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Alex B. Gray

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  • For Whom the Road Tolls: Reviewing Listed Toll Roads, Bridges and Tunnels [View article]
    Excellent article with very detailed research. Bravo Mr. Scholl.

    As a side, the state where I live here in the U.S. leased one of its major toll roads to a consortium of Australia's Macquarie Infrastructure and Cintra Concesiones de Infraestructuras de Transporte of Spain in 2006 for nearly $4 billion. I would look for more deals to possibly happen in the future with so many states running strained budgets.
    May 3, 2011. 04:54 PM | 5 Likes Like |Link to Comment
  • Investment Ideas for Rare Earth, Strategic Metal Exposure [View article]

    Good observation. Below are some of my thoughts, but I would certainly encourage other readers to throw in on this one if they know the company.

    I think the easiest way to start to understand the discount to the net asset value (NAV) is to break down the assets that are represented.

    As of July 31, 2010

    Cash and investments (excluding loans) $0.60
    Loans and accounts receivable $0.23
    Royalty interests on mineral properties - $0.38
    Misc. Assets - $0.01

    Liabilities - ($0.10)

    NAV as of July 31, 2010 - $1.12

    I believe there are several reasons that the shares trade at a discount to NAV.

    1. Many of their equity investments are in highly speculative private and public companys that may not be producing any revenues and are subject to various mining risks. Many also have low share values that can experience substantial changes in value. Of course this can work to the upside as well, but the market likes stability.

    2. Approximately 1/4 - 1/3 of their investments are in private companies. These private investment values are generally estimated by management and their auditors. It is common for the market to discount the value of private investments.

    3. Approximately $0.11 per share of the NAV is a loan receivable that is the subject of litigation. The market may not be putting any value on that loan until the litigation is settled.

    While the discount does seem extreme, I still need to do additional research on some of the larger holdings in the portfolio to understand how much risk is associated with each investment. Provided the larger holdings do not present too much risk and commodity prices remain strong, it would appear there is some downside protection built into the price. However, I am waiting for a pull back myself as the stock has run up nearly 50% since the beginning of September. Naturally I run the risk of not seeing a pullback, but I have learned my lesson in these smaller equities and like to buy them after pullback assuming a fundamental change does not cause the drop.
    Nov 6, 2010. 04:39 PM | 3 Likes Like |Link to Comment
  • Investment Ideas for Rare Earth, Strategic Metal Exposure [View article]

    I do not believe either company has all of the required permits in order to mine the property. The environment permits could be a major roadblock. Your are right, TC may take its time on this project and they have another 8 years left on their option agreement with USEG.

    I look at USEG as an oil and gas play with the molybdenum and uranium exposure as an added bonus if they ever play out. An investment in USEG would require confidence in the moves they are making in terms of oil and gas. I like what they are doing in the Williston Basin, but would like to see it play out a little further.

    I do believe Mt. Emmons will be mined given the believed size of the deposits, but it could be several years into the future. To your point, the only thing that may stand in way is acquiring the permits.
    Nov 4, 2010. 09:55 AM | 3 Likes Like |Link to Comment
  • PICO Holdings: Making The Bull Case [View article]
    Weighing Machine,

    PICO owns approximately 22.6% of Mindjet.
    Oct 8, 2013. 08:48 AM | 2 Likes Like |Link to Comment
  • Otter Tail Corporation: An Option for Income Investors Seeking Price Appreciation Potential [View article]

    I think (OTTR) will trade in a tight range, but I do believe if management delivers near the high end of its numbers, shares could easily push towards $25. Of course the earnings miss for last year does hurt the confidence as they had given similar guidance at the beginning of 2010. I think the Wind Energy segment really hurt them last year and could be a thorn again this year. Although, I do not think it will be as severe.

    They have not increased the dividend for about three years now. I think that was probably a smart move given their struggles and the economic climate. I like to see increases as much as any investor, but not at the expense of operations.

    Any investor watching this stock will probably want to consider staying on the sidelines until it is more evident that management can deliver. In the end, it will all come down to execution.

    Thanks for making some very good points and adding to the conversation. I think you have given the readers a few more things to think about.
    Apr 22, 2011. 01:46 PM | 2 Likes Like |Link to Comment
  • A Way to Play the Unrest in the Middle East [View article]

    I agree there was a better entry point even just a few months ago. The stock has rallied nicely. The stock is up nearly 3% today which is no surprise due to the rally oil and to a lesser extent gold. However, I look at Sprott Resource Corp. as a long-term investment in the overall environment for natural resources and agriculture. Even though the the article focused on the oil and gold holdings, there may be even more long-term value in the agriculture holdings. I think this management team will continue to create value.

    That being said, you bring a good option to the table. I admit I am not currently long Sprott Resource Lending (SILU) but it is on my watch list. It is still transitioning out of the old real estate portfolio which may present a good entry point. Since they have begun funding resource loans, a dividend should be in the future as long as they can find enough quality situations. Thanks for the quality addition to the conversation.
    Feb 22, 2011. 11:10 AM | 2 Likes Like |Link to Comment
  • Roadkill: Natural Gas Stocks [View article]
    I nearly included Devon (DVN) in my article and probably should have. Devon is an interesting play as the company has been divesting Gulf of Mexico and international assets to focus on onshore domestic. It plans to use this cash to pay down debt and buy back stock. Its primary producing and reserve assets are currently in the Barnett Shale and Mid-Continent. However, the company also has major undeveloped leaseholds in the Rocky Mountain region, the Permian Basin, and the Gulf Coast. In addition the company holds major leases in Canada that are largely undeveloped, including exposure to the Athabasca oil sands. I do not believe the company intends to sell any Canadian assets in the international sales. With the strengthened balance sheet and low stock price, it is definitely worth a look.
    Oct 5, 2010. 11:21 AM | 2 Likes Like |Link to Comment
  • Roadkill: Natural Gas Stocks [View article]
    I agree... It just depends how long that will take. I believe the US will need to pass legislation to give industries tax credits to make the switch and build the needed infrastructure. That said, your comment on China is on the money and the rest of the world will follow suit.
    Oct 3, 2010. 01:15 PM | 2 Likes Like |Link to Comment
  • A High Conviction Idea With 150% Upside [View article]

    Good article. I thought this information from the website might be helpful giving your readers some early background on how Mr. Byrne became the bane of many on Wall Street and also those on CNBC. As far as CNBC, it is rare they will be highly supportive of individuals going after those on Wall Street. CNBC requires a constant flow of content and the big investment banks and hedge funds can just as easily send their people over to Bloomberg or Fox Business instead.
    Aug 8, 2014. 12:06 PM | 1 Like Like |Link to Comment
  • Natural Resources Investor Sprott Resource Corp. Is Now A Big-Time Dividend Play [View article]
    Trying To Retire Early,

    I hope you reach your goal and that Sprott Resource may play a valuable role in that effort.
    Jan 10, 2013. 07:58 AM | 1 Like Like |Link to Comment
  • Natural Resources Investor Sprott Resource Corp. Is Now A Big-Time Dividend Play [View article]

    Thanks for the comment. The asset mix is unusual, but the focus of the company is on all natural resources. The ability of management to be able to move in and out of various natural resources when it is advantageous has been the key to their returns to date. That is why the mix has not really been a concern for me.

    As far as the gold, when they made their original purchase of gold bullion, it was purely for investment purposes and also as a store of value over holding cash. Below is a quote from Eric Sprott that would make this seem likely.

    " In the sea of financial assets and currencies that are being decimated the world over, the one true safe haven continues to be gold." - Eric Sprott, Markets at a Glance, October 2008

    The investment has paid off with a total return of roughly 60% which proved to be a much better alternative to cash. In many ways the statement Eric Sprott made back in 2008 still holds true as central banks continue their magic.

    If a potential investment surfaced which required liquidity, I am sure the gold would be sold if management believed higher returns can be found elsewhere. I don't really look at this as a gold investment and agree if you want to own gold then it should be bought as its own investment. I think management just believes it is better than cash while they look to allocate the capital.

    I am with you on One Earth Farms. OEF could be the most interesting asset in the mix if they can execute their plan.
    Jan 10, 2013. 07:18 AM | 1 Like Like |Link to Comment
  • PICO Holdings: An Opportunistic Value Investor [View article]
    I am very interested to see the third quarter operating results for Northstar. I believe this will be a positive catalyst for the stock over the coming months. In addition, today's announcement that they plan to build a plant in Oklahoma is very encouraging.

    The company may also start to benefit from real estate investments it made in the depressed housing market. The water assets appear to be a much more long-term prospect unless a willing buyer comes into the picture.

    All of the recent developments including the sale of the Nevada real estate and the sale of the insurance run-off portfolio would seem to be positive for the long-term investor. However, I do share the concern of Robin Heiderscheit regarding stock ownership of management.
    Oct 29, 2012. 03:26 PM | 1 Like Like |Link to Comment
  • Leucadia National Down Sharply After Earnings Release [View article]

    The elevated corporate revenue was caused primarily by the sale of Fortescue common shares resulting in net securities gains. Since most of the shares were sold during prior periods and not during the most recent quarter, corporate revenue dropped. After the second quarter ended, LUK sold its remaining FMG shares so you will see higher corporate revenue in the third quarter. Due to the nature of this revenue category, the number can vary widely from year to year and quarter to quarter. Below is the note from the 10-Q regarding the sale of FMG shares that caused the spike and subsequent drop in corporate revenue.

    "Net securities gains for Corporate aggregated $2,526,000 and $529,641,000 for the three months ended June 30, 2012 and 2011, respectively, and $427,462,000 and $531,944,000 for the six months ended June 30, 2012 and 2011, respectively. Net securities gains include gains of $417,887,000 for the six month 2012 period and $527,351,000 for the 2011 periods, resulting from the sale of a portion of the Company’s investment in the common shares of Fortescue. Net securities gains are net of impairment charges of $562,000 and $1,440,000 for the three month 2012 and 2011 periods, respectively, and $2,406,000 and $1,505,000 for the six month 2012 and 2011 periods, respectively. The Company’s decision to sell securities and realize security gains or losses is generally based on its evaluation of an individual security’s value at the time, the prospect for changes in its value in the future and/or the Company’s liquidity needs. The decision could also be influenced by the status of the Company’s tax attributes. The timing of realized security gains or losses is not predictable and does not follow any pattern from year to year."
    Aug 3, 2012. 12:02 PM | 1 Like Like |Link to Comment
  • Another Setback For Natural Gas? [View article]

    That is quite a leap to assume from that statement that I may believe government has no role in society. Of course the government has a role, but there is no doubt that left unchecked it will most certainly overreach. Do you honestly believe that there is not a single government program or agency that can be abolished with minimal impact on society or that the current tax code could not be abolished and a modified revenue source established to provide the government sufficient revenue?

    If you understood what I wrote, I do not completely oppose the NAT GAS Act. In fact, given that is our current system, I would side more with the point of view of Boone Pickens as opposed to the Wall Street Journal.

    I am not sure what the comment on the Koran really means unless you believe that without the government to protect us that we would be overrun by the enemy. Not likely.

    I do appreciate your comment. It is good to debate differences of opinion. In many cases, after the debate I find the divide is not that great.
    Mar 16, 2012. 05:44 PM | 1 Like Like |Link to Comment
  • 15% For 15 Years: Michael J. Smith's Outstanding Track Record [View article]

    There was not an issue with the TTT rights offering in the US. Once issued they traded on the exchange and could be sold or kept and exercised.
    Aug 31, 2011. 11:43 AM | 1 Like Like |Link to Comment