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Douglas E. Johnston

 
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  • Distribution Reduction In The Cards For Calumet Specialty Products? [View article]
    not to mention IDRs which is really not right when coverage is sub 1. There should be formula added to the waterfall table that multiplies the IDR value by the DCR coverage prior to payment to GP with -tive values accumulating. Then, at least, the GP would share in some of the pain.
    Oct 29 07:57 AM | Likes Like |Link to Comment
  • Distribution Reduction In The Cards For Calumet Specialty Products? [View article]
    @Feckless - they just didn't want to tell anyone public what their contract pricing is for raw inputs. Not a big deal. As for listening to Jennifer - it looks like u won't have to do that too much longer....seems like she got demoted. This along with recent departures makes me think that things are not as rosy in the boardroom
    Oct 29 07:51 AM | Likes Like |Link to Comment
  • Key Takeaways From Cliffs Natural Resources' Third Quarter Results [View article]
    the concern has to be the interest coverage covenant. Even at the new ratio of 2, they have to generate 350+ in ebitda given current interest run rate of 180mn. Not sure how they get there unless prices recover...hard not to see dividend being eliminated
    Oct 28 10:50 AM | Likes Like |Link to Comment
  • Key Takeaways From Cliffs Natural Resources' Third Quarter Results [View article]
    there was an increase in the short-term component of long-term debt. so long-term debt wen down to 3bn but short-term debt went up....not sure how that is - some amortization of premium bonds or equip. loans - won't get deets until 10q. But net taking all debt net of cash, it was only down 100mn which came from working cap change (inventory).
    Oct 28 10:46 AM | Likes Like |Link to Comment
  • Distribution Reduction In The Cards For Calumet Specialty Products? [View article]
    its pricing information they don't want to make public
    Oct 28 10:26 AM | Likes Like |Link to Comment
  • Distribution Reduction In The Cards For Calumet Specialty Products? [View article]
    @papaone - refined product such as diesel and gasoline have also come down in price. The so-called crack spread (e.g., gulf coast 3-2-1) has fallen along with oil. It averaged ~12 in Q3 down 15% from Q2 and this quarter so far its around 9. Futures market is not showing any expected increase so, in a nutshell, their margins are actually worse although they do have some hedges in place (i think it was like 50% of production for 2014) that will help.
    Oct 26 04:34 PM | Likes Like |Link to Comment
  • Caterpillar: Impressive Earnings, But Wait On The Sidelines [View article]
    Hayden - thanks...i am guessing that without the loco bump and the tax/currency benefit Q3 would have been more like $1.35ish. They are guiding Q4 at a similar level ~$1.35 so they must not be assuming any incremental boost from loco sales (or they are being pessimistic). Either way, 2015 looks more like a $1.35x4 = $5.40 type year on say current share count ~600. They are going to buyback say 7.5bn with more debt i guess so share count drops to 525 engineers earnings back into the high 5s. So its trading at 18x next years non-engineered earnings which does seem pricey. I think they are getting near the cusp of leverage (north of 50% inc. pension but non-financial) where one would think market would start to notice.

    Prob $105 is a decent level to short technically if it does not hold.

    Funny how with all these buybacks management goes out of their way to pull rabbits out and put on the positive spin. One would think they'd do the opposite to benefit longer-term shareholders. Of course, all those execs options would be worth less!

    I like the GE vs CAT trade
    Oct 25 10:32 AM | Likes Like |Link to Comment
  • Freeport-McMoRan: Does Dilution Defeat Dividend Reinvestment? [View article]
    works for MLPs!
    Oct 24 05:05 PM | Likes Like |Link to Comment
  • Freeport-McMoRan: Does Dilution Defeat Dividend Reinvestment? [View article]
    excellent article. Too many income investors are enamored with high yield without realizing that in many cases they are getting diluted down to a smaller claim on future cash flows and, therefore, need to be reinvesting constantly.
    Oct 24 05:04 PM | 1 Like Like |Link to Comment
  • Update: Caterpillar Beats Earnings, Rises Outlook, Remains Attractive [View article]
    Q4 they are guiding to 1.36/share. Looks like there was a 16c/share tax/currency benefit in Q3 along with a 10c/share bump from selling NA locomotives in advance of pollution regulation going into effect Jan 1. If we use $1.35 as a guide, then its trading 18x forward earnings. Can they continue to issue debt and buyback shares boosting EPS? not sure...doesn't seem cheap to me
    Oct 24 03:13 PM | Likes Like |Link to Comment
  • Update: Caterpillar Q3 Earnings Remained Impressive, Revenue Needs To Improve [View article]
    according to their CC, there was a 16c/share tax/currency benefit and if you adjust for the "bump" in NA locos in front of 2015 tier 4 regs it looks like normalized earnings were more like 1.35-1.40. So pretty much flat to down YoY. And there was share count decline so I don't see it as a big bang and they are guiding to $1.36 in Q4 so looks like that "bump" was a one quarter bump. If we use $1.35 for '15 and assume they stop the ridiculous financial engineering with buybacks and added debt, then its trading at 18x next year....not much room for error, I'd say.
    Oct 24 02:59 PM | 1 Like Like |Link to Comment
  • Caterpillar: Impressive Earnings, But Wait On The Sidelines [View article]
    hayden - do u have any info on how long the Tier 4 requirement is going to push up demand? I just wonder if there could be another couple of quarters of residual demand? It is strange the 640mn "bump" in NA E&T. Doesn't seem like oil n gas is going to see any marked improvement going forward if commodity prices stay around here. And the transportation bump is odd since there was nothing in Q1 or Q2 on that front. Did everyone wait until Q3 to start getting their Tier 4 in? If so, we could see continued strength there....

    it sounded like CAT does have a tier 4 loco, right?
    Oct 24 02:45 PM | Likes Like |Link to Comment
  • Why I Am Still Long Calumet, Despite The Recent Drop [View article]
    Im not short at the moment. The shares are tough to borrow and you can drive a truck through the put bid/offer. One has to wait for the right time and price. This LP has way too much risk to be long - that I am sure of. It might work out fine and dist will get covered in '16 and then begin growing again in '17 and beyond but if it doesn't...
    Oct 24 09:56 AM | Likes Like |Link to Comment
  • EXCO Resources: Compass Divestiture Simplifies Corporate Structure, Improves Credit Profile [View article]
    not sure justy. seems like they would have sold Marcellus a while back. They prob want to improve the properties a bit first - blocking out some acreage and getting a better handle on reserves. My guess is there are a lot of probable type reserves there and they basically want to wait it out for NG prices to go back up. Hence all the other deals etc. Unfortunately, so far it hasn't panned out but they still seem determined to basically bide time. how long they can wait is the question. Given where the strip is for 2015 - $3.65 and falling, things will be tough next year even with recent asset sale. My impression is E&Ps are being "forced" into hedging here and Mr market is charging a decent premium or iow, spot NG prices will probably average higher than $3.65 imo. The bankers seem like they are on their side with recent credit line up (50mn token gesture I guess) so seems like they can make it through. The one issue is that with oil now at $80 and flat futures curve, seems like they might not achieve KKR's drill return hurdle - how that all pans out will be interesting.
    Oct 24 09:52 AM | Likes Like |Link to Comment
  • Why I Am Still Long Calumet, Despite The Recent Drop [View article]
    Patrick - i can only assume you are using the company provided EBITDA estimates for the North Dakota and Montana refinery projects - Those are mighty big redwoods in that forest of yours. You might want to take a look at them trees. And if you think the balance sheet is adequate, then you must be looking at the forest with rose-colored sunglasses...

    "verticals into retail offer serious growth potential..." - spare me
    Oct 23 04:40 PM | Likes Like |Link to Comment
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