Comments for in search of Value

Comment on AIG’s Bailout Needs a Bailout: A $150 Billion Problem by The Fed’s House of Cards | NetRight Daily

The Fed’s House of Cards | NetRight Daily — Fri, 14 May 2010 14:27:03 +0000

[...] How did we get here? Poor risk management. Prior to the bailouts, too-low capital requirements for financial institutions, banks and other entities resulted in a complete overleveraging on investments across the board. That means institutions only held a limited amount of capital to cover losses on purchases of everything from MBS to corporate bonds to government bonds. For example, as noted by Senator Jim DeMint, Fannie Mae and Freddie Mac were overleveraged by about 70-to-1 if not more. Bear Stearns was overleveraged by as much as 38-to-1, according to Huffington Post. AIG by 8-to-1 prior to its bailout, as noted by John Appel. [...]

Comment on Jamba Inc.: Q1 First Impressions by Vince Randalo

Vince Randalo — Mon, 01 Jun 2009 15:23:55 +0000

What are your thoughts on the new financing agreement announced today by Jamba? At first glance it seems they will have lower interest expense as well as additional money for working capital needs plus added consumer food retail expertise and other benefits. I wonder if they can use this new source of capital as leverage with franchisees i.e. will they be able to sell stores for more because the company is now at less risk of bankruptcy. Have any of your projections changed?

Comment on Jamba Inc. – New CEO Gives Company a Boost by John L.

John L. — Fri, 29 May 2009 20:26:54 +0000

you pretty much nailed Q1 comps…nice work. i didn’t think the call was as bad as the stock price indicates today. i feel White is moving jmba in the right direction.

a couple things i’m encouraged about:
- White’s strategy of selling 5-10 stores to franchisees who may qualify for SBA financing makes me confident they can execute on their plan.

- I believe the go go initiative along with expanding the food test will add meaningful revenue and help comps.

thanks John! I look forward to your next JMBA post.

Comment on Jamba Inc. – New CEO Gives Company a Boost by John Appel

John Appel — Fri, 29 May 2009 13:03:50 +0000

Yes. SSS were as expected (after adjusting for impact of shorter store hours), but costs were much lower. Likewise, the negative outlook for SSS (continued headwinds but improvements in H2 with easier comps), and the positive outlook for food and licensing initiatives are all in-line with my expectations, but it looks like costs will continue to be lower. As a result, I expect higher EBITDA and cash levels for the remainder of the year. Stay tuned….

Comment on Jamba Inc. – New CEO Gives Company a Boost by Vince Randalo

Vince Randalo — Fri, 29 May 2009 12:18:08 +0000

Has your opinion of the company changed since the Quarter 1 earnings call?

Comment on XL Capital: UBS Still Bullish After Recent Run-up by Miguel Barbosa

Miguel Barbosa — Sat, 16 May 2009 01:44:24 +0000

Hi John,

Sorry I havent been able to call. Great stuff keep it coming :) I really enjoy your blog.

Best,
Miguel

Comment on Jamba Inc. – New CEO Gives Company a Boost by John Appel

John Appel — Wed, 15 Apr 2009 18:03:27 +0000

Managing Director – thanks for the comments. One can’t really answer your question (1) w/o a good crystal ball, but my attempt is on the last line of my quarterly projections (“non-restricted cash”). I believe they could repay their debt through cash flow if necessary, but I expect management to be proactive in refinancing the debt. As for your question (2), management has said on its earnings calls that they would like to bring the ratio of company-owned to franchise stores closer to 50/50 from the current 70/30. I think that would be a positive.

Comment on AIG’s Bond Sale is No Cause to Celebrate by How to Get Six Pack Fast

How to Get Six Pack Fast — Wed, 15 Apr 2009 17:43:52 +0000

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Comment on Cott Corp. to Lose Wal-Mart Exclusive by How to Get Six Pack Fast

How to Get Six Pack Fast — Wed, 15 Apr 2009 17:38:49 +0000

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Comment on Jamba Inc. – New CEO Gives Company a Boost by The Managing Director

The Managing Director — Tue, 14 Apr 2009 01:47:59 +0000

I accidentally came across this site and was very impressed, I appreciate your work.

I note that under contractual obligations in the most recent K, JMBA discloses relatively large operating lease obligations, which isn’t surprising for a company in the restaurant/retailer space. JMBA also has $23M in long-term debt. My worry is that there could be more downside at this point if a turnaround is not imminent. I suppose I have a wait and see view.

I have a question about Jamba (JMBA) to ask you that will help me better understand the company’s situation: (1) Will JMBA have enough liquidity to survive a recovery in its business operations without resorting to store closings?;

and (2) Would it be a positive for JMBA to franchise more of its stores instead of running the stores themselves- in your talks with management have they spoken about this at all? As you point out above, a sale to a franchisee is better than absorbing the operating lease costs, and in my view franchising some more stores would be a positive for the business model. This could provide some downside protection to the investment thesis.