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Recent Reports

Canadian Housing: A Tale of Four Markets, Foreign Buyers, and Fraud

May 24th, 2016

We recently conducted a survey of approximately 230 real estate agents in Canada.  The attached presentation summarizes our key findings from the survey.

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Z/ZG: What Is Adjusted EBITDA? Zillow Continues to Hide Elevated Cash Technology Spending in Plain Sight

May 13th, 2016

“EBITDA isn’t a controlled substance or a law enforcement agency. It’s the standard abbreviation for the financial-analysis term “Earnings Before Interest, Taxes, Depreciation and...

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HCG.TO: Every Arrow In the Quiver Has Been Fired and Earnings are Still Declining Leaving Bulls With a Chilling...

May 5th, 2016

In the strongest housing market in the history of Ontario while taking provisions for credit losses as close to zero as possible, HCG still missed consensus 1Q16 earnings expectations....

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Z/ZG: Where’s the Operating Leverage? And Other Questions That Need to Be Asked

May 4th, 2016

The structural flaws with Zillow’s operating model are all hiding in plain sight.  It’s May 2016, nearly 5-years after Zillow went public and the company is no closer to achieving its theoretical adjusted EBITDA margin...

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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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ESI: As EBITDA Generation Dwindles, The Cash Wind-down Begins in Earnest

April 21st, 2016

ESI shares traded higher after hours based on the company's long awaited 4Q15 operating results.  It appears some investors are emboldened by the earnings upside in 4Q15 despite continued weakness in student...

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HCG.TO: Without Any More “Cookies in the Closet” at CFF Bank, It Appears HCG is On Track to Miss Earnings Yet Again

March 14th, 2016

On some level you have to simply admire the recklessness of HCG’s management team.  After all, over the past three months, the company: 1) reported earnings that fell well short of...

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CSGP: The Core IS Slowing, While the Returns on CSGP’s Massive Advertising Investment in Rentals Remain in Doubt

February 26th, 2016

In the 45-50 minutes of prepared remarks from CSGP’s management on the company’s 4Q15 earnings conference call, it was quite clear Andy Florance and co. were hoping to accomplish the...

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NA.TO: Hope Is Not a Risk Management Strategy

February 24th, 2016

"So let's talk about oil and gas. So, earlier Marianne mentioned our intention to increase our reserves for 2016 to reflect current market fundamentals. So, at the end of 2015 for the Commercial Bank, we held a 6% allowance as part of that effort we are going to – we...

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Z/ZG: It’s Strange

February 12th, 2016

Things have been quite different in Internet TAM-land for the past 3-6 months.  Seemingly overnight investors have held companies in the space to a higher standard of operating metrics, profitability and cash flow (do not confuse the relative “higher” with the absolute “high”). In a shock...

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HCG.TO: Earnings Have Nowhere to Go but Down, Even with “Profits Before Expenses” Accounting HCG’s Core EPS Power...

February 11th, 2016

In case you were wondering what business looks like on the ground, or in this particular case the “air” in Alberta, here’s an important comment from the CEO of Westjet (Canada’s second...

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Z/ZG: Desperate Times, Desperate Measures – The Implications of Eliminating “Featured Listings” & Other Changes...

February 5th, 2016

It’s one of the more laborious, mind-numbing, and tedious exercises we have conducted on any investment idea, but it has proven to be the most revealing. Of course, we’re talking about the task...

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RON.TO: The Irrational Bid Is Alive and Well in Canada, Closing Out Short Idea with a (-49%) Loss Following Acquisition...

February 3rd, 2016

This isn’t the first time, nor will it be the last (unfortunately) that the stock of a company that we have recommended going short has been acquired. It happened with OPEN, MCRS, and now RON. ...

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DV: FTC and Dept. of Ed. Actions Confirm What We’ve Known All Along, There’s No Way DVU Has a 90% Job Placement...

January 27th, 2016

For once, it appears that DV management might has gotten something right in their “fearless” forecasting – the FTC investigation from our perspective has come to its “logical close”.  We...

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HCG.TO: OSFI Data Suggests Origination Weakness Continued in 4Q15, EPS Could Miss Consensus, Lowering Target to $16

January 20th, 2016

Well, now we know why Martin Reid abruptly changed HCG’s outlook for loan originations in 4Q15. As a reminder, just five weeks after HCG’s CEO insinuated that the company could generate origination...

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NA.TO: Taking a Closer Look at NA’s Commercial Loan Book as the Pitfalls of Recency Bias Come Front and Center;...

January 13th, 2016

Do you remember the late 1980’s and early 1990’s in Canada? It was a dark period in the country’s economic history as a combination of a collapse in crude oil prices in the mid-1980’s,...

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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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Canadian Housing: A Tale of Four Markets, Foreign Buyers, and Fraud

May 24th, 2016

We recently conducted a survey of approximately 230 real estate agents in Canada.  The attached presentation summarizes our key findings from the survey.

READ MORE >

Z/ZG: What Is Adjusted EBITDA? Zillow Continues to Hide Elevated Cash Technology Spending in Plain Sight

May 13th, 2016

“EBITDA isn’t a controlled substance or a law enforcement agency. It’s the standard abbreviation for the financial-analysis term “Earnings Before Interest, Taxes, Depreciation and...

READ MORE >

HCG.TO: Every Arrow In the Quiver Has Been Fired and Earnings are Still Declining Leaving Bulls With a Chilling...

May 5th, 2016

In the strongest housing market in the history of Ontario while taking provisions for credit losses as close to zero as possible, HCG still missed consensus 1Q16 earnings expectations....

READ MORE >

Current Ideas

AYI

SHORT

$151

DV

SHORT

$15

Z

SHORT

$14.00

NA.TO

SHORT

$22

HCG.TO

SHORT

$20

RON.TO

SHORT

$9

ING.PA

SHORT

$35

BCO

LONG

$35

WWE

LONG

$25

XOXO

LONG

$20

CSGP

SHORT

$100

ARC

LONG

$12.50

ESI

SHORT

$0

Some Companies We Follow