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Douglas E. Johnston

 
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  • Barrick Gold: Ultimate Value Or Dud? [View article]
    good grief...you are quoting a report well over a year old and before $4bn in infused capital.

    "ABX could go broke. " got news for you: We all could.
    Sep 16 01:00 PM | Likes Like |Link to Comment
  • Barrick Gold: Ultimate Value Or Dud? [View article]
    agreed - that's is why i wished they had done some hedging when they could have....who knows, maybe we will hear they did some...no debt maturity to speak of until 2016 ~500mn; then 2018 ~800mn and on and on....At sustained $1,000/oz, capex would have to go to 750mn or below - drastic cutbacks/mine closures etc.
    Sep 14 05:35 PM | 1 Like Like |Link to Comment
  • Potash Corporation: An Excellent Entry Point [View article]
    pretty much agree. we are probably in a multi-year period of these low fertilizer prices but when all i hear is doom and gloom, i tend to lean the other way. And this is decent entry - save some powder.
    Sep 13 10:41 AM | Likes Like |Link to Comment
  • Barrick Gold: Ultimate Value Or Dud? [View article]
    @ernie - i agree with most of what you say. except the debt levels don't seem that crazy to me (unless of course gold prices nose-dive). I see leverage at about 2.5 (netdebt/ebitda) even at 1,250/oz and coming down next year. Operating cash flow yield should be about 14% with ebitda ~$3/share so trading at 5.5 times. Interest coverage is 4x. And net debt to capital is 45% even if we assume another 2.5bn in write offs. And past write offs provide a tax asset. Believe me I was bearish on ABX early '13 (see my past articles), but they've come a long way toward recapitalizing with $1.25bn in asset sales and the share sale late last year and dividend cut. I would have liked to seen them hedge some gold production for '15 when futures were north of 1,300 as an already decent ROE can be achieved at that level and it would reduce volatility. I do think with Thornton and other ex GS guys involved, there is better stewardship. I agree not sure its a value stock (what is in this market?) but its not expensive and, as u say, does provide a hedge - hopefully. Long-term holders (pre 2013) are understandably disappointed and looking backwards provides only one perspective
    Sep 13 10:37 AM | 1 Like Like |Link to Comment
  • Cliffs Natural Resources: Trading Liquidity For A Buyback [View article]
    bonds took a big hit today because credit line is becoming secured and company levering up. equity market shrugs. crazy world
    Sep 12 07:57 PM | Likes Like |Link to Comment
  • Barrick Gold: Ultimate Value Or Dud? [View article]
    I'd love to find a stock that passes Ben Graham's original (8) rules. Got any?

    ABX is a bet on future gold prices (and copper to some degree) with the extra caveat that they should have decent ROE 10+% on a go forward basis at current pricing ~1250. Your analysis is looking in the rear-view mirror, which is fine, but some analysis on the state of ABX's restructured and recapitalized balance sheet would be nice.
    Sep 12 02:19 PM | 5 Likes Like |Link to Comment
  • Potash Corporation: An Excellent Entry Point [View article]
    aren't you looking for "safe, dividend stocks with some growth potential"? I would think this would fit the bill quite nicely
    Sep 12 02:10 PM | 4 Likes Like |Link to Comment
  • Cliffs Natural Resources: Trading Liquidity For A Buyback [View article]
    absent from the press release but in the 8-K was a "minor" detail. The revolver will become a secured loan by June '15. So pretty clear they are going to use the Q3 inventory wind down to buy back shares and they are going to borrow more to pay divs and inventory build come winter

    If I owned the bonds, I would not be happy.
    Sep 12 09:08 AM | 2 Likes Like |Link to Comment
  • SandRidge Mississippian Trust II: Oil Volumes Disappoint [View article]
    true - i couldn't the resist...hubris always makes the market gods mad!
    Sep 11 04:22 PM | Likes Like |Link to Comment
  • Why Infrastructure Could Be The Next Big Investment Opportunity [View article]
    well you can get to JFK by train - just need to switch at Jamaica. But get the point. I remember the idea of mag-lev being floated around in the early 90s as a way to put the defense brain-bank to work and improve transpo into NYC from LI. Never got moving. So we all went to work at banks spending an hour+ each way commuting. The irony.
    Sep 11 02:58 PM | 1 Like Like |Link to Comment
  • Cliffs director quits, cites "bullying" at board meeting [View news story]
    I think it simply illustrates that the new management/minority shareholder is going to do things their way regardless of risk. Use all shareholder's capital to lever the company up to the gills and bet on IO prices recovering soon. If it works they win. If it doesn't they take it private on the cheap.
    Sep 11 09:56 AM | Likes Like |Link to Comment
  • Cliffs Natural Resources: Stuck In A Quagmire [View article]
    Damn the torpedoes!

    Looks like they r going to take any FCF from inventory wind down in q3 and buy shares vs pay down credit line. Seems crazy to me especially since u r already levered to the gills and are going to build inventory in 3 months so adding debt. Credit line was dropped 500mn so they will end next season with 50% drawn. Big bet on IO recovery it seems.

    I do think street was hit with paper after proxy fight so don't think it will impact price all that much...and if was behind the revolver I wud certainly want to be short some shares

    I am nonplussed
    Sep 10 09:30 PM | Likes Like |Link to Comment
  • SandRidge Mississippian Trust II: Oil Volumes Disappoint [View article]
    Heh raj. Care to update us all on being long sdr vs wll over last six months
    Sep 10 09:01 PM | Likes Like |Link to Comment
  • Oil And Gas Trust Value Rankings, Q2 2014 [View article]
    Ah the great seer raj...u seem a bit more humble now than back in march when u called sdr a steal at 8+ and that investors were 200% likely to get $15 in dist over life. A great investment for retirees i recall you saying. I do have to say thanks as your pumping allowed me to get into some puts cheap
    Sep 10 08:46 PM | 2 Likes Like |Link to Comment
  • Cliffs Natural Resources: Stuck In A Quagmire [View article]
    the one thing i would add, from a +tive perspective you could get some decent optics around Q3 numbers with inventory wind down - traditional seasonality but given harsh winter it could be more pronounced adding 150mn+ to FCF this Q. Also, USIO will probably still realize north of $100/mT given 12m moving average. g/l
    Sep 9 08:48 AM | Likes Like |Link to Comment
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