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  • Seadrill: Holding Might Be Better Than Selling At Current Price Levels [View article]
    The way I look at it, there is a massive gap around $21 that is yet to be filled. Based on mean reversion alone, this can easily bounce to $17+ within a few months and then fill the gap at $20. Once oil stabilizes, which is very soon, this will find it's light at the end of the tunnel. Further, if SDRL authorized buybacks for the past few weeks the EPS will rise as the shares outstanding decrease.
    Dec 18, 2014. 02:23 AM | Likes Like |Link to Comment
  • Crucial Facts About Energy Stocks [View article]
    LOL ! Stick to trolling utilities
    Dec 13, 2014. 02:17 PM | Likes Like |Link to Comment
  • Is This A Good Time To Buy Seadrill? [View article]
    /CL is at 63.20 as we speak. Looks like $60 may be the short term floor
    Dec 10, 2014. 01:32 AM | 1 Like Like |Link to Comment
  • Is This A Good Time To Buy Seadrill? [View article]
    you rang the bell at the bottom. capitulation. i would buy calls to make yourself feel better
    Dec 10, 2014. 01:26 AM | Likes Like |Link to Comment
  • Go Where It Is Darkest: When Company, Country, Currency And Commodity Risk Collide! [View article]
    It's fairly obvious that iron ore prices have decreased revenues. This is what it looks like in context. Now, have revenues fallen off a cliff for 2014? No.

    2012 - 45.4B
    2013 - 48.1B
    2014E - 41.0B
    2015E - 43.5B

    The 11-year average operating margin is 36.3%. The TTM operating margin is 22.6%. 2012 TTM op margin was 19.3%. If iron ore prices stabilize the operating margins will increase. Here are the earnings in context.

    Earnings -
    2012 - 2.20
    2013 - 2.38
    2014E - 1.61
    2015E - 1.59

    In due time, this will be back to $14, but it will require patience. Unless revenues contract severely from here due to iron ore prices below 55, this is fairly safe buy here. If they sell some non-core assets this thing will also zoom up.
    Nov 29, 2014. 08:36 PM | 1 Like Like |Link to Comment
  • Go Where It Is Darkest: When Company, Country, Currency And Commodity Risk Collide! [View article]
    "In a DCF model, with $1.52 B of twelve trailing months FCF as a starting point"
    The TTM FCF is ~8B, not 1.52B. You need to adjust your starting point. The average of 22 analysts for 2015E Revenue is $43.5B. However, I'll start with $43.27B for 2015.

    2015E

    Revenues $43,276
    Operating Margin 30.07%
    EBIT $13,012
    Taxes $4,424
    EBIT(1-t) $8,588
    + Depreciation $220
    - Chg WC $333
    FCFF $8,476
    Nov 29, 2014. 08:23 PM | Likes Like |Link to Comment
  • Go Where It Is Darkest: When Company, Country, Currency And Commodity Risk Collide! [View article]
    In regards to VALE, why did you not include the Value of Non-Operating Assets in your valuation model? Taking into account accumulated depreciation, the Net Property, Plant, and Equipment is approximately $80B. Surely these assets have value and should have been factored into the value of the equity. Although illiquid, these assets (core or non-core) could potentially be sold at "market rates" and add to the value of the equity.
    If added PPE, the equity would be somewhere around $180B instead of the $100B you proposed or $36/estimate value per share.
    Nov 29, 2014. 08:00 PM | Likes Like |Link to Comment
  • Iron ore drops below $70 for first time since 2009 as glut widens [View news story]
    it rebounded above 70 on Friday.
    Nov 29, 2014. 07:45 PM | Likes Like |Link to Comment
  • Go Where It Is Darkest: When Company, Country, Currency And Commodity Risk Collide! [View article]
    Currency risk, commodity risk, and deflation risk are all REAL RISKS when considering an investment in Brazil. The current value of the equity is so devoid from fair value that contrarian value investors will step in and swing this back to reality. From here, it should easily mean-revert to somewhere near $12. The biggest risk is Chinese demand falling into an abyss. I consider this concentration risk, in that, Vale has about 30% of their revenues tied into the fate of the Chinese economy and IO demand, 19% from Brazil. Also, keep in mind that as of last quarter only 64% of their revenues were derived from Ferrous Minerals such as Iron Ore. 23% of their revenues were derived from base metals such as Nickel and Copper.
    Nov 22, 2014. 01:15 PM | Likes Like |Link to Comment
  • Vale: Challenging Short-Term Environment, Compelling Long-Term Value [View article]
    thanks Frank
    Nov 13, 2014. 11:51 PM | Likes Like |Link to Comment
  • Arch Coal Could Be A Home Run [View article]
    Coal will be around for another 6000 years, but will the company be around ?
    Nov 13, 2014. 11:13 PM | Likes Like |Link to Comment
  • Vale: Challenging Short-Term Environment, Compelling Long-Term Value [View article]
    Is iron ore traded via electronic exchanges or just over-the-counter? i can't seem to find the spot price. anyone, have a good link? thanks.
    Nov 13, 2014. 12:24 AM | Likes Like |Link to Comment
  • Vale hits eight-year low as Citi downgrades shares to Sell [View news story]
    This is by far the best time to consider a long-term position.
    Nov 12, 2014. 11:58 PM | Likes Like |Link to Comment
  • Arch Coal Could Be A Home Run [View article]
    "The U.S. and China unveiled long-term plans to curb emissions of carbon dioxide and other gases linked to climate change, a surprise move aimed at kick-starting a new round of international climate negotiations and blunting domestic opposition to cuts in both countries.

    U.S. President Barack Obama and Chinese President Xi Jinping have been coordinating their CO2-emissions plans for months and met to discuss them jointly Wednesday morning in Beijing, senior U.S. officials said in an earlier conference call with reporters."

    CHINA?? China never considered a cap on CO2 emissions in the past. This would be negative for coal if China follows through on the above.
    Nov 12, 2014. 02:22 AM | Likes Like |Link to Comment
  • Arch Coal Could Be A Home Run [View article]
    "The one existential risk for coal was political in nature and that risk seems to at least be more remote this month than last month." Actually, the existential risks are as follows -- 25%+ bond yields, declining access to funding, estimated EPS loss for 2014, 2015, 2016, 2017, and very likely 2018, and harmful CO2 emissions. The political risk IS REAL. The push for clean burning fuel (natural gas, algae, solar) IS REAL. Even with a GOP presidential victory, lobbying groups and society as a whole will demand a cap on CO2 emissions. This means coal will continue to have an albatross on it's back. In other words, the shareholders of ACI can draw parallels from JRCC and PCX. The comment is not IRRELEVANT or a draw on one's IQ. JRCC and PCX had dwindling revenues, massive debt, and low liquidity. Further, these companies both engaged in the sale of metallurgic and thermal coal. For a glimpse of the future, I would revisit the past and review what led them into filing for bankruptcy. Here's a hint -- Debt/Cash > 5.
    As of today, Arch Coal's equity has absolutely 0 VALUE. They have $5B in debt with $1B in cash (Hint: Debt/Cash > 5) and significant cash outflows that would decrease their cash reserves (primarily interest expense). However, the only short term catalysts would be for them to increase liquidity by consolidating with a larger company OR sell some of their non-core (or core?) assets. If none of these happen, they will continue to burn through their free cash flow and report loss after loss (for the next 3 years at minimum). As a shareholder, book value will decline rapidly as retained earnings also decline. They will also incur losses when they report write downs on the value of their PPE. Dividends in the next 5 years? Forget about it. There are better places where one can park their capital and this is not it.
    Nov 12, 2014. 01:54 AM | 3 Likes Like |Link to Comment
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