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AYI: The Narrative Is About to Change, Time to Get Short

April 26th, 2016

As a firm, we pride ourselves on the rigors of our idea generation process. Rigorous fundamental analysis, in-depth primary research, accounting scrutiny etc. are all hallmarks of our investment process.  However, despite the intensity of our work on any...

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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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BGG/TTC: Drought Aside, Earnings Visibility and FCF Prospects Are Improving Rapidly for BGG

August 9th, 2012

BGG shares traded off modestly today following 4Q12 results and initial FY13 guidance that were both below consensus expectations.  Two factors weighed on the company’s 2Q12 and significantly dampened the company’s FY13...

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MLHR: Recovery in Demand for Office Furniture Remains Anemic but Trends Have Improved Modestly, Closing Out MLHR Short...

March 20th, 2012

In the 8-months since we originally introduced MLHR as a short idea, the stock has declined (-17.4%) compared to a 7.7% gain in the S&P 500 over the same time frame.  For those that also rely on...

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BGG/TTC: BGG, This Needed to Happen, Now the Stock Becomes Even More Compelling

January 27th, 2012

Admittedly, we did not expect something like this.  Suffice it to say BGG’s 2Q12 earnings results and conference call included a number of unexpected outcomes both operationally and strategically.  Obviously the big news of the day was...

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BGG/TTC: BGG 2Q12 Preview, Highlights from Proprietary Outdoor Power Equipment Dealer Survey, Still Favor Long...

January 25th, 2012

If there has been any sector that has served as the backbone of the recent rally in the market it has been the homebuilders.  Most of the largest publicly traded homebuilders have witnessed stock...

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MLHR: Proprietary Survey of Office Furniture Dealers Suggests Continued Deceleration, Staying Short MLHR

December 21st, 2011

In the 5-months since we originally introduced MLHR as a short idea, the stock has declined (-18.3%) compared to a (-5.2%) sell-off in the S&P 500 over the same time frame.  The sell-off in MLHR shares over the...

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BGG/TTC: BGG, “Shooting Star” Price Action Aside, Stock Appears Poised for Gains

October 20th, 2011

As we anticipated, BGG reported 1Q12 results that were well above consensus expectations.  The magnitude of revenue upside was larger than we expected, but the company’s loss per share was roughly inline with our forecast. ...

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BGG/TTC: BGG, Looking for an Irene Based Beat for 1Q12

October 19th, 2011

The performance of BGG shares this year have been nothing short of “head scratching”.  We recognize that the spring/summer selling season for outdoor power equipment proved to be a disappointment and the company’s initial guidance for FY12 was below our...

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TTC: Now Comes the Hard Part, Still Favor Long BGG/Short TTC

August 18th, 2011

For the first time in a long time, TTC reported quarterly results that fell short of expectations.  While some investment firms and analysts are willing to look past the company’s “product rework” expense in the quarter as a “one-time” item, we...

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BGG/TTC: BGG, What the Market Is (Or Isn’t) Telling Us About Value

August 11th, 2011

Admittedly, BGG’s 4Q11 results and initial FY12 EPS guidance were well below our expectations. Our channel checks indicated that sell through of outdoor power equipment weakened from 1Q11 to 2Q11 and that trends in June and July were modestly worse...

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BGG/TTC: BGG 4Q11 Preview, Highlights from Proprietary Outdoor Power Equipment Dealer Survey, Still Favor Long...

August 10th, 2011

We have been recommending a pair trade: long BGG/short TTC for approximately 9-12 months.  Thus far the trade has not been a winner, generating a modest (-3.0%) loss compared to a relatively healthy...

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KNL: Proprietary Survey of Office Furniture Dealers Suggests Slowdown, Closing out Long KNL/Short MLHR Pair Trade with...

July 15th, 2011

Approximately seven months ago we introduced a pair trade idea: Long KNL/Short MLHR.  You can read our original report here.  Our pair trade thesis is predicated on the following...

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MLHR: MLHR Finally Delivers Some Earnings Upside, Still Recommending Long KNL/Short MLHR

June 23rd, 2011

Approximately 6-months ago we introduced a pair trade – Long KNL/Short MLHR.  Thus far the trade has returned approximately 11.8% compared to a 2.2% gain for the S&P 500.  In our original report, we established the...

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BGG: 3Q11 Yields a Solid Beat, Mgmt. Sets a Low Bar for the Rest of the Fiscal Year

April 28th, 2011

BGG shares rallied modestly today, despite the significant outperformance posted by the company on both the top and bottomline for 3Q11. We attribute the tepid stock price response to the relatively muted outlook for 4Q11 provided by...

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BGG/TTC: Survey Results from Outdoor Power Equipment Dealers Adds Credence to Our Long BGG/Short TTC Pair Trade

April 27th, 2011

We have been recommending a pair trade: long BGG/short TTC for approximately 6-9 months.  Thus far the trade has not been a winner, generating a modest gain 1.5% compared to a robust 26.5% increase for the...

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KNL: Generation and Antenna Product Lines are Just Getting Going – Long KNL/Short MLHR

April 15th, 2011

Although the company’s results were relatively inline with consensus we would argue KNL’s 1Q11 operating results and significant YOY increase in backlog further validated our thesis that the company will be the fastest growing...

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KNL: Proprietary Survey of Office Furniture Dealers Adds Further Credence to Our Long KNL/Short MLHR Thesis – This is...

April 14th, 2011

Approximately four months ago we introduced a pair trade idea: Long KNL/Short MLHR.  You can read our original report here.  Our pair trade thesis is predicated on the following...

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MLHR: Another EPS Shortfall, Still Recommending Long KNL/Short MLHR

March 17th, 2011

Approximately 3-months ago we introduced a pair trade – Long KNL/Short MLHR.  Thus far the trade has returned approximately 15% compared to a 2% gain for the S&P 500.  In our original report, we established the following thesis for our long...

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TTC: Near Term Earnings Upside Appears Priced In, Still Favor Long BGG/Short TTC

February 17th, 2011

TTC reported 1Q11 results today that were well above consensus expectations.  You can read the full release here.  Despite the large upside delivered for 1Q11, the upward revision to FY11 guidance, and communication of a FY14 operating...

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KNL: Strong 4Q10 Results, Backlog Growth Validate Our Pair Trade Thesis – Long KNL/Short MLHR

February 4th, 2011

Approximately 6-weeks ago we introduced a pair trade – Long KNL/Short MLHR.  In our report, we established the following thesis for our long KNL/short MLHR pair trade: Order trends have improved materially for...

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BGG: 2Q11 Earnings Not As Impressive As Headline Results Suggest, Waiting for Signs of Spring

January 28th, 2011

BGG reported 2Q11 results that we would characterize as far less impressive as the headline numbers would suggest.  In general, it appears that relatively strong demand in Australia and Asia combined with slightly earlier...

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BGG: Survey Results from Outdoor Power Equipment Dealers and 2Q11 Preview

January 26th, 2011

We have been recommending a pair trade: long BGG/short TTC for approximately three months.  Thus far the trade has not been a winner, generating a modest loss (-0.3%) compared to a whopping 21.3% gain for the S&P 500.  As a reminder, the...

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AYI: Can the Company Clear a Higher Bar? Our Short Term Concerns Outweigh Our Long-Term Enthusiasm, Closing Out Long...

January 7th, 2011

Acuity Brands has been our favorite long idea in the industrials complex over the past year.  As a pure-play lighting equipment manufacturer with a growing portfolio of LED products and lighting...

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Closing Out MLHR Short Idea with 15.6% Loss, Introducing Long KNL/Short MLHR Pair Trade - This Is Knoll's Generation

December 15th, 2010

Approximately 9-months ago we introduced MLHR as a short idea.  Many elements of our short thesis have come to fruition: up until recently the recovery in orders for the company and other leading office...

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BGG: Channel Sell Through Slowed Over Past 3-Months, but Earnings Upside for the Quarter Still Seems Likely

October 19th, 2010

We have been recommending a pair trade: long BGG/short TTC for approximately three months.  Thus far the trade has not been a winner, generating a (-4.7%) return compared to a 9.4% gain for the S&P 500.  As...

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AYI: Channel Checks Indicate the Company Is Poised to Deliver Another Quarter of Revenue and EPS Upside

October 4th, 2010

Acuity Brands will report 4Q10 earnings on Wednesday, October 6th before the market opens. Based on our checks with approximately 35-40 lighting agents across the country we anticipate the company is poised to...

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TTC: Large 3Q10 Beat As Expected, Guides Inline, Headwinds Should Start to Emerge in FY11, Still Favor Long BGG/Short...

August 19th, 2010

TTC reported strong 3Q10 result this morning,  you can read the full release here.  On the heels of BGG's blow-out numbers, it should come as no surprise that TTC delivered significant upside to...

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Closing out BGG and TTC Shorts with 21.2% and 7.3% Gains, Going Long BGG Against Short Position in TTC

July 19th, 2010

Approximately three months ago we introduced two short ideas in the outdoor power equipment space: BGG and TTC.  Since that time shares of BGG have sold off 21.2%, while those of TTC have declined 7.3% compared to a...

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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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Current Ideas

AYI

SHORT

$129

RON.TO

SHORT

$9

BIG

SHORT

$28

ESI

SHORT

$0

DV

SHORT

$15

BGG

PAIR - LONG BGG/SHORT TTC

25%

TTC

PAIR - LONG BGG/SHORT TTC

25%

Z

SHORT

$14.00

NA.TO

SHORT

$22

HCG.TO

SHORT

$20

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