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Douglas E. Johnston

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  • Fifth Street Finance Corp. Still Won't Cover Its Dividend [View article]
    i totally agree. Returning capital is effectively giving you your money back for which you should charge FSC at their cost-of-capital rate. So in effect, the yield you are getting is well below the dividend yield. The analogy in fixed income is a sinking bond where the yield is much different than coupon/price....if you believe they are deferring income - which can happen with oil&gas cos. due to the vagaries of GAAP accounting - then there is a benefit. There is no benefit to getting back capital here

    As the commenter BeauZeau stated above (which I have not confirmed) FSC has produced little in total return. Also Robin H above also commented that FSC has produced only 5% ROE over the cycle.
    Dec 10 10:11 AM | Likes Like |Link to Comment
  • EXCO Resources Could Be Sitting In The Buda Sweet Spot [View article]
    Here is good comment trail on Goodrich's buda results in the FRIO where they had some decent results at first, but ultimately it was not consistent

    http://bit.ly/19z9bd6

    You really can't prove up acreage on the Buda given the need for natural frac swarms, large communication, and issues around water, stimulation, etc....remember this is a very tight rock that does not obey the laws of shale....you don't manufacture in the Buda

    also, I looked at the XCO acreage and it is quite spotty along the Zavalla syncline faults (+ its farm out with CHK/KKR participation).

    Have you confirmed they have rights to Buda? My understanding is that old verticals have above to surface usually but not below.....I have not heard back from IR

    I think if you are going to make a big deal about XCO's potential in the Buda, you need to really make a stronger case without speculation...

    regards
    Dec 10 10:04 AM | 2 Likes Like |Link to Comment
  • EXCO Resources Could Be Sitting In The Buda Sweet Spot [View article]
    it seems rather speculative (as opposed to value investing) to presume that

    "A couple of months ago U.S. Enercorp spudded a new wildcat Buda well. It must have been very successful because U.S. Enercorp permitted a second Buda well, the Elizabeth 2H, in the same area a couple of days ago."

    although my understanding is you are quite bullish on USEG
    Dec 10 09:57 AM | Likes Like |Link to Comment
  • Barrick Gold - Still Offering More Gold To Its Shareholders [View article]
    Lingering bears fail to realize the extent of ABX balance sheet adjustment. With the addition of a JV/w China and some hedging (which we support), shares represent true value 15% type real returns, at current levels. Cold comfort for those who own way above but new buyers will come in at these levels
    Dec 9 11:13 AM | Likes Like |Link to Comment
  • PDL BioPharma Is Severely Overvalued [View article]
    riiiighhht...some unknown author with unknown credentials (sorry, Ruerd) is going to have a big influence on the collective mind of the market.....okay, then
    Dec 9 11:02 AM | Likes Like |Link to Comment
  • EXCO Resources Could Be Sitting In The Buda Sweet Spot [View article]
    kfn's cre portfolio is fairly small...best to leave comments on my original article
    Dec 9 10:57 AM | Likes Like |Link to Comment
  • PDL BioPharma Is Severely Overvalued [View article]
    give the author a break. He brings up valid points and, if they can not be answered with logic and numbers, then one has to give it some credence. If he is a bit colorful with his language, who cares. I seriously doubt it would impact the pps unless their is validity to the underlying message....
    Dec 8 11:47 AM | 1 Like Like |Link to Comment
  • PDL BioPharma Is Severely Overvalued [View article]
    mmus - i don't disagree with you per se but the converts convert to cash, right? It doesn't make it much better as cash will have to be raised somehow. I assume new shares issued + another batch of 30mn shares just to raise capital...makes sense that it will trade near convert strike when all is said and done (i think the May 15s are in the 5s strike)...
    Dec 8 11:43 AM | Likes Like |Link to Comment
  • EXCO Resources Could Be Sitting In The Buda Sweet Spot [View article]
    awesome thanks....i will check w IR this week to be sure they have buda rights and let u know what i find out....cheers
    Dec 8 11:36 AM | 1 Like Like |Link to Comment
  • Fifth Street Finance Corp. Still Won't Cover Its Dividend [View article]
    i guess one could try to make the argument that by allowing such high management fees they are "forcing" the stock to trade below NAV implying new shares can not be issued putting the company at risk for either losing RIC status or a liquidity event....very hard to prove would be my guess....cheers
    Dec 7 01:52 PM | 1 Like Like |Link to Comment
  • EXCO Resources Could Be Sitting In The Buda Sweet Spot [View article]
    i think before we jump to conclusions, a confirmation if they have the lease rights other than eagle ford is important. I see in their purchase agreement with CHK they refer to an exhibit A-1, which I am not able to find that describes the actual properties. I also noticed that it is mentioned in their September investor presentation as "Potential to exploit additional horizons across play (Buda & Austin Chalk)", which is tough to interpret, and not mentioned at all in their recent quarterly update. There have been other statement in XCO's presentations that have been misleading at best (e.g., XCO has option to sell wells to KKR) So I think we need to confirm what horizon's they actually own, particularly on farmouts.

    I would like to see a map of the sweet buda wells overlaid on the their acreage map. From what I understand the Buda is fickly and "sweet spots" are more like "sweet dots" - One could overlay the fault line and see how many sections xco has on it and determine potential benefit....remember CHK has rights to back in, KKR would have rights? etc. etc.

    I guess my point is that i wouldn't go run out and buy XCO based on BUDA potential without doing some serious homework before hand...

    good luck
    Dec 7 01:41 PM | 1 Like Like |Link to Comment
  • EXCO Resources Could Be Sitting In The Buda Sweet Spot [View article]
    Last I checked EXCO did not have that much acreage near the buda sweet spot and that so-called buda sweet spots are rather fickly - something to do with limestone and the inability to frac (need to find natural fracs) ? one good well here and a bad one 1/2 mile away...

    Are you sure XCO has rights to BUDA? Reading their docs mention only eagle ford shale. I know Mr Miller said there was buda upside but he said a lot of things.
    Dec 6 04:28 PM | Likes Like |Link to Comment
  • PDL BioPharma Is Severely Overvalued [View article]
    Looking at it simplistically, it seems PDLI should be valued like any other royalty or bdc with yields in the 9-10% range. Yes, div is well covered but effectively they need to plow $$$s back in to get more revenue - equivalent to larger pay out and issuing shares. I actually think the company can make it past the patent run off (assuming they can buy patents at like PV-15 (?) which I'd hope they could. But that said, seems like price should be more like 6-7 to get "yield" in the right spot and seems likely to see issuance in Q1 (like 30mn shares) assuming they want to keep the game going.....
    Dec 6 02:35 PM | 1 Like Like |Link to Comment
  • PDL BioPharma Is Severely Overvalued [View article]
    does anyone know if the converts have converted? I noticed a news story that the strikes are reset down in the 5/6s. Shouldn't they convert? and, if not, does that lend credence to the author's view?

    disclosure: I know little to nothing about PDLI
    Dec 6 10:26 AM | Likes Like |Link to Comment
  • Fifth Street Finance Corp. Still Won't Cover Its Dividend [View article]
    Brandond - I would agree with your comment on Einhorn. They are most likely one of the PE sponsors that "give" FSC loans etc and it would not surprise me if he did not own equity in the manager/advisor. I am sure it is a cozy relationship since Tannenbaum is on the board of a # of Greenlight controlled entities. It is crazy for Greenlight to own a BDC, especially one that charges high fees, since they probably own the same stuff in their own portfolio directly. Its like a hedge fund charging 2/20 owning BRK - don't laugh, I've seen it!
    Dec 6 10:18 AM | 2 Likes Like |Link to Comment
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