The Misbehavior of Markets: A Fractal View of Financial Turbulence [Benoit Mandelbrot]
Transcript of interview with Federal Reserve Chairman Jay Powell [60 Minutes]
Status as a service [Eugene Wei]
The four fundamental skills of all investing [Collaborative Fund]
The perils of investing idol worship: The Kraft Heinz lessons [Aswath Damodaran]
A pitch on Nintendo [HardcoreValue]
A pitch on Molson Coors [Elevation Capital]
A look at the timeshares businesses [Yet Another Value Blog]
A look at HSBC [UK Value Investor]
How internet marketplaces unlock economic wealth [Bill Gurley]
DoorDash tops GrubHub & UberEats in food delivery [Fortune]
Google quietly releases hotel booking with potentially huge implications [Skift]
Pricing algorithms can learn to collude with each other to raise prices [MIT Tech Review]
Not caring: a unique and powerful skill [Collaborative Fund]
On Manchester United: the paradox of profits without trophies [FT]
Investors get burned after betting on electric car metals [WSJ]
Wednesday, March 13, 2019
What We're Reading ~ 3/13/19
Monday, October 29, 2018
Zach George Long Marriott Vacations: Capitalize For Kids Conference 2018
We're posting up notes from the Capitalize For Kids 2018 investment conference. Next up is Zach George of FrontFour Capital who pitched a long of Marriott Vacations Worldwide (VAC).
Zach George's Capitalize For Kids Presentation: Long Marriott Vacations
• Largest global Upper-upscale and luxury branded vacation ownership company, premier resort, club and exchange program operator
• 100% upside from current levels
• VAC closed the transformational of ILG
o Pushed by FrontFour
o Serious synergies being discount
• VAC’s performance has been terrible this year, driven by
o Concerns that consumer spending has peaked
o Quarate retail selling its large stake in VAC
o Management focused on integration
o Yet to report its first Clean Quarter post deal close
o $1bn+ in FCF in 2 years on 6bn EV
• Reviews the timeshare biz model
o Claims points model has fixed previous issues with timeshares
o Better amenties versus standard hotels
• High quality customers, $130k+ HHI, High home ownership rate, high FICOs, mostly married
• Deal closed Sept 1
• CEO bought shares with his own money
• $75mm in targeted annual cost savings in 2 years
• Some rev synergies
• $1.60 / share annual dividend
• Recurring revs, low capex
o 60% is recurring, fee based streams
o Synergies are ~10% of 2019 EBITDA
• CEO thinks cost synergies will “pale” in comparison to revenue synergies
• Thinks $195 in 2020. 15x 2020 Earnings
• VAC ROIC and FCF conversion > market averages
• Large, impressive brand portfolio
• Deal is leader in branded vacation ownership
• Established an industry duopoly
• Why does this exist?
o Concerns timeshare biz has peaked
o Initial synergy guidance below expectations
• Wanted $100mm in cost synergies + rev synergies guidance
o Investors have had to digest significant timeshare equity supply
o Wyndham WW $5bn spinoff
o Hilton Grand Vacations HNA has sold $1bn block
o Qurate retail block sale
o Niche space has lot to do
o Management being conservative on guidance until deal closed
• 2020 -> $13/share FCF
• Some sell side models haven’t been updated for the deal closing
• Thinks 15x PE multiple on 2020 pro forma eps = $195
• Cheapest among its peers on FCF Yield
• Risk
o Regulatory risks as regulated on state level
o Substitutes like Airbnb
o Cancellation of HOA management contracts
• Unlikely to be cancelled due to the number of votes needed
o slowdown in credit securitization market
• Slows ability to churn inventory
o insufficient timeshare inventory
• $6.5bn of VOI sales inventory
Be sure to check out the rest of the presentations from Capitalize For Kids 2018.
Tuesday, July 24, 2012
Ken Griffin's Citadel Reveals New Marriott Vacations Position
Ken Griffin's Citadel has started a brand new stake in Marriott Vacations (VAC). Due to a 13G just filed with the SEC, Citadel has revealed a 5% ownership stake in VAC with 1,714,349 shares.
The filing was made due to portfolio activity on July 18th. We highlighted back in March how Steve Cohen's SAC Capital was buying VAC. However, since they move in and out of positions faster than most of the other funds we track, it's hard to say if they still own a stake (and we won't know until mid-August when the latest 13F disclosures are released). But for now, Citadel has started a new stake in the name.
Per Google Finance, Marriott Vacations is the worldwide developer, marketer, seller and manager of vacation
ownership and related products under the Marriott Vacation Club and
Grand Residences by Marriott brands. The Company is also the global
developer, marketer and seller of vacation ownership and related
products under the Ritz-Carlton Destination Club brand, and it has the
right to develop, market and sell whole ownership residential products
under the Ritz-Carlton Residences brand."
Tuesday, March 20, 2012
Steve Cohen's SAC Capital Buys More Marriott Vacations (VAC)
Steve Cohen's hedge fund firm SAC Capital filed a 13G with the SEC regarding their position in Marriott Vacations Worldwide (VAC). In it, they reveal a 5.6% ownership stake in the company with 1,887,284 shares.
This marks over an 11,000% increase in their position size since the end of 2011 as they only owned 16,779 shares back then. The disclosure was required due to portfolio activity on March 9th.
Other notable institutional owners of VAC as of 2011 year-end include Highside Capital, Corsair Capital, JANA Partners, and Catapult Capital.
Shares of VAC came into existence via a spin-off from Marriott International (MAR) on November 21st, 2011.
Per Google Finance, Marriott Vacations Worldwide "along with its subsidiaries, is the worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. The Company is also the global developer, marketer and seller of vacation ownership and related products under the Ritz-Carlton Destination Club brand, and it has the right to develop, market and sell whole ownership residential products under the Ritz-Carlton Residences brand."
