*Based on some insightful comments here and on Twitter, it appears that a capital increase process is going on which has optically cut the stock price in half. This may affect the valuation presented in this video. The attached spreadsheet considers a valuation with the market cap value before the cut in stock price.* docs.google.com/spreadsheets/d/1bMplPkBCs3LIg70sptDnkxCGse7qt69AjWMTU63Z7Lo/edit?usp=sharing
He just said in an interview that he bought the stocks in 2018 and 7x'd in terms of USD. I think u mixed it up with his new investment in Turkey (which is led by father and son). The ladder is a steel company called Cemtas and has nothing to do with logistics.
@@beaniee242 thanks for letting me know about Cemtas. I know he has spoken about owning a Turkish cement company, but I never knew which one. I don’t think he still holds that though
Please like the video and subscribe to the channel to stay up to date with more investing videos. Thank you for watching! If you liked this video, please check out my discussion of Alibaba (BABA): th-cam.com/video/dZtjx3UbV9I/w-d-xo.html or my analysis of Nintendo (NTDOY): th-cam.com/video/8ubZnb9ICoE/w-d-xo.html
Thank you for the video. Just a heads up to Reysas Investors. In Pabrai's most recent video he mentions that the father / founder of Reysas (Durmus Doven) didn't go to college, doesn't understand concepts or IRR, etc. However, if you read the company filings / Board Of Directors activity report, it says that Doven went to University and has a Masters Degree. This may be irrelevant, but this is in the context of Pabrai stating that he visits the Dovens annually and speaks to them every few months. Makes one wonder if there is something off with the filings. Who cares if he went to college or not. The question is Pabrai talking nonsense or are the documents fraudulent? He's a gifted story teller that's for sure, but why throw in that the founder isn't educated. I'd be more comfortable as an investor in Reysas knowing that the founder has a Masters Degree in International Trade and Logistics, as the company documents state. I attempted to post such a question on Pabrai's video but the comments were deleted (not by me). I am a huge fan of Pabrai but this seems like a significant oversight. Also with the rights offering coming up, I would be concerned about the increased liquidity offering an exit strategy. This is a pessimistic viewpoint but hopefully someone can enlighten me as to how an investor owning a third of a company and purportedly knowing the founders well did not know that the owner / founder has a Masters Degree and instead was staying he was not even college educated. If this is a pump and dump (which I am not stating this is, in any way) it will all come down on the heads of retail investors.
Hey this is a very insightful comment. That is very strange. I’ve become more and more skeptical of these people. They say one thing and do the other. One recent example is their flip flop on ALIBABA. I regret not investing in RYSAS last year. I’m planning to invest now and see how it goes. Not sure if it’ll keep rising like it did last year. Waiting to see how elections this month will play out. Any thoughts?
@@tushargaddi6640 I am a Reysas shareholder but I only bought shares after taking many weeks to do my own due diligence on the company and consult with a colleague in the logistics industry. After doing so, I remain extremely bullish. I found no discrepancies in anything Mohnish has said in his interviews, and his quoted valuations also appear reasonable (though when he quotes the liquidation value he is is often referring only to the REIT, which Reysas Logistik owns 63% of). I also looked at some American companies like Old Dominion to compare the business models and financials. End of the day, I felt comfortable investing. I think there is a very long runway for this company. They’ve gained market share in transport / logistics since the pandemic. Like many other Turkish companies, they prefer to do equity capital raises due to the unfavorable lending / debt environment in Türkiye. As far as I know, there is not a well established bond market, and given that this company is still valued by the market at less than 400M USD, and equity capital raise is reasonable. I expect the shareholders to maximize their options for the rights issue.
This is really outstanding analysis. (Greenwald is awesome.) I haven’t even been able to get my hands on a balance sheet, so you’re ahead of me! (haha) I see that your analysis is finding value on the balance sheet. Have you tried a discounted cash flow (DCF) approach? I don’t understand why RYSAS isn’t dropping, as the Turkish Lira is down 20%. (Maybe trading volume is so low?) Turkish lira seems to have found a floor, in trading against USD. Of course, that could change tomorrow with further declines … With E-Trade, I can trade over the counter pink sheets, Reysas Tasimacilik ve Lojistik Ticaret A.S. (RYSKF)
Thank you, David! I haven’t looked at Reysas from a DCF perspective. I think the reproduction costs alone of the assets make this a screaming bargain and any capital allocation prowess would be icing on the cake. I think RYSAS has reported some good results lately. Maybe the market is warming to the business, but who can really say? My concern with RYSKF is that the volume is pretty much 0. The company should be accessible through the international trade desk. I have heard you can call Fidelity for access. Haven’t tried it myself
Hey CJ, just saw your first video, great analysis and very useful indeed. Quick Question, where are you finding the details of Mohnish's international investments? I believe they're not public and he is only liable to publicly declare his US equity holdings?
Thanks, Moiz! I use TIKR (www.tikr.com) to get the international holdings of investors like Mohnish, Li Lu, etc. You can use this link to sign up for free: app.tikr.com/register?ref=cb51gl They compile international holdings from trade reports and international filings. Very useful!
Alibaba bought the turkish e-shopping giant Trendyol for about 700 million dollars in 2018. However Rysas, Turkey's largest logistics company, first started rail transport from China to Europe this year. It is no longer engaged in truck transportation. Realizing the connection between China and Europe, Monish Pabrai must know that this company will attract the attention of Chinese trade giants in the future.
Thanks for the insights. I didn't know about that acquisition or Reysas's expansion into international rail. It sounds like that's an excellent opportunity for the management team to continue to display their outstanding capital allocation skills. A partnership or acquisition by Chinese giants would be great for RYSAS shareholders!
Hey CJ! Im from Turkey and recently found your channel. Great work with the high quality videos. I wanted to ask you about the stock's current position. I've been thinking of buying in but it's market cap is over 100m$ as Im writing this. Would love to have your opinions if you had another look at yhe stock recently. Thank you.
Thanks, Mert! I really haven't done much of a deep dive into the company. Pabrai has talked at length about Reysas in the interviews on his TH-cam channel/his interview with SumZero. I would recommend going through those videos to get started. But based on his valuation, I think the company still looks very cheap. Essentially he has described it as getting a long-term compounder quality company at cigar butt prices.
Hey CJ, I like your channel so I’ve decided to answer your request to have viewers comment on the valuation of this stock. It’s my understanding that your net net NAV calculation of this investment is incorrect, as Graham would use current assets - all liabilities. A 15% discount from a total liquidation perspective doesn’t seem like a great deal, it’s also very difficult to determine what the normalized business earnings are on those assets. Do you have any thoughts?
Thanks for the Feedback, Brian. You're right that if we go by Graham's definition of a net net asset value, the calculation is incorrect (current assets - total liabilities = Net Net Asset Value). From my point of view the value in this business is mostly its property, so I don't think it makes sense to exclude that from this NAV calculation. (total assets (adjusted) - total liabilities = NAV). You're also right that a 15% discount (for quick and dirty adjusted values) is nothing special, but at the very least we're still getting the entire business operations for free in this very conservative scenario. I would be more inclined to approach Reysas from Pabrai's valuation which gives us a lot more breathing room. I estimated that he values the property closer to $600mm (but that's a guess). Unfortunately I don't have insight into the earnings on individual assets at this time. The only insight I have is that it's clearly acceptable for Pabrai because he owns 30% of the company. So for now I will just have to trust his assessment. However I don't even know how to invest in this company, so that's another hurdle to climb :)
Any update on how to invest in the BIST Istanbul for Americans, Australians or UK residents? I have had a look on Interactive Brokers and Saxo, but I can't see on either of their websites that they give access to Turkish stocks. Any update?
Thanks for this. Where are you getting the market cap info? I am looking at 964m Lira on RYSAS divided by 8.34 USDTRY exchange rate is giving me $115mm in cap. Cheers
Thanks for watching, Mike. Your calculation is correct. This video was released back in April, so the exact numbers are dated. Also there was a share offering that was affecting the data at the time. I get the information from TIKR btw!
@@cjwilso ok makes sense. I was just wondering why the market cap was almost 3x now vs the video date but share price is not up much. I'll have to look into the share offering
Great video once again CJ. I decided to revisit this since I began digging into the company. An example of what confuses me is the increased revenue in Lira but when converted to USD there appears to be a decline instead. Is this the result of inflation? I guess the question is in your opinion through which lens do you think one should view the company? I am of the philosophy that growth regardless of current inflation will work itself out over time. So is valuation in this instance more accurate through the lens of LIRA or USD? I appreciate your thoughts.
I’m not 100%, but either there is an error in the reporting or it’s the result of currency fluctuation. The value of the Lira has come down dramatically over the past year compared to the USD. With that being said I agree that if the asset is cheap enough, it probably doesn’t matter if you think in USD or Lira. Pabrai has said he doesn’t care about the currency fluctuations; the currency could be seashells and he would still be happy to own it. When he initially bought, he found a .10 or .20 cent dollar, so those worries go out the window with a margin of safety like that
Nov 2019 1 USD bought you 5.7 Lira today it buys just under 10 so the change in currency would be significant. Best just using USD as much more stable measure
It looks like we can buy through Phillips Capital, but I have not tried to do so. That’s the only place I have heard that is actually offering this company
Great analysis CJ. Still there are so many unknowns but lesser mortals like us :-). I was wondering what are those books in the background about? Are they all investing?
Agreed, Anand. Ignoring the fact that I can’t even invest, there’s too much I don’t understand about the company. Pabrai has done the work of kicking the tires, and I’m sure he understands practices and regulations in Turkey a lot better than us because of his contacts in Turkey. The books are from all sorts of genres. There’s investing, business, psychology, physics, self-help, history, biographies, fiction, comics, and more. I’m a firm believer in the multi-disciplinary approach to investing and life. For instance right now I’m reading a biography, a fiction book, and an investing book.
@@cjwilso my universe at best is unidimensional right now as its all about investing. I have only started exploring this world since last 2 years so just can't get enough of it. The more i read, the more i realize there is even more to read. LoL. Right now most of the books are around buffett and value investing. Still an early learner i would say, coming from software background. But each day, i am learning new things and just loving it. Thanks for asking my friend.
@@cricbuzz1123 What a fun time! Always reading, always learning :) there’s nothing quite like it. The best part about investing is that we get to do that for the rest of our lives.
Thanks, Marco. ! Definitely read the comments on this video to learn more about why the stock price has gone down recently. It may affect my intrinsic value calculation. I trust Pabrai’s rough estimate of somewhere between $400mm-$1B. Anyway enjoy!
@@marcoaraujo4771 Yeah kind of tough... I'm not sure what to think of the valuation at this point. It might still a bargain based on Pabrai's insight and conviction, but it's not as enticing as when he bought in.
Hy CJ, thanks for the work put in the video! Went over the valuation format. Do not understand where is the adjusted value of the PPE (if it is even 30usd/sqfoot then the adjusted value should be about 360 mil. Usd).
Thanks for watching! I agree that the PP&E listed on the books is likely low, so that’s where the low numbers come from in the orange and yellow sections of the spreadsheet. Also I’m simply taking a straight percentage of the reported values. It’s a back of the envelope way to estimate value. In this case I’m not sure it’s the best approach because of the apparent quality of the assets. I put Pabrai’s valuation based on comments he has made about Reysas in the green section. It’s more likely accurate to what an actual owner would pay for the real estate l compared to what is reported in the financials.
Yes! Thanks for the reply! That was clear from the file. I was just assuming you would put the adjusted PPE value on the “adjusted” column. The price / square meter of warehouse in Turkey is about 300 usd (+/-20% depending on the area). Could you please let me know where did you get the 12 million square foot info from?
@@happyfunvideos6191 Pabrai mentioned it a few months back in a Q&A session: th-cam.com/video/toZ-wmBPK6c/w-d-xo.html it’s at about the 28 minute mark!
Someone commented that Philip Capital allows for investment in Turkey, but I have not looked into it yet. Other than that I still haven't seen any other straightforward solutions :/
Hey CJ, Given the recent capital increase. What level of discount do you think that it is still offering at current prices? I.e. 4.23 TRY? I want to hit this, though I realise that Pabrai has already gained 7x and I want to be sure that it still offers a SIGNIFICANT margin of safety, considering that it's in Turkey and all my interest friends saying, "Turkey?! Don't touch it!" - btw happy to share how to buy in if you are able to help me out in knowing what discount we are getting at this current price. Cheers mate
Hey, Mike. Pabrai said in a recent interview that he values the replacement cost of the company at around $800mm ($1B - $200mm debt). Reysas market cap today is about $120mm. Based on those numbers, the market cap can still 6.5X before hitting that estimated intrinsic value. And that's ignoring the good capital allocation of management and future growth. I would call that a significant margin of safety. I am happy to trust Pabrai's estimation of intrinsic value on this one, but of course there's a chance he's wrong. I hope that helps!
@@cjwilso Thanks mate, I am hearing rumours that an online broker, whom I am having discussions with their team is adding RYSAS to their accessible stocks in the Istanbul exchange. I will confirm this within the next couple of days and let you know if I am actually able to buy. Your videos are awesome mate. Keep up the great work.
@@cjwilso Hey CJ, sorry about the late reply. You can buy via Philip Capital. I have requested they allow access to RYSAS as part of their offering and they have said yes. So set up an account and you can buy in. Are you going to buy into this one if the price remains roughly where it is?
@@mikeharris2033 thanks for figuring this out, Mike! I appreciate that. I will definitely consider it. At this point I would probably want to do some more research (which I put on hold because I didn't know how to buy it). Pabrai sounds very comfortable with the company. At this point I would be leaning heavily on his sentiment.
Looks like they did an offering. Shares float has increased by 2x which cut the value of each share by half. So this isn't a 50% margin of error investment. I wonder what Pabrai thinks now that he is diluted. They must have had to agree with him as he is a large owner.
Yeah that's what I have been seeing from talking to some folks here and on Twitter. From what I'm seeing Pabrai should have the ability to buy these new shares in the offering. I haven't seen news on whether he is going to participate. I'm guessing he approved and participated, but that's just a guess!
Any idea why RYSKF is moving way slower than RYSAS? Indeed since 9/1 RYSKF lost 14% when RYSAS went up by 43%? Could it be an issue for RYSAS shareholder outside of Turkish? Thank you
I'm not entirely sure about RYSKF, Thibaud. The volume is so low on that one. That might be skewing things. If I were looking into Reysas, I would probably try to invest directly in Turkey and avoid this OTC stock for these very concerns. It's hard to tell what's going on with it.
Hi CJ. my understanding of those shares is that (1) the broker exchange currency and buy RYSAS stocks on the Turkish market (2) and then transfer them into RYSKF that allow US investors to trade them in the US market. I do believe that I have the possibility to sell the RYSKF shares back on the Turkish market. Correct?
Hi thanks for this, i think looking at the financials Mohnish maybe bought his stake in 2019 not 2020. Although the market cap now is almost 3x more than Mohnish purchase price, compared to the liquidation value its still valuable. THanks
Has anyone found a way to invest in this company? I am in Europe and have an acccount with Interactive but they do not trade with the Istanbul stock market :(
I was looking at the income statement of this company - 7 of 10 years they made a loss in the bottom line income. I was wondering what could be Pabrai's rationale behind buying this company? Share drop is because they have diluted their existing shares
You’re right, Usman. Looking at their income statement, we can see they have been losing money. The main reason he was intrigued seems to be the value of the real estate (warehouses with recurring revenue from class A tenants). If we look higher up on the income, their revenue, operating income, and margins have been steadily increasing. The interest expense on their debts seems to be what’s making them unprofitable. If they can somehow pay down the debt (perhaps through the recent capital infusion), we might see steady profits.
Andrew, I was chatting with someone a few weeks ago who said that he was able to invest in Turkey from Europe using Interactive Brokers, De Giro, or Saxo Bank. If De Giro no longer works, I would try IB or Saxo Bank. Hope that helps!
I believe this is a result of dilution from the offering. I’m not seeing any sale of shares reported. He seems so bullish on the company, so I’m not sure why he didn’t participate in the offering.
It doesn't look like there's much volume there. It could be worth investigating! But you can buy RYSAS by calling the Fidelity international trade desk.
I'm still searching, Ashish. There's not a lot of coverage about this company. Pabrai has an advantage here because he was able to actually visit the company in person and has contacts that can keep him updated. After all he is a 30% owner of the company!
I did some digging on Twitter: twitter.com/MehmetE00342576/status/1382993948415815684 I'm still not sure exactly what's going on, but this person says there is a "paid capital increase."
@@bedriarman8353 interesting. Thanks for the information. So are you saying that hypothetically I own 10 shares of RYSAS and after the split if I want to own all 20, I have to pay 10.95 TL total as a fee to acquire the 10 additional shares? And if so what happens if you don’t pay the fee? Then I only have my 10 shares after the split?
Hi, Deepraj !Unfortunately I don’t know if a specific brokerage you can use from Turkey. You might want to check Interactive Brokers. Interactive Brokers or another local brokerage firm should offer access to your local market and USA as well.
I'd say the main reason for the drop in share price is to do with things going on with the Turkish economy, it's in a bad place to begin with, a lot of criticism of Erdogan's policies which are described as 'controversial' and unusual... he fired another central banker last week...
Thanks for the insight, Natasha. There’s definitely a lot I don’t understand about investing in Turkey, so this is helpful. I have also been reading that there is a stock split affecting the share price.
@@cjwilso I doubt it's a stock split (there hasn't yet been one, I own some shares so I'd see it if there was), if there was a split planned this would normally only be in a situation where the shares have already gone up a lot (like we saw with Tesla or Apple)... this is definitely not the situation here so I'd be shocked if there was a split planned.... that would be of no benefit to the company... if they wanted to raise more capital they'd possibly issue more shares, that would dilute shareholder value so I could see that causing a price drop... there could be something else I'm not seeing as it's difficult to find information about the company but I think this is more to do with the Turkish economy... the Lira is in freefall which is problematic for the economy but also for shareholders as the shares are in Lira, for example my broker is allowing me to hold the shares I already own but not allowing me to buy anymore because they don't want Lira on their books
@@natashalall3553 It sounds like a tough situation for retail investors :/ It's definitely likely that these macro factors are affecting the share price. And sorry for the confusion. I didn't mean stock split in that way. I actually meant to say that what I have heard is that the company is issuing new shares, and existing shareholders can purchase these new shares for a fee (Twitter conversation I had here: twitter.com/BulutCurve/status/1384558003786067976). I haven't been able to verify if this is the case btw. But yes I'm also having a hard time finding detailed info that isn't in Turkish!
Good discussion here! I am not sure what to think of Rysas. As a value investor, I try to understand the investments and I have to admit that I understand too little about Rysas. For example, why the 2019 report (English version) speaks about related short term borrowings. And I would love to know the currency of the short term assets and of the short term debt as well as the long term debt. Is there a major USD TRY imbalance at play that puts the company at risk in case of devaluation of the lira? Plus: seems that a capital injection is going on. Why that? Does that have to do with the debt? Plus: equity seems small compared to debt. Plus: last years not always profitable (2018) Plus: outside my circle of competence (logistics and Turkey). Plus: English translation of accounts with mistakes that make it difficult to follow. I.e. count of subcontractors 2018 2019 not clear. Plus: lots of deals of consolidation and involving related parties in the subsidiaries. Not impossible to understand all these, but would be a major effort and time commitment. So I see three options: 1. the "no further action bucket" - I probably chose that. 2. the "deep dive" possibility spending many days analysing the company. 3. the "blindly cloning Pabrai" option. However, likely at a much higher price than what we could get. I personally think to go to 1 with the option to do 2 if I happen to find it more interesting.
These are all excellent points. I’m confused about the capital injection. It looks like management is going to be spending a few million acquiring a bigger stake in the business, but I have very little insight into it. I think Pabrai has mentioned that he is not concerned with the macro effects of Lira devaluation because of how undervalued he thinks the business is. I definitely agree that even if I do find a way to invest in Turkey from the US, there are too many unknowns for me, and it is currently out of my circle of competence as well. It does seem learnable though. I’m with you on going for option 1 for now (especially because as of now I can’t invest in Turkey). Thanks for the great comment.
Brian, I am STILL searching for a way to invest in Turkey from the US. We could probably contact a Turkish bank or brokerage and open an account (that's probably what Pabrai has did). I'm hoping Interactive Brokers adds support for it, but I don't know if that will ever happen. I'll be sure to let you know if I find an easier way.
It doesn't look like Turkey is one of the available international companies as an account holder in the US. However I think IB in Europe or other brokerages like Degiro list this company.
@@cjwilso It's frustrating because I'm ready to buy but I just can't. I also would love to be able to buy into India and South Korea. Maybe one day. Are you convicted enough about RYSAS to think about contacting a Turkish bank? I'm willing to help out if you think it is a viable idea.
@Brian McDaniel I'm able to invest in India through Interactive Brokers. You may want to check them out. As for Turkey I was looking on www.spk.gov.tr/ for a list of brokerages or banks. I'm going to wait for this capital increase process to play out and see whether Pabrai takes part in it. But I think it's definitely undervalued based on Pabrai's actions and comments. I would still want access to their financials (reliably translated) etc. to get more information before pursing further. Also there’s a lot about Turkey that I don’t understand, so it’s hard to have complete conviction without a contact with local knowledge like Pabrai has.
Profitability is absolutely a concern. Their operating margins look healthy, but I'm concerned about interest and other expenses, but I haven't looked in depth at those factors. It could be a case of short-term expenses depressing the outlook of long-term profits, but I'm just not sure. The nice thing is they are free cash flow positive.
@@cjwilso Is a one off year with positive free cashflow enough to indicate company strength? What about capex? Does free cashflow cover capex each and every year? How was free cashflow in the past 10 years? Was it positive in each and every year in the past 10 years? Without consistency, how can we measure the discounted value of future cashflow? Doesn't consistency help predictability? Wouldn't a deteriorating cashflow eat into the liquidation value eventually? Just because Pabrai bought a company, it means it's a good company?
These are all wonderful questions. I haven’t done much of an analysis of their cash flows. It’s not a good company because Pabrai bought it; that only indicates it’s a good place to start. Pabrai originally bought because he thought it was cheap quantitatively. Only later did he realize that it could be a compounder. But as you clearly point out, this compounder status is hard to tell just by looking at the financial statistics!
@@patchtogether Pabrai has said that the cost to rebuild the existing assets (warehouses, real estate, etc.) is a lot higher than what they originally paid/is stated on the books
@@cjwilso According to Ameritrade, you can place an order to purchase this using a limit order. OTC pink securities do not have the same quote protections as a listed security. There is not currently a lit quote for RYSKF, however you can place an order using a limit price and order type if you wish. You may be able to gauge a price you wish to submit for, although this is not the same as reviewing a quote feed. In Yahoo finance you can pull the price in Turkish TRY for RYSAS.IS, not sure its the same currency OTC stock trade.
Darn, I was looking at buying RYSKF through TD Ameritrade. Do you still feel this us a poor approach? The feeds do not show up but the price seems current. Thank you for the quality analysts CJ
The Lira has had a terrible decade... at some point it might change Pabrai's mind on Turkey, but he still seems as bullish as ever because the assets are so good.
Summary for Reysas as at Nov 05 Third quarter 2021 earnings released: EPS ₺0.16 (vs ₺0.14 loss in 3Q 2020) The company reported a strong third quarter result with improved earnings, revenues and profit margins. Third quarter 2021 results: Revenue: ₺235.6m (up 13% from 3Q 2020). Net income: ₺26.3m (up ₺43.4m from 3Q 2020). Profit margin: 11% (up from net loss in 3Q 2020). The move to profitability was primarily driven by higher revenue. Over the last 3 years on average, earnings per share has increased by 76% per year but the company’s share price has increased by 96% per year, which means it is tracking significantly ahead of earnings growth.
*Based on some insightful comments here and on Twitter, it appears that a capital increase process is going on which has optically cut the stock price in half. This may affect the valuation presented in this video. The attached spreadsheet considers a valuation with the market cap value before the cut in stock price.*
docs.google.com/spreadsheets/d/1bMplPkBCs3LIg70sptDnkxCGse7qt69AjWMTU63Z7Lo/edit?usp=sharing
He just said in an interview that he bought the stocks in 2018 and 7x'd in terms of USD. I think u mixed it up with his new investment in Turkey (which is led by father and son). The ladder is a steel company called Cemtas and has nothing to do with logistics.
@@beaniee242 thanks for letting me know about Cemtas. I know he has spoken about owning a Turkish cement company, but I never knew which one. I don’t think he still holds that though
Please like the video and subscribe to the channel to stay up to date with more investing videos. Thank you for watching! If you liked this video, please check out my discussion of Alibaba (BABA): th-cam.com/video/dZtjx3UbV9I/w-d-xo.html or my analysis of Nintendo (NTDOY): th-cam.com/video/8ubZnb9ICoE/w-d-xo.html
Thank you for the video.
Just a heads up to Reysas Investors. In Pabrai's most recent video he mentions that the father / founder of Reysas (Durmus Doven) didn't go to college, doesn't understand concepts or IRR, etc. However, if you read the company filings / Board Of Directors activity report, it says that Doven went to University and has a Masters Degree. This may be irrelevant, but this is in the context of Pabrai stating that he visits the Dovens annually and speaks to them every few months. Makes one wonder if there is something off with the filings. Who cares if he went to college or not. The question is Pabrai talking nonsense or are the documents fraudulent? He's a gifted story teller that's for sure, but why throw in that the founder isn't educated. I'd be more comfortable as an investor in Reysas knowing that the founder has a Masters Degree in International Trade and Logistics, as the company documents state. I attempted to post such a question on Pabrai's video but the comments were deleted (not by me). I am a huge fan of Pabrai but this seems like a significant oversight. Also with the rights offering coming up, I would be concerned about the increased liquidity offering an exit strategy. This is a pessimistic viewpoint but hopefully someone can enlighten me as to how an investor owning a third of a company and purportedly knowing the founders well did not know that the owner / founder has a Masters Degree and instead was staying he was not even college educated. If this is a pump and dump (which I am not stating this is, in any way) it will all come down on the heads of retail investors.
Hey this is a very insightful comment. That is very strange. I’ve become more and more skeptical of these people. They say one thing and do the other. One recent example is their flip flop on ALIBABA.
I regret not investing in RYSAS last year. I’m planning to invest now and see how it goes. Not sure if it’ll keep rising like it did last year. Waiting to see how elections this month will play out.
Any thoughts?
@@tushargaddi6640 I am a Reysas shareholder but I only bought shares after taking many weeks to do my own due diligence on the company and consult with a colleague in the logistics industry. After doing so, I remain extremely bullish. I found no discrepancies in anything Mohnish has said in his interviews, and his quoted valuations also appear reasonable (though when he quotes the liquidation value he is is often referring only to the REIT, which Reysas Logistik owns 63% of). I also looked at some American companies like Old Dominion to compare the business models and financials. End of the day, I felt comfortable investing. I think there is a very long runway for this company. They’ve gained market share in transport / logistics since the pandemic. Like many other Turkish companies, they prefer to do equity capital raises due to the unfavorable lending / debt environment in Türkiye. As far as I know, there is not a well established bond market, and given that this company is still valued by the market at less than 400M USD, and equity capital raise is reasonable. I expect the shareholders to maximize their options for the rights issue.
Also thanks for the great insight and work man.
Much appreciated. Thanks for watching!
This is really outstanding analysis. (Greenwald is awesome.) I haven’t even been able to get my hands on a balance sheet, so you’re ahead of me! (haha)
I see that your analysis is finding value on the balance sheet. Have you tried a discounted cash flow (DCF) approach?
I don’t understand why RYSAS isn’t dropping, as the Turkish Lira is down 20%. (Maybe trading volume is so low?) Turkish lira seems to have found a floor, in trading against USD. Of course, that could change tomorrow with further declines …
With E-Trade, I can trade over the counter pink sheets, Reysas Tasimacilik ve Lojistik Ticaret A.S. (RYSKF)
Thank you, David! I haven’t looked at Reysas from a DCF perspective. I think the reproduction costs alone of the assets make this a screaming bargain and any capital allocation prowess would be icing on the cake. I think RYSAS has reported some good results lately. Maybe the market is warming to the business, but who can really say? My concern with RYSKF is that the volume is pretty much 0. The company should be accessible through the international trade desk. I have heard you can call Fidelity for access. Haven’t tried it myself
Great video Wilson.
Thanks again, Sagar. I'm interested in any company Mohnish Pabrai invests in, so hopefully I can continue to understand Reysas better.
Hey CJ, just saw your first video, great analysis and very useful indeed. Quick Question, where are you finding the details of Mohnish's international investments? I believe they're not public and he is only liable to publicly declare his US equity holdings?
Thanks, Moiz! I use TIKR (www.tikr.com) to get the international holdings of investors like Mohnish, Li Lu, etc. You can use this link to sign up for free: app.tikr.com/register?ref=cb51gl They compile international holdings from trade reports and international filings. Very useful!
@@cjwilso thanks so much CJ. Really appreciate it. Looking forward to future content and conversations👍
My pleasure! Thanks for watching :)
Alibaba bought the turkish e-shopping giant Trendyol for about 700 million dollars in 2018. However Rysas, Turkey's largest logistics company, first started rail transport from China to Europe this year. It is no longer engaged in truck transportation. Realizing the connection between China and Europe, Monish Pabrai must know that this company will attract the attention of Chinese trade giants in the future.
Thanks for the insights. I didn't know about that acquisition or Reysas's expansion into international rail. It sounds like that's an excellent opportunity for the management team to continue to display their outstanding capital allocation skills. A partnership or acquisition by Chinese giants would be great for RYSAS shareholders!
@@cjwilso Thank you Wilson, yes Rysas has a big story, and candidate of Ipekyolu transportation between East and West.
Hey CJ! Im from Turkey and recently found your channel. Great work with the high quality videos. I wanted to ask you about the stock's current position. I've been thinking of buying in but it's market cap is over 100m$ as Im writing this. Would love to have your opinions if you had another look at yhe stock recently. Thank you.
Thanks, Mert! I really haven't done much of a deep dive into the company. Pabrai has talked at length about Reysas in the interviews on his TH-cam channel/his interview with SumZero. I would recommend going through those videos to get started. But based on his valuation, I think the company still looks very cheap. Essentially he has described it as getting a long-term compounder quality company at cigar butt prices.
@@cjwilso Thank you :)
hi there, as someone from the UK and having tried to find out where to buy the stock do you have any suggestions? :)
Hey CJ, I like your channel so I’ve decided to answer your request to have viewers comment on the valuation of this stock. It’s my understanding that your net net NAV calculation of this investment is incorrect, as Graham would use current assets - all liabilities. A 15% discount from a total liquidation perspective doesn’t seem like a great deal, it’s also very difficult to determine what the normalized business earnings are on those assets. Do you have any thoughts?
Thanks for the Feedback, Brian. You're right that if we go by Graham's definition of a net net asset value, the calculation is incorrect (current assets - total liabilities = Net Net Asset Value). From my point of view the value in this business is mostly its property, so I don't think it makes sense to exclude that from this NAV calculation. (total assets (adjusted) - total liabilities = NAV).
You're also right that a 15% discount (for quick and dirty adjusted values) is nothing special, but at the very least we're still getting the entire business operations for free in this very conservative scenario. I would be more inclined to approach Reysas from Pabrai's valuation which gives us a lot more breathing room. I estimated that he values the property closer to $600mm (but that's a guess).
Unfortunately I don't have insight into the earnings on individual assets at this time. The only insight I have is that it's clearly acceptable for Pabrai because he owns 30% of the company. So for now I will just have to trust his assessment. However I don't even know how to invest in this company, so that's another hurdle to climb :)
Any update on how to invest in the BIST Istanbul for Americans, Australians or UK residents? I have had a look on Interactive Brokers and Saxo, but I can't see on either of their websites that they give access to Turkish stocks. Any update?
Someone commented that Philip Capital allows for investing in Turkey. I have not looked into it yet though!
@@cjwilso Thanks for the heads up and this is correct, though they can only access the largest 100 companies in Turkey. So not RYSAS unfortunately.
@@mikeharris2033 that’s unfortunate :/ in that case I’m still looking for a way
Did anyone find a way to buy reysas from europe?
Thanks for this. Where are you getting the market cap info? I am looking at 964m Lira on RYSAS divided by 8.34 USDTRY exchange rate is giving me $115mm in cap. Cheers
Thanks for watching, Mike. Your calculation is correct. This video was released back in April, so the exact numbers are dated. Also there was a share offering that was affecting the data at the time. I get the information from TIKR btw!
@@cjwilso ok makes sense. I was just wondering why the market cap was almost 3x now vs the video date but share price is not up much. I'll have to look into the share offering
@@mikesharp986 yeah check out the comments on this video. There’s some discussion about the offering
Great video once again CJ. I decided to revisit this since I began digging into the company. An example of what confuses me is the increased revenue in Lira but when converted to USD there appears to be a decline instead. Is this the result of inflation? I guess the question is in your opinion through which lens do you think one should view the company? I am of the philosophy that growth regardless of current inflation will work itself out over time. So is valuation in this instance more accurate through the lens of LIRA or USD? I appreciate your thoughts.
I’m not 100%, but either there is an error in the reporting or it’s the result of currency fluctuation. The value of the Lira has come down dramatically over the past year compared to the USD. With that being said I agree that if the asset is cheap enough, it probably doesn’t matter if you think in USD or Lira. Pabrai has said he doesn’t care about the currency fluctuations; the currency could be seashells and he would still be happy to own it. When he initially bought, he found a .10 or .20 cent dollar, so those worries go out the window with a margin of safety like that
@@cjwilso Very much appreciated. Thank you.
Nov 2019 1 USD bought you 5.7 Lira today it buys just under 10 so the change in currency would be significant. Best just using USD as much more stable measure
Great video!
Thank you!
By the way Reysas was divided that’s why share price calculated accodding to new number of shares outstanding.
Thanks again. The comments on this video have been very helpful for learning about what was happening with Reysas 👍
Hey CJ can you explain how to purchase this company as it is on the Istanbul market?
It looks like we can buy through Phillips Capital, but I have not tried to do so. That’s the only place I have heard that is actually offering this company
@@cjwilso Is there a way to Invest as a European ( German )
Great analysis CJ. Still there are so many unknowns but lesser mortals like us :-). I was wondering what are those books in the background about? Are they all investing?
Agreed, Anand. Ignoring the fact that I can’t even invest, there’s too much I don’t understand about the company. Pabrai has done the work of kicking the tires, and I’m sure he understands practices and regulations in Turkey a lot better than us because of his contacts in Turkey.
The books are from all sorts of genres. There’s investing, business, psychology, physics, self-help, history, biographies, fiction, comics, and more. I’m a firm believer in the multi-disciplinary approach to investing and life. For instance right now I’m reading a biography, a fiction book, and an investing book.
@@cjwilso that's great to hear.
@@cricbuzz1123 What have you been reading these days?
@@cjwilso my universe at best is unidimensional right now as its all about investing. I have only started exploring this world since last 2 years so just can't get enough of it. The more i read, the more i realize there is even more to read. LoL. Right now most of the books are around buffett and value investing. Still an early learner i would say, coming from software background. But each day, i am learning new things and just loving it. Thanks for asking my friend.
@@cricbuzz1123 What a fun time! Always reading, always learning :) there’s nothing quite like it. The best part about investing is that we get to do that for the rest of our lives.
Fidelity offers the stock btw.
Great job. Going to look at it.
Thanks, Marco. ! Definitely read the comments on this video to learn more about why the stock price has gone down recently. It may affect my intrinsic value calculation. I trust Pabrai’s rough estimate of somewhere between $400mm-$1B. Anyway enjoy!
@@cjwilso there goes the margin of safety.
@@marcoaraujo4771 Yeah kind of tough... I'm not sure what to think of the valuation at this point. It might still a bargain based on Pabrai's insight and conviction, but it's not as enticing as when he bought in.
Hy CJ, thanks for the work put in the video! Went over the valuation format. Do not understand where is the adjusted value of the PPE (if it is even 30usd/sqfoot then the adjusted value should be about 360 mil. Usd).
Thanks for watching! I agree that the PP&E listed on the books is likely low, so that’s where the low numbers come from in the orange and yellow sections of the spreadsheet. Also I’m simply taking a straight percentage of the reported values. It’s a back of the envelope way to estimate value. In this case I’m not sure it’s the best approach because of the apparent quality of the assets. I put Pabrai’s valuation based on comments he has made about Reysas in the green section. It’s more likely accurate to what an actual owner would pay for the real estate l compared to what is reported in the financials.
Yes! Thanks for the reply! That was clear from the file. I was just assuming you would put the adjusted PPE value on the “adjusted” column. The price / square meter of warehouse in Turkey is about 300 usd (+/-20% depending on the area). Could you please let me know where did you get the 12 million square foot info from?
@@happyfunvideos6191 Pabrai mentioned it a few months back in a Q&A session: th-cam.com/video/toZ-wmBPK6c/w-d-xo.html it’s at about the 28 minute mark!
@@cjwilso Awsome! Thanks!
Did you get a chance to invest in this company ? Hi wilson
No I haven’t. How about you?
@@cjwilso yes but lira has been crushing
What are some brokerages allowing for Americans to trade in Turkish stocks?
Someone commented that Philip Capital allows for investment in Turkey, but I have not looked into it yet. Other than that I still haven't seen any other straightforward solutions :/
@@cjwilso is there a solution for Germans?
@@cjwilso Fildelity allows it. Try it
@@PavanKumarKurimilla Thanks!
Hey CJ,
Given the recent capital increase. What level of discount do you think that it is still offering at current prices? I.e. 4.23 TRY? I want to hit this, though I realise that Pabrai has already gained 7x and I want to be sure that it still offers a SIGNIFICANT margin of safety, considering that it's in Turkey and all my interest friends saying, "Turkey?! Don't touch it!" - btw happy to share how to buy in if you are able to help me out in knowing what discount we are getting at this current price.
Cheers mate
Hey, Mike. Pabrai said in a recent interview that he values the replacement cost of the company at around $800mm ($1B - $200mm debt). Reysas market cap today is about $120mm. Based on those numbers, the market cap can still 6.5X before hitting that estimated intrinsic value. And that's ignoring the good capital allocation of management and future growth. I would call that a significant margin of safety. I am happy to trust Pabrai's estimation of intrinsic value on this one, but of course there's a chance he's wrong. I hope that helps!
@@cjwilso Thanks mate, I am hearing rumours that an online broker, whom I am having discussions with their team is adding RYSAS to their accessible stocks in the Istanbul exchange. I will confirm this within the next couple of days and let you know if I am actually able to buy. Your videos are awesome mate. Keep up the great work.
@@mikeharris2033 awesome thank you. I hope it works out!
@@cjwilso Hey CJ, sorry about the late reply. You can buy via Philip Capital. I have requested they allow access to RYSAS as part of their offering and they have said yes. So set up an account and you can buy in. Are you going to buy into this one if the price remains roughly where it is?
@@mikeharris2033 thanks for figuring this out, Mike! I appreciate that. I will definitely consider it. At this point I would probably want to do some more research (which I put on hold because I didn't know how to buy it). Pabrai sounds very comfortable with the company. At this point I would be leaning heavily on his sentiment.
Looks like they did an offering. Shares float has increased by 2x which cut the value of each share by half. So this isn't a 50% margin of error investment. I wonder what Pabrai thinks now that he is diluted. They must have had to agree with him as he is a large owner.
Yeah that's what I have been seeing from talking to some folks here and on Twitter. From what I'm seeing Pabrai should have the ability to buy these new shares in the offering. I haven't seen news on whether he is going to participate. I'm guessing he approved and participated, but that's just a guess!
Finally, numbers have been realeased - He participated in the capital raise and doubled his shares, he still owns 30%
@@mikejung01 makes sense that he would! Glad to see it
Hey is he only in the subsidiary company Reysas or the parent RYGYO? How did you know he even invested in this company?
He's been going around giving lectures and telling people he invested in it.
As far as I know, he is only invested in the parent company Reysas (RYSAS). It’s also reported in his portfolio tracked on TIKR.
How do you go investing in it from US? Without going into the country and opening an account in person.
I think you can invest by calling Fidelity… I haven’t done it myself
Any idea why RYSKF is moving way slower than RYSAS? Indeed since 9/1 RYSKF lost 14% when RYSAS went up by 43%? Could it be an issue for RYSAS shareholder outside of Turkish? Thank you
I'm not entirely sure about RYSKF, Thibaud. The volume is so low on that one. That might be skewing things. If I were looking into Reysas, I would probably try to invest directly in Turkey and avoid this OTC stock for these very concerns. It's hard to tell what's going on with it.
Hi CJ. my understanding of those shares is that (1) the broker exchange currency and buy RYSAS stocks on the Turkish market (2) and then transfer them into RYSKF that allow US investors to trade them in the US market. I do believe that I have the possibility to sell the RYSKF shares back on the Turkish market. Correct?
@@thibauddehasque It sounds like it should work both ways, but I wouldn't assume anything without talking to your broker again
Hi thanks for this, i think looking at the financials Mohnish maybe bought his stake in 2019 not 2020. Although the market cap now is almost 3x more than Mohnish purchase price, compared to the liquidation value its still valuable. THanks
Thanks, Gurkamal. You’re right Pabrai bought it earlier than I thought!
Has anyone found a way to invest in this company? I am in Europe and have an acccount with Interactive but they do not trade with the Istanbul stock market :(
I'm going to phone fidelity UK tomorrow to see :)
Did anyone find a way to buy reysas from europe?
Trading halt. No price movement for a few days anyway. Does anyone know what is happening with Reysas?
It looks like things are up and moving again. I'm not sure what happened though.
I was looking at the income statement of this company - 7 of 10 years they made a loss in the bottom line income. I was wondering what could be Pabrai's rationale behind buying this company? Share drop is because they have diluted their existing shares
You’re right, Usman. Looking at their income statement, we can see they have been losing money. The main reason he was intrigued seems to be the value of the real estate (warehouses with recurring revenue from class A tenants). If we look higher up on the income, their revenue, operating income, and margins have been steadily increasing. The interest expense on their debts seems to be what’s making them unprofitable. If they can somehow pay down the debt (perhaps through the recent capital infusion), we might see steady profits.
@@cjwilso yes this makes perfect sense. Thanks for the video!
My pleasure. For me it’s always worth looking at Pabrai’s investments!
@@cjwilso you should look at RYGYO instead of RYSAS
@@asliakinciutkan3588 I'll take a look at that too. Thanks for the idea!
Awesome video. Anyone figured how to buy the stock in USA / Canada?
Thank you! You can try calling the international trade desk at Fidelity
It's now dualy listed in the US under the ticker RYSKF. Hope that helps!
What brokerage can you buy rysas on degiro have blocked turkish trading
Andrew, I was chatting with someone a few weeks ago who said that he was able to invest in Turkey from Europe using Interactive Brokers, De Giro, or Saxo Bank. If De Giro no longer works, I would try IB or Saxo Bank. Hope that helps!
his shares outstanding has dropped to 15%? Is that due to a market offering? Or has he sold?
I believe this is a result of dilution from the offering. I’m not seeing any sale of shares reported. He seems so bullish on the company, so I’m not sure why he didn’t participate in the offering.
Yeah maybe he has other opportunities or something. I guess we’ll see next quarter!
$RYSKF as OTC ticker?
It doesn't look like there's much volume there. It could be worth investigating! But you can buy RYSAS by calling the Fidelity international trade desk.
Just bought 10000 shares through TD today.. Volume is low, usually zero...
Stock compounder Brad Kaellner just posted a video on how he went about purchasing shares. Hope this helps.
Yes I saw this! Thank you
Does anyone know what is the event that drove this dive?
I'm still searching, Ashish. There's not a lot of coverage about this company. Pabrai has an advantage here because he was able to actually visit the company in person and has contacts that can keep him updated. After all he is a 30% owner of the company!
I did some digging on Twitter: twitter.com/MehmetE00342576/status/1382993948415815684
I'm still not sure exactly what's going on, but this person says there is a "paid capital increase."
I received another comment on Twitter saying a capital increase process is going on: twitter.com/BulutCurve/status/1384544210674720768?s=20
@@cjwilso Stock is splitting but with the paid option, you have to pay 1.095 TL (per share) for the other split to be able to own it.
@@bedriarman8353 interesting. Thanks for the information. So are you saying that hypothetically I own 10 shares of RYSAS and after the split if I want to own all 20, I have to pay 10.95 TL total as a fee to acquire the 10 additional shares? And if so what happens if you don’t pay the fee? Then I only have my 10 shares after the split?
Hi bro
I live in turkey Istanbul how can I invest in usa stock market
And how can I invest in Turkey stock market
Hi, Deepraj !Unfortunately I don’t know if a specific brokerage you can use from Turkey. You might want to check Interactive Brokers. Interactive Brokers or another local brokerage firm should offer access to your local market and USA as well.
I'd say the main reason for the drop in share price is to do with things going on with the Turkish economy, it's in a bad place to begin with, a lot of criticism of Erdogan's policies which are described as 'controversial' and unusual... he fired another central banker last week...
Thanks for the insight, Natasha. There’s definitely a lot I don’t understand about investing in Turkey, so this is helpful. I have also been reading that there is a stock split affecting the share price.
@@cjwilso I doubt it's a stock split (there hasn't yet been one, I own some shares so I'd see it if there was), if there was a split planned this would normally only be in a situation where the shares have already gone up a lot (like we saw with Tesla or Apple)... this is definitely not the situation here so I'd be shocked if there was a split planned.... that would be of no benefit to the company... if they wanted to raise more capital they'd possibly issue more shares, that would dilute shareholder value so I could see that causing a price drop... there could be something else I'm not seeing as it's difficult to find information about the company but I think this is more to do with the Turkish economy... the Lira is in freefall which is problematic for the economy but also for shareholders as the shares are in Lira, for example my broker is allowing me to hold the shares I already own but not allowing me to buy anymore because they don't want Lira on their books
@@natashalall3553 It sounds like a tough situation for retail investors :/ It's definitely likely that these macro factors are affecting the share price. And sorry for the confusion. I didn't mean stock split in that way. I actually meant to say that what I have heard is that the company is issuing new shares, and existing shareholders can purchase these new shares for a fee (Twitter conversation I had here: twitter.com/BulutCurve/status/1384558003786067976). I haven't been able to verify if this is the case btw. But yes I'm also having a hard time finding detailed info that isn't in Turkish!
How can i as a German invest in Rysas?
Sorry I’m not sure about an option for German investors :/
Good discussion here!
I am not sure what to think of Rysas. As a value investor, I try to understand the investments and I have to admit that I understand too little about Rysas. For example, why the 2019 report (English version) speaks about related short term borrowings. And I would love to know the currency of the short term assets and of the short term debt as well as the long term debt. Is there a major USD TRY imbalance at play that puts the company at risk in case of devaluation of the lira?
Plus: seems that a capital injection is going on. Why that? Does that have to do with the debt?
Plus: equity seems small compared to debt.
Plus: last years not always profitable (2018)
Plus: outside my circle of competence (logistics and Turkey).
Plus: English translation of accounts with mistakes that make it difficult to follow. I.e. count of subcontractors 2018 2019 not clear.
Plus: lots of deals of consolidation and involving related parties in the subsidiaries. Not impossible to understand all these, but would be a major effort and time commitment.
So I see three options:
1. the "no further action bucket" - I probably chose that.
2. the "deep dive" possibility spending many days analysing the company.
3. the "blindly cloning Pabrai" option. However, likely at a much higher price than what we could get.
I personally think to go to 1 with the option to do 2 if I happen to find it more interesting.
These are all excellent points. I’m confused about the capital injection. It looks like management is going to be spending a few million acquiring a bigger stake in the business, but I have very little insight into it. I think Pabrai has mentioned that he is not concerned with the macro effects of Lira devaluation because of how undervalued he thinks the business is. I definitely agree that even if I do find a way to invest in Turkey from the US, there are too many unknowns for me, and it is currently out of my circle of competence as well. It does seem learnable though. I’m with you on going for option 1 for now (especially because as of now I can’t invest in Turkey). Thanks for the great comment.
I can't find anyway to invest in RYSAS. Do you know a way?
Brian, I am STILL searching for a way to invest in Turkey from the US. We could probably contact a Turkish bank or brokerage and open an account (that's probably what Pabrai has did). I'm hoping Interactive Brokers adds support for it, but I don't know if that will ever happen. I'll be sure to let you know if I find an easier way.
@@cjwilso is it not supported by Interactive Brokerage right now?
It doesn't look like Turkey is one of the available international companies as an account holder in the US. However I think IB in Europe or other brokerages like Degiro list this company.
@@cjwilso It's frustrating because I'm ready to buy but I just can't. I also would love to be able to buy into India and South Korea. Maybe one day. Are you convicted enough about RYSAS to think about contacting a Turkish bank? I'm willing to help out if you think it is a viable idea.
@Brian McDaniel I'm able to invest in India through Interactive Brokers. You may want to check them out.
As for Turkey I was looking on www.spk.gov.tr/ for a list of brokerages or banks. I'm going to wait for this capital increase process to play out and see whether Pabrai takes part in it. But I think it's definitely undervalued based on Pabrai's actions and comments. I would still want access to their financials (reliably translated) etc. to get more information before pursing further. Also there’s a lot about Turkey that I don’t understand, so it’s hard to have complete conviction without a contact with local knowledge like Pabrai has.
Did anyone find a way to buy reysas from europe?
Have you considered profitability? Is Reysas profitable? If a business keeps losing money , wouldn't that eat into its liquidation value eventually?
Profitability is absolutely a concern. Their operating margins look healthy, but I'm concerned about interest and other expenses, but I haven't looked in depth at those factors. It could be a case of short-term expenses depressing the outlook of long-term profits, but I'm just not sure. The nice thing is they are free cash flow positive.
@@cjwilso Is a one off year with positive free cashflow enough to indicate company strength? What about capex? Does free cashflow cover capex each and every year? How was free cashflow in the past 10 years? Was it positive in each and every year in the past 10 years? Without consistency, how can we measure the discounted value of future cashflow? Doesn't consistency help predictability? Wouldn't a deteriorating cashflow eat into the liquidation value eventually? Just because Pabrai bought a company, it means it's a good company?
These are all wonderful questions. I haven’t done much of an analysis of their cash flows. It’s not a good company because Pabrai bought it; that only indicates it’s a good place to start. Pabrai originally bought because he thought it was cheap quantitatively. Only later did he realize that it could be a compounder. But as you clearly point out, this compounder status is hard to tell just by looking at the financial statistics!
It is not that Reysas pabrai invested in. You got the wrong ticker
TIKR shows that he owns RYSAS. Are you seeing different information?
@@cjwilso it is reysas. But there are 2 reysas. I am seeing he s invested in Reysas Tasimaclik
I got negative value now after plug the data from LTM, -$65
The actual (reproduction) value of the assets may differ than the reported accounting numbers
@@cjwilso is the value for land and building is much below what it cost now?
@@patchtogether Pabrai has said that the cost to rebuild the existing assets (warehouses, real estate, etc.) is a lot higher than what they originally paid/is stated on the books
@@cjwilso the investment thesis is to have to take what he is saying for granted lol
@@patchtogether yes! So far it would be pure coattailing clone!
In US , you can buy via OTC offered by many brokers Ameritrade, Etrade and Schwab. Ticker RYSKF. You can't trade in realtime, thats the challenge.
Thanks I have seen that ticker too! I have never seen trading volume on it, so I haven’t tried to buy it there. I’m not entirely sure why it’s there.
@@cjwilso According to Ameritrade, you can place an order to purchase this using a limit order. OTC pink securities do not have the same quote protections as a listed security. There is not currently a lit quote for RYSKF, however you can place an order using a limit price and order type if you wish. You may be able to gauge a price you wish to submit for, although this is not the same as reviewing a quote feed. In Yahoo finance you can pull the price in Turkish TRY for RYSAS.IS, not sure its the same currency OTC stock trade.
Thanks for that explanation. It sounds like a tough way to try to own the company!
Darn, I was looking at buying RYSKF through TD Ameritrade. Do you still feel this us a poor approach? The feeds do not show up but the price seems current.
Thank you for the quality analysts CJ
Just call Fidelity to buy, no worries
Turkish Lira is way down today ...
The Lira has had a terrible decade... at some point it might change Pabrai's mind on Turkey, but he still seems as bullish as ever because the assets are so good.
Summary for Reysas as at Nov 05
Third quarter 2021 earnings released: EPS ₺0.16 (vs ₺0.14 loss in 3Q 2020)
The company reported a strong third quarter result with improved earnings, revenues and profit margins.
Third quarter 2021 results:
Revenue: ₺235.6m (up 13% from 3Q 2020).
Net income: ₺26.3m (up ₺43.4m from 3Q 2020).
Profit margin: 11% (up from net loss in 3Q 2020). The move to profitability was primarily driven by higher revenue.
Over the last 3 years on average, earnings per share has increased by 76% per year but the company’s share price has increased by 96% per year, which means it is tracking significantly ahead of earnings growth.
Wonderful summary. Thank you!
Hi CJ! I've sent you a message on Twitter.
Thanks, Emre!
Anyone still buying in 2023?