Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Paul Senior who wrote (74837)	1/9/2024 5:45:59 PM
From: Harshu Vyas	Read Replies (1) \| Respond to of 78476

DBI - one that I've been tempted by a few times and one on my watchlist. FCF yield is very high. But I have to question management and their strategy. They recently bought Keds off of WWW for over $120m. Do they seriously think that they can turn around the ailing brand? Possible, but I feel these sort of transactions usually only favour one party. Secondly, the CEO (Douge Howe) has to be brought up - he previously worked at Kohls (4y) and QVC (9y) where he held Chief Merchandising Officer. Is he capable to take the helm? For now, I remain sceptical. Obviously, I'm not a US/Canadian citizen so can't comment on their "popularity" but those lease liabilities also worry me - and it's the primary reason why I can't invest. It's a cyclical with a moat that I cannot see (I'll reiterate that I've never visited a store so I may be missing something- am going off what I've read). ________________________________________________________________________________________________________ ICD is one I've looked at in the past - at that point, dilution risk was the concern through the convertibles and PIK interest. Haven't looked at it in a while and the effect may be mitigated by the super low share price which makes it interesting once more. Regardless, you have to be mindful of the cash flows because of the noncash interest expense and amortisation of the convertible notes. Much like SBC, it's not "real" cash from operations - after deducting that and moving it to financing cash flow, they're not free cash flow positive even though some sources may try to mislead you otherwise. If you're only investing in the survival of the company, then you need to follow day rates in the basins. It's a tough one to work for a shareholder I feel. Main problem for me, though, comes down to management - are they credible? First impressions suggest not. Maybe I'm a terrible person for feeling this way but both the members of the Board and Management team give me the feeling the public shareholders will continue to get screwed. Hopefully, I'm wrong about ICD. I do like watching these downtrodden micro-caps getting a rare win. My gut just tells me otherwise.