EXCO Resources (XCO) released earnings yesterday, with a conference call this morning, and by all measures, it was a decent report. While in no way did they "blow the doors off", the mere stabilization of earnings and cash flows, after last year's debacle, is a feat worth recognizing. In addition, they beat expectations, which we believe were set low, and with a strong management team and board in place, it appears capital and liquidity have been properly rationalized. XCO is demonstrating that they can live within their cash flow while they await higher natural gas prices.

XCO had net income of 74c per share, which was high due to a net write-up of $174mn in previously written down assets. The majority of the write-up was due to the sale of their conventional assets into a partnership as the cash they received was greater than its book value. Adjusted for non-recurring

We recently wrote an article on SandRidge's Permian Trust (PER) where we determined that the shares looked attractively valued at $14/share. SandRidge has two more royalty trusts and here we take a look at the Mississippian Trust II (SDR) where we find that these shares are also attractively valued and, in fact, even more so than PER. Our analysis indicates the SDR trust is offering close to a 15% yield but, as we'll discuss, there is more risk in SDR. In particular, the return structure is asymmetric with SDR's performance being more susceptible to downward energy prices. That said, we think the incremental return offered by SDR makes it a suitable candidate for risk-tolerant income investors.

SD's royalty trusts have been under pressure as commodity prices have come down as well as oil and gas reserves relative to initial expectations when the trusts were IPO'd. For example, at the

Corning (GLW) delivered nicely this quarter with net income of 33c, well above our expectation in the low 20s. In particular, revenue was $1.8 bn, down 5.5% yoy, but when the impact of the yen is factored in, revenue was up slightly by 1.3%. We were looking for not only a soft quarter in sales but also a $130mn hit due to the big move in the Japanese currency. Smartly, GLW put a hedging program in place - probably others did too, exacerbating the yen move - and this added $65 mn in "other income." It is now hedged at 93 Y/$ mitigating any further damage. In addition, probably due to write downs, the tax rate of 6.3% was quite low this quarter. But even netting out these effects, the quarter's earnings would have roughed out to 30 cents/share.

In addition, GLW upped its dividend slightly to 40c/annum so it

Those who follow our work know that we've been watching the progress of PetroLogistics (PDH) for some time now. We've written a couple of articles (here and here) discussing the merits of the recently listed (May 2012) company, and we've been actively investing/trading in the name. We recommended longs re-enter the trade at $14 per share, after taking profits in February near $16.

In hindsight, it appears we were a bit early as shares have been trading around $12-$13 and, technically, the chart looks weak (please see Thomas Sobon's excellent comments on the technical side). In addition, high-volume trading earlier this year indicated that some pre-IPO investors likely divested some shares. However, we believe the time has come for PDH to shine with a forthcoming dividend that should knock the cover off the ball and bring PDH into the limelight of dividend investors.

PDH produces propylene

There is good news and bad news on SandRidge Permian Trust (PER). First the bad news. The distributions are likely to be significantly lower than originally advertised on this royalty trust. This was hinted at last quarter when the distribution was 2.75% below target (-1.7c). While this may not sound like much, we expect, based on information from their recent 10-K information, that distribution disappointment will begin to grow more dramatically over time. The good news, however, is this appears to be already baked into the price at around $14 a share and that a 10% internal rate of return (IRR) or "yield" is seemingly in the cards. In addition, one might deem this a real yield since it is computed using a flat, constant, price for oil and natural gas (i.e., zero-inflation). Given that US Treasury Inflation Protected bonds (TIPs) have negative real yields, PER appears to be a

Cliff Natural Resources (CLF) recently issued common and preferred shares and, with the recent price drop, we became interested in the company. In particular, with a publicly trading version of the 7% preferred shares (CLV) trading at a decent discount, we became very interested. Upon inspection, however, we found that CLV is overvalued given the deep-in-the-money put embedded in the shares based on the mandatory conversion to common shares in 2016. Investors would be better served owning the senior bonds and selling puts on the common stock vs. this preferred vehicle.

We'll start by stating we do not have a fundamental view on CLF. We became interested in the sector given the recent beating that all mining stocks have received. And, with the recent issuance of new equity, we figured it might be time to start fishing. CLF issued mandatory preferred shares with a 7% coupon in mid-February and, as

EV Energy Partners (EVEP), an oil and gas MLP, has had a rocky road over the last year. After capitulating into the mid-40s last summer, as concerns over natural gas producers peaked, the units rocked back into the mid 60s by October as the optimism over their Ohio-Utica acreage soared. EVEP management added to the froth last year with hopes of $15,000 per acre and a deal in hand by year end. They own ~170k acres, mostly in the volatile-oil fairway, so this would have been a nice year-end bonus. When reality struck that a deal was not to be had so soon, management (and bullish investors) had to eat some humble pie with the realization that the money was short and not on time. That said, with EVEP now priced at 52 and change (as of Wed. close), we believe the price is right for an exceptional rate of

EXCO Resources (XCO) is a pummeled stock. From being in the mid-$20s less than two years ago, it has drifted down to $6 per share of late. In mid-2011, management tried to buy the company out at a premium ($20.5) but was rejected for being too low of a price.

Wow! How times have changed. The big decline in natural gas prices, particularly the dry kind (methane), has hurt leveraged E&P companies like XCO. They've been saddled with poor earnings, little cash flow, and the need to raise capital. Chesapeake Energy (CHK) is probably the poster child for the sector, but XCO has been a short sellers' paradise too. Just recently, the company had to sell off a chunk of decent producing properties at cheap prices to improve liquidity. All that said, brighter days could very well be ahead for XCO and, assuming natural gas prices do not

Last Thursday, Barrick Gold (ABX) released fourth quarter and year-end results in which they wrote down $4.2bn in assets but, net of such, they produced decent (non-GAAP) earnings per share of $1.11, slightly ahead of expectations. Many analysts lauded the report thinking that, with the asset writedown, the bad news has been shaken out of the stock and it will be poised for growth going forward. We are not as sanguine. In fact, we believe that, with the price of gold under significant pressure, ABX is rapidly approaching a cash flow dilemma with a significant need to raise capital. This, coupled with our previous analysis, causes us to recommend that investors continue to seek downside protection and we maintain our $25 price target.

The troubles at Barrick are well known. Higher costs at their new gold projects (Pueblo Viejo and Pascua Lama), the recent devaluation of their copper reserves

We wrote an article a number of months ago arguing that Exelon (EXC) was more than fully valued in the $35-36 range and that investors should wait until the low 30s to enter. Part of our view was predicated on the idea that the dividend was safe, albeit funded with debt. Since then, much has changed. The dividend was put on notice during the third quarter's conference call and subsequently cut to 31 cents per share per quarter just recently; the cut takes effect in Q2. We were lucky enough to have exited our original (small) long position, soon after our "negative" article was published, as we began to view the odds of an equity dilution or dividend cut more likely. Going forward, while we do not see EXC as an obvious short candidate, we do think there are other names in the utility space that have

In a recent article we wrote, we espoused the idea of investing in Intel (INTC) for patient investors and a commenter noted that Corning (GLW) was in a similar way. That piqued our interest and we decided to take a closer look and in fact, if anything, GLW appears an even more attractive long-term investment. That said, GLW is in for a tough slog over the next quarter or two. The current negatives for GLW are a trough in display glass (i.e., LCD) sales, especially for Q1, issues with a solar subsidiary, and the $/Yen, which hurts Corning as the dollar strengthens versus the yen as it has recently. On the other hand, GLW's balance sheet is pristine, it trades at a very low multiple, its dividend yield is reasonable and sustainable, and the company generates enough cash flows to support buybacks. In addition, with a queue of exciting

I originally thought about titling this article "YAIA: Yet Another Intel Article" but I wasn't sure there were enough graying techies like me who would get the joke. I can still remember coding up my first 8086 - how cool was that - and when the state of the art was a 20 mHz bit-slice processor. Okay, I am dating myself, but the point I want to make is that I'm not exactly up on the latest technology when it comes to computer chips. So why am I writing yet another article on Intel especially since I don't really now about the technicals? Well, its because, while I may no longer be one of the technophiles, I know an attractive investment when I see one. For more details on the technical side, I would recommend reading some other SA authors, for example, here.

First, let me state the obvious.

Back in early December, we wrote about the attractiveness of PetroLogistics, LP (PDH) for income investors as we expected their dividend, which does vary, to begin to increase both in Q4 but also into 2013. Since then, there have been a number of analyst upgrades, which was discussed in another Seeking Alpha article. While that article was interesting, it missed a few of the important points that investors need to consider. For example, the author stated that PDH has a stated yield of 6%, but that was based off of annualizing the depressed Q3 distribution of 21 cents per unit. Going forward, it looks like Q4 will produce a distribution closer to 30 cents and, based on futures markets, dividend growth for 2013 looks quite rosy.

The most compelling story for PDH is that the "glut" of natural gas liquids, both propane and ethane, benefits PDH in two

Barrick Gold (ABX) looks overvalued to us and we recommend buying downside protection in the options market. Given its large capital expenditures on both acquisitions and organic growth, we see a large negative cash flow for the next two years, resulting in increased debt, leverage and, possibly, equity issuance. Its cost overruns and delayed start to its vaunted Pascua-Lama mine hurt its credibility with investors and recent comments from management have rung hollow. Looking beyond these problems, we see the stock's current price (about $34 per share) reflecting a 6% relative growth of gold prices vis-a-vis cost of production which we believe is unrealistic. It will survive, but we see a share price in the mid 20s as more reflective of true value.

We're agnostic on the short-term price of gold. Longer term, inflation and the desire for a monetary substitute may drive it higher. History suggests inflation risk, after

Let me start by emphatically stating that Teekay Tankers (TNK) is a speculative investment. It is not meant for income investors or others who cannot or do not want to risk principal. That said, TNK does provide a dividend but, in contrast to most dividend stocks, it varies from quarter to quarter based on the so called "cash flow available for distribution." That is a fancy way of saying it pretty much pays out everything it earns. Thus, even in the best of times, the dividend would change from quarter to quarter, which might make it unsuitable for income investors.

Okay, enough with the caveat emptors. Teekay Tankers is part of the Teekay family, which consists of Teekay Corp. (TK), the parent, and the "daughters" Teekay LNG Partners L.P. (TGP), Teekay Offshore Partners L.P. (TOO), and Teekay Tankers Ltd. Each of the daughters provide shipping services

PetroLogistics (PDH) has had a rough ride since its IPO back in May of this year. After starting at $17 per share, the stock declined to nearly $10 during the June swoon. Partly at fault was the prorated distribution for Q2 of 26 cents causing some investors (and websites) to "miscalculate" a prospective yield. If the company had been public for the whole second quarter the distribution would have been 45 cents and, once the market realized this, the price recovered to about $14. But, unfortunately, the 3rd-quarter distribution was a disappointment at only 21cents causing the stock to revisit $10 during the post-election market sell-off. In addition, variable rate MLPs, which PDH is one of, have increasingly been frowned upon by investors looking for more steady distributions. Finally, there was concern in the market about the expiration of a lockout, in late October, allowing pre-IPO investors to liquidate

Recently, a friend suggested we give the utility stock Exelon (EXC) a look given its decent dividend yield and its lackluster performance of late, particularly versus the sector. I guess he figures we're a glutton for punishment as the stock has lost about 20% while the utility sector has, or should we say had, been on fire. Well at first blush, we were intrigued enough to take a small position and go into research mode. It seemed to us that they were just another victim of the meltdown in natural gas prices back in the spring and yet they hadn't received any reprieve from the recent rebound. In addition, we read that Izzy Englander's Millenium Partners took a sizable stake and we know they are pretty astute at that shop. Further, there was some other SA research that presented a decent investment thesis. And last, we like the

Recently, an article here on Seeking Alpha titled "The Value of Hedge Funds: 2 Differing Conclusions" presented two sides of the case about whether or not hedge funds create value, or alpha. On the pro hedge fund side was a paper, "The value of the hedge fund industry to investors, markets, and the broader economy," which was prepared by Investment Management KPMG and the Alternative Investment Management Association (AIMA) based on analysis performed by the Centre for Hedge Fund Research at London's Imperial College. The report wholeheartedly comes down in favor of hedge funds as providers of significant risk-adjusted returns, above what can be achieved in the broader markets, even with their high fees. Given the leanings of the authors (they cater to the hedge fund industry), we wondered whether there might be any bias in the report.

An issue we have with the report is

By now, everyone knows that the price of Natural Gas (NG) has plummeted over the last few years and, with it currently hovering around $2 per mCfe in the spot market, it is wreaking havoc on companies that are exposed from the long side. One of those companies is EXCO Resources (XCO) and a recent article in Seeking Alpha, titled "EXCO Resources: A Highly Leveraged Bet On A Natural Gas Rebound," did a great job in highlighting their exposure to NG prices.

Our own analysis, based on EXCO's presentations and public SEC filings, estimates that every $1 change in future NG prices affects the net asset value of their holdings by $20-$25 per share. This particular number needs to be handled with care as it doesn't factor in optimizing production in a low price (i.e., non-profitable) world, which is close to where we are today. It is also