuation member. To estimate the LRM we consider the following: (i) life cycle expectations (i.e. retirement age and life expectancy); (ii) salary expectations; (iii) superannuation contribution rate; (iv) investment returns; (v) member "type;" (vi) fee structure; and (vii) a discount rate.
We begin by assuming a member makes $5,000p.a. at age 20, which grows to $130,000p.a. through the middle of their working life (35-50) and then declines to $90,000p.a. at 65 (noting these are gross values not inflation adjusted). Since the average member account balance for AEF is ~$60,000 (FUM of $4.05bn ($2.72bn of which is superannuation) / 43,000 members = $60,000 as at 30 June 2019), we can roughly assume that the average age of their member is between 30-35, which places them at the profitable end of this member acquisition cycle. Further, this member regularly contribute 9.5% of their earnings to their superannuation, which compounds at a rate of 6% p.a. Moreover, the prototypical member starts working / paying superannuation into AEF at age 20, retires at age 65, and redeems according to the minimum withdrawal schedule until age 85. However, how many members live according to this prescribed lifecycle; supported by an uninterrupted working life? What about people that take time off to raise children, either returning to part-time work or full-time work? We can model these archetypes also, which assumes much lower income growth and some years of earning no income. If we assume that society is roughly split into thirds by these archetypes (i.e. 1/3 uninterrupted, 1/3 interrupted and return part time, 1/3 interrupted and return full time), then we can calculate a weighted average LRM for the average member. Compressing fees by more than half to 50bps and assuming a 7% discount rate we arrive a weighted average discounted LRM of ~$18,000.
Whilst comparing this to the average member in another non-super fund is difficult for an array of reasons (i.e. average acquisition age, average income, average balance, average contribution, redemption allowance etc.), we can loosely estimate what this looks. Adopting the same framework as above, to estimate the LRM of an average managed fund member we must first define the managed fund member "archetype." First, we assume the average traditional fund member has a higher income profile (as lower income earners typically do not invest in managed funds). We tweak the income profile to peak at $180,000 between 35-50 and taper down to $120,000 by age 65. Second, we assume the acquisition age is 30 years rather than 20 to reflect that most individuals do not invest in traditional managed funds until later in life. Thirdly, we account for the non-compulsory nature of managed fund contributions. If we start with the marginal savings rate (10-year average of ~7%) as a proxy for available funds for investment and increase this to align with our ‘managed funds’ archetype who has higher income to 15%. We then assume that from this 15%, about 1/3 will be invested into a managed fun (or ~5%). Therefore, for our individual earning $180,000 during peak working years, this is an annual contribution of $7,200. Finally, we increase the discount rate to 9% since because redemptions are more likely in a traditional fund. Using these alternative assumptions, we arrive at a LRM of ~$5,000.
The significant difference in LRM helps explain why a superannuation business can command a much higher multiple of FUM or earnings. Further, we believe our estimate of LRM for a traditional fund manager is quite bullish (i.e. overstated) due to the following: (i) it assumes the individual works full-time for their entire life; and (ii) it assumes the individual stays with the fund from age 30 to 65 and makes uninterrupted and stable contributions. Although dollar cost averaging is touted as an eighth wonder of the world, we are doubtful it is applied as often as it is spoken.
Trading Multiples Valuation: Valuing AEF on a relative basis is difficult given the lack of peers. Against traditional fund managers (i.e. Magellan, Perpetual and Platinum), which trade between 5-20x earnings, and superannuation exposed platforms (i.e. Netwealth and Hub24), which trade between 25-40x earnings, AEF looks relatively expensive. We are acutely aware that AEF is currently (at ~$4.2) trading at 12.6% of FUM and ~51x earnings; and at its peak (~$9) was trading at 25% of FUM and 120x earnings. We believe the valuation difference is driven by the quality of the FUM managed and, therefore, the quality of the earnings growth.
Given their high alignment to superannuation, NWL and HUB are the two most comparable firms to AEF. As the trailing figures show, AEF appears to be trading on par with its peers. However, an important nuance is the trailing figure for AEF is based on 2019 earnings, whilst for NWL and HUB it is based on FY20 earnings given they have already reported. As such, on a like-for-like basis AEF’s ‘trailing’ earnings multiple (based on the mid-point of management’s guidance) is actually ~51x. This means it is trading below NWL and HUB, despite the fact that the majority of those businesses’ FU* is linked to FUA rather than FUM, which has a lower monetisation rate. Not to mention, the split between superannuation and managed funds is not as clearly delineated as is the case with AEF. What is also evident is limited analyst coverage of AEF and lack of forecast guidance assisting the market to predict growth (as is the case with NWL and HUB).
Relative to traditional fund managers (i.e. PPT, PTM and MFG), we note the substantial difference in FUM and business quality. AEF hosts the highest monetization rate (Rev/FUM), even whilst facing fee compression, with the highest FUM growth among its investment management peers. Furthermore, we expect EBIT margins will improve from ~30% toward its larger traditional fund managers peers due to economies of scale over time that we believe will more than offset any fee compression. AEF has also supported a very high ROE due to its sticky clientele and service-based business model. The combination of: (i) best in class monetization; (ii) high LTM and increasing membership base; (iii) improving margins; and (iv) high ROE will make for an incredible growth engine on earnings in the long term. Thus, AEF is a higher quality business with ~4x+ the LCM of a traditional fund trading at only a 2-3x premium using current ratios...

https://preview.redd.it/nffeuvef6oj51.png?width=680&format=png&auto=webp&s=e0aed3fcb4464355aa965ed151d6dc2e484ff4b8
Risks
We note the following investment risks with AEF:
  1. Fee Compression – The funds management industry is subject to fee compression across both funds and superannuation funds. There has already been a lot of restructuring of AEF’s fees since 2016. The investment product(s) they advocate is also one that serves an ethical / moral dimension and can arguably be charged at a premium above market. Notwithstanding fee compression beyond that which we have considered would place downward pressure on margins.
  2. Member Attrition – The stickiness of AEF's membership base is a hallmark of their competitive advantage although this could be reversed over time due to poor performance or corporate mismanagement. We encourage the reader to keep an eye on member growth and net inflows over time.
  3. Product Reproduction – There is no official IP upon ESG investing and new products are increasingly being promoted to capture market share of this growing market. We believe AEF's early mover and strong brand serve to mitigate this risk.
  4. Regulatory Risks – Changes in the superannuation regulatory environment can be material. This has long been debated within the public domain although it has been viewed as politically unfavourable to change the superannuation system without a reasonably long lead time and grandfathering provisions, which we hope would make any changes unlikely and less meaningful.
Investment Roadmap
Peers’ Earnings Updates: In summary, the FY20 results of peers indicate that businesses with revenues dependent on investment funds have performed quite strongly during this period.

https://preview.redd.it/np04rasg6oj51.png?width=680&format=png&auto=webp&s=0de02bee60036e9bd71068815e618c2f3711db24
Earnings Announcement: Earnings release on 26 August 2020 should provide for the first catalyst to remind the market of the AEF's fundamental performance. The key figures here will be superannuation FUM, superannuation members and FY20 earnings. AEF will also provide ongoing quarterly FUM announcements, with the following update due in early October. We may also see a mid-August FUM figure in the most recent announcement. Finally, AEF has historically provided updated FUM in back-dated results announcements. Evidence of this occurring can also be found in HUB's most recent announcement:

https://preview.redd.it/jz8frxfi6oj51.png?width=680&format=png&auto=webp&s=325d7973e1eb6c98e714dea69306b1ebf8ab0cc7
Private Market Activity: Whilst we think that a private equity buyout is unlikely for AEF, further media exposure and transaction data points should help the public value these assets. There have been some recently executed and rumoured deal activity in the space through 2020. Notably, KKR – one of the largest US-based global private equity funds – bought a 55% stake in Colonial First State valued at ~$3bn from CBA. The implied valuation was ~16x EBITDA, despite the quality of business model and LTM of members being substantially weaker than AEF. There is similar PE interest in NAB’s MLC Wealth, with US funds CC Capital and FC Flowers on second round bids for the asset. NAB's MLC Wealth business caught the attention of Carlyle, BlackRock, and KKR earlier in the year although deals were not executed. The interest from KKR in Colonial is particularly notable, given Scott Bookmyer (KKR partner) who refers to Australian superannuation as the ‘the envy of the western world’. We believe AEF may benefit indirectly from private equity interest, which will confirm both the long-term value and viability of their business model.
submitted by Bruticus91 to ASX_Bets [link] [comments]

Selling Project - Part 16

Hey guys!
It has been FOREVER since my last update and a ton has happened. Sorry for the long post, but hopefully some people appreciate a detailed dive into everything.
A really really really brief recap of the past fifteen parts
I started in December of 2018 with $1,165 with the goal of making $10,000 in one year. In 2019, I had bought and sold over $40k in baseball, football and various sports trading cards. I had a few great successes ($1,165 into $3,085 before fees - $2,771.20 into $6,200.10 before fees - $1,086.68 into $3,190.54 before fees) and a few duds. I generally sell my cards on ebay, but utilize auction houses every now and then. The biggest bottleneck I face is submitting cards to PSA (a third party grading company), a card might have a 2-4 month turnaround time. To successfully "flip" you need to balance some of these purchases with shorter flips. In 2019, I ended with a final profit of $9,262.28 – a tad bit short of my goal. In 2020, my goal is $20,000 (fitting). Using my margins from 2019, I would need to sell around $85k in cards.
I also keep a few cards for my personal collection (more on that below). Here are the cards I have kept so far.
You can find the previous installment here
PERSONAL UPDATE
First, I hope everyone is doing well and staying sane. It has been an absolutely wild three months for me, I found out I’m going to be an uncle, I got a cat and I decided I was going to propose to my girlfriend this weekend! I have still been keeping up with this project, the prices for baseball cards have absolutely skyrocketed over the past couple months, so there hasn’t been the same amount of buying as usual. I am going insane with working from home and trying to keep my head above water with everything, but flipping has been (at times) a nice escape. I am fortunate enough to be flipping something that I am passionate about, baseball cards, so I am able to enjoy this and see a lot of neat cards along the way.
In that spirit I have decided to begin keeping some cards for my personal collection as I go along. I read somewhere an interesting method of collecting, reducing your collection to 25 cards. I wanted to give it a shot with a bit of a twist, I want to keep a collection of 25 cards, but still make a profit along the way. So a couple ground rules I set for myself: * The collection is limited to vintage baseball cards (generally 1980’s and older). This was my first collecting passion and I’d like to try to keep to it.
So, without further ado, here are the first four cards in this project. The 1949 Berra came from the Yogi Berra lot I bought from SCP in January. The grades finally came back last week and I did very well on a few cards, so I felt that I deserved to spoil myself a bit. The 1949 Bowman set holds a special spot in my heart for me, my best flip ever was a group of 1949 Bowman cards I purchased for $300 which included a Jackie Robinson rookie that graded PSA 8! I sold it for over $10k. This Yogi Berra card is well centered, nice registration and a great mid-grade example of a baseball icon. I love it. The Ted Williams card and the Willie Mays both came from the December Heritage lot that I had purchased. PSA took FOREVER on this order. I was a little disappointed in the overall grades, but am confident I will turn a profit. The 1956 Topps Ted Williams is such a cool card and a staple in post-war collecting. The Mays I always liked – it’s a little beat up, but the centering is near perfect and the color looks sharp. Finally, I nabbed the 1969 Yaz. This was mostly done because I love the set. 1969 Topps was the last set to feature Mickey Mantle, something that I think goes underappreciated. The set design has always been pretty crisp, it has a couple great rookies and great all-star rookie cards. I’m a fan. Anyways! None of these cards are permanent, I can sell them at any time, but I’d imagine they will be in the collection a while.
Purchased
What Sold
PSA Update
Here is a link to the Google Doc with the status of all of my PSA cards. The spreadsheet also includes a summary of where the project is.
PSA is still extremely backlogged. For this project, I have 276 items with them. Luckily I was able to get quite a few cards back from them recently! As I previously mentioned, I received back the Yogi Berra cards I sent them in January and the Heritage cards I sent in December. Overall I am happy enough with the grades. I think they were fair on the Berra cards and they were rough on the Heritage cards (they were separate orders). I already listed or consigned these cards, so I will have updates next month on these.
Below is an updated summary:
For items purchased in 2019 (denoted with a “*”), the “cost” column represents the ending 2019 inventory valuation. For items purchased in 2020, the cost column is the cost. In the Google Sheet I included an in-depth P&L with full results and 2019 details.
Item Cost* Sold Fees Inventory^ Profit
1936 Goudey Lot (8) 50.00 56.50 (8.48) - (1.98)
Hank Aaron "Odd-Ball" Collection 150.00 777.29 (116.59) - 510.70
(16) Pre-WWII card lot w/ Cobb 1,300.00 1,708.52 (256.28) - 152.24
(23) Sandy Koufax 1950's and 1960's lot 250.00 299.50 (44.93) - 4.57
1977-1979 Topps Baseball Rack & Cello Packs (6) 250.00 380.00 (57.00) - 73.00
1957 Swift Meats Game Complete Set (18) 800.00 680.00 (102.00) (222.00)
(36) 1950s-2000s Multi-Sports Collection 500.00 1,528.51 (229.28) - 799.23
1933-1989 Wax Pack Wrapper Hoard (650+) 400.00 1,918.01 (287.70) - 1,230.31
1941-2004 Multi-Sport Group (33) 800.00 2,859.83 (428.97) 100.00 1,730.86
1912 B18 Blanket Find (100) 1,270.80 1,136.24 (170.44) 500.00 195.00
1962-63 Parkhurst Hockey Lot (45+) 500.00 287.26 (43.09) 400.00 144.17
1953 to 1969 Mickey Mantle Group (16) 1,000.00 2,747.85 (412.18) 150.00 1,485.67
1956-1959 Baseball Star Collection (48) 1,130.00 322.04 (48.31) 900.00 43.73
1961-1969 Baseball Star Collection (61) 804.95 257.78 (38.67) 600.00 14.16
1948-1965 Yogi Berra Collection (26) 1,400.00 399.50 (59.93) 1,050.00 (10.43)
Lot of (4) Signed Perez-Steele Postcards 676.59 - 676.59 -
1950's-1980's Football Wrapper Lot (42) 920.00 1,944.23 (291.63) 732.60
1953 Topps Partial Set (208) 1,472.00 2,855.13 (428.27) 100.00 1,054.86
1953-55 Dormand Postcard Set (47/52) 685.00 804.85 (120.73) 250.00 249.12
1959 & 1960 Venezuela Topps Lot (34) 216.00 58.66 (8.80) 200.00 33.86
1959 Topps Baseball High Grade Set 1,557.30 1,132.80 (169.92) 1,000.00 405.58
1970 Topps Super Proofs Lot (12) 405.41 493.75 (74.06) 200.00 214.28
1887 Allen & Ginter Boxing Lot (14) 403.40 403.40 -
1954 Topps Starter Set (119/250) 662.22 707.50 (106.13) 500.00 439.16
1947 Bond Bread Jackie Robinson Lot (6) 2,220.00 2,125.00 (318.75) 1,480.00 1,066.25
1934 R310 Butterfinger Ruth & Gehrig Lot (2) 720.00 720.00 -
1959 Topps Baseball Near Set (571/572) 3,620.00 3,620.00 -
1973 Topps Complete Set 2,512.40 6,347.41 (952.11) 600.00 3,482.90
1961 Topps PSA Graded Set 5,791.60 11,445.51 (1,716.83) 100.00 4,037.08
2013 Bowman Chrome Judge Black Wave Auto 1,940.00 1,940.00 -
1961-1982 Signed Card Lot (19) 1,364.40 1,120.00 (168.00) 800.00 387.60
35,772.07 44,393.67 (6,659.05) 16,289.99 18,252.54
*-denotes inventory purchased in 2019 valued at 2019 y/e figures. ^ -inventory on hand is valued at a conservative estimate of fair market value for remaining items. `-grading fees are expensed when the card is sent to PSA, fees are not paid until PSA has completed the order. Fees that are expensed, but not paid are sitting in Accounts Payable below.
2020 Grading Fees`: $2,944.79
Current On Hand
Cash: $5,588.15
Inventory See the Google sheet
ALSO! If anyone is interested in what the financials for this project would look like, see below. With 2019 officially in the book, I moved the final 2019 financial statement over for a year-over-year comparison:
As of 8/25/2020 2020 YTD 2019 Final
Cash $5,588.15 $1,680.15
Accounts Receivable $6,743.43 $-
Inventory^ 16,289.99 $10,605.75
Accounts Payable` ($2,886.54) ($1,858.62)
Retained Earnings ($9,262.28) $-
Initial Capital ($1,165.00) ($1,165.00)
Revenue ($44,393.67) ($40,163.15)
Cost of Goods Sold $19,482.08 $22,582.96
Fees (15% of Rev.) $6,659.05 $5,956.97
Grading Fees $2,944.79 $2,360.93
FORECAST
My goal is $20,000 profit for the year. Right now I’m $15,307.75 – PSA has dramatically slowed turnover, but I am definitely on pace to hit my goal, gross margins are up in 2020 compared to 2019 (56.1% vs. 43.8%) and net margins are also up (34.5% vs 23.1%). Sales more than doubled since the last installment and with orders finally coming back from PSA, I should continue to see steady sales.
I look forward to continuing to update everyone on this. Hope you enjoy as much as I do.
Jason
submitted by MachiavellianFuck to baseballcards [link] [comments]

Baseball Card Flipping Project - Part 16

Hey guys!
It has been FOREVER since my last update and a ton has happened. Sorry for the long post, but hopefully some people appreciate a detailed dive into everything.
A really really really brief recap of the past fifteen parts
I started in December of 2018 with $1,165 with the goal of making $10,000 in one year. In 2019, I had bought and sold over $40k in baseball, football and various sports trading cards. I had a few great successes ($1,165 into $3,085 before fees - $2,771.20 into $6,200.10 before fees - $1,086.68 into $3,190.54 before fees) and a few duds. I generally sell my cards on ebay, but utilize auction houses every now and then. The biggest bottleneck I face is submitting cards to PSA (a third party grading company), a card might have a 2-4 month turnaround time. To successfully "flip" you need to balance some of these purchases with shorter flips. In 2019, I ended with a final profit of $9,262.28 – a tad bit short of my goal. In 2020, my goal is $20,000 (fitting). Using my margins from 2019, I would need to sell around $85k in cards.
You can find the previous installment here
PERSONAL UPDATE
First, I hope everyone is doing well and staying sane. It has been an absolutely wild three months for me, I found out I’m going to be an uncle, I got a cat and I decided I was going to propose to my girlfriend this weekend! I have still been keeping up with this project, the prices for baseball cards have absolutely skyrocketed over the past couple months, so there hasn’t been the same amount of buying as usual. I am going insane with working from home and trying to keep my head above water with everything, but flipping has been (at times) a nice escape. I am fortunate enough to be flipping something that I am passionate about, baseball cards, so I am able to enjoy this and see a lot of neat cards along the way.
In that spirit I have decided to begin keeping some cards for my personal collection as I go along. I read somewhere an interesting method of collecting, reducing your collection to 25 cards. I wanted to give it a shot with a bit of a twist, I want to keep a collection of 25 cards, but still make a profit along the way. So a couple ground rules I set for myself: * The collection is limited to vintage baseball cards (generally 1980’s and older). This was my first collecting passion and I’d like to try to keep to it.
So, without further ado, here are the first four cards in this project. The 1949 Berra came from the Yogi Berra lot I bought from SCP in January. The grades finally came back last week and I did very well on a few cards, so I felt that I deserved to spoil myself a bit. The 1949 Bowman set holds a special spot in my heart for me, my best flip ever was a group of 1949 Bowman cards I purchased for $300 which included a Jackie Robinson rookie that graded PSA 8! I sold it for over $10k. This Yogi Berra card is well centered, nice registration and a great mid-grade example of a baseball icon. I love it. The Ted Williams card and the Willie Mays both came from the December Heritage lot that I had purchased. PSA took FOREVER on this order. I was a little disappointed in the overall grades, but am confident I will turn a profit. The 1956 Topps Ted Williams is such a cool card and a staple in post-war collecting. The Mays I always liked – it’s a little beat up, but the centering is near perfect and the color looks sharp. Finally, I nabbed the 1969 Yaz. This was mostly done because I love the set. 1969 Topps was the last set to feature Mickey Mantle, something that I think goes underappreciated. The set design has always been pretty crisp, it has a couple great rookies and great all-star rookie cards. I’m a fan. Anyways! None of these cards are permanent, I can sell them at any time, but I’d imagine they will be in the collection a while.
Purchased
What Sold
PSA Update
Here is a link to the Google Doc with the status of all of my PSA cards. The spreadsheet also includes a summary of where the project is.
PSA is still extremely backlogged. For this project, I have 276 items with them. Luckily I was able to get quite a few cards back from them recently! As I previously mentioned, I received back the Yogi Berra cards I sent them in January and the Heritage cards I sent in December. Overall I am happy enough with the grades. I think they were fair on the Berra cards and they were rough on the Heritage cards (they were separate orders). I already listed or consigned these cards, so I will have updates next month on these.
Below is an updated summary:
For items purchased in 2019 (denoted with a “*”), the “cost” column represents the ending 2019 inventory valuation. For items purchased in 2020, the cost column is the cost. In the Google Sheet I included an in-depth P&L with full results and 2019 details.
Item Cost* Sold Fees Inventory^ Profit
1936 Goudey Lot (8) 50.00 56.50 (8.48) - (1.98)
Hank Aaron "Odd-Ball" Collection 150.00 777.29 (116.59) - 510.70
(16) Pre-WWII card lot w/ Cobb 1,300.00 1,708.52 (256.28) - 152.24
(23) Sandy Koufax 1950's and 1960's lot 250.00 299.50 (44.93) - 4.57
1977-1979 Topps Baseball Rack & Cello Packs (6) 250.00 380.00 (57.00) - 73.00
1957 Swift Meats Game Complete Set (18) 800.00 680.00 (102.00) (222.00)
(36) 1950s-2000s Multi-Sports Collection 500.00 1,528.51 (229.28) - 799.23
1933-1989 Wax Pack Wrapper Hoard (650+) 400.00 1,918.01 (287.70) - 1,230.31
1941-2004 Multi-Sport Group (33) 800.00 2,859.83 (428.97) 100.00 1,730.86
1912 B18 Blanket Find (100) 1,270.80 1,136.24 (170.44) 500.00 195.00
1962-63 Parkhurst Hockey Lot (45+) 500.00 287.26 (43.09) 400.00 144.17
1953 to 1969 Mickey Mantle Group (16) 1,000.00 2,747.85 (412.18) 150.00 1,485.67
1956-1959 Baseball Star Collection (48) 1,130.00 322.04 (48.31) 900.00 43.73
1961-1969 Baseball Star Collection (61) 804.95 257.78 (38.67) 600.00 14.16
1948-1965 Yogi Berra Collection (26) 1,400.00 399.50 (59.93) 1,050.00 (10.43)
Lot of (4) Signed Perez-Steele Postcards 676.59 - 676.59 -
1950's-1980's Football Wrapper Lot (42) 920.00 1,944.23 (291.63) 732.60
1953 Topps Partial Set (208) 1,472.00 2,855.13 (428.27) 100.00 1,054.86
1953-55 Dormand Postcard Set (47/52) 685.00 804.85 (120.73) 250.00 249.12
1959 & 1960 Venezuela Topps Lot (34) 216.00 58.66 (8.80) 200.00 33.86
1959 Topps Baseball High Grade Set 1,557.30 1,132.80 (169.92) 1,000.00 405.58
1970 Topps Super Proofs Lot (12) 405.41 493.75 (74.06) 200.00 214.28
1887 Allen & Ginter Boxing Lot (14) 403.40 403.40 -
1954 Topps Starter Set (119/250) 662.22 707.50 (106.13) 500.00 439.16
1947 Bond Bread Jackie Robinson Lot (6) 2,220.00 2,125.00 (318.75) 1,480.00 1,066.25
1934 R310 Butterfinger Ruth & Gehrig Lot (2) 720.00 720.00 -
1959 Topps Baseball Near Set (571/572) 3,620.00 3,620.00 -
1973 Topps Complete Set 2,512.40 6,347.41 (952.11) 600.00 3,482.90
1961 Topps PSA Graded Set 5,791.60 11,445.51 (1,716.83) 100.00 4,037.08
2013 Bowman Chrome Judge Black Wave Auto 1,940.00 1,940.00 -
1961-1982 Signed Card Lot (19) 1,364.40 1,120.00 (168.00) 800.00 387.60
35,772.07 44,393.67 (6,659.05) 16,289.99 18,252.54
*-denotes inventory purchased in 2019 valued at 2019 y/e figures. ^ -inventory on hand is valued at a conservative estimate of fair market value for remaining items. `-grading fees are expensed when the card is sent to PSA, fees are not paid until PSA has completed the order. Fees that are expensed, but not paid are sitting in Accounts Payable below.
2020 Grading Fees`: $2,944.79
Current On Hand
Cash: $5,588.15
Inventory See the Google sheet
ALSO! If anyone is interested in what the financials for this project would look like, see below. With 2019 officially in the book, I moved the final 2019 financial statement over for a year-over-year comparison:
As of 8/25/2020 2020 YTD 2019 Final
Cash $5,588.15 $1,680.15
Accounts Receivable $6,743.43 $-
Inventory^ 16,289.99 $10,605.75
Accounts Payable` ($2,886.54) ($1,858.62)
Retained Earnings ($9,262.28) $-
Initial Capital ($1,165.00) ($1,165.00)
Revenue ($44,393.67) ($40,163.15)
Cost of Goods Sold $19,482.08 $22,582.96
Fees (15% of Rev.) $6,659.05 $5,956.97
Grading Fees $2,944.79 $2,360.93
FORECAST
My goal is $20,000 profit for the year. Right now I’m $15,307.75 – PSA has dramatically slowed turnover, but I am definitely on pace to hit my goal, gross margins are up in 2020 compared to 2019 (56.1% vs. 43.8%) and net margins are also up (34.5% vs 23.1%). Sales more than doubled since the last installment and with orders finally coming back from PSA, I should continue to see steady sales.
I look forward to continuing to update everyone on this. Hope you enjoy as much as I do.
Jason
submitted by MachiavellianFuck to Entrepreneur [link] [comments]

LBO. Operating Margin vs Gross Margin. Hyundai Kia Margin VS Markup - and why you might be losing money What is a Gross Margin? Gross Profit Margins Profit Margins Explained (Income Statement Analysis)

Advantages . The advantage of trading on margin is that you can make a high percentage of gains compared to your account balance. For instance, let's assume that you have a $1000 account balance and you are not trading on margin. You initiate a $1000 trade that nets you 100 pips.In a $1000 trade, each pip is worth 10 cents. The gross profit margin for a company is not the same as the company's contribution margin. Gross Margin Gross profit margin -- also called "gross margin" -- is an overall measure of the total profit on sales that a company makes after subtracting only those costs directly associated with production. As a simple example, a company with $100,000 in total sales and $65,000 in direct production-related costs has a gross margin of 35%. The gross margin shows the percentage of total sales a company ... Gross profit describes a company's top line earnings; that is, its revenues less the direct costs of goods sold. The gross profit margin then takes that figure and divides it by revenue to get a ... Sometimes the terms gross margin and gross profit are used interchangeably, which is a mistake. While they measure similar metrics, gross margin measures the percentage (or dollar amount) of the comparison of a product's cost to its sale price, while gross profit measures the percentage (or dollar amount) of profit from the sale of the product.

[index] [125] [623] [476] [137] [443] [746] [706] [454] [451] [261]

LBO. Operating Margin vs Gross Margin. Hyundai Kia

What is Gross Margin? What is Operating Margin? How to calculate Gross Margin and Operating Margin? Gross Margin and Operating Margin are two key financial t... Profit Margin, Gross Margin, and Operating Margin - With Income Statements - Duration: ... The Ultimate Candlestick Patterns Trading Course - Duration: 38:11. Rayner Teo 2,083,921 views. Understanding the financial end of your business is crucial to your business success. In this video Bob helps you understand the difference between "gross ma... The Difference Between Mark Up and Gross Margin and Why Doing it Wrong is Costing you Money - Duration: 5:17. Small Fish Business Coaching - Tradies Toolbox 1,055 views 5:17 Profit Margin, Gross Margin, and Operating Margin all measure a business's profitability. Beginning accounting students sometimes confuse these three margins, so let me help clear up any confusion ...

#