Lone Pine’s Stephen Mandel is widely regarded as one of the best bottoms-up fundamental portfolio managers out there. He also has a great reputation for managing his employees well, which is rare in the hedge-fund industry.
One of the keys to Mandel’s success is he gives check-list guidelines for his analysts to follow in what he wants for longs and shorts. Given Lone Pine’s success over the years, I would say the guidelines are working.
For long ideas Mandel wants:
-sold return on capital
-good cash flow
-prudent balance sheet
-competitive barriers (aka moat)
-strong management team
Mandel focuses on the long-term opportunity market size. He wants to see a long runway for growth where a company can reinvest capital at a high rate of return. That’s why he loves retail roll-out stories because if a retailer is successful in one region it is likely to be successful nation-wide.
For short ideas Mandel wants:
-avoid private equity targets (companies with good cash flow etc.)
-competitively challenged (aka no moat)
-fads, 1 product companies
-falling knives (results will be much worse than consensus)
For his price targets on solid growth companies, Mandel’s analysts model earnings 2 years out and are willing to put a 25Xs earnings multiple on that forecast. The game-plan is one year later the company will be valued at 25Xs forward earnings with the stock hitting the analyst’s price target as consensus catches up to Mandel’s analyst earnings estimate.
President Barack Obama talks on the phone in the Oval Office with Russian President Vladimir Putin about the situation in Ukraine, March 1, 2014.
President Barack Obama talks on the telephone with President Francois Hollande of France to discuss the situation in Ukraine, in Key Largo, Florida, March 8, 2014.
These are official White House photos that can be found here. This is probably the biggest foreign policy military crisis in Europe since World War II. I find it confusing what the public relations strategy is in releasing these photos.
Is it to prove that he can work on weekends and during his third vacation already this year? Why release them? Are we going to get a photo with Obama in his pajamas talking to Merkel next?
Russia has about four times as many soldiers as Ukraine, twice as many tanks, and more than six times as many combat aircraft. The huge imbalance in forces reflects the defense budgets of the two countries. Russia spends about $78 billion on its armed forces annually, Ukraine $1.6 billion. – Radio Free Europe Radio Liberty
The key question is under a full-scale invasion, how many of Ukrainian officer corp. would defect?
AT&T cut prices for the second time this year. Single-line 2GB plan will now be $15 cheaper to $65/month. The company is also offering a new line $100 bill credit promotion for the month of March for new and existing customers. Source: AT&T
The major changes are doubling the 4G LTE data allotment from 500MB to 1GB in the low-end $50/month Simple Choice plan, adding a new 5GB plan for $70/month, and raising the unlimited 4G LTE data plan by $10 to $80/month.
T-Mobile’s chief marketing officer told the Wall Street Journal raising prices for unlimited customers “partly reflects the cost of providing such plans.” Data use is “soaring” with customers using 50% more data year-over-year. Source: T-Mobile
Warning shots were fired when an unarmed OSCE military observer mission was turned back while trying to cross into Ukraine’s Crimea region on Saturday, the European security body said. – Reuters
mood darkened in Russian-occupied Crimea on Saturday after overnight confrontations between Russian troops and besieged Ukrainian soldiers raised tensions
Russian troops drove a truck into a missile defense post in Sevastopol, the home of both their Black Sea Fleet and the Ukrainian navy, and took control of it overnight.
Ukraine’s border service said Russian troops had also seized a border guard outpost in the east of the peninsula overnight, kicking the Ukrainian officers and their families out of their apartments in the middle of the night.
About 100 armed Russians are keeping watch over the Ukrainians at the base, where a Russian ship has been scuttled at the entrance to keep the Ukrainians from sailing out.
Russian gas monopoly Gazprom said Ukraine had not paid its $440 million gas bill for February, bringing its arrears to $1.89 billion, and hinted it could turn off the taps as it did in 2009 – Reuters
“Russia and Ukraine, right now, are one nervous 20-year-old soldier’s mistake away from something very, very bad happening that could spin out of control,” said Steven Pifer, a former U.S. ambassador to Ukraine. There are about 12,000 Ukrainian troops in Crimea – Bloomberg
President Barack Obama telephoned German Chancellor Angela Merkel on Friday from his vacation resort in Key Largo, Florida, to discuss the situation in Ukraine, the White House said. – Reuters
-China February exports –18.1% y/y vs +6.8% est.
China declared a "red line" on North Korea on Saturday, saying that China will not permit chaos or war on the Korean peninsula, and that peace can only come through denuclearization. "The Korean peninsula is right on China’s doorstep. We have a red line, that is, we will not allow war or instability on the Korean peninsula," Chinese Foreign Minister Wang Yi – Reuters
-Boeing reports hairline cracks discovered in 40 787 Dreamliners in production Reuters
The February jobs number beat expectations as the impact of weather was lower than expected. After an initial rally, the market closed around flat (+0.05%). Most pundits now fully expect the Fed to continue the $10B/month taper on the modest employment numbers.
Russia’s central bank took over a Russian unit of one of Ukraine’s largest banks
The Bank of Russia declined to comment on whether the decision to send temporary administration to Moskomprivatbank was linked to tensions between Moscow and Kiev
In his first news conference as the newly appointed governor of Dnipropetrovsk, Mr. Kolomoyski had called Mr. Putin "a schizophrenic of small stature," and warned that his ambitions in Ukraine could have disastrous consequences.
"He’s completely inadequate, he has gone completely out of his mind," Mr. Kolomoyski told an audience of officials on Monday. He said Mr. Putin had a "messianic" desire "to restore the Russian empire of 1913 or the Soviet Union of 1991, [which] can bring the world to a catastrophe."
Mr. Putin, in his news conference with Russian journalists on Tuesday, had responded by calling Mr. Kolomoyski "a unique scoundrel," accusing him of defrauding a Russian tycoon in a business deal years ago.
Neil Shearing, chief emerging-markets economist at Capital Economics in London, noted that "the application of (the law) can be pretty arbitrary, and this is another example of it." – Wall Street Journal
Russia confiscating a Ukrainian bank subsidiary doesn’t sound like a move of a man that is about to retreat.
first two months of this year, 42 companies went public..raising $8.3 billion..tying 2007 for busiest start to a year for initial public offerings since 2000
investors are bidding aggressively for newly minted shares this year..paying median 14.5 times annual sales compared with six times in 2007..at the height of the Internet frenzy in early 2000, they paid a whopping 30 times – Wall Street Journal
So the median IPO this year is going for 14.5Xs sales vs. 6Xs in 2007 and 30Xs in 2000. This could be bullish if we’re going to 1999-2000 type heights or bearish if we’re extended beyond the 2007 top.
Putin had a one hour phone call with Obama today at Obama’s request. Here is the Russian leader’s summary of the call:
The most interesting thing about the summary is Putin reiterates his world-view that he believes Eastern and Southeastern regions of Ukraine are the same as Crimea just like he did last week. Obviously he invaded Crimea, so this is NOT GOOD.