A logical follow-up to lastminute.com is clearly Expedia. Why ? Well, firstly because I use it personally (for flights) and secondly because it is one of the leading “OTAs”.
The company:
Expedia started in 1996 as a division of Microsoft and did an IPO in 1999. They have a pretty detailed company history web page.
Charlie Munger speaks at the AGM of the Daily Journal
The “Becoming Warren Buffett” documentary (h/t Monevator)
Current trends in China (h/t marketfolly)
Great annual letter from Longcast Advisors
A great collection of spin-off reading material (Greenblatt, Munger, Klarman)
Google’s self driving car team already cashed out and left. Still no self driving cars on the road but fatal accidents are rising. I guess car insurance will stay for some time. (h/t Abnormal Returns)
“A man for all markets” was a book I was eagerly waiting for. Although not as famous as other financial gurus like George Sorros or Warren Buffett, Ed Thorp in my opinion beats most of them when it comes to actual achievements. Among other things he
Quick Intro:
The idea to look at lastminute.com came from my gocompare post, this is what I wrote back then:
Peter Wood hired the former CEO of lastminute.com, Mathew Crummack.
He seems to be a smart guy, however I haven’t seen anything from him about the future strategy yet. The new CFO of GoCompare ist the old deputy CFO from Esure. So the top managers from Esure seem to have preferred to stay.
I haven’t looked that deeply into LastMinute.com but it seems to do better since he left…(note to myself: check Lastminute.com).
As I have quite a lot of travel related companies on my ToDo list, I decided to start a kind of “mini travel” series, similar to my “Watch series”. As I like to travel myself a lot, I think this should be lots of fun to look into those companies.
The company
Lastminute.com is a company based in Switzerland which initially went public in 2014 under the (strange) name “Bravofly Rumbo”. They started out as a website to offer cheap flights in Italy and Spain.-
The complete Baupost 2016 letter (h/t qed1984, EDIT: link is gone…..)
Are GoPro and FitBit already interesting ?
The 2016 book list from Broyhill AM
A few ground rules for shorting stocks
Interesting profile of Short selling legend Mark Cohodes
The company
Hastings Plc, a UK-based direct insurance company was IPOed in 2015 at 1,70 GBP per share (IPO prospectus). To call Hastings a “Mini Admiral” is actually very close to the truth.
The company was founded as an underwriting Agency in 1996 by an American called David Gundlach who then sold the company 10 years later. Via a couple of more transformations (MBO etc.) Hastings then was finally brought to the stock exchange. Interestingly, according to some sources, Gundlach had worked at Admiral before so it is no surprise that Hastings looks pretty much like a 1:1 copy Admiral:
They only do direct business, reinsure significant amounts of their premiums and make their money mostly with anciliariy products and fees instead of investment returns like “classical” insurance companies. They only exception is that they don’t run a price comparison website (PCW) but they sell almost all policies via PCWs. Like Admiral, they have branched out into home insurance from
Hastings currently has a market cap of ~1.5 bn GBP and trades at an estimated 17,6 times 2016 earnings.
The rights issue
Those who have been reading the blog long enough might remember that Italy in general is a good hunting ground for “interesting” deeply discounted rights issues and especially Unicredit rights issues in the past were very interesting experiences.
So roughly 4 years later, Unicredit has launched another rights issue. Ex date for the subscription right has been Monday, February 6th.
The conditions were as follows:
Highly recommended: JMX capital annual letter 2016
Lunch with the FT: Quant “godfather” Ed Thorp
Dan Loeb’s (Third Point) annual letter 2016
What differentiates successful retail chains ? A focus on ROIC instead of EPS growth.
Long but very good read on the loss of manufacturing jobs, US vs. Germany and trade agreements
And of course: Charlie Rose interviews Bill Gates and Warren Buffett
Yesterday, Johnson and Johnson announced that they intend to acquire Actelion, the Swiss Biotech company for 280 USD per share.
The stock price jumped to around 272 CHF/USD right after the announcement indicating a relatively high probability of closing. J&J has enough money on their bank account and according to the press, most Actelion shareholders should be happy.
Closing date is targeted as June 30th. So if everything goes according to plan, this would mean ~2,9% yield for 5 months which is not bad but not that great either (as there are always risks) , so why bother ?
However there is an interesting specialty in this case which I didn’t see when I first looked into it. The official announcement contained this potential “golden nugget”:
Uniper /E.On Spin-off
In David Einhorn’s latest letter to investors he mentions the following:
We purchased E.ON (Germany: EOAN) in the fourth quarter of 2015. When EOAN spun out Uniper (Germany: UN01) in September, we kept the UN01 shares we received at €10.02 in thetransaction and sold the balance of our EOAN stake at a modest loss to redeploy that capital into additional UN01 shares. We believe the market does not appreciate the earnings stability o fUN01’s power generation and natural gas logistics assets. Further, the incoming management team is incentivized and has committed to cost-cutting, which will create a powerful cash flow profile. We own the company at 6x our 2017 earnings estimate.
So looking back this was a smart move. Although Uniper’s stock price came back a little bit, Einhorn is still up like 35% and has done clearly better than holding on E.On:
value and opportunity 