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Strategies & Market Trends : Short Selling, Dark Side, Bubble Busting Laboratory
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To: Surfratiam who wrote (349)9/10/2006 11:59:35 AM
From: forceOfHabit   of 361
 
surf,

"LAMR trades based on their cash flow..."

For sure.

"I just do not understand the EBITDA principle. Where is the value, free cash flow."

In general, I'd agree. In the case of LAMR, the B shares make it more like a private company. The O'Reilly's probably don't care too much about return on capital, on equity, or anything. They're rich; and as long as the company stays reasonably healthy and even marginally profitable, they're happy. So I would expect LAMR (the company) to be a chronic underperformer, but that might not ever get reflected in LAMR (the stock price), especially if they buy back stock when the economy is in a soft patch, and issue stock when the cyclical booms hit.

"My plan is to hold some leap puts for the long hall and trade puts between the 50s and 40s. Currently in January 2007 55 puts."

Sounds like a pretty reasonable strategy to me.

be2
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