8/2/25 :: VROCKSTAR :: 
FC
Sidelines w better oppty costs
- came to this company over a yr ago bc it's a well managed business, throws off cash and still does
- the issue are maybe 3 things in this current environment, all of which are likely transient but nevertheless relevant to my sidelines and not interested at the moment thinking.
- so this hit my "alert" on Fri (as did a lot of stuff), so i'll be reviewing those this weekend and this is simply the top of that list. TradingView also limits my posts... or else i'd review all 20 of them ha.
1/ stock just missed expectations and in an environment were businesses are likely cutting these "nice to have but not right now" type coaching, improvement services. and/or where pricing discussions are probably weaker on the mgn. so it's hard to even consider names rn in this tape that just had a negative reaction to their prints, nevermind those that are already re-testing their mar/apr lows. so it goes into a secondary bucket right away
2/ at $200 mm cap, it's small and factor matters right now. the opportunity set of so many things means that in order for this type of name to get recognized it *needs* to have a positive catalyst or reason to own it or step in "now". with #1 above, that's not the case, and if small caps continue to bleed to large caps, even the quality names suffer a lemons problem.
GAMB is probably my favorite small cap name rn, and i can only justify having it at 4% size and on 2.5x leverage so about 10%. it's growing double digits, isn't missing results, the industry is growing, it's fcf generation is 15% (for FC for comparison it's 10% on possibly numbers that need to come down). point is, even in small cap land, my alternative is something that scores higher on nearly all metrics and i'm already finding that hard to own
3/ and this point is similar in a way to 2, as this venn diagram has a lot of circles. but on valuation mid teens PE with no "E" growth and "only 10% fcf yield" is just not good enough w better valuations and pictures, elsewhere, even in much higher caps that i think will get bid first, posted good results etc. etc. and can buyback stock.
so while i will probably keep this on my watchlist, and even though my gap fill from the April 2 comment happened (and i'll leave it on my chart for my notes), the tape has changed. this is important to put into your process. people often ask "at what price i'm a buyer or seller". realistically this changes day by day, week by week and depends on a lot of things. in a vacuum and at any given day, i can give you an answer to this question. but if we zoom forward now nearly 4 months from this point, that gap fill price (where we are today) is not good enough. and i'd probably need PE closer to 10-12x minimally and FCF yield in the mid teens. this means minimally 20% and ideally 30% lower, i'll be bothered to look again.
now, will it get there? idk. again, this is the beauty of trading view alerts and notes. i'll post this comment, set my alert at $15.55 (which is only 16% lower - not this 20% - because maybe things have changed, who knows - and if/when we get there i pull up this note, saves me another 10 mins of work - and either reset the bogey or update). that's my target and alert-setting process, fwiw.
V
FCSidelines w better oppty costs
- came to this company over a yr ago bc it's a well managed business, throws off cash and still does
- the issue are maybe 3 things in this current environment, all of which are likely transient but nevertheless relevant to my sidelines and not interested at the moment thinking.
- so this hit my "alert" on Fri (as did a lot of stuff), so i'll be reviewing those this weekend and this is simply the top of that list. TradingView also limits my posts... or else i'd review all 20 of them ha.
1/ stock just missed expectations and in an environment were businesses are likely cutting these "nice to have but not right now" type coaching, improvement services. and/or where pricing discussions are probably weaker on the mgn. so it's hard to even consider names rn in this tape that just had a negative reaction to their prints, nevermind those that are already re-testing their mar/apr lows. so it goes into a secondary bucket right away
2/ at $200 mm cap, it's small and factor matters right now. the opportunity set of so many things means that in order for this type of name to get recognized it *needs* to have a positive catalyst or reason to own it or step in "now". with #1 above, that's not the case, and if small caps continue to bleed to large caps, even the quality names suffer a lemons problem.
GAMB is probably my favorite small cap name rn, and i can only justify having it at 4% size and on 2.5x leverage so about 10%. it's growing double digits, isn't missing results, the industry is growing, it's fcf generation is 15% (for FC for comparison it's 10% on possibly numbers that need to come down). point is, even in small cap land, my alternative is something that scores higher on nearly all metrics and i'm already finding that hard to own 3/ and this point is similar in a way to 2, as this venn diagram has a lot of circles. but on valuation mid teens PE with no "E" growth and "only 10% fcf yield" is just not good enough w better valuations and pictures, elsewhere, even in much higher caps that i think will get bid first, posted good results etc. etc. and can buyback stock.
so while i will probably keep this on my watchlist, and even though my gap fill from the April 2 comment happened (and i'll leave it on my chart for my notes), the tape has changed. this is important to put into your process. people often ask "at what price i'm a buyer or seller". realistically this changes day by day, week by week and depends on a lot of things. in a vacuum and at any given day, i can give you an answer to this question. but if we zoom forward now nearly 4 months from this point, that gap fill price (where we are today) is not good enough. and i'd probably need PE closer to 10-12x minimally and FCF yield in the mid teens. this means minimally 20% and ideally 30% lower, i'll be bothered to look again.
now, will it get there? idk. again, this is the beauty of trading view alerts and notes. i'll post this comment, set my alert at $15.55 (which is only 16% lower - not this 20% - because maybe things have changed, who knows - and if/when we get there i pull up this note, saves me another 10 mins of work - and either reset the bogey or update). that's my target and alert-setting process, fwiw.
V
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.