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AYI: What’s the Cost of a Digital Transformation? For Shareholders, It Could Be a Lot; Our Revised Estimates

April 3rd, 2020

               “The recent revenue trends, however, will not fix themselves. There has been industry deflation. We have additional...

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STRA: This Is Not Your Uncle’s Higher Ed Market; Secular Headwinds and Now a Demand Shock, Time to Sell with a $63...

March 31st, 2020

“Given that more than 95% of our students are already taking all of their classes online and given that we have the capability to operate our company with our entire workforce working remotely,...

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AYI: A perfect storm of demand destruction and continued competition from Asian imports has emerged; Lowering AYI Price...

March 27th, 2020

This note represents the first of what will be a series of reports that we will publish in the coming weeks backed by surveys across a variety of industries.   While there are many...

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OSTK: In a World Where Stocks Continually Get Cheaper, OSTK Now Trading at a Discount to Cash, Could Be One of the...

March 16th, 2020

“So the biggest thing is, we've effectively imposed a view that we want to drive more leverage on the ad cost. So that would manifest to the ad cost as a percentage of revenue. So as you...

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PRDO: “90/10” Kill Zone? Potential Loss of VA Funding Could Create Massive Regulatory Issues for CTU/ AIU as Well...

March 9th, 2020

In a press release today, the U.S. Department of Veteran Affairs announced that it would disapprove the enrollment of new GI Bill students at the following five institutions: University of...

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TREX: The CEO Exits Stage Right at the Worst Possible Time; More Atrocious Earnings Quality from TREX

February 25th, 2020

“We estimate that composites account for 19% of the North American total decking market and that the enhanced products have further expanded our addressable market to about 60% of the overall decking market...

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Z/ZG: Bob Seger and the Yield Curve – When the Cyclical Is Confused as the Secular

February 20th, 2020

“And I guess I lost my way There were oh so many roads I was living to run and running to live Never worried about paying or even how much I owed” Seger, Bob. “Against the Wind”. Against the Wind....

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TRUP: Don’t Confuse What Management Says With What They Mean; The Questions That Should Have Been Asked on the Call

February 14th, 2020

Yesterday, TRUP management released the latest chapter of the scintillating fiction: Pet Insurance Economics According to Darryl.  There’s one thing that Mr. Rawlings and the rest of the...

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ATGE: Are You Insulted? At the Very Least Investors Should Be Gravely Concerned About the Sudden Surge in Bad-Debt...

February 5th, 2020

We’re nearly four years into the Wardell regime at ATGE and there are only a few things that we can conclusively state about the current management team at the company: They appear...

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AYI: PAA Research's Fourth Quarter 2019 Lighting Agent Survey

January 7th, 2020

Below is a link to a report outlining the findings from our 4Q19 survey of lighting agents. There are five critical conclusions that we want to point out: The efficacy of the 2H18 and early 2019 list price increases has eroded meaningfully The...

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OSTK: Is Anyone Paying Attention? Taking a Closer Look at tZERO’s Monetization Model

November 25th, 2019

               “In the short run, the market is a voting machine but in the long run, it is a weighing machine.” Benjamin Graham This oft...

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Canadian Banks/HCG.TO: Buy High, Sell Low; What Passes as Prudent Capital Allocation and Risk Management in the...

November 19th, 2019

“I think it's -- the work that's being done in our underwriting team to accurately price for risk. There's a lot of work that's going into the evaluation of business for self...

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OSTK: The End of the Post Patrick Purge? OSTK Shares Now Trade at a 50%+ Discount To Our Estimate of Current...

November 13th, 2019

We thought we knew what we were getting into when we wrote up OSTK as a long idea less than two months ago. Since that time, shares have crashed more than (-50%) – obviously we made some...

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CECO: Another Nelson Signature – Awful Earnings Quality

November 7th, 2019

If you’ve followed Todd Nelson’s career in the for-profit education space over the years, a few core competencies become evident: Running “fast and loose” with regulatory compliance Achieving enrollment growth at any cost for...

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TRUP: When Your Stock Price Is Entirely Reliant on “Narrative” and Investor Ignorance You Have No Choice but to...

November 6th, 2019

We apologize for not publishing our thoughts following TRUP’s 3Q19 earnings release and subsequent conference call sooner.  We wanted to make sure we had the chance to fully vet some of...

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ATGE: Management Slashes Guidance; Remember When Nursing, Med, and Vet Schools Were Supposed to Be Growth Platforms?

October 30th, 2019

“Overall, we're pleased with our top line growth in the quarter, and we believe our stepped-up investments in marketing, along with increased corporate cost discipline position us well to...

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TREX: Atrocious Earnings Quality, Continued Execution Issues, and Rising Competition, Did We Miss Anything?

October 29th, 2019

“The fact that I mentioned for the first time any guidance on the top line growth, I think is noteworthy. I think what I said was that we plan to have solid double-digit growth in 2020. The demand we've...

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TREX: PAA Research's Fall 2019 Decking Products Dealer Survey

October 22nd, 2019

Slowing sales trends as competition starts to heat up.

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TRUP: The Walls Are Closing, If Not Caving In

October 15th, 2019

Sometimes in this business it truly is remarkable how stock price action dictates the narrative around a company.  We’re not going to go down the Soros reflexivity rabbit hole here, but let’s take you back just 10-weeks ago following TRUP’s 2Q19...

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AYI: How Does This Get Better? Lowering Price Objective to $79

October 3rd, 2019

               “…we feel it is important for all investors and analysts to understand that we believe our net sales could be down modestly in this coming fourth quarter...

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OSTK: With the “Byrne” Overhang Eliminated and a Plethora of Potential Positive Catalysts Ahead, Time to Go Long

September 19th, 2019

Before we get into the issue of the day, we wanted to provide some perspective on how we’re thinking about OSTK based on a similar investment idea we introduced roughly 8-years ago.  The...

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CECO: A Case of History Repeating Itself in the Worst Possible Way?

September 18th, 2019

It’s been an interesting six weeks for Career Education Corporation.  In the time since we introduced CECO as a short idea, the stock has witnessed a 20%+ rally following the company’s 2Q19 earnings results, only to give up almost all...

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ATGE: 4Q19 - When Corporate Overhead Becomes a “Plug” to Meet Consensus EPS Expectations, While Enrollment Metrics...

August 23rd, 2019

Question – Jeffrey Marc Silber: Okay. And then sorry, just one more question on the quarter. Just looking at some of the details, if I look at the home office expense, even...

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RY: The Song Remains the Same for 3Q19 – Reckless Risk Management and IFRS-9 Accounting Driven Earnings Gains

August 22nd, 2019

“And so I think each quarter, I would just continue to reiterate from the guidance I provided previously is that the baseline here is that our reserves -- Stage 1 and 2 reserves will grow in line with...

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BIG: Closing Out BIG Short Idea With a 61.0% Gain and 90.6% Alpha Generation; Core Thesis Remains Intact

August 15th, 2019

Approximately 3-years ago we introduced BIG as a short idea. Our thesis at that time was as follows:   The financial benefits of gaining access to EBT/SNAP benefits and the introduction of Easy Leasing...

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Z/ZG: How Do You Spell Valuation Compression? “I-N-V-E-N-T-O-R-Y V-A-L-U-A-T-I-O-N A-D-J-U-S-T-M-E-N-T”; Other Key...

August 8th, 2019

“And I just wanted to talk about my attitude or our attitude toward iBuying. As we tried to make clear over the past 6 months, the demand is real and it's very strong. So we are quite...

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CECO: Failing Grades in Brand, Price, and Programmatic Differentiation + Todd Nelson? Time to Sell

August 1st, 2019

“The proliferation of outsourced online degree programs offered by traditional academic institutions has changed the competitive landscape in higher education.  The programs require almost no capital investment...

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TRUP: Now That the Growth Story Is Broken, the Company Can Finally Be Valued as the Loss Generating Insurance Business...

July 31st, 2019

“When it comes to claims as a percentage of revenue, it's really a factor of how is claims per pet increasing based on how ARPU, which is a per-pet number, is increasing. And they don't...

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TREX: “Can They Execute?” And Other Pressing Questions for TREX Management

July 30th, 2019

Admittedly, heading into the quarter we thought the revenue results and sales outlook for 3Q19 for TREX would be materially worse.  For the past few months the only consistent feedback we heard surrounding the company was that dealers...

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AYI: Game Over – Acuity’s Growth Days Are Gone

July 2nd, 2019

With all due respect to AYI management, there was nothing ridiculous about the (-11%) sell-off in AYI shares this morning.  Obviously we are in the minority here, as the stock rallied 3-4 to close down a more meager -8%.   Based on our checks with...

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Current Ideas

STRA

SELL/SHORT

$63

AYI

SHORT

$79

OSTK

LONG

$39

BIG

SHORT

$28

CECO

SELL/SHORT

$8

TREX

SHORT

$36

WWE

LONG

$65

XOXO

LONG

$37

RLGY

PAIR TRADE

$10

RDFN

PAIR TRADE

$30

ARC

LONG

$5.50

BCO

LONG

$35

ING.PA

SHORT

$35

TRUP

SELL/SHORT

$10

RY

SELL/SHORT

$70

CM

SELL/SHORT

$76

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