I've looked at this name in the long ago past. I'm pretty sure the reason for passing was its small size and its dependence on a few product lines that could potentially face competition from better funded companies.
You just mentioned a third risk which may not have existed when I looked at it (or I just didn't think about it), and that is the risk of them wasting money trying to develop new products. If they now have a large pile of money and a recent bias towards giving less capital back to shareholders, then I think the risk of management trying to pull a rabbit out of the hat should maybe be front and center to a shareholder.
Again, I don't know too much, just wanted to add my two cents.
That last point has been my major concern. No CEO + looking to develop new products = completely uncertain route for where whatever amount of earnings actually ends up.
I also follow this one closely, but had a different take on what you call "information gaps". In my view they contribute to lumpy earnings, which I consider to be an advantage, rather than a disadvantage. That buy low, sell high thing.
Yes, we often don't know exactly why UG yoyos around it's mean, but what we do know from its very long track record is that its mean is to be a remarkably profitable company. I also wasn't able to nail the low, but I did accumulate steadily during its down phase such that on the rebound it now constitutes the second largest position in my portfolio.
You made a very thorough and accurate assessment of this company, I think your only gap was being able to frame what you learned within a contrarian investing mindset.
Thanks for your thoughts, Ben. Perhaps the company presents a similar setup in the future - nothing is out of the question. I'll be tracking it regardless!
Devin, you called it! I actually bought initially and added more after reading your research. I guess I should have sold after reading the latest piece… oh well.
I've looked at this name in the long ago past. I'm pretty sure the reason for passing was its small size and its dependence on a few product lines that could potentially face competition from better funded companies.
You just mentioned a third risk which may not have existed when I looked at it (or I just didn't think about it), and that is the risk of them wasting money trying to develop new products. If they now have a large pile of money and a recent bias towards giving less capital back to shareholders, then I think the risk of management trying to pull a rabbit out of the hat should maybe be front and center to a shareholder.
Again, I don't know too much, just wanted to add my two cents.
That last point has been my major concern. No CEO + looking to develop new products = completely uncertain route for where whatever amount of earnings actually ends up.
I also follow this one closely, but had a different take on what you call "information gaps". In my view they contribute to lumpy earnings, which I consider to be an advantage, rather than a disadvantage. That buy low, sell high thing.
Yes, we often don't know exactly why UG yoyos around it's mean, but what we do know from its very long track record is that its mean is to be a remarkably profitable company. I also wasn't able to nail the low, but I did accumulate steadily during its down phase such that on the rebound it now constitutes the second largest position in my portfolio.
You made a very thorough and accurate assessment of this company, I think your only gap was being able to frame what you learned within a contrarian investing mindset.
Just my two cents.
Thanks for your thoughts, Ben. Perhaps the company presents a similar setup in the future - nothing is out of the question. I'll be tracking it regardless!
Today was a very unusual day for UG. High volume , ability to buy/sell as much as wanted.
All on the back of todays Q3 earnings.
Devin, you called it! I actually bought initially and added more after reading your research. I guess I should have sold after reading the latest piece… oh well.