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Christopher Wallace

 
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  • Fairfax Financial Might Be The Best Play On BlackBerry [View article]
    @Marcap: thx for your comment. How do you arrive at your valuation?
    Sep 15, 2013. 12:42 AM | Likes Like |Link to Comment
  • The Impossible Situation For North American Palladium [View article]
    The risk in PAL is their weak liquidity and large, high-cost debt. I agree with you on the price of palladium, which is forecast to have a supply deficit over the next several years. I have no idea about any manipulation.
    Sep 13, 2013. 06:38 PM | Likes Like |Link to Comment
  • Fairfax Financial Might Be The Best Play On BlackBerry [View article]
    jcount - thanks for that. 17 seems to be the number most cited as a buyout price, coincidently. Great upside to those who got in recently at 11 and under. Are upcoming earnings announcements going to be that relevant with deal talks in the works?
    Sep 13, 2013. 01:28 PM | 2 Likes Like |Link to Comment
  • The Impossible Situation For North American Palladium [View article]
    I have now spoken with the company who estimate that sustaining capital costs are likely to be $10 million per year. I also read the 594 page (ok, skimmed a lot of it) NI-43101 technical report which estimates sustaining capex at $35.2 million for 2013 - 2018. There is no better information than that.

    The problem is, and I know this is something of a mea culpa for me, but this is information you cannot get at by reading the company's financial statements, press releases, investor presentations, any part of their website, etc. So the fact is that I got it wrong in assuming that historical capex which had produced no increase in production, which was of a similar magnitude to competitor Stillwater, was required capex to sustain existing production. If PAL can maintain 250,000 ounces of annual production with only $10 million annual sustaining capital expenditures, they will generate more than enough cash to meet their financial obligations in 2017. Just because they have not been able to do that in the past, does not mean they will not be able to do it in the future. With the stock price now below a buck, I guess there are other investors who jumped to a similar conclusion.

    While I take their guidance with a cautious grain of salt, I hope that they do achieve those numbers. For if they do meet their targets, this would become, for me at least, an interesting though risky, investment.
    Sep 13, 2013. 12:58 PM | 1 Like Like |Link to Comment
  • Syria Puts Defense Contractors In Spotlight: Arotech Shines [View article]
    They have priced the issue at $1.75: http://bit.ly/162rJzu 3.5 - 4 million shares, closing Sep. 18. Assuming the over-allotment option is exercised, that takes the share count to 20 million, or about 25% dilution. Does that change my thesis? No, but it would lower my valuation, as other things equal, it would lower EPS to probably $0.27 due to the increased share count. Applying an 11x multiple you get close to $3 per share, so it remains, to me at least, an attractive investment for those willing to accept the risks that attend all small cap companies.

    The use of proceeds are "Arotech expects to use the net proceeds from the offering for general corporate purposes, which may include increasing its working capital, reducing its bank line of credit, funding research, development and product manufacturing, acquisitions or investments in businesses, products or technologies that are complementary to its own, and capital expenditures." A basic bolster the balance sheet kind of raise, which never thrills me, nor is it really anything to complain much about.
    Sep 13, 2013. 11:20 AM | Likes Like |Link to Comment
  • Syria Puts Defense Contractors In Spotlight: Arotech Shines [View article]
    ARTX has just announced a share offering: http://yhoo.it/18Uc9Jq Rather scant on details, but I suggest more will come out shortly.
    Sep 12, 2013. 05:06 PM | Likes Like |Link to Comment
  • Fairfax Financial Might Be The Best Play On BlackBerry [View article]
    While I agree that Watsa is a very savvy investor, I am not so sure he will come out of this one ok. What is his average cost? Is it not close to $20?
    Sep 12, 2013. 03:10 PM | 1 Like Like |Link to Comment
  • Gold Has Reached Bottom Of Short Term Channel [View instapost]
    Both NUGT and DUST can certainly generate excitement - NUGT has dropped from just over 100 to the low 60s today. Pretty shocking for two weeks work!
    Sep 11, 2013. 09:13 PM | Likes Like |Link to Comment
  • 3 Indicators That Signaled The 2007 Top: They're Back [View article]
    Thanks for your comment, Go Lakers. I think I responded to people taking both sides of my thesis. Yes I am bearish on North American equities in general at this moment. Time will tell if I am right or wrong; I have been both before.

    My last comment was not a hedge on my thesis. The article stands. It was only a response and further clarification to some of the comments as noted.
    Sep 11, 2013. 11:35 AM | Likes Like |Link to Comment
  • BlackBerry's 'Strategic Alternatives': There Is More Than Hope [View article]
    Good article. Obviously there are risks with BBRY failing to keep up in the smart phone race. But it retains enough goodies that a bid is likely to ensue. And I do mean "likely"; I would not rule out no bid, but my money is on the fact that someone shows up. Fairfax has the pole position at the moment, but I would not be surprised to see one of more of the strategics the author suggest to show up. I had previously thought MSFT was a likely candidate, but I am less confident with Nokia being digested. I think taking a small position in BBRY stock (as I have done) is wise. This is not a "back up the truck situation" but one where you have to be there. Between now and year end I see downside o $9, which is acceptable, particularly if the upside is the high teens. Works for me.
    Sep 11, 2013. 11:16 AM | 4 Likes Like |Link to Comment
  • 3 Indicators That Signaled The 2007 Top: They're Back [View article]
    The decay factor is so well known now on leveraged etfs that I felt it would be trite to say it again here as it has been repeated so many times here at Seeking Alpha and elsewhere. It has become like saying "stocks are risky" or "past performance is no guarantee of future results". All are true, but all are also so well-known that I really don't think they need repeating in a forum such as this.
    Sep 11, 2013. 10:30 AM | Likes Like |Link to Comment
  • 3 Indicators That Signaled The 2007 Top: They're Back [View article]
    How about APPL? Would that constitute a breakdown in leadership this cycle?
    Sep 11, 2013. 10:24 AM | Likes Like |Link to Comment
  • 3 Indicators That Signaled The 2007 Top: They're Back [View article]
    There are some excellent comments here, thank you all for your participation.

    There are some comments that seem to have missed the point of this article. This was not ever intended to be an examination of the efficacy of certain stock market indicators over long periods of time. Interesting as such an article might be, this was not it. If anyone has the time and resources to undertake such a study, please publish your results and let me know!

    Also, this article looked at 3 "indicators", and indicators provide indications, they do not provide certainty. They also do not provide causation, and certain readers jumped to those wrong conclusions. Others pointed out the issue of randomness, that unless you demonstrate a long history of repeat performance, the indicator may just be generating a random fluke and therefore is meaningless. I absolutely acknowledge the issue of randomness. The article was clear in its statements about fallibility and history's tendency to not repeat exactly.

    My goal was not to make any statement about certainty, but simply to make an observation about the last top and hopefully generate some discussion. Thanks to everyone who commented for helping me achieve the second part.
    Sep 11, 2013. 10:19 AM | Likes Like |Link to Comment
  • 3 Indicators That Signaled The 2007 Top: They're Back [View article]
    @Jsteinm1: The article opens with the statement "While the stock market, like other aspects of history, never repeats itself exactly," and the Conclusion paragraph states "Certainly no single indicator is infallible." Each of these indicators are widely followed for a reason. They predicted a turn at the last market top. No one is advancing "proof", but an indication that we may be nearing a top. What indicators do you use to gauge where the market is at?
    Sep 10, 2013. 04:14 PM | 3 Likes Like |Link to Comment
  • 3 Indicators That Signaled The 2007 Top: They're Back [View article]
    Thanks for your comment Svetoslav. That is a very interesting stat indeed.
    Sep 10, 2013. 03:36 PM | Likes Like |Link to Comment
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