The market rallied today as election booths underflowed with discontented voters, unemployed workers looking for a warm place to hang out during the day, and douchey hipsters who thought the lines were for the Apple store.

Apparently the Republicans are going to win back the House and thus have 1/4 of the decision making bodies in the US (the others of course being the Senate, the Executive Office, and Marisa Miller because Money McBags would do whatever her body decides) which is somehow a good thing even though their policies are what got us to where we are in the first place.  So hoooooooooooofuckingray.  Instead of the party who can’t get us out of this mess having all of the power, they can now share part of it with the party who got us in to this mess as the clusterfuck of bad ideas and incompetence will continue.  So Rally fucking on.

To use a terrible analogy, it’s like when Bo and Luke Duke came back to the Dukes of Hazzard after their contract dispute led their gay cousins to take over for a season.  While it might have been a marginal improvement, the show still fucking sucked and all anyone wanted to see was Daisy Duke anyway, so who fucking cared whose turn it was to drive the racist car.  And that is like this election because no matter who wins, the economy will still suck and all anyone wants to see is real economic growth (and Daisy Duke), so who fucking cares which unoriginal, solution-less dickbag drives the figurative legislative car.

Hopefully you all did the sensible thing and voted for “None of The Above” and wrote in Money McBags of the BOGUS party (Bail Outs Get Us Savings) who will finally take this farce of an economic non-strategy all the way.  Money McBags spent at least half the day writing his acceptance address (and the other half googling Cintia Dicker‘s address) and promises to return this country to fiscal prosperity through destroying it and building it back up with more bail outs, more TARP, and especially more PPIP (though what else would one pee?).

As for macro news, it was more non-existent than people who have read all of Middlemarch or Art Laffer’s credibility.  The story remains QE2 and it will be very interesting to see how the market digests the size of it (perhaps they will ask Peter North’s co-stars for advice) because there still remains a lack of consensus as to how much the Fed will ease.  Of course the silliest part of all of this (even sillier than this trend of giving up showering and deodorant and way the fuck sillier than suing Mcdonald’s for being fat), is that the prospect of QE2 has rallied the market when the whole reason for QE2 is that the economy is more fucked than Capri Anderson after an eight ball in Charlie Sheen’s hotel room.  So while QE2 is somehow the panacea for the dying economy (just like QE1 was, and TARP was, and everything else that has led to cyclically low 2% GDP growth (until the 2% is revised lower) was), the market is acting like that panacea has already cured the disease when in fact it may exacerbate the disease like Mentos in a Diet Coke bottle.  This is as confusing to Money McBags as men who look like lesbians and ergodic theory so as the market rallies, he is left scratching his head in amazement (or perhaps it just scabies).

Internationally, Australia and India both raised rates as their economies continue to be healthier than Gabourey Sidibe‘s appetite after skipping both first and second breakfasts.  China’s unquenchable thirst (perhaps caused by too much soy sauce) for natural resources has helped drive Australia’s economy higher and as a result of the rate increase and Bernanke’s folly, the AUD reached its 28 year high last night achieving parity with the US dollar.   Money McBags is now counting down the days until the dollar is no longer worth even a dong, which will be bad news for the Key West Vietnamese population.

Also, something to be aware of as your EPV etf drops faster than Abe Vigoda‘s balls in a steam room and that is that Spain’s 2nd largest bank is looking to Turkey for growth by buying a 25% stake in Turkish bank Garanti.  Now look, Money McBags is well aware of the benefits of Turkey’s growing population, its youthful demographics, the the way it perfectly complements cranberry sauce, but something strikes Money McBags as being a bit fucked up when that is where Spain is turning to for growth.  First of all, it means Spain realizes it is fucked for a long time and that is about as good for Europe as Lillian McEwen’s memoir will be for Clarence Thomas.  But secondly, BBVA stretching for growth here opens up all kinds of risks because whenever Money McBags hears of a financial services company trying to buy growth, so many red flags go flying up that you would think he was part of a semaphorist circle jerk.  So while Europe is running right now, be very very careful.


In the market today, PFE had what Money McBags calls a a Jennifer Lopez Q as they put up a good bottom line but a weak top line.  The company sold off ~1% as their revenue was below analyst guesses thanks to a stronger dollar and Lipitor sales falling by 11% due to increased competition from generics and fat people being unable to afford to eat as much.  Also in the health care space, MHS put up a good Q and rose ~9% as they were able to grow their business and maintain margins which the Street thought would be less likely than Paul Krugman exhibiting modesty (or common sense) or Money McBags caring which of the Bernaola twins was tickling his taint.

Elsewhere, MA put up a nice Q and rose ~5% as eps of $3.94 grew 15% and beat analyst guesses of $3.54 as consumers max out their 1% cash back credit cards in order to earn income (like that is any stupider than continually borrowing from China?).  ADM got cropped on as profits dropped due to weak grain merchandising margins and CLX tumbled by ~4% after the conglomerate posted disappointing earnings and lowered full year numbers as apparently all 800 of their categories sucked.

In small cap news, NTRI cut some dead weight by lowering costs and rose ~9% as they raised full year guidance.  Money McBags has talked about this name many times here as they have plenty of leverage in their model but management has executed worse than a San Diego TV station’s news cast.  Money McBags hopes to break down their Q in more detail if he gets time later in the week but with revenue down 4%, he isn’t itching to buy any.  Also, ININ released their Q3 after their pre-announcement the other week and shot up ~9%.  Remember, Money McBags broke them down the other week and pointed them out as an interesting company and told readers to listen to their call to see if they discussed what this new leg of growth was (Money McBags would call it a third leg of growth, but that would be way too easy).  Money McBags also hopes to get to their call later in the week but they did mention that their cloud-based communications orders are seeing strong increases.

Which of course brings us to TMRK.  If Money McBags were to write a ballad for TMRK, it would be called “To all the small cap companies he has loved before” because TMRK exhibits many of the traits he looks for in a small growing company.  They are in the early stages of a huge multi-year growth market that continues to consolidate, they have a niche advantage (for now) with government business because Uncle Sam wants his servers the fuck out of Washington in case one of those Al Qaeda fucks gets on the loose (and by colocating their shit down in TMRK’s Miami centers, the government’s data is hella safe because even Al Qaeda loves them some South Beach), their revenues should continue to grow 20%+, and fund managers have been sitting on their hands on this one waiting for it to take off so they can jump in like lemmings (seriously, over the past 4 to 5 months Money McBags has spoken with 3 to 4 fund managers who all said they like the name, but are tired of it never moving.  Well guess what motherfuckers, it’s moving now.  And Money McBags means motherfuckers in the nicest way since he’d be happy to do some one off due diligence for you, or even perform at your kids’ upcoming bar mitzvah, for a few shekels).

The only things that worry Money McBags about this company are the debt and the fact that they have no earnings (and Money McBags rarely buys a company with no earnings (you hear that SPRT?) but they have solid EBITDA and cash flows) but the CFO said he expects positive EPS to hit in fiscal 2012 and this was fiscal Q2 2011, so in the next 4ish Qs.

As for this Q, revenue was up 22% to ~$85MM, EBITDA was up ~28% to ~$23MM, and guidance was raised from $345MM to $350MM on the top line to $350MM to $353MM with the low end of EBITDA guidance increased by a nut hair to $100MM to $102MM.  But the most exciting part of this business, the sizzle to their steak or the rust to their trombone if you will, is that their cloud computing revenue was up another 15% sequentially to a $30MM annual run rate.  So sure it is <10% of their top line, but Money McBags is more convinced that cloud computing is the way of the future than he is that the market is structurally broken or that Molly Sims is hot.  So this is the little growth engine that in time can propel this kind of boring colocation company to new heights.

The company is now trading ~11.5x 2011 fiscal year EBIDTA guidance which is not cheap and around where take-outs have been happening but as Money McBags said, this is a long-term play, kind of like the Indian outsourcers 10-15 years ago or Jennifer Lawrence.  So as long as valuation doesn’t go haywire, Money McBags could give a shit if it is trading at 9x EV/EBITDA or 13x EV/EBITDA because he fully expects EBITDA to keep growing in the double digits for several years so this is a company he just kind of lets sit there and in five+ year he’ll collect his profits (that is if we still have an economy).