Sunday, June 20, 2010

Summer hiatus

There will be occasional posts on TheAlphaNinja.com this summer, but will be sporadic.

More to follow.

Tuesday, June 8, 2010

Nice insider purchase at ION Geophysical (IO)


ION Geophysical director James Lapeyre continues to buy shares on the open market, as the stock has become about 30% cheaper in a matter of a few weeks...


Monday, June 7, 2010

Netflix for iPhone.....


Apparently Netflix (NFLX) will be available on your Apple(AAPL) iPhone this summer. Nice news for those of us who continue to wonder why we pay $90 per month simply to use a product that costs $100 at Walmart...

Netflix shares are up three dollars on the news. Interesting to see this news come out right after AT&T talked about going towards a usage model for pay plans, as Netflix will certainly be a bandwidth-hog....T shares are up 1.5%.


D Day....


Thursday, June 3, 2010

Yet another Wal-Mart effort to cut prices (WMT)


Makes sense...

Wal-Mart figures if it can master logistics better than their suppliers can, then they may as well go ahead and take over deliveries, leaving suppliers to focus on production and passing on the cost savings to customers.


The retailer aims to take over U.S. transportation services from suppliers in an effort to reduce the cost of hauling goods. Wal-Mart is contacting all manufacturers that provide products to its more than 4,000 U.S. stores and Sam's Club membership warehouse clubs, says Kelly Abney, Wal-Mart's vice-president of corporate transportation.

The goal: to handle suppliers' deliveries in instances where Wal-Mart can do the same job for less, then use those savings to reduce prices in stores, Abney says. Wal-Mart believes it has the scale to allow it to ship everything from dog food to lawn chairs more efficiently than the companies that produce the goods. "It has allowed our suppliers to focus on what they do best, manufacturing products for us," he says. "With lower costs usually comes increased sales."

A biased (but quite fair) opinion on Moody's from David Einhorn (MCO)

He's short the stock on the premise that it is unlikely they will win each and every legal battle headed their way over flawed ratings.



Wednesday, June 2, 2010

Random thought for the day

Warren Buffett continues to testify at the Financial Crisis Inquiry Commission today.  It's pretty interesting because this commission is MUCH less willing to attack this man, compared to the way Goldman Sachs employees were treated.

If anyone needs some extra summer reading, below is a little bit of the introduction to Inside Job: The Looting of America's Savings & Loans, written by Stephen Pizzo, Mary Fricker, and Paul Muolo.  Their research into the now extinct Centennial Savings & Loan is a fantastic look at the dangerous mix of brokered deposits and the riskier loan portfolios they necessitate.




Coauthors Steve Pizzo and Mary Fricker were jarred to attention by thrift 
deregulation's fallout when tiny, conservative Centennial Savings and Loan in 
their rural Northern California hometown of Guerneville began acting strangely 
in December 1982 (two months after the signing of the Garn-St Germain Act) 
and announced it was going to pay $ 1 3 million cash for a construction company. 
Pizzo was editor of the Guerneville weekly, the Russian River News, and Fricker 
was news editor. Pizzo wrote a news analysis highly critical of Centennial's plan 
to spend seven times its net worth' on a construction company, and he began 
aggressive coverage of a succession of strange happenings at Centennial Savings 
and Loan. 

Centennial officers suddenly were awash with money. Their names popped 
up in complex real estate transactions documented at the county recorder's office. 
Out-of-town visitors from places like Holland, Las Vegas, and Boston mysteri- 
ously came and went, taking money with them. Still the thrift's financial state- 
ments recorded phenomenal growth. And the small-town rumor mill geared up 
to churn out dozens of explanations for this bizarre behavior. In the Russian 
River News, Pizzo began asking some fairly obvious questions of the Centennial 
officers: "Where is all this money coming from? " "Who are you lending it to, 
and why?" "How can you justify these extravagant salaries, benefits, perks, planes,  luxury cars, boats, and trips?" Was this, Pizzo asked, the proper role for a savings  and loan, heretofore the most conservative, predictable, and reliable of all American financial institutions? 


Pizzo's journalistic probings infuriated Erv Hansen, the president of Cen- 
tennial Savings, and he exploded. He dispatched his assistant to complain to 
the paper's publisher. Periodically he threatened that tellers at Centennial would monitor withdrawals, and if they were substantial, he would sue the News for causing a run on the thrift. Drunk in a local bar one night, Hansen told Pizzo's 
business partner, Scott Kersnar, "You tell your partner he better stop sticking 
his nose where it doesn't belong or I'll do to him what 1 did to that San Diego 
reporter on that stock manipulation deal." Pizzo had no idea what had happened 
to the San Diego reporter, but he took the warning seriously because he had 
already discovered that some of those customers buzzing around Centennial's 
loan window had organized crime backgrounds. 

For four years Pizzo pursued the Centennial Savings and Loan story, and 
gradually his Russian River News articles about Centennial Savings found their 
way outside tiny Guerneville. They circulated quietly at the Federal Home Loan 
Bank in San Francisco and Washington and at the Justice Department. In late 
1985 Centennial collapsed — $165 million was missing. 

Congress to the rescue!

Just a few years and a few trillion dollars too late, the "Financial Crisis Inquiry Commission" is grilling Moody's today on their failed ratings on (among other things) sub-prime mortgages.

A Google trends chart shows just how late this inquiry is.

Zipcars files for an IPO

More interesting to see the details of this business, rather than anticipating buying shares.

Short-term car rental firm Zipcars filed an S1 yesterday, as it looks like they will tap the market for a modified IPO - I say modified because like almost every other IPO out there these days, this isn't raising money for pure growth, but rather to pay back other pieces of the capital structure.

A peek at their operating model:


And a discussion of recent trends:

Insiders will continue to own a large piece of the company, while backers like Benchmark will likely sell off a decent chunk of their stake:



And the risks.  Among the most important is the entry of the North American rental giants into Zipcars' field.  
The market for car sharing services is becoming increasingly competitive, and if we fail to compete effectively our business will suffer.
We expect that the competitive environment for our car sharing service will become more intense as additional companies enter our North American markets. Currently, our primary competitors in North America are traditional rental car companies that have recently begun operating car sharing services, which generally have greater name recognition among our target members and greater financial, technical and marketing resources. Secondary competitors include for-profit and not-for-profit companies who provide car sharing services in specific neighborhoods, communities or cities. These secondary competitors may increase the number of vehicles in their fleets or enhance the vehicle offerings in their existing fleets to be more competitive, and additional competitors may enter our markets in North America. Some of our competitors may respond more quickly to new or emerging technologies and changes in driver preferences or requirements that may render our services less desirable or obsolete. These competitors could introduce new solutions with competitive price and convenience characteristics or undertake more aggressive marketing campaigns than ours. We believe that price is one of the primary competitive factors in our market and pricing in our markets is very transparent. Our competitors, some of whom may have access to substantial capital, may seek to compete aggressively on the basis of pricing. To the extent that we decrease our pricing as a result of downward pricing by our competitors and are not able to reduce our operating costs, it could have a material adverse impact on our results of operations, as we may lose members and experience a decrease in Zipcar reservations.


Copyright 2010 AlphaNinja

Tuesday, June 1, 2010

Interesting interview with Bill Ackman (C)

In it, he discusses his own surprise at being interested in Citigroup stock, and shares his view of where to find value in this market.