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Christopher Owens

 
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  • Paragon Offshore: Could Old Rigs Offer Good Value? [View article]
    Ehhh. From an ROIC perspective it doesn't make sense versus debt repo. From an FCF and business viability perspective it makes more sense. They can walk away from 3 remaining rigs and don't need to take delivery unless there is a contract. Add backlog, add FCF, lower age, and increase exposure to North Sea.

    See both sides of argument, but it is really difficult to ever show that a strategic deal is anything other than dilutive when equity trades at 2x FCF (or whatever next year turns out to be) and debt trades at 60c.
    Nov 17, 2014. 01:50 PM | Likes Like |Link to Comment
  • Paragon Offshore: Could Old Rigs Offer Good Value? [View article]
    This is a tough one. I appreciate both arguments. On one hand, PGN rigs are old, day rates are falling, capacity is coming, and it has a lot of debt. While FCF to market cap is cheap, FCF to EV doesn't look nearly as compelling. We could also argue that FCF is overstated given declining backlog and need to modernize fleet.

    On the other hand - it looks like its trading at about 2x next years' fcf (give or take), they will accumulate a nice cash balance between now and YE 2015, the debt is cheap and termed out, and they can use their term facility to repo debt in the 70's (ostensibly lowering their leverage ratios). For whatever its worth (not much in a commoditized industry), mgmt. seems competent and their rigs appear to be in good shape despite age.

    I think the risk premium baked into the shares is pretty high right now - especially given that a default or negative fcf does not appear imminent. To be short, I think you need a very clear line of sight to $50/$60 oil and a view that a good portion of existing rigs on order will be delivered. If that is view, it probably makes sense to be short. Again, its a tough company to value, but I the equity has to be worth something as long as they are generating free cash flow.
    Nov 12, 2014. 06:12 PM | Likes Like |Link to Comment
  • Paragon Offshore: Complete Fleet Analysis After October 13, 2014, And Commentary [View article]
    I don't understand decision to repurchase debt. It seems like they equity part of their cap structure is more expensive and they probably want to hold onto all the liquidity they can if things get dicey.
    Oct 27, 2014. 10:28 AM | Likes Like |Link to Comment
  • Alteva: After Rejecting A Buyout Offer, This Cash Rich Microcap Is Worth A Look [View article]
    Has the cash tax been paid on JV sale? Any estimate on what it will be?
    Sep 30, 2014. 04:23 PM | Likes Like |Link to Comment
  • CSS Industries: Stable Fundamentals, Cash-Rich Balance Sheet, And Deep Undervaluation Argue For 30%+ Upside [View article]
    Interesting article and really nice presentation. I enjoy the fact your writing style is objective and non-promotional. Perhaps mgmt. should consider using their line of credit for working capital purposes and paying a special dividend to shareholders? Looks like they're conservative, but there is a line between being conservative and wasting capital.

    Again, really nice job.
    Sep 30, 2014. 10:47 AM | Likes Like |Link to Comment
  • Noble Corp.: Complete Fleet Analysis After Paragon Offshore Spin-Off And Commentary [View article]
    You're using the quarterly numbers for your of PGN. PGN earned $76 million in the first quarter. Hence, you're implying that PGN trade at 12x EBITDA rather than 3x (annualizing 1Q)
    Aug 5, 2014. 04:50 PM | Likes Like |Link to Comment
  • Berkshire Hathaway: The Last Bargain [View article]
    I agree with your thinking. However, it's easier to "prove" Berkshire is cheap by using below market multiples and still showing it cheap.
    Aug 2, 2014. 06:00 AM | Likes Like |Link to Comment
  • Berkshire Hathaway: The Last Bargain [View article]
    You are 100 percent incorrect. Investment appreciation creates a non-cash deferred tax liability. This runs through other comprehensive income and creates dtl.
    Aug 1, 2014. 10:00 AM | Likes Like |Link to Comment
  • Berkshire Hathaway: The Last Bargain [View article]
    See deferred tax liability on balance sheet. Roughly half attributable to investment appreciation.
    Aug 1, 2014. 09:58 AM | 1 Like Like |Link to Comment
  • Berkshire Hathaway: The Last Bargain [View article]
    I'll sell you facebook and twitter if you will sell me a basket of railroads and utilities at 10x earnings.
    Jul 31, 2014. 01:36 PM | 14 Likes Like |Link to Comment
  • Berkshire Hathaway: The Last Bargain [View article]
    You are 100% right. The mean actually stays at 1.58x when keeping at 1.2x - so doesn't change much but your conceptually correct. Thanks
    Jul 31, 2014. 10:16 AM | 1 Like Like |Link to Comment
  • Berkshire Hathaway: The Last Bargain [View article]
    Higher than 1.6x?
    Jul 31, 2014. 09:20 AM | Likes Like |Link to Comment
  • Berkshire Hathaway: The Last Bargain [View article]
    Year end price. I have not intention of going back and calculating P/B every day for last 20 yrs. If you want to calculate, feel free to send me results.
    Jul 31, 2014. 09:19 AM | Likes Like |Link to Comment
  • BNSF And Union Pacific Have Intermodal Advantages [View article]
    Does anyone know why BNSFs fuel charges are much higher as % of revenue than UNP? For instance, UNP spend 921 million on fuel vs BNSF 1159. They had virtually the same revenue. I think BNSF stopped hedging fuel once they became part of Berkshire, but is there something inherently different about the fuel consumption between the two co's? It about a billion pre-tax difference on an annual basis. BNSF also has higher depreciation charges relative to UNP given the elevated capex to build takeaway capacity in eagle ford and bakken.
    Jul 28, 2014. 12:24 PM | 1 Like Like |Link to Comment
  • Magnum Hunter's Eureka Pipeline: A Fantastic Asset Fairly Valued [View article]
    Yeah, but if you thought something was worth 3x its value, that should be your first priority for cash and you should be more than willing to pay 8% rather than give up a dollar for 33c.

    I am seeker: Read the 10k. Arc Light has PIK debt and is massively senior to MHR in their ownership of the pipeline. In fact, there are lots of interesting things in the 10-q.
    Jul 22, 2014. 09:31 AM | Likes Like |Link to Comment
COMMENTS STATS
129 Comments
115 Likes