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WWE: As More Meat Is Added to the Bone on the Network Front Positive Developments in the Core Remain Overlooked

March 5th, 2013

In the 18-months that we have been recommending going Long shares of WWE, we have been highly critical of management’s reluctance to provide investors with the company’s general operating and financial...

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ESI: 10-K Highlights – the SEC Subpoena Is Not the Sole Cause for Concern

February 25th, 2013

We have little doubt that among the kernels of information included in ESI’s 2012 10-K filing that the disclosure of the subpoena from the SEC will receive the greatest attention – as it should.  However, for anyone who has followed the...

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Z: 20% of the Traffic (and growing) and Less Than 1% of the Spend; Zillow’s TAM Story Gets Better and Better

February 14th, 2013

Didn’t we go through the same experience last quarter?  Zillow beat revenue and EPS for 4Q12, operating metrics were stellar, and management guided lower in large part due to increased expectations for...

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OPEN: Growth Is Grinding To a Halt…. And TopTable Isn’t Going to Save the Day

February 8th, 2013

Well at least they didn’t miss consensus revenue estimates again….  Seriously though, do you remember the “good old days” when supposed growth companies that reported a massive deceleration in operating metrics, low quality...

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WWE: Is the WWE About to Go “Over the Top” With its Potential Network?

February 5th, 2013

WWE shares have advanced 7.8% thus far this year compared to a 6.0% gain for the S&P 500.  Despite the solid stock price performance to start the year, we doubt that many WWE investors are taking “victory laps”.  After all, in the...

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COCO: With $200MM Left to Go, Things Could Be Coming to a Head

January 31st, 2013

Despite all of the levers the company has pulled (cohort default rate “management”, asset sales, off-loading student loan credit risk temporarily, sale lease backs) over the past two years, it finally appears that COCO is starting to run out of...

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MCRS: Not Much to See Here…. For Now

January 25th, 2013

MCRS reported a quarter that was as uneventful as it was uninspiring. Ultimately there were operating metrics that improved somewhat and those that could be construed as confirmation of our short thesis.  Below we discuss the key positives and negatives from the quarter.

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ESI: And So It Begins…. What Do You Believe?

January 25th, 2013

Who said volatility is dead?  In a day that will go down in infamy for ESI investors, the stock traded in an astounding 40%+ range today.  After gaping down in excess of 20% in early trading ESI shares rebounded over the course of the day to close up 17.7% - efficient...

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Proprietary Restaurant Checks Suggest Challenges Could Mount for OPEN and MCRS in 2013; Other Key Observations

January 22nd, 2013

Over the past month, PAA Research conducted a survey of approximately 80-85 restaurant operators a significant percentage of which are clients of OPEN and MCRS. The general purpose of the survey was to gain...

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MCRS: Thoughts from the National Retail Federation “Big Show”

January 15th, 2013

Yesterday we had the opportunity to tour the floor at the National Retail Federation’s “Big Show 2013”.  We wanted to pass along some key observations from our time in the exhibit hall.  As you might imagine given our outstanding short call on...

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ESI: The True Nature of ESI’s Educational Outcomes Finally Coming to Light, Liquidity Position Looks Tenuous, Taking...

January 6th, 2013

If you were to distill our short thesis on ESI into its central elements (which we’ve now had in place for almost four years now) it can be succinctly summarized in two points: 1. The company’s...

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2012 Performance Update: Do Our Investment Ideas Generate Alpha? Other Ways We Measure our Performance

December 31st, 2012

First and foremost we wanted to wish everyone a happy, healthy, and prosperous new year and thank you for your continued interest in our research.  While there was plenty to be pleased about from a performance...

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MCRS: Analyst Day Fails to Address Our Concerns

December 13th, 2012

Coming into MCRS’s first “Investor Day” in over 13 years, we thought the burden of proof very much was on management to articulate why the proliferation of mobile POS solutions, mobile ordering, and cloud based iOS systems would not negatively impact the company’s...

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MCRS: How MCRS Really Makes Money and Why It Should Alarm Investors in the New Age of mPOS and iOS POS Solutions

December 12th, 2012

It’s been nearly four months since we first introduced MCRS as a short idea.  Since that time the stock has declined (-13%) compared to a 1% gain for the S&P 500 over the same period.  As so often is...

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WWE: Evaluating Positive Developments from the “Core” and Potential Network Economics

November 15th, 2012

It seems like only 5-6 months ago we were lamenting a similar dynamic surrounding WWE shares.  Here we are again, with WWE shares plumbing decade lows even though there are ample signs that the company’s core product continues...

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XOXO: After Another Quarter of EPS Upside and Strong FCF Generation, We Have to Ask: Where is the Love (from Investors)?

November 9th, 2012

Heading into XOXO’s 3Q12 earnings release we thought we knew the following: The Knot and the Bump franchises remained incredibly strong from a consumer engagement perspective Investors had...

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THQI: They Just Couldn’t Thread the Needle

November 6th, 2012

At no point over the past 3-years have we felt that we were in denial about the issues that THQI faced in trying to turn the company’s earnings prospects around.  We were intimately aware of the company’s disproportionate exposures to the very segments of the video game...

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Z: Sometimes It’s Important to Remember These Guys are “Empire Builders”…

November 6th, 2012

If you told us heading into the earnings print that Zillow would have added more than 4,000 premier agent subscribers in the third quarter, we almost certainly would have expected Zillow shares to trade higher.  Obviously that has not...

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OPEN: After Another Ho-Hum Quarter, the Six Lingering Questions We’re Thinking About

November 2nd, 2012

Heading into the company’s 3Q12 earnings release, OPEN shares had rallied 31.8% over the past 3-months compared to a meager 3.4% gain for the Nasdaq.  Clearly investor enthusiasm for OPEN shares continued to increase over the past...

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OPEN: Expecting 3Q12 Results to Add Further Credence to Our Maturation/Competition Thesis

November 1st, 2012

We had to laugh.  Approximately two weeks ago, rumors started to surface that YHOO under the stewardship of Marissa Mayer, might consider an acquisition of OPEN.  Outside of combining one high margin, mature business facing...

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COCO: The Games Continue…. The Three Most Important Questions for COCO Stakeholders Now

October 31st, 2012

In some respects, given all that has happened over the past 2-3 years in the for-profit postsecondary education space it’s hard to imagine that COCO is still hanging around.  After all, in an era when brand, price, and return...

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MCRS: Growth…… Is…… Slowing

October 26th, 2012

It’s hard to put our finger on it as to what element of MCRS’s 1Q13 earnings results added further validation to our short thesis, but there are more than a few signs there.  In our view, there were four or five items in the company’s 1Q13 results that should be viewed as...

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ESI: After The Worst Fall Term Enrollment Intake in ESI’s History, It’s Clear the Emperor Has No Clothes, Taking...

October 25th, 2012

Losing Altitude and Gaining Speed…..At the simplest level, here are the five things that you need to know about ESI following the company’s 3Q12 earnings release and fall term enrollment...

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MCRS: The Burden of Proof Has Shifted

October 24th, 2012

With one simple statement, the management of Urban Outfitters changed the entire perception surrounding the sustainability of incumbent providers of PC based POS software solutions to restaurants and retailers.  On September 27th at the Urban Outfitters investor day, the...

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Z: A Closer Look at the Rental Property Marketplace – Raising Estimates and Price Objective to $50

October 22nd, 2012

In the housing depression over the past five years, there has been one segment of the marketplace that has performed quite well – rentals. Historically, the rental property market has been largely comprised of...

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BGG/TTC: Housing, Operating Efficiency, and FCF Improvements Indicate BGG Might Finally Flex Its Earnings Muscles

October 18th, 2012

The Spring/Summer 2012 selling season will not be remembered fondly by participants in the outdoor power equipment marketplace.  Severe drought through much of the US and ongoing economic in weakness led...

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For-Profit EDU: Checks with Privately Held Institutions Suggest We’re On the Cusp of Yet Another Round of Meaningful...

October 15th, 2012

On Tuesday, October 16th APOL will kick-start the earnings season in the for-profit postsecondary education sector.  Investor expectations for the company’s results, particularly surrounding new...

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ESI: More Correspondence with the SEC, but It’s not related to the Off-Balance Sheet Treatment of PEAKS

September 25th, 2012

More Correspondence with the SEC….We just wanted to flag a round of correspondence between ESI and the SEC that occurred in July and August of this year.  The letters were just released through the SEC’s...

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COCO: Another Log on the “Regulatory Fire”

September 18th, 2012

“The investment thesis for us is pretty straightforward, as I said earlier, career-oriented, that's a big deal to us. I mean, we're teaching students how to become prepared for their first job. Not only do we teach them and get them through the process, we also spend a...

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MCRS: “Square”ly in the Scope of the Mobile Payments and iOS Revolutions, Time to Get Short

August 23rd, 2012

“I just charge additional license fees for these iPad implementations, so it actually drives business”Peter Rodgers, EVP Investor Relations and Business Development MICROS Systems, Inc.That’s it, nothing to see here....

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Current Ideas

CTC

SHORT

$101

ATGE

SHORT

$15

AYI

SHORT

$108

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

WWE

LONG

$25

KNL

PAIR - LONG KNL/SHORT MLHR

25%

XOXO

LONG

$20

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