Seeking Alpha

Cliff Courson's  Instablog

Cliff Courson
Send Message
I'm currently self employed in real-estate. Age 48. Previous Submarine naval nuclear power plant propulsion operator, Pressurized light water, S5W S3G core 3, and engineer/Electrician NEC 3354. Knowledgeable on energy, alternative energy and energy transportation investments themed towards... More
View Cliff Courson's Instablogs on:
  • Cheap, Unloved, smallcap 'Ben Graham' Value Play

    Ok, back by popular demand, I have another oversold, underappreciated, cyclical smallcap Ben Graham/Martin Whitman value retail/manufacturing play in a just hated industry (right now), due to this historic recession. This company is one of the cheapest and oversold in its industry, with a MC of $36M, Price/sales of .23, Price/Book of .56, Low public float of 9M shares, with 10.35M total outstanding. This company is selling way less than its intrinsic value. This company has been in business since 1865, established in 1924, and had 1450 employees, as of Dec09, but are currently aggressively reducing. This company is not only a retailer of their products, they also are a manufacturer, and they have two distinct product lines. This company had been paying a continuously increasing .10/qtr (.40 annual) dividend for the last 6 yrs, until recessionary glum sales hit the bottom line, forcing management to suspend the dividend in early 2009. They have a diversified sales and marketing platform, with sales to over 3000 different customers in 2009, with approximately 8% being international. There is no customer concentration risk. They have two wholly owned manufacturing facility’s, one in North Carolina, and one in Virginia, about 2M sq ft combined, are considered modern, well equipped and maintained, and a 300K sqft Warehouse in Va, also owned.

    Most recent 10Q shows decline in sales from last year, but increase  Q over Q, still with overall losses. Most of the loss, however, was attributed to one time accelerated depreciation, and charges related to prior restructuring, closing of plants, transferring operations and the like, mitigated somewhat by ongoing cost reduction efforts.

    As of July10, they had cash on hand of 18.9M and total debt of $15M, having just paid a large chunk ($12.9M) of the debt in a creditor prepayment negotiation to avoid penalty for prepayment. Remaining debt service requirements are $3.8 million in 2011; $3.6 million in 2012, 2013 and 2014; and $458,000 in 2015.  Current Ratio is 3, meaning they ample short term cash to pay near term debt and bills.  As of Sept 10th, they have a S-3 filed with the SEC, for a Rights offering, similar to a Secondary, to offer more shares to raise up to $10M, and a maximum of $12M if ‘oversubscribed’. Actual Share Price has not been announced. The current PPS seems to factor in this dilution, as there was only a negligible drop on this announcement. Also, all current issued employee and management compensation stock options are underwater, unexerciseable, and may expire worthless (good for common, as less prethought dilution). They got a $6.6M tax refund in 2009, due to sustained losses, and I would expect the coming up filing for 2010 to be similar, with losses carried forward, offsetting sales, and acting as a tax ‘cushion’.

    They also receive funding, thru a ‘Continued Dumping and Subsidy Offset Act’ (CDSOA), which is payments from the Government to offset antiduty orders for imports.

    They recorded income of $9.3 million, $11.5 million and $10.4 million in 2009, 2008 and 2007, respectively, from CDSOA payments and other related payments. In addition to these payments, the Government has set aside over $137M over the last 4 yrs, which this company feels they are due approximately 27% of (recent percentage allocation), which would be approximately $32M in back distributions, but this is held up in Court, pending outcome.  However, as of April10, the current ongoing uncontested amount expected thru this program is $1.5M, not including any previously withheld monies, and is expected to be received 4Q10.

     

    The company I am describing is Stanley Furniture Co, INC out of Stanleytown VA.

    www.stanleyfurniture.com/

     

     

    Recent 10Q

    http://www.stanleyfurniture.com/media/document/2010PressRelease2ndQtrEarnings_FINAL.pdf

     

    http://www.sec.gov/Archives/edgar/data/797465/000095012310076197/c04795e10vq.htm

     

    Stock price appears to have bottomed in the $3.40s mid June, and has been in an unbought/unsold pessimistic limbo for the last 4 months. I think this is a very cheap value play on an oversold and hated industry segment, that will recover as clarity on US recession recovery becomes more evident, spending on consumer durables rises again, and the company’s cost cutting metrics show effectiveness.

     

    Any ‘surprise’ moneys awarded retroactively, thru the subsidy program would absolutely zoom the stock price, making it an instant goldmine.

     

    I recommend accumulation of STLY shares sub $3.45 (use limit orders) on weakness, current investor fatigue, and overall macroeconomic industry sales fear environment. RSI 44.

    Long STLY.

     

    Cheers!

     

    coursonc




    Disclosure: Long STLY
    Tags: STLY
    Oct 06 11:27 PM | Link | 1 Comment
  • SDE, another future WEC Failure
    SDE: It will never work, can you guess why?
    Look at this junk:
    www.youtube.com/watch?v=Bf5fOr8XjpY

    Let me give you a little hint, its partially the same reason OceanLynx did not work.

    First, Both of the technologies are attempting to harvest the KE of the Ocean.
     And that is a mistake, because it eventually results in devastation, even though SDE has no mooring, it still is harvesting KE ( remember Port Kembla).
    www.illawarramercury.com.au/news/local/n...

    Secondly, SDEs design utilizes the relatively low(compared to Deeper water) Wave energy associated with Shallow water 'breaker' waves, meaning that for every linear horizontal meter of available wave, its device has lower associated wave energy flux input, meaning associated lower wave energy absorption, and eventual output, which limits the device. They even tell you their limitations "The system has a potential to produce a net of 38kWh per meter of beachfront".
    Remember, Wave energy flux is directly proportional to Wave Height.

    Thirdly, being a shorebased design, the SDE device consumes a high amount of onshore real estate, which may not be a factor in some geographic areas, but definitely is, in most. About 90% of the system, the generators, hydraulics and automation, is located on the beach in an approximate distance of 500 meters from sea front. This also requires security, theft of copper, think Vandalism, electrocution hazard, and so forth.

    www.youtube.com/watch?v=Bf5fOr8XjpY

    Conclusion. SDE is double dog doomed for eventual commercial failure and lacks even a reasonable competitive edge in all but some very crappy limited applications and relegates them to minor niche status. Survivability also would in my opinion be very poor.

    www.energy-daily.com/reports/SDE_Has_Fin...

    en.wikipedia.org/wiki/SDE_Sea_Waves_Powe...

    coursonc



    Disclosure: Long OPTT
    Tags: WEC, OPTT
    Aug 28 7:26 PM | Link | 1 Comment
  • Boring Mooring, the WEC Achillies Heel

    There has been a lot of discussion about the ability of a WEC design needing capacity to withstand extreme storm wave conditions. I agree this subject, and its overall successful inherent design, is paramount to the ultimate survival, and invest-ability into the WEC company who makes it. I will even go so far as to say, at the glee of the industries naysayers, that it may be the Achilles heel, as failure of the mooring system, results in catastrophic loss. The naysayers will also interject, and expound at great length the lack of actual at sea test data for specific and actual WEC applications, albeit existance of high experience and use of the systems for other non WEC applications.  It is a touchy subject, one that even I am reluctant to discuss, as it makes the WEC investment seem more of a go- no go endeavor, if you assess failure risk as high, rather than go eventually, at what price, as the mooring system is heavily depended upon for success. One good thing is, Even going back to the days of Keefs ancestors, the marauding Pirates, (in search of Elephant testicles<inside joke>?) there has been a real need for the secure and reliable ability to moor your Ocean going device (Pirate testicle collection ship), and man has been learning ever since. There is a lot of data, and different designs, materials, that have been used in various marine environments throughout mans foray into the Oceans, and a lot of mooring knowledge can be attributed to the Oil and Gas industry, gleaned thru necessity during off shore oil drilling activities, for mooring of giant oil platforms, and on station ships, in varying oceanic sub floor mediums. Some of these mooring designs have stringent conditions, due to the application to a producing oil platform, prone to leaks and spills as a result of excessive movement.  Some of these highly successful and  proven technologies can be implemented in WEC mooring technologies, with great success, and others require modifications. Obviously, the Oceans motions of surge, sway and yaw necessitate an external restoring force (mooring) in order to return or maintain  original equilibrium position and Station Keeping.  Mooring systems for WEC use have advanced as the WEC deployment location has progressed to higher wave flux. Shoreline, Nearshore, and Offshore are three common classifications.

     

    The two major requirements for a WEC mooring are to withstand the environmental and other loadings

    involved in keeping the device on station, and to be sufficiently cost effective so that the overall

    Economics of the device remain viable. The mooring should not adversely affect the efficiency of the device, should allow for removal of single devices with out affecting other devices, materials should be corrosion, sunlight and marine growth resistant, and of adequate strength, fatigue life and durability for the operational lifetime, and not allow tension loads on electrical transmission cables, and be of redundant design allowing failure of one line or cable without significant impact as a whole to the system.

     

    http://www.oreg.ca/docs/MooringSystems.pdf

     

    As we know, The OPT PowerBuoy technology comprises a semi submerged

    floating buoy consisting of an upright spar unit, surrounded by a vertically mobile toroidal

    (doughnut-shaped) float, with an onboard power conversion system and a submerged heave plate.

     

    The device is moored by a three point mooring system consisting of three gravity based anchors. (GBAs)

    These GBAs will be positioned in triangular orientation around the proposed test berth. An Auxiliary Subsurface Buoy (NYSE:ASB) will be attached to each GBA via a tensioned vertical mooring line made from synthetic rope. Mooring lines made from the same material will be linked in pre-tension from each ASB to the spar unit.  Each mooring line will be approximately 135m each in length. Bridle lines will be fitted between each mooring line and the base plate to further limit horizontal motion of the spar unit. The GBA design has been developed to allow cost effective deployment and retrieval using a relatively small capacity barge.

    www.oceanpowertechnologies.com/PDF/OPT_E...

     

    Navigational Risk Assessment (NRA) has been undertaken for the Billia Croo site by Abbot

    Risk Consultants in line with Maritime and Coastguard Agency’s guidance

    The largest waves at Orkney originate from the 300°N offshore sector and a number of other analyses have confirmed that the 100 year return period storm wave is approximately 28m. General climate

    characteristics have been extracted from Kirkwall 1971-2000 meteorological averages with average

    annual rainfall of approximately 1030mm/year, and average annual wind speeds are recorded at 13.6

    knots (at 10m).

     

    Robert E. Harris, Lars Johanning, and Julian Wolfram have contributed extensively to WEC mooring design:     High suitability WEC mooring designs are outlined on pg 6, Table III, with mooring components and suitability in Table IV, pg 7.

    http://www.oreg.ca/docs/MooringSystems.pdf

     

    A Point Absorber WEC is relatively small compared to the wave length and is able to capture energy from a wave front greater than the physical dimension of the absorber  The point absorber has an advantage, in that it does not have a principal wave direction and is able to capture energy from waves arriving from any direction. Thus, Point absorber moorings can be simpler, than terminator or attenuator WEC designs, because the keeper station for the terminator or attenuator designs additionally has to allow the unit to ‘weathervane’ into predominant wave directions, but this is not necessary for point absorbers. Point Absorbers also are predominately PE absorbers, designed to capture the up and down motion of the waves, in contrast to KE absorbers, and as such also have a lower mooring footprint per KW absorption, than other designs such as terminator, or attenuator designs.

     Development of Efficient design techniques for Mooring system optimization for WEC and Arrays is ongoing. This is a study from ‘SeaChange, a marine Knowledge, R&D facility from Ireland with MCS Kenny.

    http://www.marine.ie/NR/rdonlyres/1AE5EFE4-6DBD-4172-8C57-CA5D065DC39D/0/Developmentofanefficientdesigntechniquefortheoptimisationofmooringsystemsforwaveenergy.pdf

     The South Western Mooring Tests Facility (SWMTF) is a unique installation funded by the South West RDA and ERDF, part of PRIMaRE

    http://primare.org/

    www.primare.org/resources/files/PRIMARE%...

     The facility aims to significantly aid the research and development of suitable mooring configurations for wave energy devices in support of wave energy device developers and the South West RDA’s Wave Hub project. The test facility will be deployed in Falmouth Bay.

    Mooring basics
    http://www.inamarmarine.com/pdf/Moorings.pdf

     Kevlar and steel rope mooring comparisons by DuPont
    http://www.ultramarine.com/hdesk/document/kevlar.htm

     Mooring systems
    http://www.bluewater-offshore.com/downloads/CBMooringSystems.pdf

    Mooring designer
    www.axystechnologies.com/BusinessUnit/AX...

     coursonc




    Disclosure: Long OPTT
    Aug 26 6:04 PM | Link | 8 Comments
Full index of posts »
Latest Followers

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.