Surge Energy: The Time Has Come For Investors To Get Greedy [View article]
Value Digger,
Do you have any thoughts on the $99M impairment charge taken? MD&A says majority of the impairment is due to poorer reservoir in Windfall & Waskada compared to prior year.
Have you been able to quantify this statement? Taking an impairment would suggest an expected permanent loss, yet the company goes on to state that assuming successful water-flood projects in 2013, the Co expects to be able to increase reserves at both properties in the future.
Assuming an unsuccessful water-flood project, do you anticipate further write-downs and if so by how much?
Can you quantify an entire write-down of these two properties, and comment on whether you think the company took a bath on these properties?
Geodrill: A High Quality, Low Priced Contract Drilling Company [View article]
I do still own the stock. Drillers have been a huge disappointment over the past year. I think over the long term they are in a good position, but until the market gets better these companies will struggle. Juniors are an important part of the money flow and they are basically gone right now. GEO is more tied to juniors than EGD and other larger players like MDI. In good times GEO does really well, but in bad times watch out. I underestimated the extent GEO would suffer in bad times.
At these levels, I think EGD is a better investment. Fundamentally EGD has always been a better investment. The company is better managed, more diversified, and taking market share fast. The main argument for GEO is a pure play on Africa. Margins are high and profits can be very attractive.
Some concerns I have with GEO 1) the board is not very strong 2) the new CFO is terrible 3) the growth opportunities may not be as strong as originally anticipated. GEO has not branched to majors and intermediates as much as hoped since going public. Harper needs new clients in order to grow and he hasn't been effective on this front. However, getting any new clients when your main base (juniors) are not working will certainly be difficult.
Overall thesis remains the same, albeit with some added risk components, but I imagine the timing of results may take longer than planned.
China Medical Technologies (Update): Dude, So That's What You Did With My Company [View article]
For those who enjoy Roddy Boyd's articles, please consider donating through his website. This is well done journalism provided for very little. Hopefully with our support it will remain this way for many years into the future.
When we showed the waiter our Groupon, he instantly stated that it does not cover tax or tip. Apparently Groupon is having problems with regards to this particular issue. The waiter told us the previous Groupon offered by the restaurant did cover tax and tip, but could no longer because "Groupon is going through legal stuff with regards to tip and tax". Thus, you are correct that tax and tip are included regardless of whether one uses a Groupon, but how that user pays for these things now must come from an additional expense.
The user does not have an option to order $30 of food and use the remaining $10 on tip and tax. He/she now must order the full $40 to get the benefit, and pay tax/tip on that amount, which is an additional outflow of $.
Not too sure. Markets are strange. Company looks to be on track and executing well. Stronger pricing, margin expansion, Asia penetration, energy division looks like it has big potential, etc. This is still an obscure little business, so volatility should be expected. The new IR guy is getting the name out. As long as Fred continues to execute I think going forward the stock price will do quite well.
Based on yesterday's earnings call it seems that Fred does not view BDs as a poor financing method, which makes me believe that he is not opposed to another deal in the future. He is also well area that investors hate these deals, and although no names were mentioned on the call I think he specifically referred to Kuppy. His argument about needing cash fast and not having time to wait upwards of 6 months to shop for a good deal is understandable. His other argument about leading Canadian banks supporting these deals, which makes them okay, is a little less agreeable. Fred comments on putting the cash to good use, and it seems that is already in play given the new rigs coming in and additional ones on order.
Layne Christensen reports April 12 at 10 Eastern, for anyone who may be interested. It seems that they are taking an impairment charge on under performing segments and moving into higher margin areas, which I assume will include mineral exploration. What companies such as LAYN see/predict should help all Energold fans in understand the big picture going forward. Here is a link and at the bottom you can find the number to call. http://bit.ly/Igr9G3
Also, Energold's website seems to be looking nicer. Perhaps a little more polished and professional. It seems they are actively hiring in many locations as well, and for multiple positions.
Nice work Alex. Smaller players have recently commented on substantial growth, including potential acquisitions so it's very possible that Energold needed the cash quickly for similar reasons. Like you said, I don't think this particular BD was all that destructive; it's frustrating, nonetheless.
I agree, bought deals are likely much easier and quicker to execute. Hopefully investors will bring up the issue in this quarter's earnings call and put pressure on Fred to consider other methods of financing.
Hi Jon, Unfortunately the financing process is one area where I think management needs to improve. These bought deals are designed for poor companies with no other financing options, and clearly Energold is not in this category.
Why Davidson is sold on this form of financing is an unanswered question, as I have not spoken with him about his reasoning for such methods. Additionally, why he didn't wait until after the quarter is another interesting topic.
Overall, this is a risk that an investor must be willing to accept. Energold is a good business, but obviously not a perfect one. Hopefully these bought deals will be less frequent, or stop entirely, as the company continues to grow.
Surge Energy: The Time Has Come For Investors To Get Greedy [View article]
Do you have any thoughts on the $99M impairment charge taken? MD&A says majority of the impairment is due to poorer reservoir in Windfall & Waskada compared to prior year.
Have you been able to quantify this statement? Taking an impairment would suggest an expected permanent loss, yet the company goes on to state that assuming successful water-flood projects in 2013, the Co expects to be able to increase reserves at both properties in the future.
Assuming an unsuccessful water-flood project, do you anticipate further write-downs and if so by how much?
Can you quantify an entire write-down of these two properties, and comment on whether you think the company took a bath on these properties?
Blowing The Whistle On Cyberonics [View article]
Geodrill: A High Quality, Low Priced Contract Drilling Company [View article]
At these levels, I think EGD is a better investment. Fundamentally EGD has always been a better investment. The company is better managed, more diversified, and taking market share fast. The main argument for GEO is a pure play on Africa. Margins are high and profits can be very attractive.
Some concerns I have with GEO 1) the board is not very strong 2) the new CFO is terrible 3) the growth opportunities may not be as strong as originally anticipated. GEO has not branched to majors and intermediates as much as hoped since going public. Harper needs new clients in order to grow and he hasn't been effective on this front. However, getting any new clients when your main base (juniors) are not working will certainly be difficult.
Overall thesis remains the same, albeit with some added risk components, but I imagine the timing of results may take longer than planned.
China Medical Technologies (Update): Dude, So That's What You Did With My Company [View article]
Groupon: Is A Deal Really A Deal? [View instapost]
The user does not have an option to order $30 of food and use the remaining $10 on tip and tax. He/she now must order the full $40 to get the benefit, and pay tax/tip on that amount, which is an additional outflow of $.
PhotoMedex: A Fad Product And A Challenging Future [View article]
Always a pleasure reading your articles. Borrow seems a little tight- any thoughts on where to get some?
Energold: 2012 And Beyond [View article]
Energold & Bought Deal Financing [View instapost]
Qualstar a Merger / Acquisition Target? [View article]
Energold: 2012 And Beyond [View article]
http://bit.ly/Igr9G3
Also, Energold's website seems to be looking nicer. Perhaps a little more polished and professional. It seems they are actively hiring in many locations as well, and for multiple positions.
Energold & Bought Deal Financing [View instapost]
Energold: 2012 And Beyond [View article]
http://bit.ly/FOtQxW
Energold: 2012 And Beyond [View article]
Energold: 2012 And Beyond [View article]
Unfortunately the financing process is one area where I think management needs to improve. These bought deals are designed for poor companies with no other financing options, and clearly Energold is not in this category.
Why Davidson is sold on this form of financing is an unanswered question, as I have not spoken with him about his reasoning for such methods. Additionally, why he didn't wait until after the quarter is another interesting topic.
Overall, this is a risk that an investor must be willing to accept. Energold is a good business, but obviously not a perfect one. Hopefully these bought deals will be less frequent, or stop entirely, as the company continues to grow.
Do you have any thoughts?
Energold: 2012 And Beyond [View article]
http://bit.ly/wYWyXj