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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Harshu Vyas who wrote (74819)	1/8/2024 4:59:04 PM
From: Harshu Vyas	Read Replies (1) \| Respond to of 78476

If it's of any interest to you, I've been doing some very brief WWW analysis since reading that thread mentioned above. If we look at the WWW chart, WWW Stock Chart - Wolverine World Wide, Inc. - Stock Analysis, you'll notice the stock peaks in 1998 and falls through 1999 and does very little until 2000. What's interesting is why the stock fell. EPS (diluted) for '96, '97 and '98 were as follows: $33m, $42m, $42m. Earnings weren't the problem - cash flows were. OCF was as follows: $17.4m, $(0.2)m, $(4.5)m The reason for the poor cash flows was due to not billing receivables and overspending on inventory. By 1999 cash flows improved to $47.2m and by 2000 cash flows had improved to $71m. At that point, the share price began to resolve upwards. My point here being simple - with WWW, historically, cash flows have driven the share price. And recently that trend seems to follow. In 2022, WWW had cash flow of $(179)m as they purchased too much inventory. So far, this year, they've only generated $7m of OCF. Since these numbers are weak the share price stays low and multiples will stay low. As cash flow begins to come back primarily from working capital management (that's my assumption), the share price may do what it did in 2000. As for me, why I like the stock - adjusted cash flows are much higher than GAAP cash flows. I've explained this on my website but didn't mention any of the problems above. I only went back to 2006. Should have gone back to the late nineties. Perhaps the catalyst is much simpler than a successful turnaround and delevering. History certainly seems to suggest that. EDITED- to be clear, in 2020 and 2008 cash flows didn't drive prices. Worsened expectations did. As for the 2015/16 poor performance, I think it comes down to overly optimistic expectations but I could be wrong (see links below). Wall Street Concerned About Wolverine’s Ongoing Challenges – Footwear News Wolverine World Wide Stock Dips On Mixed Q1 – Footwear News

To: Harshu Vyas who wrote (74819)	1/8/2024 7:31:26 PM
From: E_K_S	1 Recommendation Recommended By Sean Collett Read Replies (2) \| Respond to of 78476

Re: DELL - Time to establish you strategy, time frame & exit (unless you plan to hold forever). So what's your strategy? Is this going to be a 1%, 5% , 25% or 50% portfolio position ? Do you now scale into that w/ small buys on dips and/or just small buys over next 45 days? Do you plan to set a stop? These are all things I consider (except using stops) when I am building a core position. For me, my buy points do not work for this stock as I try to find stocks selling at/below their SMA(200) weekly, many others I know look at SMA(20) but DELL is at an All Time HIGH. I try to build my core portfolio (new position) w/ 3-5 Buys over days/weeks and decide if it is going to be a 1% portfolio position or more/less based on my price target expectations. Typically the stocks I look at are out of favor, selling at some discount w/ a problem that needs to be fixed, and/or the market has yet to see the value and/or opportunity that I see. PYPL +2.69% is one I have been accumulating. It is selling 142% Below it's SMA(200) & close to breaking above it's SMA(200) daily at $64/share. I started this position 1/2023 and now have 27 small buys through out 2023. 25% of my shares are underwater but my avg cost is 3% lower than today's closing price. My highest cost shares are 15% higher, while my lowest cost shares are 20% lower. I am bullish on PYPL w/ their new CEO & management team and believe $130-$140 is a good 18 month target price based on PE expansion and earnings growth. MA & V avg PE is 33x PYPL s/d earn $4.38/share end of 2024 so even a 25x PE, price s/d hit $105/share. (Note: tables below from Morningstar for PYPL) As discussed up thread previous management has not done a very good job as evidenced by poor ROA & ROIC numbers. My thesis is the new CEO & management team will improve that (+50% or more?). It will take at least 18 months but Mr. Market may reward the shareholders in 12 months. Strategy is to peel off those high cost shares in 3 months (if not sooner), then sit & wait for management to streamline their platform, create new payment partnerships and even move into Bitcoin transaction processing. I have set my parameters, last 19 Buys are all in the Green and no stop losses unless some catastrophic 'company specific' event might occur, then I would close the position. ------------------------------------------------------ In your case, you may want to establish a stop loss level and then just raise that stop loss level 2% for every 5% move up for the stock. FWIW, I try to find 6-8 New Positions a year w/ expectations to sell in 18 months and/or hold forever. Typically I start at a 1% portfolio position. Also, I will add/sell (peel off) from other positions as they develop over then next 18 months . . .