Monday, July 14, 2008

New Position: Photochannel (PNWIF.OB)

Photochannel (PNWIF.OB is another Aaron Edelheit pick. I actually put in a limit order on Friday for this one, and it was filled today at $3.40. Currently, it's trading at $3.31. I'll add a description of the company to this post a little later.

11 comments:

ravinsu said...

Welcome to the Photochannel club, bro :)
I am not sure if you had noticed it or not, but I had given a brief write-up on GF (mainly to silence the dentist:)). Also we have a lot of back & forth about Photochannel going on Daniel's blog.

Albert said...

Dave and Edelheit, sitting in a treetop....

I saw that you wrote he is the best value investor you've never heard of. I looked for more info on him, but couldn't find any, What's your basis for thinking he's a great value investor?

Don't know if you saw it, but I commented on your DSNY post. I admit I looked at PNWIF, but I like the DSNY story a little bit more.

DaveinHackensack said...

Thanks, Ravinsu. I'll check out your GF write-up and may crib from it a little, if you don't mind, when adding my description here.

Albert,

To be precise, I wrote that AE "may be one of the best investors I had never heard of up until last month." It may be a little early to put him in the pantheon of "great value investors". My basis writing what I did about him is that developments on the four stocks I've seen his write-ups for on the VIC seem to have gone the way his analysis predicted. He hasn't had the big gains with PNWIF and DSNY yet, but the news on those companies since his write-ups is consistent with his analysis and predictions.

I did see your comment on the DSNY thread, and, partly prompted by your comment, I asked DSNY's CFO about the decline in y-o-y revenues from Clipstream. I'll post the notes on our conversation a little later. It just goes to show that even commenters with occasional puerile remarks (e.g., "Dave and Edelheit, sitting in a treetop....") can be worth reading. Thanks for commenting.

Albert said...

Thanks. Puerile comments are right in my wheelhouse. But seriously, I'd be interested in reading what the DSNY folks have to say re Clipstream.

As for Edelheit, I was just curious if you had found anything in terms of his performance that demonstrated a strong track record. You say that the developments in his analysis of four stocks has gone the way he predicted, but not all of the results of his calls have been great in terms of actual returns. SAT is down nearly 50%, despite short pops, BIM has underperformed (and he at least admits the situation has changed fundamentally), etc. I'm not saying he's not a good investor, I was just trying to see what he's done.

I admit that his call on HEM has worked out nicely, and I *think* his analysis of DSNY is pretty good. I'm not entirely clear (because I haven't had the time since Saturday to figure out) where AE gets his estimates of $11M and $16M in revenue for 2009 and 2010 though. I understand he's expecting some pretty big increases in transaction fees, but that's quite a jump.

DaveinHackensack said...

Albert,

I don't have any info on Edelheit's long-term track record. I'm also not familiar with his write-ups on BIM and SAT, but I'll check them out. The four write-ups of his I have read are the ones for PNWIF, HEM, CADA, and DSNY.

Regarding Edelheit's estimates for DSNY, I assume he extrapolated from a handful of currently paying MPE clients and tried to estimate the revenues if most of the rest started paying. I tried to ask DSNY's CFO if he thought Edelheit's estimate for next year sounded plausible, but he wouldn't offer any specific guidance. I guess we'll get a sense of how accurate Edelheit's estimate was after the Q1 report.

DaveinHackensack said...
This comment has been removed by the author.
DaveinHackensack said...

Albert,

I didn't make the connection until just now that you were talking about BIM.TO. I was looking at that company a few weeks ago, and had discussed it with DanielW on his site, without knowing it was an Edelheit recommendation.

Daniel said...

Edelheit started a fund in 1998. At the start of this year it was up an annualized 22.4% net of fees compared with 8.2% for the Russell 2000.

While I don't buy into the argument that you need 10 years to know if somebody is a good investor or not--he has a great long-term track record.

More importantly, his reasoning is good and it's based on first-hand research into the details of little-known companies.

DaveinHackensack said...

Thanks for that info, Daniel.

Incidentally, last night at Barnes & Noble, I was re-reading the chapter of Bruce Greenwald's Value Investing on Paul Sonkin. There is some similarity between the M.O. of Sonkin and Edelheit.

Daniel said...

Interesting you mentioned the Greenwald book. That's one of the three I had waiting for me when I got here--the other two being When Markets Collide and Fooling Some of the People (which I'm almost finished with and can recommend).

DaveinHackensack said...

Interesting coincidence.