The Fate of the U.S. Mail Industry – Sign, Sealed, Delivered?
Following on from a recent blog post on what makes a great short, we will discuss the Thematics / Structural Declines component of the Montaka short framework, using a real-life example. As a quick recap, structural declines refer to changes in industries which are non-cyclical in nature and typically occur over long periods of time. […]
Accounting for the Unholy Trinity
Trinity Industries (NYSE: TRN) is a U.S.-based manufacturer of freight and tank railcars; as well as a lessor of railcars. TRN benefited immensely from the crude-by-rail boom in North America over the last five years, given it was the largest supplier of tank railcars to that market. The Company’s revenues increased at an average rate […]
Why we are drowning in oil
It seems every second headline these days is about oil. Whether it’s the oil price, oil inventories or any comment from any official from any oil producing nation. The world is watching with extreme intensity, looking for any indication that the global oversupply of oil is starting to abate. It’s not. The following are a […]
What is our favourite recession-proof business?
Take-Two Interactive Software Inc. (Nasdaq: TTWO) is a developer and publisher of video game content for console systems such as the PS4, Xbox One and Nintendo’s Wii; handheld gaming systems such as Sony’s PSP; and personal computers, including smartphones and tablets. The Company is perhaps best recognized as the developer of the Grand Theft Auto […]
Would you listen to a CEO?
So often we observe sell-side analysts and external investors basing a large part of their investment theses on the sentiment and intentions offered by the senior management team of the companies in which they are investing. We caution such an approach. All too often, CEOs of publicly listed companies are communicating a well-crafted, well-intended message […]
Dissecting our returns
At Montaka, we are delighted to have delivered our early investors a great start. Since we launched on July 1, 2015, Montaka has delivered substantial positive returns against a global market which turned negative over the same period. This is illustrated in the chart below which shows Montaka’s returns over the six month period to December […]
Navistar: struggling to keep on trucking
The analysis of candidates for Montaka’s short portfolio follows a rigorous process that requires stocks to exhibit at least one characteristic of our four-point framework: (i) thematic/structural changes; (ii) divergent expectations; (iii) asymmetries; and (iv) misperceptions. Navistar International (NYSE: NAV), a US-based manufacturer of International brand commercial and military trucks, buses, and engines, filled the […]
Does anyone still buy DVDs from kiosks?
Would you like to own a business that owns little else but 41,000 kiosks that distribute rental DVDs from over 33,000 locations across the United States? While this business model may have made sense in the past, it makes little sense these days. It is so cheap and convenient these days for consumers to stream […]
Scientific Games finally succumbs to the laws of economic gravity
Many readers will by now be aware of Montaka’s short portfolio research framework that was developed over the years by your author. (For a detailed introduction to our research process, click here). There are four specific characteristics of a short that we seek to identify in our research of new potential ideas. These are: (i) […]
Lufthansa: short-haul profits, long-haul problems
On 29th October Lufthansa (Xetra: LHA GR) reported the results of its fiscal third quarter. A strong summer travel season and low oil price helped Europe’s largest airline achieve underlying earnings of €1.7 billion for the first 9 months of 2015, an astounding 70% increase on the prior year, and management upgraded its full-year earnings […]