Non-GAAP presentation and management incentives
What would make Jeff Gundlach bullish
Chinese accounting shenanigans at US listed companies
Accounting issues at Alibaba
The growing difference between GAAP and pro forma profits
More on non-GAAP games
Tuesday, May 31, 2016
Wednesday, May 18, 2016
Closing MFRM for now
Over the past week I’ve closed out my MFRM short position, as the share
price has come more in line with the following company-specific and broader
market realities:
- MFRM is a rollup acquisition model with exploding debt
- From a profitability standpoint, the company has yet to prove that this model has economies of scale
- Q1 earnings reports have been horrible for retailers
Here is a valuation table with updated figures based on MFRM’s 2016 guidance put forth in the Q4 earnings release.
With EV per store having fallen well below historical levels given the
current stock price, the valuation here in the low $30’s has provided a nice
return from the mid-$40’s where the short recommendation was initiated. While I
do think it could easily go lower, the risk-reward has become more symmetric.
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