@dollarsandsense

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$23.7M follower assets

Investor focused on finding the best companies at the cheapest prices. Investing for the next 40 years and just trying to beat SPY
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November Update 12/2/22
Now much happening in the month of November. On the whole, stocks move higher which is something I tend to dislike so I didn't encounter many opportunities to buy.

1.) A few things moved. $SLV +1 to #4 pushing $BOC to #5.

2.) $SFM surges on strong earnings and makes it to #7 (previously #9).

3.) $PYPL lagged this month getting pushed down by $SCHD.

Both $SFM and $SLV had an insane month up 20%, probably won't add any there. $PYPL starting to look good again though. If this rally continues though I may not add much to anything.
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Long-Term Thinking @ $HELE
I love when randomly looking through financial statements of companies I come across this ultra long term thinking from management.

Whats crazy is this is part of an even longer 3 Phase plan by the company. From 2014-2020 was phase 1 which was diversifying the product base, Phase 2 is about reinvesting into the company and is from 2020-2024.

So far the plan seems to be working quite well.

But given the company is still fundamentally a branded products company it faces significant challenges and is even guiding for -10% revenue growth in 2023. But this long term thinking to me shows management is somewhat trying to create shareholder value, even if the stock is down 60% this year.
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I remember reading about $HELE five years ago or so and thought it was interesting, but never did anything.

Looks like I should revisit the company, especially down 60%. Thanks for reminding me of this one and the information. 🙏
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Not All Mergers Work Out
Almost every time I hear about a merger of companies I am reminded of one of the greatest annual reports of all time.

AOL Time Warner posts the largest yearly net loss in the history of finance totaling almost $100b dollars, led by the $45b writedown of Goodwill from AOLs merger with Time Warner.

And the year-over-year reduction in goodwill.

I guess sometimes mergers don't work out.
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$DUOL Insanity
Sometimes I think companies go public for the sole reason of fleecing investors. While I think Duolingo is a great platform I think it's very hard to defend these two charts:

Stock-based comps well exceed free cash flow. While this is not entirely something new it can also be paired with the dilution.

Duolingo is just destroying any ownership of its business. The company has a lot of promise especially with its expansion into new verticals of education but this dilution is just gross.
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A Mess @ $KSS
I started following Kohls after they threatened to poison pill to stop a takeover attempt. It was an interesting moment somewhat overshadowed by Twitter threatening the same against Elon. This leads me to believe its managements responsibility to prove that was the right decision.

So, Kohls reported earnings today, how did they do? Spoiler: Not Great.

Revenue down 7%, margin collapse, inventory up 34%!!!

Management trying to save face with commitments of deleveraging and the suspension of their share buybacks. But interestingly...

Commitment to a dividend? But...

There is no Free Cash Flow??? They are just going to pile on more debt by keeping the dividend. Strange.

On top of this given "macroeconomic challenges" Kohls has pulled FY Guidance. Along with this it was announced a few days ago the CEO would be stepping down.

Overall very unfortunate quarter all things considered. The stock is up nevertheless as apparently all of this was expected. So I think I will continue to stay away until the company starts to show some improvement somewherre.
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Seems like they maybe regret not entertaining the takeover offer, and are now keeping the dividend high to keep shareholders happy... I'm sure given the macro picture, many shareholders would love to be bought out at a premium now!
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$CRSR, Signs of Life?
What was once more than 15% of my portfolio Corsair has fallen quite a bit. Most of this has been due to supply chain issues and slowing demand for their products. But as of this most recent earnings call it seems something is improving, although it is hard to tell what exactly.

On the surface, these numbers look bad, and they are, however, I tend to agree with management when they say stimulus drove consumer spending in gaming and streaming. As that fades Corsair must face the hard reality of declining revenue.

On top of this Corsair cut guidance for the third time this year. Lowering all targets by quite a bit.

On top of that SBC was up 20%, although still not a large amount overall which seems fine.

So where is the good?

Well, there is the 1% revenue beat. But I think more important is falling inventories.

I imagine this was a signal that constraints may be easing and Corsair can get back on the path to profitability again.

To me, it seems like things are trending upward. After all, the company is still growing revenues nicely, making solid acquisitions without piling up too much debt and now things seem to be normalizing.

Also, the gross margin saw slight improvements.

All-in-all, I like it, cautiously optimistic.
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The falling inventories do make Corsair less dependent on price cuts for getting stuff out the door. But what exactly will bring more demand for gaming equipment when games are looking to be in VR headsets rather than on TVs connected to consoles?
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