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OPEN: The Growth Story Unravels Just As Competition Appears Poised to Step Up, Lowering Price Objective to $30

November 2nd, 2011

In the lengthy report we published on OPEN on Monday (backed by a survey of 110-120 restaurant owners) we outlined a number key issues that we expected to become discounted in the stock over the next...

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OPEN: The NA Moat Is More Vulnerable Than You Think – A More Realistic TAM Analysis, Lowering Price Objective to $37

October 31st, 2011

In the 7+ months since we introduced OPEN as a short idea, we have been in a position where the stock has gained more than 40% against us and now trades more than 40% below where we initiated our...

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OPEN: The North American “Moat” Looks to be Increasingly Under Siege

September 8th, 2011

OPEN shares traded off sharply today in response to GOOG’s announcement that it had acquired Zagat, a worldwide publisher of ratings and reviews of restaurants and other businesses.  The Zagat restaurant surveys, launched more than 30 years...

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OPEN: The Growth Story Is Cracking Sooner Than Expected, Lowering Price Objective to $48

August 2nd, 2011

Approximately 5-months ago, we introduced OPEN as a short idea based on the following thesis: 1. OPEN’s electronic reservation booking system (ERB) in many respects is a solution without a problem 2. Restaurants view the...

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OPEN: 2Q11 Preview, Competition Matters

August 1st, 2011

If you happen to be looking at OPEN for the first time, you might be wondering: what’s the big deal about the stock from a pure performance perspective?  Year-to date the stock has gained a measly 0.5%, compared to a 2.8% gain for the S&P 500.  Obviously, OPEN has been...

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OPEN: Competition Continues to Eat Away at OPEN’s Total Addressable Market (TAM)

June 24th, 2011

Approximately 12-weeks ago, we introduced OPEN as a short idea.  You can read our original 40-page report by clicking here.  The principal elements of our short thesis are as follows: 1. OPEN’s electronic reservation booking system...

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KNOT: Ecommerce Issues Aside, Revenue Growth is Accelerating

May 6th, 2011

Make no mistake, KNOT’s 1Q11 results provide further evidence that the company’s efforts to improve monetization of their major media platforms have started to result in accelerated revenue growth.  However, KNOT reported 1Q11 results that fell short of...

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OPEN: Unassailable OPEN? We Don’t Think So, 1Q11 Preview

May 3rd, 2011

Approximately 8-weeks ago, we introduced OPEN as a short idea.  You can read our original 40-page report by clicking here.  The principal elements of our short thesis are as follows: 1. OPEN’s electronic reservation booking system (ERB) in many respects...

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KNOT: Evaluating the Financial Impact of KNOT’s Entrance into the Group Buying Space

March 29th, 2011

In August of 2010, KNOT introduced daily deal offerings on its weddingchannel.com site in 7 markets. Generally speaking the KNOT’s Daily Deals offering includes products and services related to the preparation for (dance lessons,...

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OPEN: Evaluating OPEN’s Competitive Challenges in Europe – Is Market Leadership in Europe “Fait Accompli”?

March 17th, 2011

Approximately 2-weeks ago, we introduced OPEN as a short idea.  You can read our original 40-page report by clicking here.  The principal elements of our short thesis are as follows: 1. OPEN’s...

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OPEN: The “TAM” Fallacy and the Implications of a Solution without a Problem – Time to Get Short

March 2nd, 2011

Let’s get this out of the way early on – we are firm believers in the concept that valuation is not a short thesis, or more simply stated valuation is not a thesis.  Ask any hedge fund manager who has relied on...

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KNOT: 4Q10 Results Highlight Growth Acceleration

February 10th, 2011

KNOT reported 4Q10 results that were more or less inline with our expectations and above consensus estimates. The company’s 4Q10 results further validated our thesis that KNOT reached a critical inflection point in 2H10 and is poised to generate accelerated revenue...

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KNOT: 4Q10 Results Should Highlight Acceleration in Growth, Exceed Consensus Estimates

February 9th, 2011

KNOT will report 4Q10 earnings results after the market close on Thursday, February 10th.  We expect the company’s 4Q10 results will further validate our thesis that KNOT reached a critical growth inflection point in the second...

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Closing out Long CSGP/Short LOOP Pair Trade with 35% Gain

February 9th, 2011

Approximately 12-months ago in a report entitled "When the Castle Is Under Siege It Helps To Have a Wide Moat: Long CSGP/Short LOOP" we introduced a pair trade idea: long CSGP/short LOOP.  Our thesis at that time was as follows: CSGP (CSGP 42.3 ↑0.74%) has...

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KNOT: 3Q10 Revenue Shortfall Belies Significant Topline Acceleration Heading Into 4Q10, 2011

November 4th, 2010

Approximately 5-months ago we introduced KNOT as a long investment idea.  At that time our primary thesis was as follows: KNOT still has leading media and ecommerce franchises serving large end-markets. The company has just...

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CSGP: 3Q10 Results Should Highlight Growth Acceleration, Validate Our Long CSGP/Short LOOP Thesis

October 20th, 2010

Approximately 7-months ago we introduced a pair trade: long CSGP/short LOOP. Thus far the trade has worked out reasonably well.  Both stocks have appreciated considerably, but shares of CSGP have outperformed those of...

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KNOT: From Branding to Monetization, Raising our FY11 Estimates

September 29th, 2010

We introduced KNOT as a long idea approximately 3-4 months ago based on the following: KNOT still has leading media and ecommerce franchises serving large end-markets. The company has just started to scratch the surface of its market opportunity. We...

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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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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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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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When the Castle Is Under Siege It Helps To Have a Wide Moat: Long CSGP/Short LOOP

March 12th, 2010

This report was originally published on 2/11/10.A few years ago, Warren Buffet stated to Fortune magazine:“The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather...

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Insider Selling at NILE Continues, Company Enters Settlement Discussions with Diascience Corp. (aka Yehuda Diamonds)

March 12th, 2010

This report was originally published on 1/7/10.We wanted to highlight a few noteworthy developments related to our pair trade recommendation of long SIG/short NILE (55.39 ↓0.40%).  First, we wanted...

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Channel Checks With Independent Jewelers Indicate Trends Might Not Be As Bad as the Zales November Comp Would Have You...

March 11th, 2010

This report was originally published on 12/16/09.Shares of SIG (29.54 ↓0.94%) have pulled back in the past 10-days following ZLC (3.03↓6.19%)’s 10-Q filing, in which Zale’s reported...

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An Update on Blue Nile’s “Operating Margin Conundrum” and Thoughts on Upcoming 3Q09 Results

March 11th, 2010

This report was originally published on 11/4/09.We introduced a pair trade idea in June to go long Signet (SIG 29.49 ↓1.11%) Jewelers against a short position in Blue Nile (NILE 55 ↑0.22%).  Although we...

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The Blue Nile/Diascience Corp. (Yehuda Diamonds) Legal Battle Heats Up

March 11th, 2010

This report was originally published 11/2/09.In our original report on our pair trade idea: long Signet (SIG 29.43 ↓1.31%) Jewelers/shortBlue Nile (NILE 54.76 ↓0.22%), we highlighted the risk that a lawsuit against Blue Nile could pose to the...

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Signet Jewelers (SIG) Remains the Best Investment Vehicle in the Specialty Jewelery Space

March 10th, 2010

This report was originally published 9/9/09.SIG reported 2Q10 results this morning.  You can find the full press release here.  Overall, the company handily beat consensus expectations and the stock has reacted...

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Are Polished Diamond Prices About to Increase?

March 10th, 2010

This report was originally published 8/25/09.In a recent post on NILE (54.88 ↑1.95%), we discussed the primary fundamental short thesis on the stock, which included among other things the company’s “operating margin conundrum”.  In short, it is our view that...

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A Closer Look at Blue Nile’s Promotion Strategy and the Company’s Operating Margin Conundrum – The Fundamental...

March 10th, 2010

This report was originally published on 8/12/09.Approximately 6-weeks ago we introduced a pair trade recommendation Long Signet Jewelers/Short Blue Nile.  Thus far it has not yielded positive...

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Taking a Closer Look at Citi’s Blue Nile Upgrade and An Update on the Diascience Corp. Lawsuit

March 9th, 2010

This report was originally published on 7/16/09.NILE shares have rallied 17.9% in the past 5-trading days following a series of analyst upgrades from William Blair and Company and CitigroupInvestment Research. We wanted to...

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A Pair Trade with Some Sparkle – Long Signet Jewelers/Short Blue Nile

March 8th, 2010

This report was originally published on 6/25/09.Over the past few months there have been some nascent signs of stabilization in consumer spending. For the most part we have avoided the entire consumer sector during the recovery in the market over...

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Current Ideas

EXPI

SELL/SHORT

$4

HUSQ.B

SELL

$50

UFPI

SELL/SHORT

$45

TREX

SHORT

$18

PRDO

SELL/SHORT

$5

STRA

SELL/SHORT

$42

CWH

LONG

$75

OSTK

LONG

$128

CM

SELL/SHORT

$50

RY

SELL/SHORT

$50

ARC

LONG

$5.50

AYI

SHORT

$50

BIG

SHORT

$28

WWE

LONG

$65

XOXO

LONG

$37

RLGY

PAIR TRADE

$10

RDFN

PAIR TRADE

$30

BCO

LONG

$35

ING.PA

SHORT

$35

TRUP

SELL/SHORT

$10

CTC

SHORT

$101

ATGE

SHORT

$15

HCG.TO

SHORT

$0

RON.TO

SHORT

$9

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

ZU

SHORT

$15

TRLA

SHORT

$20

MCRS

SHORT

$31

APOL

SHORT

$35

OPEN

SHORT

$30

KNL

PAIR - LONG KNL/SHORT MLHR

25%

CSGP

SHORT

$100

GCA

LONG

$8

IPSU

LONG

$20

MLHR

SHORT

$22

LOOP

PAIR - LONG CSGP/SHORT LOOP

40%

THQI

LONG

$35

WPO

SHORT

$275

COCO

SHORT

$0

HNI

SIG

RGR