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#62
08-12-2007, 04:57 AM
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Re: First good idea
The effect of the credit market on any really leveraged company like this was pretty much bad luck for you. The chain of events that sparked this mess was so far away (assuming exposure to residential housing market is as small as this company claims to have) that it's tough to blame you. However, I'm not that sure why you are confused about the 8% drop on prices on very light volume. This type of things happens when you trade illiquid securities in times of panic (i.e. last 2 weeks), right? When people get desperate to make margin calls or flight to quality, this happens I thought...
You also say that the quant hedge fund was likely involved. Now my knowledge of this GS thing is vvvvvv limited but it has to make plays based off numbers, and even both of you did not see any value or bright spots on the balance sheet. You guys had some knowledge about the company and its innerworkings and its position in the marketplace which seemed to lead you to a buy. I doubt this quant hedge fund was too involved in this company but i definitely could be wrong here. A question: did you consider a relative value play? You could've found a company that was involved in the same types of business that didnt have as favorable a position (or whatever drove you to buy this stock) as dayton and shorted it and bet on the spread. Obviously the cost of carry is an issue here as well--but if I am correct most of your bet was related to value of this company and not the value of any particular sector and doing this relative value bet would've allowed you to isolate risk, correct? I'm really new to this stuff also and would love to hear more from you two. In addition, Im curious about the goodwill number on the balance sheet. I think it was ~15% of the total net assets. Where did this come from and how did you account for it in your evaluation? 
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#63
08-12-2007, 01:07 PM
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Re: First good idea
[ QUOTE ]
DSUP has an enterprise value at $8.50 of (depending on which seasonal balance sheet you use) around $480m. [/ QUOTE ] What about the remaining future minimum lease payments under non-cancelable operating leases? They are material in this case. $64.3 million as of the June balance sheet. Most credit guys consider non-cancelable operating leases a form of off balance sheet financing and will finesse the $64.3 million figure to create adjustments to debt, EBITDA, interest expense, enterprise value, etc.
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#64
08-21-2007, 02:09 AM
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Re: First good idea
[ QUOTE ]
On DSUP, what you say is closer to the truth. That said, the crappy high yield market, if it stays that way, does take out some of the upside...but for me it was taking $2-3 per share upside out of a $20+ stock price in terms of my original thinking. In terms of "true value" and "outlook" being unchanged...well, that is always the big question. It is always possible that the outlook is deteriorating and I don't have visibility into it. If the credit crunch were to roll over into a serious commercial real estate problem, for example, that would change things. I don't think that will happen because we had a huge downturn already in 2003 and vacancies are dropping right now -- but it is possible. [/ QUOTE ] Just swinging in the dark here, but could on emphasis on infrastructure stemming from the Minneapolis bridge disaster spark any growth for this company in the next year or two? It sounds like their market. Just a thought. eastbay
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#65
08-21-2007, 06:30 PM
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Re: First good idea
From the 08/09 Economist: A bridge too far gone
The problem with America's infrastructure is not that drivers are in danger of being pitched into rivers. Dramatic events may dominate the news, but the nation's roads and bridges are less perilous than inefficient and decrepit. Enormous sums are being spent just to keep them in a mediocre state, and even more will have to be spent in future. Partly as a result, the new infrastructure needed for a rapidly growing population is not being built fast enough. And America has been slow to find alternative ways of paying for new projects or for rationing the use of existing ones. How bad is America's infrastructure? The fullest answer comes from the American Society of Civil Engineers, which grades the nation as though it were a schoolchild. Its first report, in 1988, issued three Bs (for aviation, flood defences and drinking water) and one D. All other systems were graded C. In sum, a slow pupil, but not a hopeless one. By 2005 America was a dropout, with no As or Bs, four Cs and ten Ds. Worryingly, the second-best grade went to the nation's bridges. Americans do not really need such reports to tell them that something is wrong. They feel the problem every time they drive over a pothole (and they often do: some 27% of urban arterial roads were classified as poor in 2005). They sense it as they sit on the tarmac, waiting to take their turn on an overcrowded runway. Last year more than a fifth of American flights arrived more than 15 minutes late—the worst performance for six years. Most of all, they reflect on what has gone wrong as they sit in increasingly long traffic jams. In the ten years beginning in 1995, the number of miles driven has increased by 23%, while the length of the roads has gone up by 2%. The result is as expected. Most appalling, perhaps, is the cost of maintaining such an indifferent system. Spending on infrastructure has risen steeply since the 1950s, even when inflation and population growth are taken into account (see chart). These days, most of the cash goes towards patching up crumbling stock. Spending on new projects and major renovations dipped in the 1970s and 1980s, but has since risen and is now higher even than in the golden era of highway-building. The money does not go nearly as far as it did. Alan Soltani of Benham, a civil-engineering firm, reels off a list of reasons why new roads and bridges now cost so much to build. Labour and rights-of-way are far more expensive than in the past. Safety standards are stricter. Roads are wider. The cost of materials has risen steeply, not least because America must compete with countries (such as China) that are investing heavily in infrastructure. The price of structural concrete has gone up by 73% in the past two years alone. As a result, the network is growing only slowly. Between 1960 and 1965 America built 144,000 miles of new highway. Between 2000 and 2005 it added just 59,000 miles. No state illustrates this pattern of boom, bust and forced boom better than California. In the 1960s it poured money into roads, pipelines and universities, on the assumption that it was the state's manifest destiny to grow. “We've got plenty of money and we've got to do it,” explained Pat Brown, then the governor. The result was a superb education system and a road network that seemed almost miraculous. Reyner Banham, a British architecture critic, judged the intersection of the 10 and the 405 freeways in Los Angeles to be “one of the greater works of Man”. That intersection now features some of America's greater traffic jams. Thanks to several decades of under-investment and a steep increase in heavy-goods traffic, California's roads are a mess. According to the delightfully precise “international roughness index”, the only worse ones are in New Jersey—and New Jersey has the excuse of freezing winters. Levees are crumbling near Sacramento, threatening farmland and suburbs. No surprise that, egged on by Arnold Schwarzenegger, the governor, California's voters in November authorised nearly $20 billion in bond issues to pay for transport and another $4 billion for flood protection. What was widely praised as a bold, far-sighted solution to the state's infrastructure problems is in fact little more than a Band-Aid. Bonds must be paid for out of general taxation. Since raising taxes in California is politically unpalatable, all the infrastructure measures have done is to release money that would have been spent in the future. They have also foisted the burden of paying for the state's roads onto the general tax-paying population, rather than onto those who use the roads most heavily. That is undesirable from an economic point of view—and a missed opportunity, because a simple way of making people pay for road use already exists. The land of the free The petrol taxes that paid for much of America's post-war freeway system have been eaten away by inflation and higher fuel efficiency. The federal tax, of 18.4 cents a gallon, has not been raised since 1993. California's 18-cent tax has remained unchanged since 1994. The state's motorists now pay about one-third as much in petrol taxes, in real terms, to drive a mile as they did in the early 1960s, according to the Public Policy Institute of California. Yet raising such taxes is politically tricky. Twice in the past two years Minnesota's governor, Tim Pawlenty, has vetoed transport bills that included tax increases. “How dumb can they be?” he asked of the supporters of one bill—words that now haunt him. This would matter less if private cash was flooding into infrastructure, or if new ways were being found to control demand. Neither is happening. In part because of the enormous market for government debt (which pays interest tax-free) it is often easier for states to pay for their own pipe-dreams rather than hand over projects to private developers. A new toll road in Texas, which is being built by a Spanish company, raised howls of outrage. Britain and Europe are far ahead of America in using public-private partnerships, just as they lead America in congestion pricing. “This is the land of the free,” notes Richard Little of the University of Southern California, wryly. The collapse of the Minnesota bridge may help change attitudes. A national Gallup poll conducted soon afterwards found that more than half of all people thought the disaster hinted at broad flaws in the nation's transport system. Almost three-quarters favoured laws that would funnel $100 billion to repair bridges. Yet opinion polls tend to show strong support for spending on just about everything. The real question is whether Americans are prepared to pay more taxes in return for better infrastructure. In one state, that question may soon be answered. A chastened Mr Pawlenty now appears to be considering an increase in the petrol tax.
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#66
08-21-2007, 08:10 PM
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Re: First good idea
http://www.usitoday.com/article_view.asp?ArticleID=339
Article on Dayton's history, companies, and their functions. Mere coindedence that Dayton wound up in Ohio.
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#68
08-24-2007, 02:25 AM
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Re: First good idea
[ QUOTE ]
From the 08/09 Economist: A bridge too far gone The problem with America's infrastructure is not that drivers are in danger of being pitched into rivers. Dramatic events may dominate the news, but the nation's roads and bridges are less perilous than inefficient and decrepit. Enormous sums are being spent just to keep them in a mediocre state, and even more will have to be spent in future. Partly as a result, the new infrastructure needed for a rapidly growing population is not being built fast enough. And America has been slow to find alternative ways of paying for new projects or for rationing the use of existing ones. How bad is America's infrastructure? The fullest answer comes from the American Society of Civil Engineers, which grades the nation as though it were a schoolchild. Its first report, in 1988, issued three Bs (for aviation, flood defences and drinking water) and one D. All other systems were graded C. In sum, a slow pupil, but not a hopeless one. By 2005 America was a dropout, with no As or Bs, four Cs and ten Ds. Worryingly, the second-best grade went to the nation's bridges. Americans do not really need such reports to tell them that something is wrong. They feel the problem every time they drive over a pothole (and they often do: some 27% of urban arterial roads were classified as poor in 2005). They sense it as they sit on the tarmac, waiting to take their turn on an overcrowded runway. Last year more than a fifth of American flights arrived more than 15 minutes late—the worst performance for six years. Most of all, they reflect on what has gone wrong as they sit in increasingly long traffic jams. In the ten years beginning in 1995, the number of miles driven has increased by 23%, while the length of the roads has gone up by 2%. The result is as expected. Most appalling, perhaps, is the cost of maintaining such an indifferent system. Spending on infrastructure has risen steeply since the 1950s, even when inflation and population growth are taken into account (see chart). These days, most of the cash goes towards patching up crumbling stock. Spending on new projects and major renovations dipped in the 1970s and 1980s, but has since risen and is now higher even than in the golden era of highway-building. The money does not go nearly as far as it did. Alan Soltani of Benham, a civil-engineering firm, reels off a list of reasons why new roads and bridges now cost so much to build. Labour and rights-of-way are far more expensive than in the past. Safety standards are stricter. Roads are wider. The cost of materials has risen steeply, not least because America must compete with countries (such as China) that are investing heavily in infrastructure. The price of structural concrete has gone up by 73% in the past two years alone. As a result, the network is growing only slowly. Between 1960 and 1965 America built 144,000 miles of new highway. Between 2000 and 2005 it added just 59,000 miles. No state illustrates this pattern of boom, bust and forced boom better than California. In the 1960s it poured money into roads, pipelines and universities, on the assumption that it was the state's manifest destiny to grow. “We've got plenty of money and we've got to do it,” explained Pat Brown, then the governor. The result was a superb education system and a road network that seemed almost miraculous. Reyner Banham, a British architecture critic, judged the intersection of the 10 and the 405 freeways in Los Angeles to be “one of the greater works of Man”. That intersection now features some of America's greater traffic jams. Thanks to several decades of under-investment and a steep increase in heavy-goods traffic, California's roads are a mess. According to the delightfully precise “international roughness index”, the only worse ones are in New Jersey—and New Jersey has the excuse of freezing winters. Levees are crumbling near Sacramento, threatening farmland and suburbs. No surprise that, egged on by Arnold Schwarzenegger, the governor, California's voters in November authorised nearly $20 billion in bond issues to pay for transport and another $4 billion for flood protection. What was widely praised as a bold, far-sighted solution to the state's infrastructure problems is in fact little more than a Band-Aid. Bonds must be paid for out of general taxation. Since raising taxes in California is politically unpalatable, all the infrastructure measures have done is to release money that would have been spent in the future. They have also foisted the burden of paying for the state's roads onto the general tax-paying population, rather than onto those who use the roads most heavily. That is undesirable from an economic point of view—and a missed opportunity, because a simple way of making people pay for road use already exists. The land of the free The petrol taxes that paid for much of America's post-war freeway system have been eaten away by inflation and higher fuel efficiency. The federal tax, of 18.4 cents a gallon, has not been raised since 1993. California's 18-cent tax has remained unchanged since 1994. The state's motorists now pay about one-third as much in petrol taxes, in real terms, to drive a mile as they did in the early 1960s, according to the Public Policy Institute of California. Yet raising such taxes is politically tricky. Twice in the past two years Minnesota's governor, Tim Pawlenty, has vetoed transport bills that included tax increases. “How dumb can they be?” he asked of the supporters of one bill—words that now haunt him. This would matter less if private cash was flooding into infrastructure, or if new ways were being found to control demand. Neither is happening. In part because of the enormous market for government debt (which pays interest tax-free) it is often easier for states to pay for their own pipe-dreams rather than hand over projects to private developers. A new toll road in Texas, which is being built by a Spanish company, raised howls of outrage. Britain and Europe are far ahead of America in using public-private partnerships, just as they lead America in congestion pricing. “This is the land of the free,” notes Richard Little of the University of Southern California, wryly. The collapse of the Minnesota bridge may help change attitudes. A national Gallup poll conducted soon afterwards found that more than half of all people thought the disaster hinted at broad flaws in the nation's transport system. Almost three-quarters favoured laws that would funnel $100 billion to repair bridges. Yet opinion polls tend to show strong support for spending on just about everything. The real question is whether Americans are prepared to pay more taxes in return for better infrastructure. In one state, that question may soon be answered. A chastened Mr Pawlenty now appears to be considering an increase in the petrol tax. [/ QUOTE ] i hate to be a stickler here, but i don't think that article is free...i don't use economist online much, but i never paste financial times comment/analysis pieces that are pay-to-subscribe because that devalues the work fo those who wrote it imo. i so love the economist and would love to share it and some of the FT comment/analysis pieces but don't because they are pay to subscribe. instead, i post a link and summarize the article. imo, you should have done likewise here so that people who have paid can read your link and those that haven't can still benefit from the points via your summary. sorry to be a stickler but i also think this is part of 2p2 terms and conditions (i.e. not pasting full copywrited articles) if this article is free on the website then i'm sorry for the post. if it is pay to view, a mod should PM you and get a link so they can replace your post imo. Barron
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#70
08-30-2007, 04:24 AM
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Re: First good idea
[ QUOTE ]
[ QUOTE ] 12.42?? It hit that price early June. You waited that long? [/ QUOTE ] No I bought at 14. [/ QUOTE ] Out of curiosity, have you held or added through the 50% "dip" (stock was at 7.13 last look), or did you bail out some or all here? Sorry to keep bumping a thread which probably gives you heartburn, but dealing with trades which are seemingly going south is an important topic. eastbay
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