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Author Archives: Torin

Glentel Part 2: The Problems Facing The Company

August 5th, 2014 | Posted by Torin in GLN - (Comments Off)

It seems germane to start with an overview of how Glentel got to where it is today. For a brief moment, Glentel was actually a favorite among micro-cap value managers. Guy Gottfried, portfolio manager of Rational Investors and previously an analyst at value giant Fairholme, pitched the company at the Value Investing Congress in 2013, … Read more

Glentel Part 1: Introduction

August 5th, 2014 | Posted by Torin in GLN - (Comments Off)

Monte Sol and its affiliates own Glentel shares. In the future Monte Sol and its affiliates may reduce or increase their investments in Glentel depending on changes in share price or business performance. Monte Sol and its affiliates have no obligation to disclose any future transactions in Glentel shares. The analysis presented here is the … Read more

Thoughts on Margin of Safety

February 5th, 2014 | Posted by Torin in Investing - (Comments Off)

Warren Buffett has said that the three most important words in investing are “margin of safety”. The term is quite common, and anyone who has done even a modicum of investment reading is familiar with it. But what does it mean? What should it mean? The common understanding of the term is simple: an investor … Read more

NTS: Still Cheap

October 22nd, 2013 | Posted by Torin in NTS - (Comments Off)

That title is a play on a previous post. NTS actually got a lot less cheap yesterday, when the company announced that it has agreed to be acquired for $2.00 per share. NTS shares traded up 23% on the news, to a $1.95/$1.96 spread. I have advocated a $3.00 per-share value for NTS elsewhere in these pages, … Read more

Zedi Part 8 – The Conclusion: Contemplating the Recovery Scenarios

October 10th, 2013 | Posted by Torin in ZED - (Comments Off)

This about does it for Zedi. I want to show one last chart: For me, it is impossible to look at this chart and not think “gosh, what would happen if the natural gas market actually improved?” I am going to streamline the analysis as much as possible. Forget estimating revenue and profit by segment … Read more

Zedi Part 7 – The Sum Is Greater than the Stock Price

October 10th, 2013 | Posted by Torin in ZED - (Comments Off)

There are a number of ways to value Zedi. I’ve already looked at free cash flow. The other conventional valuation method one might use is EV/EBITDA. Zedi looks awfully cheap on this basis too. On trailing figures, ZED shares trade for 4.6x EBITDA. On a forward basis, and including the cash I think could accrue … Read more

Zedi Part 6 – Cash Flow and Working Capital

October 9th, 2013 | Posted by Torin in ZED - (Comments Off)

One conceivable criticism of Zedi is that there hasn’t been much in the way of cash generation in recent years. To wit:   Profit, as measured by EBITDA, has grown at a pleasing rate. Free cash flow, as measured by cash flow from operations less investments in PP&E and intangibles, has failed to keep up. … Read more

Zedi Part 5 – Understanding the Reported Financials

October 8th, 2013 | Posted by Torin in ZED - (Comments Off)

You have to dig into Zedi’s financials a bit to really understand what is going on. After you’ve looked at the income statement, the best place to go next is the segment financial disclosure. Zedi reports in three segments: Canadian Production Operations, Canadian Field Operations, and United States Operations. Canadian Production Operations is the original … Read more

Zedi Part 4 – Data Fees, Acquisitions, and Oil

October 8th, 2013 | Posted by Torin in ZED - (Comments Off)

In the last post I wrote about fracking and how it has created a temporary but massive oversupply of gas in North America. Despite this harsh industry climate, Zedi has survived, and even prospered. Revenue and EBITDA have grown at 30% annual CAGRs through the collapse. This strong performance has been the result of stable … Read more

Zedi Part 3 – The Plague of Fracking

October 8th, 2013 | Posted by Torin in ZED - (Comments Off)

If you are already familiar with how fracking has changed the North American natural gas industry, you can skip this post and wait for the next one. If you aren’t, here is a primer: In the 1990s, a few U.S. natural gas producers began experimenting with horizontal, rather than vertical, gas drilling. Sending a drill … Read more