Timberrrrrrrrrrrrrrrrrrrrrrrrrrrrr.  The market is trading down as if Europe is going to go bankrupt like John Edward’s morals or like investors think it will give them AIDS (which means Magic Johnson is happily buying today since he can’t be infected again).  The news continues to be fears that even with austerity measures and a bailout, Greece is going to be more fucked than Custer at the Battle of Little Bighorn or Houston after the Houston 620.  As a result, the dollar is at its one year high against the euro, though to be fair, part of that high is because 90% of dollars have traces of cocaine on them.  Adding fear to Greece’s impending doom is worry that the debt contagion is spreading to the other crappy European countries about which no one cares (you hear that Liechtenstein with your alps, tax haven, and policy of neutrality?).  Spain is once again worrying the markets as Spanish banks are proving to be weaker than the force carried by W and Z bosons or Tiger Wood’s “sexual addiction” excuse.  Apparently two banks in Northern Spain were supposed to merge but that is now some sort of power struggle to see who gets to be in charge of the crappy loans which sounds a bit like Dustin Hoffman and Warren Beatty arguing over who gets the marketing rights to Ishtar.  Along with bank issues, the country’s current unemployment rate is over 20% and considering they have like a 15 hour work week, that is fucking shocking.   Spanish Prime Minister Jose Luis Rodriguez Gonzalez Ramirez Guerrero Zapatero is shocked by the speculation that his country may be facing worse fiscal problems and claimed his country has “strong solvency” and the possibilty of needing a bailout is “complete madness”  before he asked reporters if they’d like to buy an unfinished church and promised he’d make them a deal, even throwing in a Shake Weight for free.  The market is scared today with Europe’s debt crisis pulling a Coleman Silk and spooking investors but we were due for some consolidation so as long as you hold names you are comfortable with, don’t panic.

In US macro news, pending home sales rose 5.3% which beat guesses and reached a 5 month high.  As always, this increase was driven by tax breaks for new home buyers and cardboard boxes now being included in reported home sales numbers.  Also, factory orders jumped 1.3% in March and were up 3.1% when excluding transportation orders which is the biggest surge in 5 years since the great home redecoration bubble of 2005.  The US macro news continues to be encouraging but we still need to see unemployment decline until we will start feeling giddier than Amanda Carrier‘s bowflex.

In stock news, everything is down so this could be a buying opportunity for real companies.  Unfortunately, SIRI isn’t one of them despite putting up a quarter where they actually earned a $.01 per share profit.  SIRI’s business model is more flawed than Amy Winehouse’s face or supply side economics.  With the prevalence of iPods, podcasts, internet radio, and Brooklyn Decker (not clear what Brooklyn Decker has to do with this, but she is hot), there is absolutely no reason to pay for radio unless you are a fan of the great Howard Stern and when Stern retires at the end of the year, Sirius will be deader than Larry Craig’s political career.  Money McBags would rather be subject to 24 hours of Celine Dion’s music while watching re-runs of Friends and having his anus waxed than go long SIRI.  In other news, MRK and PFE both had good quarters as untemployed people still need to stay medicated to stave off depression, anxiety attacks, and the stench from Paris Hilton‘s vagina.

In small cap news, Money McBags is getting absolutely obliterated like Alf Landon in the 1936 election (perhaps he shouldn’t have eaten all of those cats) or Carmella Bing in Sodom 4.  CRUS is getting pounded, though it has run up so much that momentum investors are likely just taking profits.  This is true of most of Money McBags’ names but he is holding steady as he believes in their stories and they are not overvalued (except for maybe VMW which is a bit overvalued, but whatever).  Yesterday Money McBags told all of you to watch NTRI’s Q last night and they are up 20%+ after putting up moderately better numbers than the street was expecting yet giving what Money McBags thinks is pretty good guidance.  For the Q, NTRI earned $.15 per share on revenue of $159MM of revenue but they had $8MM of potential one-time marketing expenses so absent those, they would have earned closer to $.28 per share.  While revenue was basically flat with last year, new customers were up 11% and new customer revenue was up 14% due to a mix shift back to more expensive products.  New customers basically drive this business as they help with reactivation as recency of dropping out plays a big role in getting people to rejoin plus the weak new customer additions from the past two quarters have hurt their regular program revenues.  The bad news was that their Walmart/Walgreen’s/Sam’s club retail promotions bombed worse than Michael Richards on Showtime at the Apollo.  The roll out of those programs cost them $3MM in marketing expense which won’t be repeated again and was part of the $8MM excess marketing spend.  Of course that other $5MM came from higher ad rates so it’s not clear how much of those are really temporary vs. a shift in demand for ads and thus persistently higher rates.  The company guided to $1.02-$1.12 eps for the year and $.33-$.36 eps for next Q with moderate topline growth so they are banking on marketing spend going back down to ~29% of sales while their gross margin and op ex improvements maintaining.  They are trading at ~20x that with their 20% run up today and are still pretty cheap on an EBITDA basis.    They earned ~$70MM EBITDA last year but with their guidance they should slightly exceed that so call it $75MM.  With $90MM cash and no debt, they now have an EV of $600MM and thus are <9x EV/EBITDA on 2010 earnings.  That’s about inline with peers but pretty cheap for their cash flow business model.  The stock is still 33% below its high from the beginning of the year which means they have 50% more to go to get back to where the market thought they should be valued if growth was to come back.  The point is, strong growth isn’t quite here yet but they are starting to get trickling sequential growth and adding that to operating improvements gives you a stock with the potential that is now reasonably priced for a static environment.  But the thing is, we know there are a ton of fat people in this country so programs like this are always going to be in demand until society stops shunning bulimia.  NTRI’s diabetic targeted product is continuing to grow and apparently hiring the once delicious Angie Everhart has spiked up sales to their women’s segment.  Money McBags is going to let the shorts cover today but may be buying tomorrow when this thing settles.  There is plenty of room to move up while downside seems limited, that said, the stock is near fairly valued if you think their weight loss products will only have moderate growth.

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