EXPI/RLGY: Real Estate Wars - The “White Hot” Housing Market Has Masked a RACE to the Bottom Among Residential Real...

The race to the bottom in broker economics.

PRDO: Borrower Defense to Repayment Claims Could Imperil PRDO’s Cash Balances; What About ATGE?

“The most common types of conduct that might make a borrower eligible for loan relief through borrower defense to repayment discharge are misrepresentations of the truth made by the school or its representatives...

EXPI: As Good as It Will Ever Get? EXPI is the Poster Child for the Bubble in Real Estate Agents

               “For the Indians, one run on, let’s see, one hit? That’s all we got? One g—damn hit?” Harry Doyle....

CWH: A Simple Sanity Check Suggests the EBITDA Floor Is Higher Than You Think

For those who think they’re really good at playing this game, we present you the following question: A year ago consensus estimates for FY21 EBITDA for CWH were $293MM.  By tomorrow, we expect consensus EBITDA estimates for CWH for...

TREX: What is “Normal”? Coming to Grips with Reality at Trex

“Normal is the wrong name often used for average” Henry S. Haskins On TREX’s 2Q21 earnings conference call there were TWELVE references to “normal”, “normalization”, or “normalized”. ...

TRUP: Problems, Problems, Problems….. And Then There’s New Jersey

“Easy, compadre. I'm your friend out here, all right?... If you want to throw down, fine. I've got Jack Johnson and Tom O'Leary waiting for you…… Well, guess what? Now this is...

TRUP: Another Challenging M&A Comp for Trupanion

Over the past 2-3 years there have been two landmark M&A transactions in the pet insurance space.  First, SYF acquired Pets Best in March 2019 for roughly $80MM. No more than a month later, specialty insurance player WTM purchased Embrace for $73MM. ...

EXPI: Slowing Agent Productivity Gains Are the First (of Many) Red Flags in a White Hot Housing Market; Let the...

Well that was quite the round trip.  No one rings the bell when valuation compression starts, or for that matter when it stops. EXPI shareholders and their agents (one in the same in this case),...

CWH: Breaking Through the Ceiling Creates a New Floor; Raising Estimates

For the past 6-9 months, every single one of our conversations around CWH revolved around a single question: When will demand collapse?  Put this in the category of “every general fights the last war”.  Even after crushing...

CWH: The Inventory Advantage, Raising Target to $75, PAA Research's Spring 2021 RV Dealer Survey

TRUP: When Will the COVID-19 Tailwinds End for TRUP? Other Key Questions Heading into the Company’s 1Q21 Earnings...

What changed? We posed the same question to start 2021 following a year in which TRUP shares rallied more than 230%, despite the company’s continued struggles to grow profitably.  TRUP...

AYI: When Mix Shift Is Your Gross Margin Expansion Story

“Given our current gross profit margin improvement, we think that we can achieve the gross profit of above 42% for the balance of the fiscal year.” Karen Holcom, Senior VP and CFO, Acuity Brands, Inc. 3/31/21. 2Q21 Earnings Conf. Call For...

EXPI: As Good As It Will Ever Get? Now EXPI Faces the Struggle of Trying to Become a Real Brokerage Firm

“I think, even starting in early 2020, we really backed off the top line number of 10% gross margin for core brokerage, just because as we learned more about how all this mixes together, it would be tough to...

OSTK: When Striving for Greatness, Never Bury the Lead

Two weeks ago OSTK shares traded north of $110/share.  OSTK shares have declined (-35%) in just 10-trading days.  This begs one simple question: what the hell happened?  First and foremost, if you’re a longtime follower of OSTK this type of...

TREX: Wood Pulp and Polyethylene Boards Don’t Grow to the Sky

TREX has an $11B+ market cap.  In a market full of excess, this singular data point has us shaking our heads day after day.  After all TREX manufactures composite decking from wood pulp and recycled plastic.  Based on the deluge of...

TRUP: What Changed? Certainly Not TRUP’s Profitability Prospects; Marketing IRR’s Could Collapse in 2021

What changed? That is the one question that has been plaguing us (and many other short sellers) about TRUP for the past 12-months.  What elements of TRUP’s business improved over the past year to...

PRDO: From the Frying Pan to the Fire – New 90/10 Proposal Represents an Existential Threat to PRDO, Is This...

“We have implemented various measures intended to reduce the percentage of our institution's cash basis revenue attributable to Title IV Program funds, including AIU’s deferred...

ATGE: The Walden Conundrum and Other Suspect Reasoning

“Despite the tremendous opportunity at the Company, we have serious concerns about the ability of the Board of Directors (the “Board”) and management team to realize the Company’s true potential, allocate capital appropriately, and...

OSTK: Accelerating the Evolution of Overstock, Raising Price Objective to $140

“Pelion” – a huge or difficult task. “In Greek mythology, the twins Otus and Ephialtes piled Mount Pelion on Mount Ossa and both on Mount Olympus in an attempt to reach heaven and attack the gods. The word is...

OSTK: Is Overstock the Cheapest Stock We Follow? Twenty-one Questions for 2021; Raising Price Objective to $128

Overstock.com is a rapidly growing, profitable ecommerce platform generating significant free cash flow that also owns a promising portfolio of blockchain based technology companies.  How rare is that?...

AYI: Squashing UV-C and Gross Margin Expansion Hopes

“So I am increasingly confident that this [UV-C anti-germicidal lighting] is a long-term product portfolio opportunity, not a point-in-time product portfolio opportunity. None of us can quantify how much that is yet. So good news is it's a -- it appears to...

AYI: 4Q20 Lighting Agent Survey Suggests Neither UV-C, Nor Biden Can Save the Lighting Industry

Below please find a link to a powerpoint presentation outlining the results of our latest survey of lighting agents across the country.  

EXPI: As Good as It Will Ever Get? Someone Needs to Tell EXPI’s New Agents That Downline Opportunities for Passive...

Following a quarter in which EXPI added more than 4,700 agents, generated more than $23.6B in transaction volume, and of course increased the share count by 3MM, there’s really only one...

TREX: The Four Things That Matter Now That the Setup for Shorts Has Improved Dramatically

There are better companies whose stocks have been absolutely destroyed over the past few weeks for posting the type of upside that TREX delivered in the third quarter.  Yes, the company generated strong sales growth and...

CWH: Camping World Shares Are Absurdly Cheap and Ten Other Things We Know for Certain

Eighty-one cents?! That’s all CWH gained yesterday following a quarter during which the generated 26.9% same store sales growth, delivered 740 bps of gross profit margin expansion, efficiently managed G&A costs, and beat...

TRUP: All Sizzle No Steak; At Trupanion It’s Always Optics Over Operating Profit Improvement, the AFL Deal Is No...

Each and every day for the past year, we thought we would walk into our offices in the morning to the news of a sizeable stock offering from TRUP.  After all, the company’s regulatory...

CWH: Building the "Costco of Camping" - Our Letter to Buffett and Munger

We sent the attached slide deck along with individual letters to Warren Buffett and Charlie Munger. This is the second time we have sent a letter to Warren Buffett. Eleven years ago, we sent a letter to Mr. Buffett to illuminate some of the...

EXPI: When Stock Price Is Your Only Fundamental, It’s Time To Sell; Introducing EXPI as a Short Idea with a Price...

The stock market has been extraordinarily kind to “fake it until you make it” stories that operate in large total addressable markets (TAM).  If you run a long/short book in any...

CWH: What a Successful Launch of the “AirBnB” for the RV Space Could Mean for Camping World – An Absolute Game...

“As we think about the possibilities of it, it wouldn't surprise me if we -- it wouldn't surprise me if we stayed away from the rental business, but we looked at alternative technology...

ATGE: The March to Nowhere Continues; Revised Estimates

“What I mentioned before was not so much decline in ACAMS, but our desire to see it grow a lot faster, given what we know are the opportunities…. So from our perspective, we're at an inflection point at ACAMS, growth has plateaued a...