The Market Bull

Tuesday, September 3, 2013

NGVC

Natural Grocers by Vitamin Cottage, Inc. is a specialty retailer of natural and organic groceries and dietary supplements. The Company operates within the natural products retail industry. The Company offers products and brands, including a selection of natural and organic food, dietary supplements, body care products, pet care products and books. The Company offers its customers an average of approximately 18,000 store-keeping units (SKUs) of natural and organic products per store, including an average of approximately 7,000 SKU of dietary supplements. As of June 30, 2012, the Company operated 55 stores in 11 states, including Colorado, Idaho, Kansas, Missouri, Montana, Nebraska, New Mexico, Oklahoma, Texas, Utah and Wyoming, as well as a bulk food repackaging facility and distribution center in Colorado.

Expect a short squeeze to play out in the near-term.

Valuation Measures

Market Cap (intraday): 873.99M

Enterprise Value (Sep 4, 2013): 873.40M

Trailing P/E (ttm, intraday): 93.88

Forward P/E (fye Sep 30, 2014): 63.87

PEG Ratio (5 yr expected): 2.98

Price/Sales (ttm): 2.13

Price/Book (mrq): 10.59

Enterprise Value/Revenue (ttm): 2.15

Enterprise Value/EBITDA (ttm): 31.13

https://www.tradingview.com/v/5IF2tMGB

Thursday, October 25, 2012

EXPR

Express, Inc. (EXPR) is a clothing retailer that targets men and women between the ages of 20 and 30. The stock has fallen significantly in the past year, and it appears to be a great value play. The stock's chart has a very significant gap that I am betting on being partially or completely filled.

The following are some multiples on the stock that reflect its value:

Price/Earnings: 6.61

Price/Sales: 0.46

Price/Book: 3.27

PEG (Price to Earnings Growth): 0.38

How do these compare with peers? The following are the retail industry's averages for these multiples:

Price/Earnings: 20.44

Price/Sales: 1.73

Price/Book: 6.57

PEG (Price to Earnings Growth): 1.46

EXPR has a Current Ratio of 1.48, a Quick Ratio of 0.70, and an Interest Coverage of 6.54 (company's operating profits are 6.54 times greater than interest payments). Therefore, it should not have difficulty in repaying its debt.

https://www.tradingview.com/v/mCHHyqeM

Tuesday, July 31, 2012

EUR/USD

Needless to say, Europe finds itself in a weak economic environment and with elevated/unsustainable levels of sovereign debt.

What solution is there to promote economic growth and diminish the debt burden? ... Printing money.

The ECB is likely to, at some point in the future, follow in the Fed's footsteps and inject liquidity into markets by increasing its balance sheet via large-scale asset purchases. A greater money supply should lead to more lending and more economic growth. More money should also, in theory, lead to inflation, thereby reducing the real value of outstanding debt.

So, if things continue exactly as they are now, the euro will weaken as investors consider the possibility/risk of disorderly defaults and of contagion. If, on the other hand, European policymakers "fix" the problem by printing money, the added supply of euros should further weaken the currency.

What reason is there to be bullish on the euro? Apparently none. Any rallies in the currency are probably due to short covering off news that, most likely, will not change the long-term outlook for Europe and its currency.

And, in my opinion, there isn't room for a contrarian argument to be made. Sure, a vast majority of investors are bearish on the euro, but such views are based on fundamental data which one cannot ignore.

https://www.tradingview.com/v/U7Jtx9oz

SPY

Global risk assets have rallied over the past couple days off remarks by European Central Bank president Mario Draghi that the ECB is ready to enact any measures in order to preserve the euro. Investors have been speculating that the ECB will initiate a form of quantitative easing in Europe. The ECB would be buying European assets, such as Spanish/Italian sovereign bonds and corporate bonds of companies in financial distress, via the European Stability Mechanism (ESM). The ECB would be lending money to the ESM, which would use this "printed money" to buy assets and then use these assets as collateral in a repo with the ECB. In effect, the European Central Bank is printing money and pumping it into the system. Were this to in effect take place, one would expect global risk assets to further rally. Since the ECB would be "printing" euros, this "solution" to the European debt crisis would further weaken the euro over the long-term. With markets discounting that world central banks will be announcing new measures this week. The US Fed will be meeting this week (FOMC meeting today and tomorrow). The Bank of England (BoE) and the ECB are also to meet this week. While investors expect the ECB to announce their version of QE, many anticipate that the Fed will be moving the IOER (interest on excess reservers) to 0% from 0.25%, with the hope of "forcing" banks to lend out the excess liquidity they hold above their capital requirements. With investors having such expectations going into the meetings this week, markets have factored in the possibility of these new economic measures going into effect. Were policymakers to disappoint and no new measures announced, expect the markets to sell off sharply. With such macro uncertainty (European debt crisis, potential Chinese slowdown, and US fiscal cliff) it seems smart to take profits at these levels in the market and to have a cautious outlook. This risk underweight thesis would only be changed by new policy measures effectively being announced this week or in coming months. However, there is no reason to be very bullish at these levels and with the current economic context.