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AYI: 3Q10 Consensus Revenue Expectations Look Reasonable, Expect EPS Upside in the Form of Continued Gross Margin...

June 29th, 2010

AYI will report 3Q10 results before the market opens tomorrow. We expect the company to deliver inline revenues, but once again top consensus estimates due to better than expected gross margins. ...

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MLHR Misses (Again), Even With Acceleration in Order Activity Consensus For FY11 Needs to Come Down

June 23rd, 2010

MLHR reported 4Q10 earnings after the close.  You can read the full release here.  Overall, the company's revenue and earnings results fell well short of consensus and PAA Research's even more cautious estimates....

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KNOT: Too Cheap "KNOT" To Own

June 21st, 2010

At a time when the US housing market remains in recession (and by proxy the US economy), the benefits of global monetary and fiscal stimulus have started to fade away, and sovereign debt fears cast a long shadow, we have focused on identifying long ideas that are US based companies that...

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Solving the Credit Crisis..... In Higher Education

June 18th, 2010

Over the past 48 hours a significant change has occurred in the operating landscape for proprietary higher education institutions.  While most investors and sell-side analysts debate the eventual outcome of the Department of Education's "gainful employment" proposal,...

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Impressive CY11 Title Slate Should Overshadow UFC Disappointment

June 16th, 2010

Earlier this evening THQI hosted its investor presentation at this year's E3 Expo.  The company's presentation focused on its impressive core gamer title slate for CY11. Think about it this way: THQI spent almost an hour discussing more than a dozen...

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IPSU: Highlights from Conversations with IPSU Management - Progress at Port Wentworth

June 15th, 2010

Yesterday we had the opportunity to speak with Hal Mechler, CFO of Imperial Sugar Company.  Management's tone was more positive than on the company's most recent conference call both about the broader sugar market and the...

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MLHR: The Theme In the Office Furniture Market Appears to be Stagnation More than Acceleration

June 10th, 2010

Approximately three months ago, we introduced MLHR as a short idea.  At that time we thought shares were poised to witness downside following a 25% run up in the stock. even though sell through trends in the office furniture...

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PAA Research SMid Cap Portfolio Update - YTD up 8.9%

June 2nd, 2010

We wanted to provide you with an update on the performance of our SMid Cap portfolio, which we introduced on 9/3/09. As a reminder this is a “mock” portfolio with an initial value of $100 million. We plan to manage the portfolio like a long/short equity hedge...

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A View from the Frontlines of Housing

May 27th, 2010

We've stated it before and we'll say it again: we are firm believers in Edward Leamer's thesis that "Housing is the Business Cycle".  It continues to be the prism through which we view the economic cycle. It colors every investment idea we evaluate and how we position the PAA...

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THQI: Strong Reviews, Expansion of Midnight Event at Gamestop Bode Well for Sell Through for UFC Undisputed 2010

May 24th, 2010

THQI will release one of its key titles for FY11 tomorrow, UFC Undisputed 2010.  Expectations among gamers, MMA fans, and investors is high following the strong sell through for UFC Undisputed 2009 and...

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TTC: 2Q10 Upside More than Overshadowed by Threat of Slowdown in the US, Golf and European Headwinds

May 21st, 2010

TTC reported 2Q10 results earlier today.  You can read the full release here.  The company's earnings results were inline with TTC's positive pre-announcement on 5/13.Key Observations from TTC's 2Q10 ResultsHere are...

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PAA Research SMid Cap Portfolio Update – YTD Gain of 8.7%

May 17th, 2010

We wanted to provide you with an update on the performance of our SMid Cap portfolio, which we introduced on 9/3/09. As a reminder this is a “mock” portfolio with an initial value of $100 million. We plan to manage the portfolio like a long/short equity...

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Latest WASDE Report Is Bullish For Sugar, Evaluating "Normalized" Earnings for IPSU

May 14th, 2010

Earlier this week, the USDA released an update on its World Agricultural Supply and Demand Estimates.  Overall, the report was generally supportive of higher raw sugar prices. Domestic raw sugar prices have come under pressure in the...

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IPSU: A Difficult Quarter as Predicted Also Contains a Host of Silver Linings

May 10th, 2010

IPSU reported 2Q10 earnings results this morning.  You can read the full release here.  As we discussed in our preview of the quarter, IPSU's operating results were hampered by a slower than expected ramp-up of capacity at the company's...

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WPO: 1Q10 Results Do Little To Change Our Short Thesis, Our Revised Estimates

May 10th, 2010

WPO reported 1Q10 results on 5/7.  Overall, the results did little to alter our short thesis on the stock.  The company beat our estimates on the topline but fell short of our EPS forecast due to lower than expected profitability at the...

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THQI's 4Q10 Results and Guidance Come In as We Expected, CY11 Could Bring $1.2B+ Revs, $1.00+ EPS

May 6th, 2010

THQI reported 4Q10 results after the close and provided initial guidance for 1Q11 and FY11.  You can read the company's earnings release here.  The earnings results and initial guidance provided by management were inline...

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COCO's 3Q10 Results Might Signal the Last Days of Margin Expansion, The Questions that Should Be Asked, Establishing a...

May 4th, 2010

COCO reported 3Q10 earnings results this morning.  You can read the full release here.  Overall, we would characterize the results as more or less inline, but they will likely be viewed as a...

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PAA Research SMid Cap Portfolio Update - YTD Gain of 13.8%

May 2nd, 2010

We wanted to provide you with an update on the performance of our SMid Cap portfolio, which we introduced on 9/3/09.  As a reminder this is a “mock” portfolio with an initial value of $100 million. We plan to manage the portfolio like a long/short equity...

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Just When We Thought BCO's Days of "Death by 1000 Cuts" Were Over... Still the Results Were Not as Bad as the Headline...

April 29th, 2010

BCO reported 1Q10 results this morning.  You can read the full release here.  Overall we would characterize the results as disappointing in light of the improvement in the global economy over the...

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What We Wanted to Ask on the LOOP Earnings Call....

April 29th, 2010

LOOP reported 1Q10 results after the close. Overall, the company delivered solid outperformance on the topline ($18.8 million vs. $18.2 million consensus) and a penny of upside on the bottomline.  The bigger headline for the bulls on the stock is that the company...

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From Headwinds to Tailwinds - 2010 Should Bring Solid Earnings Growth and FCF Generation for BCO

April 27th, 2010

We introduced BCO as a long idea approximately 9-months ago, you can read our original report here.  It has not been our best call. The stock has effectively gone no where while equity markets have ripped.  On Thursday,...

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Closing Out Thomas Weisel Partners Group (TWPG) Long Idea With 44% Gain

April 26th, 2010

We are closing our our Thomas Weisel Partners Group long idea today with a 44% gain.  You can read our original report here.  This morning Stiffel Financial Corp. announced a deal to acquire TWPG in a stock deal.  TWPG shareholders will receive...

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BGG: Crushes 3Q10 EPS Expectations, but Guides Lower - Four Reasons Why We Think The Stock Can Still See Downside

April 22nd, 2010

We recently introduced two short ideas: TTC and BGG.  Both are leading manufacturers in the outdoor power equipment market.  Our thesis on the two companies was as follows: Our channel checks indicated...

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ESI's 1Q10 Results Were Stronger Than Expected, but Leave Us With Plenty of Questions

April 22nd, 2010

ESI reported 1Q10 results this morning that topped PAA Research and consensus expectations. You can read the full release here.   Here are the quick highlights: Revenues and EPS of $384.0 million and $2.46 beat consensus...

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PAA Research SMid Cap Portfolio Update - YTD Gain of 12.6%

April 20th, 2010

We wanted to provide you with an update on the performance of our SMid Cap portfolio, which we introduced on 9/3/09.  As a reminder this is a “mock” portfolio with an initial value of $100 million. We plan to manage the portfolio like a long/short equity...

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CSGP: Noisy Quarter Shouldn't Overshadow Acceleration in Core Business, Traction for Showcase.com

April 20th, 2010

Approximately two months ago we introduced a pair trade idea to go long CSGP against a short position in LOOP.  You can read our original report here.  Thus far the trade has not delivered the type of return we...

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ESI 1Q10 Preview, New Lawsuit Raises More Questions About ESI's Regulatory Compliance Practices

April 19th, 2010

ESI will report 1Q10 results on Thursday, 4/22 before the market opens.  Based on the feedback from our recent survey of privately held for-profit education institutions, we think enrollment momentum across ESI's network of...

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Time to Grab the "Bull" by the Horns, Getting Short TTC and BGG

April 19th, 2010

The outdoor power equipment sector is an industry whose revenue growth trends have historically been driven by three primary factors: home sales, general consumer confidence, and weather.  It should come as no surprise given these factors that unit sales...

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THQI's Baseline Profitability Now Proven, the Focus Turns to Earnings and Cash Flow Growth for FY11 and FY12 - Just...

April 15th, 2010

THQI spent the better part of FY08 and FY09 streamlining its studio system, reducing headcount company-wide, and altering its project development process.  It was an arduous, painful process...

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A "Must Read" Report for Any Investor in the For-Profit Education Sector Heading Into 1Q10 Earnings Season

April 14th, 2010

In the for-profit postsecondary education sector, controversy never dies and it seems like trading opportunities are omnipresent. After a one-month period during which news flow within the industry slowed to a...

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Current Ideas

AYI

SHORT

$129

RON.TO

SHORT

$9

BIG

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$28

ESI

SHORT

$0

DV

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BGG

PAIR - LONG BGG/SHORT TTC

25%

TTC

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NA.TO

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HCG.TO

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ING.PA

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OPEN

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WWE

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KNL

PAIR - LONG KNL/SHORT MLHR

25%

XOXO

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CSGP

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GCA

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ARC

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LOOP

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COCO

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