With the DCF model BV is immaterial. You are paying for a cash stream, and the BV is what produces it so you can't count it twice. Think of it this way: if you wanted to buy a soda machine that produced $25/ day net, you would pay what you thought that was worth. Or you would pay what the machine cost, but you would not add the two ... its either/or
why is it that if you change the tangible book value (even by a factor of 1000!) it makes no difference to the Fair Value? it's like the equation doesn't take into account this variable. actually i'm sure it doesn't... can anyone explain? thanks
Investment thesis on NOVC Novation Companies (Tech Enabled Vendor Management).
Deloitte and Touche has a clean opinion on NOVS, their auditor since 1996 see 10k for 2011.
Stifel Nicholas advised NOVS on a complete Balance Sheet restructuring in 2011 as defined in their S-4 filed with the SEC.
Jefferies, Babson Capital and Mass Mutual Common Shareholders, (along with insiders own about 45%). Fortress, FBR and RAS (Betsy Cohen CEO of TBBK and RAS) hold Senior Debt and agreed to a nominal 1%interest rate for five years or till 1.2. 2016.
NOVC has a $290 M Deferred Tax Asset (DTA) that was almost completely written off under FAS 109 till 2012 Q1 was released reversing $63m of the DTA reserve (33m classified as short term). An indication of taxable income aka cash flow to come. In addition I believe another estimated $216M plus of DTA is non disclosed in the form of TTD Temporary Timing Differences residing in NOVC multi-billion dollar portfolio- which is still cash flowing today. SEE www.novationcompanies.com and read their PDF on company fact sheet and Q&A.
1. Streetlinks.com (SL) an AMC or appraisal/lender risk management business mandated by Dodd Frank ACT Streetlinks.com 93% owned by NOVC. This is a $7-10 Billion dollar + market.
2. Adventtax.com (AFS - HR Block peer) AFS services the unique financial service requirements for the 70M non-banked in USA, see Meredith Whitney comments as well as Goldman Sachs prospectus NTSP 2010. Currently AFS offers two solutions for this large market; a RAL replacement via Settlement Products and GDOT like prepaid debit card mygetitcard.com solution - 78% owned by NOVC Payday Lenders have more locations (22k) or more branches then Burger Kind and McD combined.
3. MangoMoving.com [www.mangomoving.com] MM) Asset-Less 3PL third party logistic business or asset less moving company, (my research indicates this is a $12 Billion market), which can price at 25% discount to Allied Van Lanes. MM partners with [www.remax.com] and [www.pods.com] to name a few. As more baby boomers retire they will need to move. MM will scale faster with Streetlinks.com and their sub Corvisa technology and strategic data that allow them to know both sides of the move via the appraisals. 51% owned by NOVS
4. Corvisa www.Corvisa.com is the technology backbone of NOVC value proposition. It uses technology to help NOVC companies to scale faster all tax free. I believe by year end NOVC could be generating $25m per quarter in tax free cash flow.
2012 (NOVC billion dollar portfolio continues to cash flow $ 10M per year - however I treat this as offset to Corp SGA because it is not a growth engine):
1. SL Employs 600 per www.novationcompanies annual meeting 5.24.12. They should generate gross revenue of $41m for Q1 an increase of 121% year over year Q1 2011 was about $18M. The 10k documented 2011 at $120M but I believe they will do $200M gross revenue for 2012, ($30M, $75M, $120M forecast $200M, gross revenue in 2009, 2010, 2011 and 2012, respectively). Corvisa see www.corvisa.com is generating new lender risk management (NLRM) products including LenderX, LVR, and SCORE that will improve gross margins and increase earnings significantly. SCORE is one illustration. My research suggests each unit yields of SCORE $95 MSRP with a $40 profit target. It applies to as many as half of all 18M residential appraisals executed in 2011 or $7Billion dollar market. SL really controls the lender relationship with the appraisals but will substantially increase earnings with NLRM solutions, TAX FREE thanks to the DTA. NLRM include SCORE for all residential appraisals, LVR for Mortgage Servicers and LenderX the do it yourself AMC that still provides lenders compliance to Dodd Frank ACT.
2. Adventtax.com** AFS offers financial solutions to the unique 70M NON or Under Bank US Citizens. Presently AFS doubled Q1 unit volume 500k settlement products SP and Q1 gross revenue and mygetitcard.com increased by 38% year over year. Next year the first tax season will see changes to Refund Anticipated Loan market (RAL). IRS is eliminating the debt indicator essential for RAL lenders to execute. In addition most of the bank regulators (FDIC and Comptroller of the Currency) are forcing the lenders out of RAL market. State regulators will continue to pressure PAYDAY lenders, (400% APR percentage rate). AFS solution to the 70M non/under banked (per Goldman Sachs NTSP prospectus 2010) is far more efficient then RAL or PAYDAY Lenders. I also believe AFS will introduce new Corvisa.com generated solutions for this unique market. Aspen Institute recently awarded AFS President John Thompson an award for his work with NON Banked market. AFS founders, Mark Ernst and John Thompson still own 13.5% and 6.5% of AFS and were CEO of HRBlock/#2 at IRS/now COO of FISV and SVP at HRBlock, respectively.
3. Mango Moving LLC (a 3 Party Logistics PL company which is a target for private equity and securing 18x PE) can and will bring a new model for moving and cannibalize the Allied Van Lines of the world. This recent acquisition will pick up tremendous synergy from Streetlinks.com technology and practices especially from their sub Corvisa. MM produced 3M in gross revenue for 2012 Q1 and the overall market for residential moving is estimated $12Billion.
I believe NOVC could be operating at tax free taxable income of 1.00 per share by end of 2012 and into 2013. The DTA will be accretive to BV/EPS in 2012 as we have witnessed in 2012 Q1 with the $63m reversal (note 33m was classified as short term on the balance sheet). How will Mr. Market price this upside into 2013 I do not know. THE PE multiples are a bit more difficult since GDOT a mygetitcard.com alternative is priced at 30 x earnings [ycharts.com] and Mango Moving (Asset Less 3PL trade at 18). No other public company is revolutionizing such large markets all under the corporate roof of NOVC with DTA. The DTA will allow NOVC to deploy capital far more efficiently.
Today you and I can buy NOVC at .70 See CEO proxy annual shareholder letters below issued last week. In my opinion this maybe one of the greatest "value" investments of the year and why insiders are buying common stock big time. Do your own due diligence and let me know what you believe.
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Deloitte and Touche has a clean opinion on NOVS, their auditor since 1996 see 10k for 2011.
Stifel Nicholas advised NOVS on a complete Balance Sheet restructuring in 2011 as defined in their S-4 filed with the SEC.
Jefferies, Babson Capital and Mass Mutual Common Shareholders, (along with insiders own about 45%). Fortress, FBR and RAS (Betsy Cohen CEO of TBBK and RAS) hold Senior Debt and agreed to a nominal 1%interest rate for five years or till 1.2. 2016.
NOVC has a $290 M Deferred Tax Asset (DTA) that was almost completely written off under FAS 109 till 2012 Q1 was released reversing $63m of the DTA reserve (33m classified as short term). An indication of taxable income aka cash flow to come. In addition I believe another estimated $216M plus of DTA is non disclosed in the form of TTD Temporary Timing Differences residing in NOVC multi-billion dollar portfolio- which is still cash flowing today. SEE www.novationcompanies.com and read their PDF on company fact sheet and Q&A.
1. Streetlinks.com (SL) an AMC or appraisal/lender risk management business mandated by Dodd Frank ACT Streetlinks.com 93% owned by NOVC. This is a $7-10 Billion dollar + market.
2. Adventtax.com (AFS - HR Block peer) AFS services the unique financial service requirements for the 70M non-banked in USA, see Meredith Whitney comments as well as Goldman Sachs prospectus NTSP 2010. Currently AFS offers two solutions for this large market; a RAL replacement via Settlement Products and GDOT like prepaid debit card mygetitcard.com solution - 78% owned by NOVC Payday Lenders have more locations (22k) or more branches then Burger Kind and McD combined.
3. MangoMoving.com [www.mangomoving.com] MM) Asset-Less 3PL third party logistic business or asset less moving company, (my research indicates this is a $12 Billion market), which can price at 25% discount to Allied Van Lanes. MM partners with [www.remax.com] and [www.pods.com] to name a few. As more baby boomers retire they will need to move. MM will scale faster with Streetlinks.com and their sub Corvisa technology and strategic data that allow them to know both sides of the move via the appraisals. 51% owned by NOVS
4. Corvisa www.Corvisa.com is the technology backbone of NOVC value proposition. It uses technology to help NOVC companies to scale faster all tax free. I believe by year end NOVC could be generating $25m per quarter in tax free cash flow.
2012 (NOVC billion dollar portfolio continues to cash flow $ 10M per year - however I treat this as offset to Corp SGA because it is not a growth engine):
1. SL Employs 600 per www.novationcompanies annual meeting 5.24.12. They should generate gross revenue of $41m for Q1 an increase of 121% year over year Q1 2011 was about $18M. The 10k documented 2011 at $120M but I believe they will do $200M gross revenue for 2012, ($30M, $75M, $120M forecast $200M, gross revenue in 2009, 2010, 2011 and 2012, respectively). Corvisa see www.corvisa.com is generating new lender risk management (NLRM) products including LenderX, LVR, and SCORE that will improve gross margins and increase earnings significantly. SCORE is one illustration. My research suggests each unit yields of SCORE $95 MSRP with a $40 profit target. It applies to as many as half of all 18M residential appraisals executed in 2011 or $7Billion dollar market. SL really controls the lender relationship with the appraisals but will substantially increase earnings with NLRM solutions, TAX FREE thanks to the DTA. NLRM include SCORE for all residential appraisals, LVR for Mortgage Servicers and LenderX the do it yourself AMC that still provides lenders compliance to Dodd Frank ACT.
2. Adventtax.com** AFS offers financial solutions to the unique 70M NON or Under Bank US Citizens. Presently AFS doubled Q1 unit volume 500k settlement products SP and Q1 gross revenue and mygetitcard.com increased by 38% year over year. Next year the first tax season will see changes to Refund Anticipated Loan market (RAL). IRS is eliminating the debt indicator essential for RAL lenders to execute. In addition most of the bank regulators (FDIC and Comptroller of the Currency) are forcing the lenders out of RAL market. State regulators will continue to pressure PAYDAY lenders, (400% APR percentage rate). AFS solution to the 70M non/under banked (per Goldman Sachs NTSP prospectus 2010) is far more efficient then RAL or PAYDAY Lenders. I also believe AFS will introduce new Corvisa.com generated solutions for this unique market. Aspen Institute recently awarded AFS President John Thompson an award for his work with NON Banked market. AFS founders, Mark Ernst and John Thompson still own 13.5% and 6.5% of AFS and were CEO of HRBlock/#2 at IRS/now COO of FISV and SVP at HRBlock, respectively.
3. Mango Moving LLC (a 3 Party Logistics PL company which is a target for private equity and securing 18x PE) can and will bring a new model for moving and cannibalize the Allied Van Lines of the world. This recent acquisition will pick up tremendous synergy from Streetlinks.com technology and practices especially from their sub Corvisa. MM produced 3M in gross revenue for 2012 Q1 and the overall market for residential moving is estimated $12Billion.
I believe NOVC could be operating at tax free taxable income of 1.00 per share by end of 2012 and into 2013. The DTA will be accretive to BV/EPS in 2012 as we have witnessed in 2012 Q1 with the $63m reversal (note 33m was classified as short term on the balance sheet). How will Mr. Market price this upside into 2013 I do not know. THE PE multiples are a bit more difficult since GDOT a mygetitcard.com alternative is priced at 30 x earnings [ycharts.com] and Mango Moving (Asset Less 3PL trade at 18). No other public company is revolutionizing such large markets all under the corporate roof of NOVC with DTA. The DTA will allow NOVC to deploy capital far more efficiently.
Today you and I can buy NOVC at .70 See CEO proxy annual shareholder letters below issued last week. In my opinion this maybe one of the greatest "value" investments of the year and why insiders are buying common stock big time. Do your own due diligence and let me know what you believe.