EMS Stable Name with Some Upside

EMS has moved 50% since our Dallas presenter recommended the name in June. He purchased more shares in mid $40's, just below the current price. It's no longer an aggresive buy, but if investors are looking for a stable name with a bit of an upside, EMS certainly fits that criteria. The company raised it guidance by 15% on the last earnings call. The presenter's target is mid $50's, based on 8-9 times next year's EBITDA.

Roulston's Consumer Chair on Bloomberg and Fox

Craig Johnson, President, Customer Growth Partners and the chair of our Consumer Community is a frequent contributor to Bloomberg, Barron's, WSJ and other media outlets. In just the last two days, Craig could be heard and seen on Bloomberg Radio and Fox, giving his perspective on August retail sales, consumer spending, on the recent Best Buy quarterly release. Craig remains unconvinced that we're witnessing a consumer recovery. He believes only the value end of the retail spectrum is seeing some uptick in spending.



Craig's latest Fox appearance can be accessed at
http://www.foxbusiness.com/search-results/m/26433794/is-the-consumer-really-back.htm

Our Boston presenter still likes GLP, despite the stock's 150% move since he recommended it a year ago. GLP has an 8% dividend yield. The dividend is poised to increase after Global Partners have held the payout steady for the past seven quarters. The company has just bought stock around the current price. As long as oil prices stay relatively stable, GLP's inventory carrying costs should remain steady. Whatever the company stores in excess of customer needs, they're making money on it. The big picture is very positive. Global Partners has diversified from a pure heating oil play into gasoline. The company went public at $20 in 2005 and since then its assets have increased dramatically through a number of acquisitions. The presenter targets $30 within a year.

Retail expert sees potential new growth opportunities

Chris Lee is talking to a lot of foreign companies and from his experience with Forever 21 he sees some new changes coming in the US retail environment. Specifically he sees the weak real estate market offering retailers a chance to cross borders in a unique growth opportunity. With real estate pricing cheap world wide foreign players can take advantage to have an immediate impact with more choice locations. REIT's have a lot of vacancy but a new concept may be for the bigger box players who have excessive space and long term leases may look to sub space or reconfigure current locations. As an example WMT's fornt of store 10-15,000 square feet in front of registers where today a lot of fast food and other traffic movers could be replaced in an improving economy to try to keep that customer who traded down in downturn to keep them in subsequent upturn. Does an Apple store replace Pizza express? How about if Federated or Dillards or Sears shrinks their store and brings in Wet Seal, Saphora or others in front of store. With both the need to increase returns and opportunistic foreign tenants potentially available this could be a new paradigm.

The Electronic Trading Debate

The Wall Street Journal published our rebuttal to Senator Schumer's response to our editorial: http://online.wsj.com/article/SB10001424052970203440104574404581166261194.html

Investment management is a business that is easy to leverage, except in the area of trading, where size creates a disadvantage as lack of liquidity can penalize performance. For this reason, I believe managers and their clients all have an interest in defending innovation in trading markets. Innovation provides investors more opportunities to handle their orders according to their preferences, rather than in some monolithic, one-size-fits-all product that we wouldn't even accept for laundry soap. Customers, not Senators, should be the ones to choose which innovations to reward with market share.

Natural Gas feedback in the fields

When the street talks of a 24 month burn off at current prices to allow pricing to return to the natural gas market, our contacts are telling us it looks more like 48 months. A variety of factors from so much new capacity to lower demand. But so much of the capacity now is tied to leases that have to be drilled. To be able to keep leases drillers must move ahead with some drilling even at a loss. There is an issue in next 60-90 days where mark to market rules and loan covenants for reserve valuations and present values (PV10 is present value minus 10%) the haircut at this point will be daunting. High cost reserves are going to force loan covenant resets and the question is does this just affect smaller players or do some of the larger players suffer? Even when wells get shut in they still need to produce at some lower rate. These operate at money losing rates so IRR in whole industry suffers. So much gas has been identified and leased in last few years. if pricing wont change soon the ripple effect as production and reserves cant be turned off eventually has to have iompact on oil prices.

Our San Francisco presenter still likes Fidelity National Financial (FNF). The stock has underperformed since he presented it back in late April, but it's a low risk name so people are not as excited about it in today's market. The refi activity is phenomenal and the earnings power is great.