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David White

 
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  • Looking For A Bounce In Oil Stocks? Let Hedging Guide You
    Thu, Oct. 16 CHK, CLR, EOG 1 Comment

    Summary

    • In the last three months CHK has sold off -36%. CLR has sold off -28%; and EOG has sold off -22%.
    • Oil prices have declined from roughly $105 to about $82 per barrel.
    • For these strong oil and gas E & P companies, this sell off may represent a long term or a short term buying opportunity.
    • Hedging may be a big determinant in whether you want to risk your money on these stocks. Current hedging data and more is provided in the article.
  • Oversold, 13.4% Dividend Breitburn Energy Is A Bargain On This Dip
    Tue, Oct. 14 BBEP 45 Comments

    Summary

    • BBEP is in the process of merging with QRE. This is expected to be accretive to distributable cash flow.
    • BBEP's merger with QRE makes BBEP more oily, which should be good longer term. In the short term, it may hurt.
    • BBEP (and QRE) have mature, low-decline rate assets. They do much less "drilling" compared to shale oil and gas developers. Financing the little they do should be little changed.
    • BBEP is also well hedged for 2014. This should cut down on the amount of "hurt" the lower oil prices will inflict.
  • Oversold, 11.3% Dividend Vanguard Natural Resources Is A Bargain On This Dip
    Editors' Pick • Mon, Oct. 13 VNR 35 Comments

    Summary

    • VNR closed on the acquisitions of two new properties in Q3 2014. These both should be accretive to distributable cash flow.
    • VNR reserves are 68% natural gas. Hence VNR is not overly exposed to falling oil prices; and natural gas prices seem likely to rise.
    • VNR oil production is well hedged for both 2014 and 2015 as is its natural gas production.
    • VNR grows mostly by buying mature, low decline rate assets that require little development. This should obviate the development financing problems of many development companies.
  • 11.5% Dividend Payer American Capital Agency Adopts Monthly Dividends And NAV Estimates
    Sun, Oct. 12 AGNC 22 Comments

    Summary

    • AGNC gained $1.77 per share in book value in Q2 2014 along with $0.65 per share in dividend payout for a total return of $2.42 (about 9.9% for Q2 alone).
    • AGNC has announced monthly dividends and book value estimates beginning October 31, 2014 (and available about November 15, 2014). This should help investors track book value.
    • The 10-year US Treasury Note yield is down from 2.53% as of June 30, 2014, to 2.28% as of October 11, 2014 (-25 bps) - book value gain for AGNC.
  • Oversold, 14% Dividend Payer CYS Investments Looks Attractive
    Fri, Oct. 10 CYS 16 Comments

    Summary

    • CYS had a total economic return of 9.8% for Q2 2014 alone (dividend + book value gain).
    • CYS likely lost a small amount of book value in Q3 2014, but it will still pay its great dividend.
    • The spike in bond yields (fall in bond prices) was short lived; and they have now retraced. This makes CYS a much safer investment.
  • Oversold, 15.4% Dividend Payer Armour Residential REIT Looks Attractive
    Tue, Oct. 7 ARR 20 Comments

    Summary

    • ARR pays a fantastic 15.4% annual dividend.
    • The dividend appears to be stable, although the Core Income of $0.13 per share in Q2 did not fully cover the $0.15 dividend.
    • ARR has already declared the same $0.15 per share dividend ($0.05 per month) for Q4 2014.
    • Interest rates have been relatively stable for Q3 with the 10 year US Treasury Note yield ending Q2 at 2.53% and ending Q3 at 2.49% (a 4 bps difference).
    • The Q2E 2014 book value of $4.90 probably decreased to roughly $4.86 per share. This is almost 25% higher than the $3.90 stock price on October 6, 2014.
  • If Gilead's Hepatitis C Treatment Grosses $10B+ Per Year, Arrowhead's Hepatitis B Treatment Is Attractive.
    Mon, Oct. 6 ARWR 27 Comments

    Summary

    • GILD's Hepatitis C treatment Sovaldi grossed $5.75B in 1H 2014. FY2014 targets range from $9B to $14B. It's a BLOCKBUSTER.
    • ARWR has a hepatitis B treatment - ARC-520 - that is in Phase IIa development. It looks very promising so far. Further news is expected soon.
    • Hepatitis B is roughly twice as prevalent as Hepatitis C, and there are no known "cures" yet. ARC-520 could be at least a "functional cure".
    • If your interest has been peaked, there are many more details in the article below.
  • 10% Dividend Increase At Union Pacific Makes This Steady Producer More Attractive
    Sun, Oct. 5 UNP 5 Comments

    Summary

    • On July 31, 2014, UNP announced a dividend raise of 10% to $0.50 per share for Q3 2014.
    • The transport sector is up 28.1% year to date, while UNP's stock price is up 26.62% year to date.
    • Railroads represent a near monopoly that is also a secular growth story for decades to come, as the price of energy is expected to climb.
  • Downtrodden Guess Likely To Be Hurt Further By A Weak Euro, Euro Area
    Fri, Oct. 3 GES 2 Comments

    Summary

    • Guess has seen both revenues and operating earnings fall consistently for the last three years.
    • Q2 2015 operating earnings were down 55% year over year.
    • Guess has 35% of its market in Europe, where more than 20% of young people (Guess' target demographic) are unemployed.
    • Guess is also suffering from a move away from the "fantasy girl" to a more realistic girl in marketing and advertising. It is unclear how the company will address this.
  • Raise Of Dividend To 18.5% Makes Western Asset Mortgage Look Attractive
    Mon, Sep. 29 WMC 34 Comments

    Summary

    • WMC raised its dividend from $0.67 to $0.70 per share for Q3 2014. This brings the annual dividend rate to about 18.5%.
    • Core earnings plus drop income at $1.00 for Q2 2014 would easily cover this. Even the core earnings alone of $0.75 per share would have.
    • WMC is heavily hedged. It should be able to withstand a move upward in interest rates with little damage.
  • There Are A Lot Of Positives For Chesapeake Energy, Including A Major Technical Support
    Sun, Sep. 28 CHK 6 Comments

    Summary

    • Chesapeake Energy increased production in Q2 2014 by 13% year over year.
    • However, it saw EBITDA and adjusted EBITDA fall significantly as prices of oil and natural gas fell.
    • CHK has huge assets in some of the most prolific unconventional fields in the US (12+ million acres).
    • CHK has reduced its net debt to approximately $10B, which has been a milestone for some time.
    • Lower than normal natural gas stores and a likely El Nino winter may lead to higher natural gas prices this winter. The fundamentals should help CHK make a technical bounce.
  • Bellwether Northwestern Is A Buy On The Interest Rate Spike Mediated Dip
    Wed, Sep. 24 NWE 4 Comments

    Summary

    • NWE has historically been one of the best performing utility companies in the US. It provides solid long term growth and a good dividend.
    • It managed nearly 4% growth in 1H 2014. It managed to increase gross margin 3% in Q2 2014.
    • Its newly acquired hydro assets are going on rate base soon. Read further to learn more.
  • Linn Energy's Latest Asset Swap With Exxon Mobil Should Cut Costs And Increase Payouts
    Tue, Sep. 23 LINE 38 Comments

    Summary

    • LINE has inked another 1031 asset swap with XOM. This will swap high development and maintenance expense Permian assets for low decline, low maintenance Belridge assets.
    • The XOM assets are 51% developed and 100% oil. They are also strategically located near many other LINE assets.
    • LINE gives up 4.7 MBoe/d of production for XOM's 3.4 MBoe/d of 100% oil production.
  • How Does Annaly Look After The Recent Rate Rise? Still Good
    Mon, Sep. 22 NLY 5 Comments

    Summary

    • Annaly Capital has been one of the blue chips of the mortgage REIT sector.
    • It still has a large investment in Agency fixed rate RMBS. These go up in value as interest rates go down; and they go down as interest rates go up.
    • Interest rates are at virtually the same point on September 19, 2014 as they were on June 30, 2014.
    • This means the $13.23 per common share, which is higher than the $11.31 stock price as of September 19, 2014, is a good reason to buy this 10.6% dividend payer.
    • Read the article for an explanation and rationale of likely interest rate moves. NLY's valuation will likely move with such rate moves.
  • New Operations News And A Guide Higher On Q3 Production Make Abraxas Petroleum Look Attractive
    Mon, Sep. 22 AXAS 3 Comments

    Summary

    • Abraxas Petroleum on September 15, 2014 raised its midpoint production guidance from 6600 Boepd to 6950 Boepd.
    • The original guidance was already a +32% gain sequentially over Q2 2014 production of 4,987 Boepd. The new Q3 guidance is about +39% higher than Q2 2014 production.
    • AXAS cut lease operating expenses from a midpoint of $13.50/Boe to $12.50/Boe. Read on for more details.
  • The Fall On The COO Leaving Has Created A Buying Opportunity For Continental Resources
    Sun, Sep. 21 CLR 8 Comments

    Summary

    • CLR's President and COO Rick Bott abruptly decided to leave.
    • Oil prices have been going downward for the last month or more.
    • With oil prices seemingly stabilizing, now may be a good time to buy CLR, which has been a blue chip in unconventional oil & gas E&Ps.
  • 3.6% Dividend Payer DDR Corp. May Be A Troubled Company
    Tue, Sep. 16 DDR 2 Comments

    Summary

    • DDR grew FFO 3.7% year over year to $0.28 per diluted share. It pays a 3.6% dividend ($0.62 per share annually), which is a 15% increase over 2013.
    • However, the retail industry in general is moving to more online retailing. This means slower growth or even shrinkage of the mall space that DDR is in.
    • Further DDR's strategy, while good, has apparent road blocks ahead. This almost has to mean lower growth and eventually lower earnings performance. Read more for some interesting details.
  • 5% Dividend Health Care REIT Is Overpriced, But Its Long-Term Strategy Is Sound
    Mon, Sep. 15 HCN 4 Comments

    Summary

    • HCN is in a business for which the demographic fundamentals are fantastic. HCN's strategic plan is also good.
    • HCN is one of the leaders in the Healthcare REIT space. It has a long term total return of 15.9%. It returned 31.1% through August 31, 2014 year to date.
    • Unfortunately its great performance has led to it being overpriced. For more details, read the article.
  • It's Hard To Ignore George Soros' SPY Put Position Anymore
    Sun, Sep. 14 CNX, EDU, LVLT 42 Comments

    Summary

    • George Soros had a $2.2B S&P 500 put position as of June 30, 2014, per his 13F filing. This represents 16.6513% of his portfolio.
    • The current bull market is 66 months old. The median length has been only 50 months. The average length has been 67 months since 1871.
    • Investors have not seen even a big pullback in the S&P 500 since July-August 2011. We are overdue for at least that.
    • There are many more reasons to expect a down move in the S&P 500 in the reasonably near future. Read the article to learn more.
  • Can SandRidge Energy Get Its Mojo Back?
    Fri, Sep. 12 SD 30 Comments

    Summary

    • SandRidge sold production assets in early 2014. Therefore, its revenue comparisons will tend to be bad for the rest of 2014.
    • SandRidge also suffered from the same bad weather that hit other oil and gas E&P development companies.
    • However, the reality is that its management strategy is sound, and it is executing that strategy well for good growth, especially in liquids.
    • It has already gotten much of its mojo back. If you are interested in the details of this, read more. It may be fascinating.
  • Is Alibaba Amazon's Replacement As The Online Retail Growth Leader?
    Fri, Sep. 12 AMZN 33 Comments

    Summary

    • The Alibaba IPO is scheduled for September 19, 2014. Alibaba has sales that are roughly four times those of Amazon.
    • Amazon is far overpriced on a fundamental basis with an FPE of about 172. It has also been technically losing its upward momentum in 2014.
    • The BABA IPO should officially make BABA bigger in market cap than AMZN. Plus it will give BABA about $21B in new money it can use for development.
    • WMT, SPLS, and others are competing with AMZN online already. The BABA IPO may end AMZN's momentum run with finality. Read further for more details.
  • After The Oil Price Fall, It May Be A Good Time To Buy Star Performer Athlon Energy
    Thu, Sep. 11 ATHL 1 Comment

    Summary

    • The recent oil price fall may present a good buying opportunity for 50% per annum EPS grower Athlon Energy.
    • ATHL guidance for Q3 2014 is for 26.5-27.5 MBoe/d of production. ATHL has already cited 28 MBoe/d of pro forma production for June 2014 -- ensuring a beat.
    • ATHL's oil production is well hedged for both FY2014 and FY2015. This ensures revenues to a large degree.
    • ATHL grew revenues 109% year over year in Q2 2014. It grew EBITDA 95%. Read further for more details.
  • Tepper Declares 'The Bond Rally Is Over'; But Is It?
    Mon, Sep. 8 AWK, AWR, CWT 6 Comments

    Summary

    • David Tepper, famed founder of hedge fund Appaloosa Management LP, on September 4, 2014 proclaimed that the bond rally was over after the ECB cut interest rates.
    • Many things argue against Tepper being correct this time out. Most notably the Q2 14 country Euro Area GDP growth was 0.0%. This article discusses many such issues more completely.
    • Further the ECB's bond buying program should move many Euro Area bonds yields downward. These may drag US Treasury yields down with them.
    • This article also suggests at least one way investors can play the uncertain world economic state. Read more for some interesting information that most investors should know.
  • Sabra Health Care's Industry, Diversification, Stability, Dividend, And Growth Look Attractive
    Fri, Sep. 5 SBRA 1 Comment

    Summary

    • Sabra has been diversifying its customer base, its tenant base, and its variety of businesses to apparent success.
    • Sabra's Q2 2014 results substantiate the profitability and growth of its businesses. Normalized FFO grew 39% and normalized AFFO grew 29% year over year. This is good growth.
    • Sabra also pays a hefty 5.30% dividend. Read further for more details. You may find SBRA an interesting investment.
  • Matador Resources Is A Strong Stock And It May Triple Or More.
       • Sat, Aug. 30 MTDR 4 Comments

    Summary

    • MTDR has 152,132 net prospective acres with about 62,000 in the Permian and 29,149 net acres in the prolific oil window of the Eagle Ford.
    • Its approximately 62,000 net acres in the Permian Basin are virtually undeveloped as yet. They provide huge upside to oil production with wells up to 91% oil.
    • The early results from the Permian look very promising. MTDR has a 2-rig exploration and delineation program for the Permian for FY2014.
    • Since the Permian leases are mostly government leases, one well can hold a huge acreage by production. This factor will allow MTDR to drill more where it wants to.
    • Continue reading for more details.
  • 11.5% Dividend Payer Invesco Mortgage Capital Is Returning Large Profits In 2014
    Wed, Aug. 27 IVR 9 Comments

    Summary

    • IVR pays an 11.5% dividend.
    • IVR gained $1.27 per common share in book value in Q2 2014 for a total economic return of about +9.6% for Q2 alone and 16% for 1H 2014.
    • Further, IVR is positioning itself strategically for eventual rising interest rates. Read more for more details. A well-run income investment may be worth your time.
  • Continental Resources Is Set To Take Back Its Crown And To Double Its Reserves
    Editors' Pick • Mon, Aug. 25 CLR 8 Comments

    Summary

    • Continental Resources was recently supplanted as the biggest oil producer in the Bakken by the combination of KOG and WLL.
    • CLR is growing faster than the combined companies of KOG and WLL by drilling alone. Plus, it is already the bigger overall producer, including other areas such as the SCOOP.
    • In addition, CLR is testing new well density drilling strategies and new well completion techniques that will lead to much more production and proved reserves.
    • Read the article for more details. They make CLR look like a huge buy.
  • Newcastle Investment Corp.'s Planned Senior Housing Spin-Off Should Mean Gains For Shareholders.
       • Fri, Aug. 22 NCT 13 Comments

    Summary

    • NCT had a recent 3 for 1 reverse stock split.
    • NCT put in a good Q2 2014. It pays a roughly 8.75% annual dividend, which looks stable.
    • NCT is planning to spin-off its senior housing business as SNR in the very near future. Past spin-offs have been lucrative for investors in NCT.
    • Read more to get an idea of how lucrative the spin-off may be for investors.
  • 12%+ Dividend Payer AG Mortgage Investment Trust Is An Attractive Mortgage REIT
       • Tue, Aug. 19 MITT 3 Comments

    Summary

    • MITT pays a 12.7% annual dividend. Its Core Earnings in Q2 2014 covered this.
    • MITT had a $0.73 per common share book value gain in Q2 2014 for a total economic return of about 6.8% for Q2 2014 alone (about 27% annualized).
    • MITT is shifting its strategy to account for the likely interest rate rises in the future quarters. This shows good management. Read more for more details.
  • Orchid Island Capital's Recent Performance Compared To Peers AGNC, ARR, And WMC
    Tue, Aug. 19 ORC 20 Comments

    Summary

    • ORC is a relatively new mortgage REIT, which was founded in 2010. It has been growing its portfolio via large secondary offerings.
    • ORC pays a very attractive 15.19% annual dividend. Additionally it had a +$0.58 book value gain (+4.65%) in Q2 2014 for a total economic return of about 9% in Q2.
    • This article also looks at ORC's performance longer term. It compares that performance to other mortgage REITs. It discusses ORC's preparation for the future quarters. Read more.
  • Multiple Catalysts Make Oversold Diamondback Energy Attractive
    Editors' Pick • Mon, Aug. 18 FANG 1 Comment

    Summary

    • FANG's Q2 2014 production was up 32% from Q1 2014 and 171% from Q2 2013 at 17.8 Mboe/d.
    • On July 18, 2014, FANG announced the acquisition of 13,136 net acres in the Permian Basin with production of 2.2 Mboe/d and 5.2 MM of proved reserves.
    • FANG spun off VNOM in Q2 2014. It retained ownership of 92% of the common units and all of the IDRs.
    • FANG is working to cut costs and improve drilling and completion techniques for further profits.
  • Bakken E&P Oasis Petroleum May Be A Good Buy On This Dip
    Mon, Aug. 18 OAS 9 Comments

    Summary

    • OAS has 507,000 net acres in the prolific Bakken play.
    • Recent completion technique improvements have seen OAS get about a +35% improvement in IP rates. This should pump future production numbers up.
    • After a -20%+ drop in stock price, OAS is a buy with good fundamentals and positive geopolitical events for oil.
    • Read further to see more details in what may be a great long-term trade.