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Christopher Owens

 
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  • Valuing Berkshire Via Burlington Northern Santa Fe Railway [View article]
    I thinks it's interesting the difference in fuel expense. BNSFs fuel expense 700 million higher in first 9 months than UNP although revenues pretty much equal. BNsf at 7.6 million carloads versus 7.2 for UNP. BNSF also has higher depreciation charges as percentage of revenue. Anyone know if these differences are structural- ie UNP is inherently more efficient or just timing/accounting differences. I tried calling Warren, but I got a busy signal.

    Also, BNSF admitted service issues in recent q's and that they lost share to UNP. Hopefully that is remedied.
    Jan 16, 2015. 07:20 PM | Likes Like |Link to Comment
  • National Research Corporation: Confirming A Major Valuation Discrepancy [View article]
    Madrem - I would just read what you posted. I am not sure I can interpret it any better than the recap doc.

    I am not sure exactly how the stock options were determined.

    Also, the CEO has been selling A's recently at $14 and B's at $34 - 2:42:1. It hasn't been a ton of stock, so not sure I can read a ton into it.
    Jan 15, 2015. 03:19 PM | Likes Like |Link to Comment
  • National Research Corporation: Confirming A Major Valuation Discrepancy [View article]
    Madrem - Per the cited paragraph - A's can only be converted to B's in the NASDAQ disallows a dual class listing. So USER is correct.
    Jan 15, 2015. 02:23 PM | 1 Like Like |Link to Comment
  • Wells Fargo: Strong Core Business And Credit Demand Prospects Justify Premium Valuation [View article]
    I agree with the general argument in the article. However, I think "premium" valuation is not accurate. Yes, Wells trades a premium on book value, however, I would argue that it trades at a discount on actual honest to goodness earnings - which its competitors have had trouble delivering. Furthermore, WFC is growing, extremely asset sensitive, and returning capital to shareholders in a meaningful way via share repo and dividends.
    Jan 15, 2015. 01:19 PM | Likes Like |Link to Comment
  • Boulder Brands Wins Big With Pizza Hut Gluten Free Contract [View article]
    Huh, then why is the CEO dumping his shares...
    Jan 15, 2015. 09:28 AM | 1 Like Like |Link to Comment
  • Magnum Hunter: The Nightmare [View article]
    Your math is whack.
    Jan 12, 2015. 08:21 PM | Likes Like |Link to Comment
  • Magnum Hunter Preferreds: A Double Digit Tax Advantaged Income Stream With Upside [View article]
    Firsttracks:

    What is your assumption for MHR's reimbursement to the CEO for use of his personal airplane?


    Thanks,

    Chris
    Dec 8, 2014. 05:41 PM | 1 Like Like |Link to Comment
  • Alaska Communications: Better After The AWN Sale? [View article]
    Personally, I think this is interesting.

    Using Ted's disc. FCF of $12 million gets ~13% FCF yield.

    The rest of capital is being invested into 20%+ IRR fiber build.

    Appears like this is a duopoly with GCI with replacement costs materially in excess of net PP&E on ALSK's balance sheet.

    Mgmt seems decent although I am pretty new to story

    On balance, this looks like it should work
    Dec 8, 2014. 03:17 PM | Likes Like |Link to Comment
  • Boulder Brands talks beverages [View news story]
    Wow.
    Dec 8, 2014. 02:58 PM | Likes Like |Link to Comment
  • Chevron: A Great Opportunity Reveals Itself, But Don't Sweat The Oil Price [View article]
    I think looking at forward earnings generated in an era where the oil price was 50% higher than it is today is a little misleading. Also, CVX's earnings are somewhat useless as there depreciation and depletion charges are MATERIALLY lower than their capital expenditures. CVX has essentially been borrowing money to pay its dividend and start projects to grow its dividend. I am not sure if those projects would make it past the drawing board in today's environment.

    I am not commenting on the price/value of CVX generally, I just wouldn't look at stale forward earnings estimates as the central part of my investment thesis.
    Dec 1, 2014. 03:06 PM | Likes Like |Link to Comment
  • Update: Starz Acquisition [View article]
    It is unclear to me whether the $5 billion figure referenced is an equity value or an enterprise value. If it is an enterprise value, it implies a stock price in the mid-30's. Perhaps the reason for the muted reaction yesterday. The NYP article was unclear to me on this point.
    Nov 25, 2014. 09:07 AM | Likes Like |Link to Comment
  • 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
COMMENTS STATS
140 Comments
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