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ARC: Generating Copious Free Cash Flow While Waiting for a Market Upturn, Enhanced B/S Flexibility Enables Increased...

February 22nd, 2012

We cannot think of a better testament to the skill and guile of ARC’s current management team than the chart below.  In it we compare ARC’s aggregate free cash flow generation over the past five...

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BCO: The North American Grind Continues, Value Without Catalysts, Just a Compelling Emerging Markets Growth Story

February 3rd, 2012

Admittedly when we founded PAA Research, investment recommendations like what BCO has become for us, were exactly what we’re trying to avoid.  Our absolute return focus and strict adherence to loss...

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BCO: North American Headwinds Shouldn’t Overshadow Emerging Markets Growth Story

October 27th, 2011

We remain as enthusiastic as ever about the share appreciation prospects for BCO.  In the 2-years since we first introduced the BCO as an investment idea the stock has barely budged even though the company is on track to generate EBITDA...

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BCO: Don’t Let the Headline EPS Numbers Fool You, BCO Continues to Truck Along

July 28th, 2011

We first introduced BCO as a long idea in June of 2009. Admittedly, this has not been one of our best stock ideas.  The stock has returned an anemic 2% while the S&P 500 has surged 29% higher over the same time frame – not exactly...

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ARC: Our Revised Estimates

May 4th, 2011

Our Revised EstimatesARC’s 1Q11 results were more or less inline with our expectations after adjusting for accelerated amortization of trade names and costs associated with elimination of the company’s interest rate swaps as a result of the company’s debt refinancing.  Recent...

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BCO: Latam Growth Engine Overshadows Competitive Pressures in North America and Europe

April 29th, 2011

We first introduced BCO as a long idea in June of 2009. Admittedly, this has not been one of our best stock ideas.  The stock has returned a relatively uninspiring 14% while the S&P 500 has surged 44% higher over the same time...

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ARC: At Long Last Some Cyclical Tailwinds for the Reprographics Industry?

February 22nd, 2011

After slogging through three brutal years of weak demand for non-residential construction services, it appears that ARC might finally start to benefit from a recovery in project activity in 2011. Suddenly signs of life in the commercial real...

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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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BCO: Flexing Its Emerging Market Muscles, Operating Momentum Finally Emerges

February 3rd, 2011

We first introduced BCO as a long idea in June of 2009. Admittedly, this has not been one of our best stock ideas.  The stock has returned a measly 4% while the S&P 500 has surged 39% higher over the same time frame – not exactly the...

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GCA: More of the Same, But the Cash Keeps Rolling In

November 4th, 2010

GCA reported 3Q10 results after the close that we can only characterize as "more of the same....".  That is to say, the company's results were hampered by continued weakness in same store transaction volumes, a mix shift towards ATM transactions, both of which had a...

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ARP: Checks with Independent Reprographers Confirm Weakness Continued into 3Q, Analyzing ARP's Covenant Compliance

November 1st, 2010

As early as April of this year, we argued that the revenue trends in the reprographics industry were on the cusp of stabilization, if not recovery.  Obviously we have been a little bit early in our call,...

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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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ARP: Quick Thoughts on ARP's Earnings Results, Our Revised Estimates, ARP's Secular Growth Strategy Starts to Emerge

August 4th, 2010

Obviously this is an earnings call we did not get right. In our preview of the quarter, we argued that ARP was poised to deliver revenue and earnings upside for the second quarter based in large part on...

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BCO: Some Modest Operating Momentum Starting to Emerge, Revising Estimates

July 29th, 2010

BCO reported 2Q10 results this morning. You can read the full earnings release here. Overall, the company delivered both topline and bottomline outperformance for the first time in many quarters. Although management tempered its full year...

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Finally a Bottom in the Reprographics Industry? Channel Checks Suggest So, ARP Positioned for a Solid Q2 Beat

July 28th, 2010

In April, we argued that the reprographics industry was showing signs of imminent revenue stabilization, despite what continued to be weakness in the macro-economic data related to non-residential construction...

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GCA's Loss of Its Harrah's Contract Throws Stock Into a "Doubt Spiral" - Four Reasons Why We Think the Stock Can Trade...

July 22nd, 2010

GCA shares sold off an astonishing 44.4% yesterday on massive volume (19.2MM shares) following the announcement that the company had received notice from Harrah's that the casino operator would not...

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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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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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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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Reprographics Industry Slowly Stabilizing, ARP On Track for 2010 FCF of $60MM, More Insights on BIM's Impact

April 8th, 2010

We recently conducted a survey of 30-35 independent reprographers to gain a better understanding of industry-wide trends during 1Q10, their outlook for 2Q10 and the rest of 2010, and how BIM has impacted the...

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Conversations with ARP Management: Answering the BIM Question

March 25th, 2010

We recently had the opportunity to speak with senior management of ARP.  Although we discussed a number of issues that will impact ARP shares in the near-term, our primary focus was on the strategic direction of the company in light of the increased usage...

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GCA 4Q09: Block, Tackle and Generate Cash

March 12th, 2010

This report was originally published on 2/22/10.We introduced GCA (8.05 ↓0.86%) as a long idea approximately 4-months ago, since that time shares have appreciated more than 20%.  GCA will report its 4Q09 earnings after the market closes on Tuesday, February 23rd....

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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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BCO Happily Says Goodbye to 2009; 2010 Should Be Back to Basics – Steady Organic Growth and Solid FCF Generation

March 12th, 2010

This report was originally published on 2/3/10.Normally when a non-financial services company issues an earnings release that is more than 25 pages, it usually is cause for significant concern.  However...

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ARP Raises Guidance for 4Q09 Revenues, EPS – Consensus Estimates Appear Too Low for 2010

March 12th, 2010

This report was originally published on 1/27/10.After the close today, ARP (7.65 ↓1.80%) issued a press release indicating that the company now expects to beat its prior revenue and EPS guidance for 4Q09.  You can read the...

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Feedback from Independent Reprographers Suggests the Potential for ARP to Beat Estimates is High, AIA Billings Index...

March 12th, 2010

This report was originally published on 1/20/10.We introduced ARP (7.64 ↓1.93%)as an investment idea approximately 9-months ago. At that time we thought the stock had considerable upside based in...

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BCO’s “Danza Con El Diablo” Continues – Venezuela Remains an Overhang

March 11th, 2010

This report was originally published on 12/21/09.After the close today, BCO (27.21 ↑0.55%) announced its intention to repatriate cash held in Venezuela at the “parallel rate” opposed to the “official rate”, which the company has...

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Canon’s Takeover Bid for Oce N.V. Validates Value of ARP Shares

March 11th, 2010

This report was originally published on 11/16/09.CanonInc. today announced its intention to launch a takeover bid for Oce N.V., a leading manufacturer of digital printing systems and document management service provider.  Canon (CAJ 44.5...

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Global Cash Access Holdings, Inc. (GCA): A Cheap Way to Play a Gaming Recovery

March 11th, 2010

This report was originally published on 11/4/2009.Similar to other consumer oriented sectors, there are growing signs that a trough in activity in the gaming sector has been reached or is rapidly approaching.  Let’s look at a few recent...

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BCO: 3Q09 Operational Beat Clouded by One-Time Gains and Higher Tax Rate

March 11th, 2010

This report was originally published on 10/29/09.The Brink’s Company (BCO 27.09 ↑0.11%) reported 3Q09 result this morning.  You c an read the full release here.  There were a number of “puts and takes” in the quarter that have clouded...

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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

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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