Hugh Hendry (Eclectica), end of April 2012 update (pdf)

This is the pdf version of this great investor.

Some notes about Contango (MCF)

Source: Company's site; E&P 101 - The Short Course - 31/01/2001 - contango.com/investor/events/E_P_101_The%20Short%20Course.ppt

MCF is in the UPSTREAM sector, exloration & production (E&P).

National Western Life (NWLI)'s investment thesis borrowed from Redfield, Blonsky & Co., LLC

Hi all,

yes it's a lot of time that I don't post anything for you, beloved readers.

Today I have no 'original' post but a link to share with you: it is about NWLI, National Western Life http://rbcpa.com/companies/NWLI_Notes.pdf

I found this post from Redfield, Blonsky & Co., LLC, an advisor I do not know how I came to know them, but at that time I was looking for St. Joe's investment thesis and from what I remember it was a very deep analysis.

Why I'm looking for thesis about NWLI?

Because it's selling at less than half of book value (the lowest point in 10 year, with an historical average of 0.7 p/book), have (and ever had) 0 debt, and it's an historical holding of Third Avenue Small Cap.

Here are the numbers about book value, book value growth, ROE and some averages.

Year	Quarter	Bvps	YoY Bvps Gr.	Roe 1Y
2007	Q1	263.4
2007	Q2	265.1
2007	Q3	270.6
2007	Q4	279.3
2008	Q1	283.3	7.5%	8.2%
2008	Q2	283.9	7.1%	7.8%
2008	Q3	274.8	1.6%	5.3%
2008	Q4	272.0	-2.6%	3.4%
2009	Q1	279.1	-1.5%	3.4%
2009	Q2	293.2	3.3%	3.3%
2009	Q3	303.0	10.3%	4.2%
2009	Q4	307.2	13.0%	4.3%
2010	Q1	315.7	13.1%	4.5%
2010	Q2	326.1	11.2%	4.5%
2010	Q3	334.8	10.5%	5.7%
2010	Q4	335.8	9.3%	6.2%
2011	Q1	340.3	7.8%	6.1%
2011	Q2	345.7	6.0%	5.3%
2011	Q3	351.4	5.0%	5.7%
Average			6.8%	5.2%

Have a nice reading,

Giuseppe

Yes, my first position belongs to the '10 times revenue club' ... but is not Facebook

As my beloved readers know well, I have a 'value-soul' but it is not rare to find in my portfolio a good number of 'growthy' stocks, whose valuation are, well, all but cheap.
One of those stock is Intuitive Surgical, Inc. (ISRG) and it is now my first position (less than 15%).
The '10 times revenue club' I mention in the title is a reference (maybe, a tribute) to a great post written by William Gurley, general partner at Benchmark Capital, where he warns of the risk of re-playing the mentality in vogue during the 'dot.com' bubble in the late 90s: "(...) Calculating or qualifying potential valuation using the simplistic and crude tool of a revenue multiple (also known as the price/revenue or price/sales ratio) was quite trendy back during the Internet bubble of the late 1990s. Perhaps it is not peculiar that our good friend the price/revenue ratio is back in vogue. But investors and analysts beware; this is a remarkably dangerous technique, because all revenues are not created equal".
Just to contextualize the numbers, I have listed below the average values (here I have used ev/sales in order to correct the numerator, p, or market cap, for the net cash or debt position of each company) for sectors (GICS) represented in the S&P 500:

Consumer Discretionary 1.7, Consumer Staples 1.8, Energy 2.9, Financials 5.0, Health Care 2.3, Industrials 1.6, Information Technology 2.7, Materials 1.8, Telecommunication Services 2.3, Utilities 2.2 --> average value S&P 500 = 2.6

So, 'our' ISRG, with its 9.7, is a stock with an ev/sales of 9.7, more than 4 times the average of its sector (health care) and one of the most expensive stock in the entire S&P 500.


But now, before talking about valuation and explain why and if ISRG 'deserve' this kind of valuation, I'll go straight on the recently published 10-K that cover the fiscal year ended December 31, 2011, where I'll detail the most important lines in order to understand the business.

Why a Beppaun's blog

As my definitive attempt to be 'up to date', I finally convinced myself to build a blog.

I should have named it Beppaun 2.0 but being the 1.0 version only on my mind, I thought it could be enough to name it Beppaun, as I'm currently known by my friends.

This will be mainly the place where I'll post thoughts about the company I own in my portfolio and it should serve as a notebook where I justify the reason of my investments.

Please, help me to improve this project and ... have a nice experience with the Internet.