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Canadian Housing: Reflexivity Cuts Both Ways, Negative Feedback Loops Have Started to Emerge

March 29th, 2018

We hope you will consider this report for your weekend reading list. Over the past few weeks we surveyed more than 300 real estate agents in Canada. The attached presentation outlines the feedback we received from those agents...

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BIG: A Troubling Fact Pattern Emerges as Thesis Creep Sets in For Longs

March 9th, 2018

Heading into BIG’s 4Q17 earnings release, we thought the company would be able to generate positive comps, albeit lower than consensus, but would struggle to generate the kind of operating leverage on meager SSS growth it has achieved over...

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BIG: Will Unrelenting Competitive Pressures and Rising Cost Inflation Finally Lead to Massive EPS Degradation?

February 28th, 2018

Presumably BIG will report 4Q17 earnings results on Friday morning.  At this stage, the company has not yet announced an official reporting date which is somewhat unusual.  Historically, BIG has...

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HCG.TO: Originate or Die, It’s That Simple, the “Devil” of Course Is in the Details

February 15th, 2018

“Against this backdrop, management and the Board are reassessing the corporate strategy and are focused on finalizing the Company’s long-term strategy during the first half of 2018 to help grow the business, create...

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Z/ZG: Listen to Management Carefully and You’ll Hear All You Need to Know About the Structural, Secular, and...

February 9th, 2018

“Somethin' ain't right. Gonna get myself, I'm gonna get myself Gonna get myself connected I ain't gonna go blind For the light which is reflected I see through...

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ATGE: The “New Adtalem” Looks a Lot Like the Old DeVry

February 7th, 2018

For the past 18-24 months ATGE bulls have argued that the removal of DVU from the company’s portfolio of education assets would result in meaningful share price appreciation.  For many an ATGE investor, DVU’s severe revenue declines and modest...

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AYI: The Lighting Industry Is Under Siege and Management is Grasping for Straws, Can Tax Reform Be AYI’s Obi Wan?...

January 10th, 2018

“I’m not an economist so I don’t have a crystal ball” Vernon Nagel, Chairman, President, and CEO. Acuity Brands Inc. 1/9/18. 1Q18 earnings conf. call Finally, a...

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AYI: Nowhere to Hide - PAA Research's Fourth Quarter Lighting Agent Survey

December 12th, 2017

PAA Research surveys lighting agents across the country on a semi-annual basis.  The latest survey was conducted in the first few weeks of November.  35 lighting agents responded to our survey.     

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ATGE: How Much Would You Pay to Change a Story? For ATGE the Price STARTS at $7.5 Million

December 5th, 2017

In a move that has been telegraphed for some time but occurred sooner than expected, ATGE announced that it has reached an agreement with Cogswell Education to “sell” DVU.  The headline purchase price is $1,...

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BIG: A Low Quality Earnings Beat Is the Least Worrisome of the Red Flags

December 4th, 2017

Expanded square footage, broader product offerings and SKU sets (gray!), more liberal down payment options through Progressive, and the Big Lots private label credit card couldn’t prevent BIG from witnessing massive deceleration in growth...

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CM.TO/RY.TO: “You Come at the King(s), You Best Not Miss”; The Credit Cycle is Here - Time to get Short

November 28th, 2017

The gravity of this statement from The Wire’s Omar Little is not lost on us. Time and time again in the two and half years that we have been following the Canadian housing market investors have suggested to...

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HCG.TO: Credit Contraction? B-20 Impact? IFRS-9 Gambit? And the Big Question: What Business Is HCG Really in Now?

November 15th, 2017

Meet the new Boss, same as the old Boss?  When Yousry Bissada steps up to the mic today to discuss the performance of HCG during the first three months of his stewardship, we’re almost certain...

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Z/ZG: Our Confidence in Our Short Thesis Continues to Grow

November 8th, 2017

Even through the prism of what some might argue are “jade colored glasses”, we cannot find enormous fault with Zillow’s 3Q17 earnings results and 4Q17 outlook.  The company delivered a modest topline beat largely due to better than...

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AYI: Time to Turn Out the Lights? The LED Adoption Cycle Could Be Cresting

November 7th, 2017

“We are often asked about the vitality and conditions of the key end markets we serve. We now know that the overall growth rate of the lighting market over the last 2 quarters was essentially flat and even slightly down compared with the...

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ATGE: Games People Play – Management Continues to Try to “Fake It Until They Make It” While Diluting the Core...

November 3rd, 2017

“Games people play, You take it or leave it Things that they say, Just don't make it right If I'm tellin' you the truth right now, do you believe it Games people play in...

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FOR-PROFIT EDU: STRA and CPLA - A Merger Forged Out of Necessity, If Not Fear of Survival

October 30th, 2017

This morning STRA and CPLA announced their intention to “merge” in an all-stock deal.  CPLA shareholders will receive 0.875 shares of STRA stock for each share they own.  Although this transaction has been...

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CTC: We’ve Seen This Story Before and It Doesn’t End Well, Time to Get Short

October 9th, 2017

“We’re focused on growth in e-commerce….I don’t think enough companies worry about obsolescence. We think about it all the time.” Kevan Gorrie, CEO Pure Industrial REIT 2/9/17 (Canada...

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AYI: As Management Makes It Up as They Go Along, It’s Becoming Clear This Is No Longer a Growth Company

October 5th, 2017

For some investors and analysts, today was yet another grand exercise in banging your head against the wall, which some have affectionately (or not so affectionately) called short selling.  We recognize why...

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CSGP: Collision Course – After $1.1B+ Spend on Multi-Family Lead Gen, Growth Prospectively Will Need to Come at the...

September 14th, 2017

“We're very excited to take the online lead in the segment with such spectacular growth. As we integrate ForRent, we believe that we can offer their perspective renters access to the most...

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BIG: After Months of Frustration We Now Can See the Beginning of the End

August 25th, 2017

“I guess the best thing that I can say is from a strategic standpoint, Seasonal and Furniture and Soft Home seem to be categories that not everybody is focused on.” Timothy A. Johnson, Big Lots CFO, 8/25/17 2Q17 Earnings Conf....

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Z/ZG: The Hunter Becomes the Hunted - Feedback From 380+ Real Estate Agents

August 21st, 2017

The attached powerpoint presentation summarizes our findings from our 8th annual survey of real estate agents in the United States.  

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ATGE: Boxed Into a Corner as We Approach Stall Speed

August 18th, 2017

“Our transformation is well underway, as reflected in our heightened focus on our student-centric culture, our new corporate name and our improving financial performance.” Lisa Wardell, CEO Adtalem Global Education, Inc. 8/17/17 Well at least...

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Z/ZG: An Earnings Conference Call “For the Ages” That Reminds Us Why Zillow Has Become Our Top Short Idea; The...

August 9th, 2017

Redfin is trying to get rid of buyers' agents, and we'll see how that goes. As I said previously though, we are focused on doing something different. We are brokerage-agnostic is the way for...

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HCG.TO: Is There a Plan to Create Sustainable Earnings as a Slowing GTA Housing Market, B-20 Guidelines, and IFRS-9...

August 3rd, 2017

Are HCG investors really better off than they were three months ago?  At that time, HCG faced a liquidity crisis that the company narrowly survived.  The stock price, which many would argue...

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Z/ZG: Seven Causes for Concern (at least) as Zillow Management Pushes the “Narrative”

July 26th, 2017

Approximately two weeks ago, Spencer Rascoff, CEO of Zillow published a post on LinkedIn entitled: “Why Some Investors Care About Culture”.  In the post, Mr. Rascoff lauded two (unnamed) investors that are large...

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HCG.TO: There’s Declining Book Value/Share and Not Much Else, Why Pay More than Warren? Moving Price Objective to $10

June 22nd, 2017

In what can only be described as a shocking development to most participants in the Canadian financial ecosystem, HCG announced late last night that Berkshire Hathaway will provide the company with a...

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AYI: Product Price Deflation Has Become the Dominant Trend in Lighting - PAA Research's 2Q17 Lighting Agent Survey

June 7th, 2017

There has been a great deal of discussion in the investment community over the past 6-12 months about the slowdown in the lighting equipment industry.  Many investors as well as the lighting equipment...

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DV: When the “Charm Offensive” Ends and Reality Sets In, DV’s Nursing Problem Will Become the Central Issue, Meet...

May 23rd, 2017

“This is a notable earnings call for me as it marks 1 year since I assumed the CEO position in May of 2016. We have accomplished a great deal in a short period of time, and we're well...

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HCG.TO: “Existence of Material Uncertainty – Future Funding Capabilities”, Reiterating $0 Price Objective

May 12th, 2017

HCG reported 1Q17 adjusted EPS of….. Just kidding.  Make no mistake the entity known as Home Capital Group and its primary lending subsidiary, Home Trust no longer exist.  As we argued a few...

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Z/ZG: Define Small

May 5th, 2017

“Mark, on the CFPB, we don't break out the amount of the revenue that comes from co-marketing efforts, but we have said and it continues to be the case that it's a small portion of overall revenue.” Kathleen Phillips, CFO Zillow, 1Q17 Earnings Conf. Call....

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HUSQ.B

SELL

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TTC

LONG

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25%

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