This is the video answer and valuation for last weeks video valuation case study. Please let me know what I could do better in the comments below and please send me any suggestions for future content and/or case studies. Have a great World Cup and Father’s Day weekend everyone.
Portfolio Update – Sold Vivendi. Now Portfolios Are 69% Cash.
I made a transaction for the first time in more than a year in the portfolios that I manage and wanted to update where those stand as of today. I sold out of Vivendi today up 50% in the nearly 2 years that I held the company. My reasons for selling were simple: 1) Vivendi was one of the first companies I bought into after I started doing actual company analysis and the thesis played out exactly as I had hoped it would. They sold assets, paid down debt, and are in a much healthier position now going forward. 2) Going forward there is now too much uncertainty for me on what their plans are with their massive amount of cash they will soon be getting and I do not want to see a repeat of the early 2000’s acquisition spree that went horribly wrong. 3) MOST IMPORTANT POINT. I am now much more confident in my abilities to analyze companies for potential investment then I was two plus years ago when I bought Vivendi and think that I can do much better buying microcaps and/or special situations companies and want to be ready for any kind of market crash with a lot of cash in the portfolios.
The percentages below are the percentages (rounded) that make up the current portfolios. Also, until the market drops significantly the make up of the portfolio below will likely remain intact until more companies become undervalued again and I can start buying again.
Cash – 69%
BOBS – 13%
PARF – 12%
CMT – 6%
Weekend Reading Links
The New York Times – Cocaine Incorporated.
A Wealth of Common Sense – Buffett’s Fourth Law of Motion; Your Behavior.
The Daily Galaxy – An absolutely amazing site if you love science, astronomy, exoplanets, and anything else having to do with space.
Financial Times – Rafael Nadal’s Key To Winning.
The Sova Group – Xoom Company Analysis.
East Asia Student – 10 Best Mandarin Learning Resources.
Walrus Value – Investment Booklist and Borrowing Hard To Find Books for Free.
Valuewalk – The Classic Shelby Davis Double Play.
JLCollinsnh – The Worst Possible Investment you Can Construct (Practicing Inversion).
MIT Technology Review – Scientific Thinking In Business.
Hey everybody I have wanted to make some video content for the blog for a while now but have not had anything interesting to do a video about until I found this company I came across recently. The video is below, is only 1 minute and 43 seconds long, and contains all the major information needed to value the business so please leave your comments below on how you would value the business, if you would buy the business, what other topics you would like me to talk about in the future, and what I could do better with future videos since this is the first time I have done a video.
PS – I forgot to talk about a couple of pieces of information in the video that may help you value the business. Sorry about this and please bear with me as this is the first time I have done a video. I plan to make the future videos better.
1) This company has an inventory sell through rate of approximately 15-20% per month.
2) This company does ALL of its business online at this point and DOES NOT have a retail space so overhead is minimal.
3) For every $1 this company spends to buy inventory for resale, it has gained about $5 of EBIT, because of the higher price upon selling the items, after the original costs of buying the items, fees, shipping, etc, but before taxes.
4) It has had sales of just over $4 million in 3.5 years.
5) It has an approximate 50% EBIT margin.
I will post my video reply and tell you what the company is next week and I hope you enjoy!