Drilling deeper into the ground
As the price of crude oil fell from $115/bbl to $30/bbl, life for the offshore oil drillers became much more challenging. Drilling offshore was a necessary precursor to many deep-sea oil production projects – which themselves were only economically viable at very high oil prices. At $30/bbl oil, most of these projects are uneconomic; and […]
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 […]
Why we are bearish on the oil price?
In this blog, we describe the framework for how we think about commodities and use it to explain why we believe the oil price will likely stay lower for longer. Montaka has a number of positions in the portfolio that will profit from such a scenario, on behalf of clients. Now, imagine you compiled a […]
In retail, it pays to be discerning
Many who had predicted the demise of brick-and-mortar retail stores due to competition from online retailers such as Amazon have been left with mixed results. Indeed, online competition has permanently changed the retail landscape and forced brick-and-mortar retailers to react with their own online offerings. However, there are still pockets of the retail space that […]
The impact of Beijing’s Corruption Crackdown
Structural declines at the industry level are one of the characteristics the Montaka research team looks for in identifying great opportunities on the short side. A decline that is structural means that it is not going away this quarter or the next. It is here to stay for many years at least. For companies that […]
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 […]
Quiksilver update
Last year, Montaka’s Andrew Macken wrote a short thesis on the deterioration in the business quality of surf wear company Quiksilver. On September 9, 2015, Quiksilver filed for Chapter 11 Bankruptcy. We re-share the original thesis here.
Tough times persist at Prada…
We were recently asked by one of our clients to provide an update on our views on Prada (HKEx:1913). As many readers will be aware, we aired our views publicly on this stock back in May 2015. By way of a recap, our short thesis was based on the following three categories of Montaka’s short-side […]
