Thursday, October 2, 2014

The Pivot

"Don't worry Sugar Bear,
I'll still be around."
Poor Sugar Bear. He'll be very disappointed when he learns that he can't get enough Tim Ramey. That is because Mr. Ramey will join Pivotal Research Group, where he'll again function as an analyst covering Food, Beverage & Personal Products. This comes on the heels of Mr. Ramey joining Post Holdings in January of this year as the Director of Strategic Ventures. 

Prior to joining Post, Mr. Ramey was a controversial analyst at D.A. Davidson & Co. He was controversial insomuch as he gained notoriety for repeatedly challenging Ackman on his Herbalife short and for making those that followed his advice a shit-ton of money. In fact, Bill Ackman was so frustrated with the legacy of Mr. Ramey's outlook on the company that he lashed out at him during his "smoking gun", "Enron-like" fraud presentation on Herbalife in July(a full six months after Mr. Ramey was no longer working as an analyst at DADCO). Ackman claimed that Mr. Ramey had been fired from DADCO for being too bullish on Herbalife, a statement which Mr. Ramey ultimately forced Mr. Ackman to publicly retract. In fact, when DADCO was contacted asking if Mr. Ramey had been terminated, they categorically denied that claim and stated that he "was absolutely not terminated" from their firm. 

The shorts will inevitably argue that Mr. Ramey's switch to Pivotal is a sign he was fired from Post and that he reached the zenith of his career when he hit #2 on StarMine's 2014 Top Stock Picker in their Overall Analyst Awards for his 2013 work at DADCO. Among those 2013 picks, the street watched as names such as Herbalife shook it's way to 138% returns, Omega Protein bulked up 101%, NuSkin ageloc'ed 273%, Tyson Foods pecked out 72% and Constellation Brands saw a starry eyed return of 99%. Surely, that kind of performance gets you fired from your analyst position (#FWP).

In light of Bill Ackman's former claims about Mr. Ramey's reasons for switching jobs, I pre-emptively reached out (just to spare Pershing Square the trouble of another retraction) and confirmed that Tim Ramey was NOT fired from his position at Post where he was an integral component of the company's recent M&A activities; particularly his very active role in the Post acquisition of Michael Foods. In reality, Mr. Ramey is reportedly remaining employed at Post Holdings as a consultant, built on a 25+ year friendship with Bill Stiritz.

I doubt that Mr. Ramey could comment on his plans to initiate coverage for specific companies like Herbalife, but in a letter he sent to friends, colleagues and clients, he noted that his coverage at Pivotal will focus on his formerly covered industries. It is probably very safe to say though that he will not be launching coverage on Post Holdings, but I do suspect that he'll launch coverage on many of his former names given his in depth coverage of the names in the past.

And looking back at the tape bomb shortsellers threw at Herbalife with last week's false rumor that Carl Icahn was selling his stake in the company, I won't be surprised at all if they try to re-engineer Mr. Ramey's new gig at Pivotal into another lie about Bill Stiritz's position in Herbalife. 

A sage adviser once said that "one lie equals 1,000 lies". Remember that when the shorts tell you that Tim Ramey's pivot was actually his firing from Post  Holdings and that Bill Stiritz is selling his stake in Herbalife. You'd also do well to remember that as a 13D holder in Herbalife, if Stiritz was selling his stake, EDGAR would have told you about it already, which it hasn't.