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Chris Damas

 
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  • Why Rentech Nitrogen's Q3 Distribution Fell 68% [View article]
    You are too kind vivianna. Actually I am having an erratic and rough year research wise and trading wise. I hope to do better in 2014 after a much needed vacation second half December. But fertilizers are my best area no doubt. I need to warn people BEFORE they dive. And hopefully make the call when they are ready to rally.

    Thanks for reading and commenting with insight.
    Nov 23 11:04 AM | 1 Like Like |Link to Comment
  • Terra Nitrogen Swoons - Should You Buy It Here? [View article]
    There is no long term in commodities. If you get into buy and hold and then commodity goes lower, you are facing even a bigger loss.

    I have taken a bearish view on TNH above. I estimated their cash generation potential based on my assumptions. The CVR Partners is more difficult, because they have a high fixed rate operating expense.

    So I pass on this one.
    Nov 21 02:11 PM | Likes Like |Link to Comment
  • Canexus Transforming Into An Oil Transporter [View article]
    The newsletter order form seems to be working OK.

    I sent you the Canexus note and signed you up for the newsletter.

    Thanks for reading.
    Nov 19 10:59 AM | Likes Like |Link to Comment
  • Terra Nitrogen Swoons - Should You Buy It Here? [View article]
    The valuation assumes $400 ammonia and $200 UAN and $4 natural gas at full production capacity of 345,000 and 2 million short tons respectively and assumes they can sell all their product at those prices (via CF). Alternatively, my estimate is for an average run rate cost of product of $104/st versus $113 in Q3 2013 and $85 2012.

    I've corrected the distribution estimate to $9.52 for the next four quarters to reflect that the GP will pay est. 48.5% of the plant upgrade expense remaining which I estimate at $50 million ($22.5 million left in Q4, rest in Q1 2013 (Q3 YTD actual $77.5 million versus $100 million guidance).

    The distribution run rate assumes a 70% CAD payout to the common units at the profitability level I have modeled. (56% in 2012 and 2011, 73.5% 2010).

    My rough guess for the unit price hitting $125 is just that. If it settles at 15 times (6.67% yield) my 1 year distribution forecast of $9.52, that would be $142.80.

    I tend not to put all the details in my fertilizer articles because they seem to get plagiarized on other financial blogs a few days later.
    Nov 19 10:01 AM | 4 Likes Like |Link to Comment
  • Canexus Transforming Into An Oil Transporter [View article]
    I have put a note out on this stock so if you want it, please email me, or sign up for the free newsletter at http://bit.ly/QNMpFP
    .
    Nov 18 10:47 PM | 1 Like Like |Link to Comment
  • Why Rentech Nitrogen's Q3 Distribution Fell 68% [View article]
    Yes I have watched it - finally a crack in TNH's armor. Some may have noticed TNH had not come down.

    EPU and Q3 distribution were skinnier than before ($2.52 and $2.02 respectively). Alot of that was because volumes were impacted by a 44 day turnaround of half of the Verdegris plant. The units are thin and moves are exaggerated.

    Prices for ammonia and UAN were $479 and $253 in Q3. They aren't much higher than that now.

    You have to figure TNH stayed level while the others fell hard so alot of this is catch up. Another roughly 5% down to get where RNF and UAN are on a six month comparison not including distributions. RNF has unique challenges so UAN is probably a better compare, except TNH gross margins are better than UAN's.

    Yes, three days of increasing volume would indicate TNH should be near a reversal. But technical analysis doesn't work too well on illiquid small caps and they don't buy units back to support the price as does the parent CF.

    What needs to be done, is determine the base line profitability of TNH at UAN and ammonia prices expected for 2014. I haven't done it, because I am busy with other things.
    Nov 18 03:12 PM | 1 Like Like |Link to Comment
  • Canexus Transforming Into An Oil Transporter [View article]
    I wouldn't panic. The facility should probably work fine and MEG and Cenovus will be great customers. They should sign another deal soon.

    I think either Gibson Energy or Keyera would love to own NATO.

    I am more interested that the existing chemicals busineses due better.

    I should note Goodman Investment Counsel (Dundee) and Franklin Templeton own a collective 43 million shares so they are probably more concerned than us.
    Nov 15 12:39 PM | 2 Likes Like |Link to Comment
  • Refiners continue to rise as Brent-WTI spread widens [View news story]
    I was impressed by their chemical earnings in the Q3 but there are other authors on this site that cover PSX more than I do. MPC and VLO are my core positions. However, I am lightening up on oil refineries.

    Note: I am usually early and a Santa Claus rally could push up the oil refineries even more, as they were hammered over the summer and early fall.
    Nov 15 11:11 AM | Likes Like |Link to Comment
  • Refiners continue to rise as Brent-WTI spread widens [View news story]
    You mean PBF?

    I like it. I sold some at $28.95 today though. It tends to fade in the afternoon. It's probably going over $30.

    DK - Drift Kids? Sorry Delek LOL...I don't follow Delek much and I think Tyler is going to be down next month? My comments hold for all these one or two refinery MLP's or stocks. Watch out for that old iron. But if everyone thinks WNR is going to roll into an MLP via NTI, maybe they'll catch the "drift" over at DK....

    PBF is about as small as I am going from now on.
    Nov 15 11:09 AM | Likes Like |Link to Comment
  • Canexus Transforming Into An Oil Transporter [View article]
    No one should add to their position unless they are comfortable and have the facts in hand.

    I am waiting on some explanation from the company and hope to put something out on the weekend.
    Nov 15 10:20 AM | 1 Like Like |Link to Comment
  • Refiners continue to rise as Brent-WTI spread widens [View news story]
    Refined product exports are still small as a portion of US production and largely available to coastal refineries (e.g. on the Gulf of Mexico). Gasoline in particularly is far from being cleared by the "Brent" price, and it isn't clear what the prices are in Mexico or South America - quite often local prices are subsidized and lower.

    US finished gasoline exports were running at 380K bbl/day in the most recent week versus 9.0 million bbl/d product supplied nationwide. Valero shipped only 91K per day gasoline in Q3. GOM gasoline is virtually in a glut situation and refiners are trying to boost diesel versus gasoline heavy crude usage.

    Distillate (diesel primarily) was somwehat better at 1.356M export out of 3.790M supplied and export prices theoretically could be pushing GOM diesel prices slightly higher than they otherwise would be. This has little impact on a refinery somewhere in PADD 2 though.

    US refined product exports are not the price determinant for gasoline which is the biggest refined product, and certainly have little impact on inland price bases.
    Nov 15 07:00 AM | 1 Like Like |Link to Comment
  • Canexus Transforming Into An Oil Transporter [View article]
    I put something out on Canexus in The BCMI Report today, which is free. Go to the website to sign up for future updates coming soon.
    Nov 14 09:31 PM | 1 Like Like |Link to Comment
  • Refiners continue to rise as Brent-WTI spread widens [View news story]
    Really old iron at Tulsa. Navajo reduced production unexpectedly just a few days ago.

    http://bit.ly/1dvJnSo

    I liked it at the beginning of the year. Great dividend payouts. Especially like the Rockies refineries in Utah and Wyoming. But who knows when the iron is going to fail again?

    In that production range I prefer PBF which seems to have upside with crude by rail.
    Nov 14 07:03 PM | Likes Like |Link to Comment
  • Refiners continue to rise as Brent-WTI spread widens [View news story]
    Unfortunately the Barrons article is wrong as the WTI/Brent spread is no longer a good proxy for Gulf Coast or even East Coast oil refiner profitability. It's the WTI/LLS and refined product crack spreads.

    Think about it. Why would the spread between WTI and Brent really matter? US oil refiners don't use Brent anymore. And they sell refined products not related to Brent. Now that light sweet oil imports have been virtually backed out of the Gulf from domestic production, the LLS (Lousiana Light Sweet) blend is trading at a discount to dated Brent. PBF on the East Coast is sourcing more Bakken and WCS crude, not Brent.

    It's a much narrower differential for Mid-Con producers and the approrpriate one.
    The other ones of course are the local domestic diffs or the sour diffs such as Bakken/WTI and WCS/ASCI.

    No matter your differential is below WTI, if your lcocal refined products are trading at a discounted basis to NY Harbor or Chicago (called the basis) you aren't getting a very good crack spread even if your oil is bought at a discount to coastal varieties or Cushing or Midland or Alaskan Northern Slope (http://bit.ly/19nUHf2) for that matter.

    WTI/LLS, which is the GOM coastal sweel oil grade, is now setting the tone for the biggest refining area - PADD 3.

    High Brent prices are only useful as a sign that European refiners are hurting and are shutting down, leading to more US refined exports to the Old World.
    Nov 14 03:25 PM | 9 Likes Like |Link to Comment
  • Dry Bulk Shipping Stocks Look Interesting [View article]
    I'm still waiting for some sort of acknowledgment that I was right on SB and all the defensive comments that they wouldn't, shouldn't refinance debt with an equity issue were wrong. And ditto goes for that Credit Suisse analyst that you have relied on.

    Whether we buy it at here (the new issue price still to be determined) is another matter. I have investigated the Greek shipping companies and to be honest, I don't think they are investible. They don't meet my critieria for adequate disclosure and corporate governance.

    SB trading at $7.39 down 76 cents on 1.3 million.

    Disclosure - I sold SB at higher prices.
    Nov 13 10:13 AM | Likes Like |Link to Comment
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