Category Archives: Short Ideas

Closing Our Our SWHC Short Idea With a 10.6% Return

October 28, 2009 – 4:02 pm

We are closing out our short idea in Smith and Wesson.  We are also removing the SWHC short position from our PAA Research SMid Cap portfolio.  Even though we think consensus estimates remain too high in light of building inventory in the gun dealer channel, we think the current stock price reflects the fundamental downside scenario.  [...]

By PAA Research | Also posted in Firearms | Tagged , , , , , , | Comments (0)

ESI 3Q09 Preview, Backing Into FY10 Consensus – Margins Don’t Grow to the Sky Do They?

October 21, 2009 – 8:42 am

ESI reports 3Q09 earnings and fall term enrollments Thursday morning.  In general, we have discussedat great length our concerns about what we view as structural issues with the company’s tuition policies and the return on educational investment students now receive.  We think this will eventually cause the company to reduce tuition, which could severely alter [...]

By PAA Research | Also posted in For-profit Education | Tagged , , , , , , | Comments (2)

COCO Takes a Bigger Bite in California – Analyzing the Heald Capital (Heald College Acquisition)

October 20, 2009 – 4:56 pm

Corinthian Colleges, Inc. announced it has reached an agreement to acquire Heald Capital, the owner of Heald Colleges for a total consideration of $395 million.  This is the company’s largest acquisition ever based on total purchase price.  The company expects the transaction to be accretive immediately upon closing.
Heald College Profile
Heald College has eleven campuses spread [...]

By PAA Research | Also posted in For-profit Education | Tagged , , , , | Comments (0)

It’s Still Too Early for BGG, Getting Short Into Earnings as a Trading Call

October 19, 2009 – 9:48 am

One of the first investment ideas we introduced on this site was a short-term trading call on Briggs and Stratton.  You can read our original report here.  At that time we were fairly confident the stock could trade off based on our view that consensus expectations were too high heading into the company’s 3Q09 earnings, [...]

By PAA Research | Tagged , , , , | Comments (1)

Dear Mr. Buffet: About the Washington Post Company….

October 8, 2009 – 6:56 am

Please note, the following is a letter PAA Research recently sent to Warren Buffet, Chairman and CEO of Berkshire  Hathaway, Inc.. We thought our readers might find the analysis of Washington Post and Kaplan in particular interesting.  As a reminder, Washington Post is on our list of short ideas in large part due to our [...]

By PAA Research | Also posted in For-profit Education | Tagged , , , , , | Comments (1)

The “Obama Effect” One Year Later – What Firearms Dealers Are Saying Now

September 30, 2009 – 9:13 am

There is little debate that President Obama’s most effective economic stimulus has been for the broader firearms industry.  As soon as it became clear in October of last year that Obama would win the presidential election, gun sales took off.  Gun owners and firearms activists became concerned that a Democrat controlled Congress and White House [...]

By PAA Research | Also posted in Firearms | Tagged , , , , , , , , , , | Comments (0)

August NICS Background Check Data Shows First Month-to Month Sequential Improvment in a While, Key Questions Heading into SWHC’s 1Q10 Results

September 8, 2009 – 9:03 pm

The August data for the number of background checks conducted under the National Instant Criminal Background Check System (NICS) was released this morning. Overall, the total number of background checks increased 12.3% on a YOY basis and increased 11.2% on a month-to-month basis to 1,074,757.  This represents the first month-to-month increase since March of this year. [...]

By PAA Research | Also posted in Firearms | Tagged , , , , , , , | Comments (0)

COCO’s Bad-Debt Expense Slight of Hand, 25%+ Cohort Default Rates Are Coming, It Appears Regulatory Headwinds Could be Mounting

August 27, 2009 – 9:02 am

We have written extensively about our concerns about the for-profit postsecondary education space and ITT Educational Services, Inc. in particular.  Our primary thesis is that overly aggressive tuition policies have significantly reduced the return on educational investment to the point where for some programs it is outright negative.  This is a SECULAR issue, which will be [...]

By PAA Research | Also posted in For-profit Education | Tagged , , , , , | Comments (3)

Sturm, Ruger Strong 2Q09 Results, but Orders are Falling and Channel Inventories Rising – Back to Normalcy in the Firearms Market

July 29, 2009 – 8:55 pm

Sturm, Ruger& Company, Inc. reported 2Q09 results after the close.  You can view the results here.  The company reported revenues and EPS of $72.4 million (vs. $36.9 million 2Q08) and $0.46 (vs. $0.11 2Q08).  EPS beat the lone estimate available by $0.20.  We think EPS upside was largely factored into the stock following SWHC’s earnings [...]

By PAA Research | Also posted in Firearms | Tagged , , , , , , | Comments (1)

ESI’s Bad-Debt Expense and Questions We Would Like Answered on ESI’s Conference Call

July 23, 2009 – 10:20 am

ESI reported 2Q09 results this morning.  You can get all of the details here.  Overall the company reported bigger upside to consensus estimates than we expected ($317.1MM and $1.87 actual vs. $306.1MM and $1.73). As we stated yesterday, we thought the company would beat estimates, but the upside was stronger than we expected.  YOY new [...]

By PAA Research | Also posted in For-profit Education | Tagged , , , , | Comments (0)