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Douglas E. Johnston

 
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  • How Low Could Cliffs Natural Resources Shares Fall? [View article]
    the fear on debt holders minds is that the credit facility (now 1.25bn) will be secured by assets - previously it was pari-passu with unsecured bonds. So suddenly, bond holders are second in line and the concern is more secured financing is on the way leaving the bonds more like equity.
    Oct 9, 2014. 09:02 AM | 2 Likes Like |Link to Comment
  • How Low Could Cliffs Natural Resources Shares Fall? [View article]
    ok - i am answering my own question. It looks like it was because Wabush was totally shut down and the $87.48 is strictly Bloom Lake. What is interesting is the guidance for the full year cash COGS is 80-85, which would imply about a $78 cash COGS for H2 (11% decline H1->H2). So it seems they do have some levers to lower costs but whether they can keep up with IO declines, who knows.

    As I think already mentioned, for USIO there is a lagged price impact due to longer term contracts.

    So my question is: should we assume that cash costs remain the same as in Q2 in a flat to declining IO price environment?
    Oct 8, 2014. 08:56 AM | Likes Like |Link to Comment
  • How Low Could Cliffs Natural Resources Shares Fall? [View article]
    Vlad - i noticed that the cost of goods rate (sans DD&A) for canada dropped from 103.73 in Q1 to 87.48 in Q2. Any idea what drove that?
    Oct 8, 2014. 08:26 AM | 1 Like Like |Link to Comment
  • How Low Could Cliffs Natural Resources Shares Fall? [View article]
    connell from first eagle...he's been involved with quite a few take unders so with his buy at 10+ he must think there is some intrinsic value.
    Oct 8, 2014. 08:24 AM | 1 Like Like |Link to Comment
  • Cliffs Natural Resources downgraded further into junk at S&P [View news story]
    the problem is the unsecured bonds were just usurped by the ammended credit facility, which will be secured - no impact on equity mind u
    Oct 8, 2014. 08:11 AM | Likes Like |Link to Comment
  • Cliffs Natural Resources downgraded further into junk at S&P [View news story]
    ahh yes, S&P ahead of the curve as usual
    Oct 8, 2014. 08:09 AM | Likes Like |Link to Comment
  • SandRidge Mississippian Trust I: Valuation Compelling After The Correction [View article]
    yes but the implied volatility and bid offers are huge
    Oct 8, 2014. 08:00 AM | Likes Like |Link to Comment
  • Has Cliffs Natural Resources Bottomed? [View article]
    @cookie - that really only happens with an MLP type heavily retail owned stock. Given this has dropped from what $70 to $8, i seriously doubt there are any mom n pops left....Saving 90+mn/annum makes the risk of BK even smaller, which is currently what is driving the price action
    Oct 7, 2014. 02:28 PM | 3 Likes Like |Link to Comment
  • Time Is Running Out For Cliffs Natural Resources [View article]
    i'm still trying to get a decent offer on those...not a lot of liquidity
    Oct 7, 2014. 02:22 PM | Likes Like |Link to Comment
  • Time Is Running Out For Cliffs Natural Resources [View article]
    @rupert - it is not just a weather effect - that's just an added "bonus". It happens every year, they build inventory in Qs1-2, which get sold off in Qs3-4. And I was not trying to give you an accounting lesson. I was merely presenting you with the facts that you seemed to have overlooked. It is highly doubtful that CLF will run out of "cash" by year-end or year-end 2015 even. They might run out of time but it would be in 2016 and with some serious missteps. g/l
    Oct 7, 2014. 02:21 PM | Likes Like |Link to Comment
  • SandRidge Mississippian Trust I: Valuation Compelling After The Correction [View article]
    @pablo - the way the trust is set up there is no incentive for SD to do anything to improve $$s to trust owners (i.e., trust has no capital budget)...if anything, there is a clause in the trust docs that allow SD to sell off (or buy back) all interests and give trust owners a one-off. I forget exact deets but its in the fine print.
    Oct 7, 2014. 02:15 PM | 1 Like Like |Link to Comment
  • Time Is Running Out For Cliffs Natural Resources [View article]
    @doc - that is a good point. A discussion on US iron ore pricing would have been useful too.
    Oct 7, 2014. 11:08 AM | Likes Like |Link to Comment
  • Time Is Running Out For Cliffs Natural Resources [View article]
    @Dr - regardless, if you are presenting analyst information, you should verify yourself. Otherwise, what is the point?
    Oct 7, 2014. 11:04 AM | Likes Like |Link to Comment
  • SandRidge Mississippian Trust I: Valuation Compelling After The Correction [View article]
    Can't say I agree with you on this one Richard. I've looked at sister trust SDR and don't see the value there until the mid 3s. My understanding is SDT is about $1.5 in dist. "ahead" of sdr, which puts value in the lower 2s. I'll have to revisit but since these are tough to short, I don't follow too often. It did look cheap vis-a-vis SDR i guess
    Oct 7, 2014. 10:57 AM | Likes Like |Link to Comment
  • Has Cliffs Natural Resources Bottomed? [View article]
    Agree - and Q3 should be a positive cash flow with inventory draw down. It would be good to see them pay down credit line (so its strictly used for inventory management) and also cut the dividend (forced reinvestment/buybacks from investor perspective). While it would be nice to issue debt to buyback shares, they are not in a position to do such.
    Oct 7, 2014. 10:52 AM | 3 Likes Like |Link to Comment
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