It is about as difficult to sink a business without debt as it is to sink a ship without holes.
- Manlobbi
Investment Strategies / Mechanical Investing
No. of Recommendations: 8
For those of us who've been around a while, I cant help but recall some of the very old threads about Seagate (STX).....once upon a time there was an idea that these spinny disk drives would go extinct. IIRC at one point it even sported a dividend yield of ~6%. Its about a 10x from those days...and up 15% AH on latest earnings. Like the rest of us mortals, Jim's had his fair share of bad calls over the years (CBI, KMX), but this one made up for all of the others. If only I had.......
No. of Recommendations: 6
I found Seagate to be the ideal candidate for repeated near-the-money cash backed put writing. Very remunerative even with the price going nowhere, which it definitely did for a long time.
CBI definitely went bust. I kinda figured that after a century or so in business they'd have figured out the resilience thing, but nope! Oh well.
KMX, I still have hope for, oddly enough. I like the business, despite the recent weak spot (currently holding it as repeated cash-backed put writing...I'm either patient or more likely just stubborn)
Jim
No. of Recommendations: 0
<DG
A blindly optimistic view? Historically they traded reliably at or over 1 times trailing sales per share, which might make a non-crazy new target. That's what, about $190 these days? Jim 12/4/2025 >
...still...?
Thanks!
:-)Shawn
No. of Recommendations: 0
Sorry. In review just realized my last post was too cryptic. It was regarding Jim's remote Dollar General recommendation & his response to comment:
<Like the rest of us mortals, Jim's had his fair share of bad calls over the years (CBI, KMX), but this one made up for all of the others. If only I had.......>
:-)Shawn
No. of Recommendations: 6
<DG
A blindly optimistic view? Historically they traded reliably at or over 1 times trailing sales per share, which might make a non-crazy new target. That's what, about $190 these days? Jim 12/4/2025 >
...still...?
Emphasis on the "blindly optimistic"? It's just an if-then: if the old valuation norms returned, then the price would lead to that happy result.
I guess if their business operation ever returns to running on all cylinders then the old valuation levels might eventually return. Emphasis on "if" and "eventually " : )
Meanwhile I've been sort of swing trading the new lower range, lightening up when prices were higher a coupla months ago, then adding some long calls during the current weakness. Prices around $100ish don't seem crazy for a firm that makes money through thick and thin, and may be making $8ish EPS a year out. I've made a whole lot from these fellas, just not lately.
Jim
