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TRUP: 10 Critical Questions and Many Potentially Worrisome Answers

September 18th, 2018

Over the past few weeks, we’ve been incredibly fortunate to gather extensive feedback from bulls and bears alike about the merits of their investment thesis on TRUP.  One thing is clear: this is a highly contentious stock.  Bulls feel...

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BIG: What Would You Do?

August 31st, 2018

Somewhere in the Bay Area right now, a seasoned executive in the retail space sits in his office with a furrowed brow and clenched hands as he contemplates his move back to Ohio.  West Point grads are known for their tenacity in tackling a challenge, so there’s little doubt that Bruce...

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Z/ZG: A Closer Look at the Homes Division - Is Profitability Really the Goal? Not When You Sell Homes at a 3-4% Premium...

August 17th, 2018

“At this point, we're clearly bias towards scale over profitability, but because we've been selling the houses so much faster than we anticipated, the return on equity has been better...

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HCG.TO: On a March to Nowhere, the Structural Flaws of the “New HCG” Have Started to Become Clear

August 14th, 2018

For several years now, we have wondered aloud what HCG’s financial profile would look like in a scenario in which the company was forced to introduce true underwriting rigor to its mortgage origination...

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Z/ZG: There Must Be a Pony in There Somewhere, An Ode to Zillow’s “Napkin Math” as the Company Attempts to Evolve...

August 7th, 2018

“Then he clambered to the top of the pile, dropped to his knees, and began gleefully digging out scoop after scoop with his bare hands. 'What do you think you're doing?' the...

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TRUP: “You Had Us at Hello”, Introducing TRUP as a Short Idea with a Price Objective of $10

August 2nd, 2018

“We are a direct-to-consumer monthly subscription service providing a medical insurance plan for cats and dogs throughout the United States, Canada and Puerto Rico. “ Trupanion, Inc. S-1 Filing....

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PAA Research's Second Quarter 2018 Lighting Agent Survey

June 28th, 2018

More of the same on the pricing front as structural disruption in the channel continues and agents increasingly question the duration of the led cycle...

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ATGE: In the Nursing Market, There’s Nowhere to Run to, Nowhere to Hide

June 22nd, 2018

“The first slide talks about demand for nursing, and I know this is a frequent question that many of you have. And the data are conflicting. There's a lot of disagreement in the marketplace about whether there is or will be a shortage,...

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CM.TO/RY.TO: The Big Banks Finally Acknowledge That We’ve Entered Phase 1 of Phase 1

May 24th, 2018

“So the original 10% was related to what we thought or anticipated the B-20 impact would be. So that was on that part of the business. When we take a look at the second half ,we continue to see that there will be origination...

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Z/ZG: Where’s George Carlin When You Need Him? New York State Allegedly Says No to the Premier Agent Program for...

May 8th, 2018

“About this time, someone is telling you to get on the plane. "Get on the plane. Get on the plane." I say….. I'm getting IN the plane! IN the plane! Let Evil Knievel get ON...

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ATGE: Mediocrity Yes, Quality No

May 4th, 2018

We’re going to keep things brief here. The current ATGE management team has always favored style over substance, particularly in their shareholder communications.  Management has spent an inordinate amount of time crafting a growth narrative around the company when in reality...

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Z/ZG: What Did Zillow Really Announce? The Company’s Decision To Start Buying Homes Isn’t the Most Important...

April 13th, 2018

With management’s usual flair for the dramatic and acute sense of self-importance, Zillow announced yesterday that it plans to buy and sell homes on the open market through expansion of the...

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Canadian Housing: Reflexivity Cuts Both Ways, Negative Feedback Loops Have Started to Emerge

March 29th, 2018

We hope you will consider this report for your weekend reading list. Over the past few weeks we surveyed more than 300 real estate agents in Canada. The attached presentation outlines the feedback we received from those agents...

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BIG: A Troubling Fact Pattern Emerges as Thesis Creep Sets in For Longs

March 9th, 2018

Heading into BIG’s 4Q17 earnings release, we thought the company would be able to generate positive comps, albeit lower than consensus, but would struggle to generate the kind of operating leverage on meager SSS growth it has achieved over...

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BIG: Will Unrelenting Competitive Pressures and Rising Cost Inflation Finally Lead to Massive EPS Degradation?

February 28th, 2018

Presumably BIG will report 4Q17 earnings results on Friday morning.  At this stage, the company has not yet announced an official reporting date which is somewhat unusual.  Historically, BIG has...

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HCG.TO: Originate or Die, It’s That Simple, the “Devil” of Course Is in the Details

February 15th, 2018

“Against this backdrop, management and the Board are reassessing the corporate strategy and are focused on finalizing the Company’s long-term strategy during the first half of 2018 to help grow the business, create...

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Z/ZG: Listen to Management Carefully and You’ll Hear All You Need to Know About the Structural, Secular, and...

February 9th, 2018

“Somethin' ain't right. Gonna get myself, I'm gonna get myself Gonna get myself connected I ain't gonna go blind For the light which is reflected I see through...

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ATGE: The “New Adtalem” Looks a Lot Like the Old DeVry

February 7th, 2018

For the past 18-24 months ATGE bulls have argued that the removal of DVU from the company’s portfolio of education assets would result in meaningful share price appreciation.  For many an ATGE investor, DVU’s severe revenue declines and modest...

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AYI: The Lighting Industry Is Under Siege and Management is Grasping for Straws, Can Tax Reform Be AYI’s Obi Wan?...

January 10th, 2018

“I’m not an economist so I don’t have a crystal ball” Vernon Nagel, Chairman, President, and CEO. Acuity Brands Inc. 1/9/18. 1Q18 earnings conf. call Finally, a...

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AYI: Nowhere to Hide - PAA Research's Fourth Quarter Lighting Agent Survey

December 12th, 2017

PAA Research surveys lighting agents across the country on a semi-annual basis.  The latest survey was conducted in the first few weeks of November.  35 lighting agents responded to our survey.     

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ATGE: How Much Would You Pay to Change a Story? For ATGE the Price STARTS at $7.5 Million

December 5th, 2017

In a move that has been telegraphed for some time but occurred sooner than expected, ATGE announced that it has reached an agreement with Cogswell Education to “sell” DVU.  The headline purchase price is $1,...

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BIG: A Low Quality Earnings Beat Is the Least Worrisome of the Red Flags

December 4th, 2017

Expanded square footage, broader product offerings and SKU sets (gray!), more liberal down payment options through Progressive, and the Big Lots private label credit card couldn’t prevent BIG from witnessing massive deceleration in growth...

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CM.TO/RY.TO: “You Come at the King(s), You Best Not Miss”; The Credit Cycle is Here - Time to get Short

November 28th, 2017

The gravity of this statement from The Wire’s Omar Little is not lost on us. Time and time again in the two and half years that we have been following the Canadian housing market investors have suggested to...

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HCG.TO: Credit Contraction? B-20 Impact? IFRS-9 Gambit? And the Big Question: What Business Is HCG Really in Now?

November 15th, 2017

Meet the new Boss, same as the old Boss?  When Yousry Bissada steps up to the mic today to discuss the performance of HCG during the first three months of his stewardship, we’re almost certain...

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Z/ZG: Our Confidence in Our Short Thesis Continues to Grow

November 8th, 2017

Even through the prism of what some might argue are “jade colored glasses”, we cannot find enormous fault with Zillow’s 3Q17 earnings results and 4Q17 outlook.  The company delivered a modest topline beat largely due to better than...

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AYI: Time to Turn Out the Lights? The LED Adoption Cycle Could Be Cresting

November 7th, 2017

“We are often asked about the vitality and conditions of the key end markets we serve. We now know that the overall growth rate of the lighting market over the last 2 quarters was essentially flat and even slightly down compared with the...

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ATGE: Games People Play – Management Continues to Try to “Fake It Until They Make It” While Diluting the Core...

November 3rd, 2017

“Games people play, You take it or leave it Things that they say, Just don't make it right If I'm tellin' you the truth right now, do you believe it Games people play in...

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FOR-PROFIT EDU: STRA and CPLA - A Merger Forged Out of Necessity, If Not Fear of Survival

October 30th, 2017

This morning STRA and CPLA announced their intention to “merge” in an all-stock deal.  CPLA shareholders will receive 0.875 shares of STRA stock for each share they own.  Although this transaction has been...

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CTC: We’ve Seen This Story Before and It Doesn’t End Well, Time to Get Short

October 9th, 2017

“We’re focused on growth in e-commerce….I don’t think enough companies worry about obsolescence. We think about it all the time.” Kevan Gorrie, CEO Pure Industrial REIT 2/9/17 (Canada...

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AYI: As Management Makes It Up as They Go Along, It’s Becoming Clear This Is No Longer a Growth Company

October 5th, 2017

For some investors and analysts, today was yet another grand exercise in banging your head against the wall, which some have affectionately (or not so affectionately) called short selling.  We recognize why...

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Current Ideas

TRUP

SELL/SHORT

$10

XOXO

LONG

$37

WWE

LONG

$65

AYI

SHORT

$98

RY

SELL/SHORT

$70

CM

SELL/SHORT

$76

CTC

SHORT

$101

ATGE

SHORT

$15

HCG.TO

SHORT

$0

RON.TO

SHORT

$9

BIG

SHORT

$28

ESI

SHORT

$0

BGG

PAIR - LONG BGG/SHORT TTC

25%

TTC

PAIR - LONG BGG/SHORT TTC

25%

Z

SHORT

$14.00

NA.TO

SHORT

$22

ING.PA

SHORT

$35

ZU

SHORT

$15

TRLA

SHORT

$20

MCRS

SHORT

$31

APOL

SHORT

$35

OPEN

SHORT

$30

BCO

LONG

$35

KNL

PAIR - LONG KNL/SHORT MLHR

25%

CSGP

SHORT

$100

GCA

LONG

$8

IPSU

LONG

$20

MLHR

SHORT

$22

ARC

LONG

$12.50

LOOP

PAIR - LONG CSGP/SHORT LOOP

40%

THQI

LONG

$35

WPO

SHORT

$275

COCO

SHORT

$0

HNI

SIG

RGR