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Upcoming Changes to Your PAA Research Account; Investment Idea Performance Update – Average Short Idea Alpha...

December 16th, 2015

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.  2015 will certainly not be remembered as an...

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DV: Buying at 20x When Trading for 4x EBITDA Might Not Be Good for Long Term IRR’s

December 15th, 2015

At DeVry Brasil, executing our game plan continues to be about adding valued acquisitions, launching new programs, marketing effectiveness and achieving operating leverage. By the way, we expect FX to moderate over the planning...

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NA.TO/HCG.TO: Four Things I Learned in the Past Week about Canadian Financial Institutions – Rhetoric vs. Reality

December 7th, 2015

We spent much of last week reading, listening, and analyzing the slew of earnings releases, financial supplements, and conference calls from the largest banks across Canada.  Had we known the results and...

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CSGP/Z: The Reality in Rentals - Awash in Leads as Incremental Spending Goes Towards Self-Branding Initiatives

November 23rd, 2015

Over the past few weeks, we conducted a survey of more than 50 rental property managers across the country.  Overall the feedback from our survey suggests that CSGP management's assertions about the company's...

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HCG.TO: Purposeful Obfuscation Continues, While Core Earnings Power Evaporates and Allowances Remain at Irresponsible...

November 5th, 2015

A company has finally surpassed the Maple Leafs as the worst run organization in Toronto… The latest development in the mortgage origination fraud scandal at HCG is both remarkable and...

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Z: You Asked for It, Now You’ve Got It – The Bull Case for Zillow Relies on the Company’s Ability to Become a...

November 4th, 2015

Where were you on that fateful day, July 28, 2014 when Zillow announced its intention to acquire Trulia in a purchase that was valued at $3.5B at that time? It was a brutal time for short sellers as...

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CSGP: Have You Noticed?

October 29th, 2015

It truly is remarkable. Quarter after quarter, CSGP management talks about phenomenal traffic gains for its flagship properties and explosive growth in bookings.  Yet, when the rhetoric melts away and questions are asking about organic or “core” revenue growth the answers are considerably...

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HCG.TO: OSFI Data Suggests HCG Earnings Could Fall Short for 3Q15; Five Key Questions That Need to Be Answered

October 21st, 2015

A few things have become clear about HCG over the past several months: Management refuses to “clear the air” surrounding the extent of the company’s involvement in and potential exposure to mortgages...

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ESI: Department of Education Letter Suggests Liquidity Woes Could Accelerate – The End Game Is Nigh

October 19th, 2015

In a letter released today, the Department of Education informed ESI that the company will be placed on a form of delayed disbursement of Title IV funds and become subject to even more stringent reporting requirements...

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Z: Is Zillow’s ARPA Growth Miracle Over? The Demise of the “MSA” in the Mortgage Channel Suggests It Could Be,...

October 16th, 2015

“By the minute I was getting paid like a hot line, Servin' rollin' fiends was calling, we was dot com, Well connected, well respected and well protected.”-          Meek Mill/Wale....

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Canadian Housing: Flashing Yellow or Red? Feedback from Our Survey of Mortgage Brokers

October 13th, 2015

On the surface everything in the Canadian housing market seems fine: home price appreciation nationally continues its unprecedented and meteoric run, housing starts remain a source of economic growth, and non-farm payrolls continue...

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Canadian Housing: The Demographic Crisis No One Seems to Talk About

October 5th, 2015

Let’s play a little game called “guess the country with a pending demographic crisis”. Here are some hints to start out with, for this country:   1) the median age has increased from 32.9 in 1990 to 40.5 in 2015, 2) the percentage of population...

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NA.TO: Surprising Capital Raise Could Spook Investors, It Might Not Be the Last…

October 1st, 2015

After the close, National Bank of Canada announced that it plans to raise $300MM through a common equity offering of 7.2MM shares at a price of $41.90. The deal is “bought” and is expected to close on 10/9/15.  Considering that much...

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DV: Drowning in a Sea of Useless Anecdotes While Critical Operating Issues Remain Unresolved, Lowering Target to $20

August 19th, 2015

Recently in one of our research notes about Zillow we wrote the following:“Investors love anecdotes about companies; they represent the “broth” in the mosaic theory “soup” we create on any...

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Z: Forget the Agent in North Dakota Spending $20K and the Growth in Agents Spending $5K/Month, Deceleration Is the Real...

August 5th, 2015

Investors love anecdotes about companies; they represent the “broth” in the mosaic theory “soup” we create on any given investment idea. Industry statistics and company specific filings...

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Z: Running Into a Wall - Growth Is Slowing and Other Key Observations from Our Survey of 400+ Real Estate Agents

August 4th, 2015

Each year, for the past six  we have conducted a survey of real estate agents across the country.  We find that the feedback from agents at the local level gives us a much more informed view of the state...

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ESI: Was That the Final Goodbye? We’ve Reached the Point of No Return – ESI Might Not Survive Beyond the Next 6-9...

July 30th, 2015

Following a conference call that sounded 50% like a deposition and 50% like an advertisement (it was 100% strange), we can’t help but wonder if this could be the last time we might here from ESI...

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HCG.TO: Amidst a Web of Deception Two Facts Are Now Clear: There Was Fraud and HCG Is Drastically Over-Earning,...

July 30th, 2015

“My pain…. Is self chosen At least so the prophet saysI could either burnOr cut off my pride and buy some timeA head full of lies is the weightTied to my waistThe river of deceit pulls downThe...

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HCG.TO: Management Desperately Tries to Spin a Narrative While the Company Increasingly Runs to Stand Still; Let’s...

July 22nd, 2015

“…the hedge funds tend not to do the due diligence. They don’t take the deeper dive and understand.”SAID NO ONE EVER.  Wait a minute, someone actually did say this and very recently.  This...

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Canadian Housing: The Pressure Point – MIC’s and Private Mortgages Have Become the Central Lynchpin Holding Up the...

July 16th, 2015

“The vulnerability associated with household indebtedness remains important and is edging higher, owing to an increase in the level of household debt and the ongoing negative impact on incomes from...

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HCG.TO: The Disturbing Facts Continue to Pile Up Suggesting Far Deeper Issues, the Downside Could Be Bigger Than We...

July 13th, 2015

Was it only two years ago that HCG management triumphantly trumpeted its conquest of short sellers?  Make no mistake the fact pattern surrounding the company over the past six months has been...

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Z: A Sin of Omission and Other Thoughts on the CFO’s Departure

July 9th, 2015

From our perspective, within the walls of Zillow Chad Cohen has been the fourth most important person in the company’s empire building efforts over the past decade behind Spencer Rascoff, Greg Schwartz, and Richard Barton.  This is why we think...

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CSGP: A Year From Now, Who Will Remember Brad Bellflower? Cutting Adjusted EBITDA and EPS Estimates

June 8th, 2015

Now that was a press release straight out of the late 1990’s tech company playbook.  Even for a management team that’s renown for its constant self-promotion and “smoke and mirrors” games with growth metrics,...

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ESI: A Grand Exercise in Greater Fool Theory as the March to Zero Continues

June 2nd, 2015

It’s as if the SEC never filed suit against ESI, the CEO, and the CFO….The 100%+ rally in shares of ESI over the past three trading days has been truly something to behold.  The stock has been acting like the typical villain in a horror...

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Z: Game Changer? The Age of Upstream Might Finally Be Upon Us As Brokers Attempt to Reassert Control over the Flow of...

May 15th, 2015

“Beware the the “tions” of 2015, Especially Those Related to Project Upstream….”-          PAA Research, 1/29/15“There’s something brewing here that really makes me think that...

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Z: Purposeful Obfuscation of Slowing Metrics and Other Key Takeaways from Zillow’s Earnings Release and Analyst Calls

May 13th, 2015

Heading into the company’s 1Q15 earnings call we thought we might get the following from Zillow: Messy 1Q15 results - check New metrics that would be impossible to reconcile with historical...

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ESI: The ZERO Scenario Is Finally Here and the For-Profit Education Space Might Never Be the Same

May 12th, 2015

“You shouldn’t talk to that guy, he’s a liar”You might be thinking that’s a quote from someone talking about Kevin Modany, but in fact this is a quote FROM Kevin Modany which was said to a reporter when he was...

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HCG.TO: A Web of Inconsistencies, As We Look Back to the 1990’s

May 8th, 2015

Among Canadian financial services companies Home Capital Group has had a remarkable run of generating strong loan growth, 20%+ ROE, and most importantly for investors, significant shareholder returns.  The stock is up 40 fold over the past 15 years! ...

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CSGP: Why Are Investors Excited About CoStar’s Capital Intensive, Margin Dilutive Market Share Grab in Rentals?

May 1st, 2015

“Yeah. I'm not buying that stock [Apartment finder] at that price [14x EBITDA]. I will buy that stock at half that price.”-          Andy Florance, CEO CoStar Group, Inc. 4/30/15Just an...

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WWE: Starting to Play the Game? Churn Concerns Continue to Persist

April 30th, 2015

In general as a public company, WWE has done a poor job of managing investor expectations.  Management has yet to fully figure out how to play the game of underpromising and overdelivering.  This dynamic was particularly problematic in 2014 when...

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Current Ideas

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