Kinnaras Capital Blog

One of the challenges of investing is weighing hard, quantitative information against intangibles that are difficult to quantify.  BioScrip, Inc. ("BIOS" or the "Company") is a company that fits this mold.  The Company is fairly cheap and at current prices offers an interesting risk/reward.  However, the Company's atrocious Board and overpaid management team led by CEO and Chairman Richard Friedman is a huge negative and impediment towards the Company achieving a better valuation. Continue reading "BioScrip Management Bilking Shareholders"

After the market closed on May 21, Harbinger Capital Partners (“Harbinger”) revealed that Calpine Corp. (“CPN” or the “Company”), of which Harbinger owns 24%, received an offer from NRG Energy Inc. (“NRG”) that valued CPN at roughly $11.3B or $22.60 per share.  This represents a paltry premium to CPN’s current share price and investors should realize this move is simply an attempt by NRG to steal the Company from investors who may have difficulty in assessing how valuable the reorganized CPN and its fleet of power generating assets will be.

Continue reading "NRG's Attempt to Steal Calpine"

Shares of Priceline.com ("PCLN" or the "Company") have been on a tear in recent years as the Company has become a dominant player in online travel.  The stock has consistently outperformed Street estimates as it has been able to achieve rapid top line and bottom line growth.  While PCLN has generated impressive operating results over the past two years, the Company is facing considerable headwinds which could result in a substantial correction in the coming year when factoring in its premium valuation. Continue reading "Priceline.com: Sky High Valuation"

Shares of Downey Financial Corp. ("DSL" or the "Company") have recently resumed their downward trend.  The 10-K was filed last week and included some new information that was helpful in reinforcing a continued negative view on the Company.  Since a variety of analysis has been provided on DSL over the past year, I wanted to focus on some interesting components of its 10-K. Continue reading "Downey Financial on Shaky Ground"

Oppenheimer & Co. bank analyst Meredith Whitney has Wall Street in the palm of her hands these days.  She is a top rated analyst and is credited with her bearish calls on various banks, particularly Citigroup ("C"), and has even been credited with triggering broad market sell offs as a second order effect of her negative reports on some banks.  However, while some will persist with keeping the negative tone on financials, I'd be inclined to think the majority of the gains from shorting have been made.  Nonetheless, talking about widely held stocks like C is in the interest of financial media and analysts like Whitney.

Continue reading "Some Free Advice for Meredith Whitney"

I had covered Ecology & Environment (“EEI” or the “Company”) in a previous write up but some recent market activity prompted me to provide a quick update.  While I focus primarily on valuation when analyzing a potential investment, the growing volume in EEI has been an eye opener for me, particularly when the stock was trading just about 3,500 shares per day from Aug-Oct 2007.  Since then, daily trading volume has been picking up and shares are starting to trade around a tight band around $11.50.  Tight is a relative term and given that EEI is a microcap, bid/ask spreads have narrowed to $11.30/$11.70 for fairly consistent intervals.

Continue reading "Growing Trading Volume and Institutional Interest at Ecology & Environment"

I've been short Costco Corp. ("COST" or the "Company") for several months and recent results continue to support the initial thesis I laid out.  Unimpressive Q1 2008 results were released in December and the past two months' same store sales results have shown that COST is pretty much in the same boat as other large, big box general merchandise retailers.  Unlike other retailers that have traded at much lower valuations and/or have corrected much more significantly ahead of performance news, COST's valuation and stock price have generally been lagging its operating performance.  Given that COST's operating performance and same store sales figures have shown little immunity to broader macro trends, the Company still presents itself as a very attractive short opportunity.

Continue reading "Costco: 20+ P/E for Single Digit EPS Growth?"

Downey Financial Corp. ("DSL" or the "Company") announced 2007 results last week and shares rallied despite very weak results.  The broader financial sector has been oversold in recent months so this rally was not that surprising.  The results were clearly terrible but I think a variety of actions ranging from an active/intervening Federal Reserve Board and overtures of a government led/organized bailout of bond insurers contributed to establishing a sentiment that says the worst is over.  From a valuation perspective, certain financials are looking attractive but while DSL has benefited from this rising tide I'm not sure it qualifies for a life jacket. Continue reading "Going Long Downey Financial (Yeah Right)"

Jarden Corp. ("JAH" or the "Company") continues to demonstrate how desperate it is to mask its deteriorating operations and support its overvalued share price by issuing laughable press releases.  About two weeks ago, JAH issued a press release covering its expectations for Q4 2007 indicating the company would be "in line with...expectations" and that JAH is "comfortable with Analysts' estimates for as adjusted EPS for fourth quarter and the full year 2007."  Given how the sellside is spoon-fed these "pro forma, as adjusted for constant charges, synergies that will never happen" figures, it should not come as a huge surprise that JAH is comfortable with its own internal estimates.  JAH is an amazing company in that its management skillfully directs the bucketshop research analysts towards whatever JAH feels is important and then issues irrelevant press releases that goad support for its shares while management wheels and deals in the background.  JAH's investor relations ("IR") team might have done investors a better service by issuing press releases for other, far more relevant items. Continue reading "Jarden's "Rope a Dope" Press Releases"

No real information here so continue on if you're looking for some heavy lifting.  However, I did get a good chuckle when a reader sent me a video link to Cramer recently discussing Downey Financial Corp ("DSL").  I found it humurous mainly because of how it contrasted with his previous discussions regarding DSL. Continue reading "Jim Cramer - Downey Financial Mea Culpa?"