Tracking David Tepper's Appaloosa Management Portfolio - Q1 2014 Update

Below is a spreadsheet that highlights David Tepper's Appaloosa Management Portfolio moves this quarter. Please check-out our SeekingAlpha column for an analysis of the moves:



 To know more about Tepper's distress investing style, check out Distress Investing: Principles and Technique.

To learn more about how to profit from a strategy of cloning hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy.
 


Tracking Carl Icahn's Holdings - Q1 2014 Update

Below is a spreadsheet that highlights Carl Icahn's moves this quarter. Please check-out our SeekingAlpha column for an analysis of the moves:



To learn more about how to profit from a strategy of following the best hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy .

Tracking John Paulson's Paulson and Co. Holdings - Q1 2014 Update

Below is a spreadsheet that highlights John Paulson's moves this quarter. Please check-out our SeekingAlpha column for an analysis of the moves:








To learn more about how to profit from a strategy of following the best hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy .

Tracking David Winters' Wintergreen Advisors Portfolio - Q1 2014 Update

Below is a spreadsheet that highlights David Winters' Wintergreen Advisors moves this quarter. Please check-out our SeekingAlpha column for an analysis of the moves:








To learn more about how to profit from a strategy of following the best hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy .
 

Tracking Glenn Greenberg's Brave Warrior Advisors Portfolio - Q1 2014 Update

Below is a spreadsheet that highlights Glenn Greenberg's Brave Warrior Advisors moves this quarter. Please check-out our SeekingAlpha column for an analysis of the moves:



 To learn more about how to profit from a strategy of following the best hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy .

Tracking Lou Simpson's SQ Advisors Portfolio - Q1 2014 Update

Below is a spreadsheet that highlights Lou Simpson's SQ Advisors moves this quarter. Please check-out our SeekingAlpha column for an analysis of the moves:






To learn more about how to profit from a strategy of following the best hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy .



Tracking Prem Watsa's Fairfax Financial Holdings Portfolio - Q1 2014 Update

Below is a spreadsheet that highlights Prem Watsa's Fairfax Financial Holdings moves this quarter. Please check-out our SeekingAlpha column for an analysis of the moves:



 To learn more about how to profit from a strategy of following the best hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy .

Tracking George Soros's Portfolio - Q1 2014 Update

Below is a spreadsheet that highlights George Soros's moves this quarter. Please check-out our SeekingAlpha column for an analysis of the moves:






To learn more about how to profit from a strategy of following the best hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy .



Tracking Bill Ackman's Pershing Square Holdings - Q1 2014 Update

Below is a spreadsheet that highlights Bill Ackman's moves this quarter. Please check-out our SeekingAlpha column for an analysis of the moves:






To learn more about how to profit from a strategy of following the best hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy .



Tracking Bruce Berkowitz's Fairholme Portfolio - Q1 2014 Update

Below is a spreadsheet that highlights Bruce Berkowitz's moves this quarter. Please check-out our SeekingAlpha column for an analysis of the moves:







To learn more about how to profit from a strategy of following the best hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy .

Tracking Mohnish Pabrai's Portfolio - Q1 2014 Update

Below is a spreadsheet that highlights Mohnish Pabrai's moves this quarter. Please check-out our SeekingAlpha column for an analysis of the moves:






To learn more about how to profit from a strategy of following the best hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy .

Tracking David Einhorn's Greenlight Capital Portfolio - Q1 2014 Update

Below is a spreadsheet that highlights David Einhorn's moves this quarter. Please check-out our SeekingAlpha column for an analysis of the moves:






To learn more about how to profit from a strategy of following the best hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy .

 

Tracking Seth Klarman's Baupost Group Holdings - Q1 2014 Update

Below is a spreadsheet that highlights Seth Klarman's moves this quarter. Please check-out our SeekingAlpha column for an analysis of the moves:




To learn more about how to profit from a strategy of following the best hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy .

 

Is Weyerhaeuser undervalued? - Comparative valuation with Plum Creek Timber and Rayonier

Rayonier (RYN) and Weyerhaeuser (WY) recently spun-off businesses and that piked my interest to take another look at timber companies (spin-offs can frequently open up a margin-of-safety in both the parent and the child companies). WY has a vertically integrated structure (core timber business that feeds raw materials to both their wood products and Cellulose Fibers businesses). The real-estate portion was spun-off (“Reverse Morris Trust” transaction with TPH - Tri-Pointe Homes) as there was very little synergy with the rest of the business. RYN took a different route and became a pure timber REIT by spinning off its specialty cellulose fibers business (Rayonier Advanced Materials - RYAM).

Comparison of Financials:

 Below is a look at the TTM numbers for Weyerhaeuser (new business- excludes real-estate), Rayonier (new business - excludes cellulose fiber business), and Plum Creek Timber (PCL):


  1. EV to revenue is 8.42 for PCL compared to 6.71 for new RYN and 2.97 for WY: ~65% undervaluation vs PCL and 55% undervaluation vs new RYN. The vast undervaluation is also due to the difference in businesses. WY’s wood products & cellulose businesses are lower-margin commodity businesses - 60% of EBITDA comes from this area. The timberland portion is comparable to PCL & RYN. WY Timberland revenue for 2013 was $2.14B.
  2. EV to EBITDA is 27.18 for PCL compared to 18.43 for new RYN and 13.3 for WY: ~51% undervaluation vs PCL and 28% undervaluation vs new RYN.
  3. Net Debt to EBITDA is 8.04 for PCL compared to below 2 for new RYN and 2.12 for WY: good opportunity for RYN & WY to leverage the balance sheet. The average REIT debt load is 8x EBITDA. WY is not yet a pure REIT and so the opportunity is more for RYN.
  4. Acreage is at around 8M for PCL vs 2.6M for new RYN and 6.2M for WY. Acreage is valued at $1,386 per acre for PCL, $1,807 for RYN, and $3,348 for WY. The higher valuation for RYN compared to PCL may be due to the fact that RYN has 200K acres in the coastal corridor covering Florida & Georgia which should earn a higher valuation compared to raw timberland. The valuation for WY is skewed because in addition to 6.2M acres owned they have long-term leases/licenses on an additional 14.6M acres. 13.8M acres is Canadian for which it has long-term renewable licenses and 0.7M acres is US with long-term lease. 

WY Business Structure: 

WY’s Cellulose Fibers business and the wood products businesses are both lower margin commodity businesses but they both contributed significantly to their EBITDA for 2013. 29% of sales are exports - so, a strong US dollar is detrimental to the business - the investment could act as a hedge against a drop in the US dollar, assuming they do not hedge against currency risks.

Out of the 2013 EBITDA of $1.561B, only $632M (~40%) comes from the timberland portion. The rest of the businesses are structured as Taxable REIT Subsidiaries (TRS). As such, there are limits to what can be received as dividends from the subsidiaries. So, funding WY dividends from the cash flow of these subsidiaries has limits. But, management says they plan to shoot to distribute 75% of Funds Available for Distribution (FAD).

Below is a look at WY's Funds Available for Distribution (FAD) for 2013 excluding real-estate:

A - 2013 EBITDA - $1.561B
B - Interest Expense - $343M ($4.891B long-term debt assumed at 7%)
C - Taxes - $50M (wild guess!)

Funds From Operations (FFO): $1.168B
CapEx: $283M
Adjusted Funds From Operations (AFFO): $885M

(AFFO is FFO minus CapEx) - Truer measurement of residual cash flow compared to FFO.
(AFFO is probably very close to WY’s definition of FAD and so we will go by that as an approximation)

Per share AFFO is $1.68 against dividend commitment of 88c for a payout ratio of ~52%. So, it looks like they have plenty of room to grow the dividend to their target range of ~75%.
Capex for 2014 is projected to be $390M and keeping everything else steady (to keep this analysis conservative) will still result in AFFO of ~$775M and AFFO will then be $1.48 and payout ratio of ~60% - still some room for dividend growth.

The analysis indicates there is room for very good dividend growth going forward.

Summary:

The comparative TTM financial analysis indicates significant undervaluation of WY compared to both PCL and RYN.  Also, it looks very probable that WY will be able to grow their dividend aggressively going forward.



Tracking Nelson Peltz's Trian Fund Holdings Portfolio - Q1 2014 Update

Below is a spreadsheet that highlights the changes to Nelson Peltz's Trian Fund Holdings US long stock portfolio as of Q1 2014:



To learn more about how to profit from a strategy of cloning hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy.  


Walking Tour of Kannur Attractions - Trip Report

This was an impromptu trip that took off as a way to kill upwards of six hours while the rest of my family was engaged in the state Karate Tournament at Sreepuram School in Kannur proper. As it turned out, the detour turned out to be entirely satisfying, although the hot sun drained me out by the end of the day.

For the first leg to Fort St. Angelo (aka Kannur Kotta, Entrance is Free, Open 8AM to 6PM all days) I opted to take a city bus as all the people I inquired with suggested that as the best way. One could either get down at the State Bank stop or the next one (New Private Bus Stand). The area around Fort St. Angelo is very well maintained and is very walkable as most of it is under the control of Cannore Cantonment (Indian Army). The walk from the bus stop is around 3KM. The last 2KM is pretty nice as there is lot of greenery around you. The fort itself is also very well maintained and there is plenty of well-groomed space inside. One spot that can be easily missed inside the fort area is the underground cell. There are no markings and for the casual observer, it just looks like a pothole. The location is to the seaside, opposite the restrooms just below the third “wind” tree. On a bright day, you can see the inside of the cell pretty clearly. Other places of interest inside the fort include the horse barracks, the cannons, and a church (entry inside is prohibited). You can access the seashore from several spots and one can easily spot crayfish as the waves hit the rocks and retreat. The prawn hatchery run by Matsyafed and the old pier are next to the fort as well. Food can be a problem as there are no good restaurants in the vicinity. There is a small shack run by Matsyafed in the compound - they have fish meals as the only lunch option and it is fairly basic.

Arakkal Museum (nominal entrance fee, 8AM to 6PM all days) is around 1.5KM from the fort. Most of that walk is also fairly pleasant although the last half kilometer can be smelly as you have to go past the fish market. The museum itself is on a heritage house and showcases the possessions of the only Muslim royal family in Kerala. Baby Beach is located around 2.5KM from Arakkal Museum and the name really is a misnomer as it is just a rocky seashore with a good view - the nice thing for walkers is that the wind can really help you cool down. The walk again is very pleasant as you are crossing through the cantonment - the area has several attractions that showcases the army such as battle-tanks and such.

Payyambalam Beach is a 3KM walk from Baby Beach and it is through some of the nicest residential areas in Kannur. The last half kilometer is again a drag as the area close to the beach is not well-maintained. The main beach access is cordoned-off by a garden and there is a nominal fee for entry into the garden. There is a pretty rundown horse-riding school within the premises as well. Also, a restaurant building is also present although they have very modest offerings: light snacks and coffee/tea, etc. The garden or the beach are good areas to hang-out.

About 3.5KM from the beach area via normal city streets gets you to the Stadium Complex, the mecca of shopping. There are tons of street vendors selling all kinds of stuff from the Railway Station Bridge onwards. The stadium building and the adjacent areas also host a number of retail outlets including Khadi & Handloom shops. Another 2.5KM on the main road (NH17) got me back to Sreepuram School. Overall, it took 7 hours including all the stops. A not-to-be missed attraction that is not in this itinerary is Muzhappilangad Drive-in-beach, supposedly the only one in South India. It is about 15KM South from the downtown area followed by a small detour. Thalassery Fort and Bekkal Fort are other attractions in the vicinity - the former is around 1 hour on the way back to Ernakulam while Bekkal Fort is 1.5 hours North of Kannur - of the two, Bekkal is the more famous one.

 














Last Updated: 08/2014. 

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