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Christopher Owens  

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  • Magnum Hunter's Shrinking Asset Base And The Implications For Shareholders [View article]
    Nice article Jason. One accounting thing I would point out - unlike straight debt, interest payments on the preferred shares occur below the operating cash flow line in "cash flows from investing activities." So in addition to generating -$18 million in op. cf., MHR also had $45 million in pref. dividends. So a fuller view of op. cf. would be negative -$63 million. On the other hand, MHR did have about -$60 million in working capital changes which knocked down op. cf. but won't be a reoccurring charge.

    So I don't disagree that the cash flow looks anemic, but there are two relatively important adjustments to make when thinking about the cash flow picture going forward - one + and one -.
    Mar 28, 2015. 01:32 PM | 3 Likes Like |Link to Comment
  • One Potential Weakness Of Berkshire Hathaway [View article]
    I liked your article, David. I learned something new. Thanks.
    Mar 4, 2015. 02:24 PM | 4 Likes Like |Link to Comment
  • Update: Paragon Adds $40 Million To Backlog And Sells A Jackup [View article]
    Yeah - I think that's about right.
    Feb 17, 2015. 05:57 PM | Likes Like |Link to Comment
  • ExxonMobil: As Long As That Kind Of Free Cash Flow Rolls In, I Am Not Going To Be Concerned [View article]
    They had $49 billion in op. cash flow. $4 billion can from asset sales, so core op. cf. was $45 billion. Furthermore, actual capex was 32.9 billion - they have yet to pay for 1.7billion in capex completed in 2014. This mean they generated $12 billion in recurring free cash flow. The mkt cap of XOM is 380 billion, my math tells me that is a 3.2% fcf yield. Not a free cash flow machine.

    Finally, these numbers were constructed when oil was, on average, >50% higher than it is today.
    Feb 3, 2015. 09:16 AM | Likes Like |Link to Comment
  • Chevron suspends share buybacks for a year, shares -3% [View news story]
    How is CVX cheap? They're gonna generate like $20 billion in operating cash flow at strip pricing. They use about $8 billion for a dividend. That leaves them with $12 billion in cash before capitalized expenses. They're spending $34 billion in capex. So they'll have to issue about $22 billion in debt next year. They already have $15 billion in net debt. SO at year end 2015 they have $37 billion in debt. At the current share price, that leaves them with an enterprise value of about $240 billion, or 12x EV/CF. That is ridiculously expensive. Earnings for this company mean nothing because depreciation has zero correlation with capex and they are paying their dividend by issuing debt.

    Unless crude prices improve, their balance sheet will have dramatically deteriorated and they'll have sunk a ton of money into uneconomic projects.

    People who look at the dividend and or earnings to make their investment decision need to dig a little deeper.
    Jan 30, 2015. 02:14 PM | 7 Likes Like |Link to Comment
  • 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 | 3 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]

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


    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]
    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