Seeking Alpha
View as an RSS Feed

Douglas Hoyt  

View Douglas Hoyt's Comments BY TICKER:
Latest  |  Highest rated
  • SunEdison: Immense Future Potential [View article]
    I've seen comments from many retail investors who consistently fail to understand the cash generating power of the model. NOT INCLUDING the cash stream coming from the dividends paid to SUNE by the EM yieldco, cash produced by the devco plus the dividend and IDR's coming from TERP will greatly exceed $3 per share by y/e 2016. Add the EM yieldco's contribution to that and the number goes over $4.
    SUNE continues to diversify its portfolio by geography and energy type, now including solar, wind, and hydro so the company can handle "one bad roll of the dice." It should also be noted that expanding global demand for solar panels makes the investment in the Indian manufacturing facility much less risky than suggested.
    May 18, 2015. 09:01 AM | 2 Likes Like |Link to Comment
  • SunEdison's Acquisition Strategy Mirrors That Of Cisco's From The Networking Era [View article]
    For the author. I thought I'd mention that your concern on the increased cost of capital following the high split of the IDR's being hit is addressed around 2:28 of the CMD during the Q&A session. I don't know if their answer will allay your concern but it seems clear, at the least, that they recognize the potential problem and have given it considerable thought.
    May 15, 2015. 07:14 AM | Likes Like |Link to Comment
  • SunEdison's Acquisition Strategy Mirrors That Of Cisco's From The Networking Era [View article]
    Just wanted to say thanks for the feedback and for sharing your informed perspective.
    May 11, 2015. 11:33 AM | 1 Like Like |Link to Comment
  • SunEdison's Acquisition Strategy Mirrors That Of Cisco's From The Networking Era [View article]
    Now I think I see where you are coming from with respect to the depreciating asset thesis. That being the improvement in electric power generating efficiencies means power price declines leading to lower values for generating assets. At least I think that is what you are saying. If so, it may make TERP a less attractive long term investment but in the short run the conservative guidance for a 24% CAGR of the dividend makes holding the stock worth while for a 1-4 year time frame.
    May 10, 2015. 08:41 AM | 3 Likes Like |Link to Comment
  • SunEdison's Acquisition Strategy Mirrors That Of Cisco's From The Networking Era [View article]
    "- Currently TERP generates massive value for SUNE because yield chasing investors are giving the underlying assets undeservedly high valuations.
    - Solar asset values will decrease dramatically over time and solar assets will get toxic over time.

    Why? Is your assumption based on the current assets losing value due to the increasing efficiency of new PV technology? If so, what is to prevent the panels from being upgraded therefore maintaining the asset's value? Besides, these assets have contracted PPA's that extend out for 15-20 years. So the dividends they generate are locked in for those time periods.

    - TERP payments at the front end come out of depreciation and it requires growth to feed that beast.

    TERP's dividend payments come from contracted revenue streams. Streams headed higher as more projects are dropped to them from SUNE and its large and growing backlog of projects. Growth of the portfolio is in no way a problem either through organic project drops or M&A.

    - SUNE will get a lot of value out of the IDRs. But at the same time, these IDRs will increase cost of capital for TERP further making TERP future questionable."

    TERP's dividend will continue to grow even after the high split of the IDR structure is reached. Investors in TERP do not have to reach for yield as dividend growth is assured for years.
    May 9, 2015. 02:10 PM | 1 Like Like |Link to Comment
  • SunEdison's Wind Ambitions Will Hold The Company Back [View article]
    The idea that SUNE's acquisition of First Wind, which diversifies its platform while doubling the pipeline of its addressable market, is a mistake isn't just wrong for the reason I just stated. It also is wrong in making the assumption that SUNE's pursuit of the opportunity in solar will be hampered by its entry in to wind.
    Apr 6, 2015. 09:20 AM | Likes Like |Link to Comment
  • Solar stocks bounce as market rallies, Deutsche pounds table [View news story]
    Just wondering how the TWO 5 GW agreements SUNE has made with two provincial governments in India squares with the notion of oil's decline effecting the cost benefits of solar/wind in light of solar's continuing cost decline predicted to be 20% more by 2017. Solar is fast reaching cost parity with fossil fuels which combined with its environmental benefit makes it the logical choice for future electrical generation in emerging markets.
    Jan 20, 2015. 09:24 PM | 2 Likes Like |Link to Comment
  • Las Vegas Sands: Focus On Macao And Premium Valuation Remain Concerns [View article]
    Given the long term growth trajectory LVS is on I don't think 20x 2014 estimates to a premium valuation. It's cheap.
    Jan 31, 2014. 04:58 PM | 1 Like Like |Link to Comment
  • Las Vegas Sands: Focus On Macao And Premium Valuation Remain Concerns [View article]
    1) In Macau, LVS should organically outgrow peers given its peer-high weighting to mass gaming’s multi-year secular strength and Island-high hotel capacity; 2) CY14 Macau consensus GGR accelerates by 2Q14 as Hengqin expansion begins to augment Macau visitation; 3) Singapore diversifies LVS from other Macau names and delivers strong free cash flow; 4) LVS remains poised to increase capital returns to shareholders (and potentially lever up for upside surprises in this regard) and; 5) it remains in strong position to capitalize on significant upcoming new Asian gaming markets, including Japan.

    Overall, 4Q13 hold-adjusted (“luck factor extracted”) results were $1.37b versus our $1.35b, while actual property EBITDA was $1.21b. Singapore VIP hold was below theoretical (5 of the last 6 quarters). While investor fatigue on lower Singapore hold may lead to conspiracy theories, hold should normalize over time. Singapore VIP hold (and play) is volatile given high bet size and a relatively small player pool. As such, hold normalization timeframes are lengthened versus markets such as Macau, but normalization should nonetheless materialize over time. Of note, Singapore patrons seemingly do not bet as often on baccarat side wagers (which increase hold); we note Macau hold has averaged over 3.1% for 3 consecutive years – we are forecasting 2.85% as theoretical hold for Singapore.

    4Q13 Macau hold-adjusted EBITDA totaled ~$888m versus our ~$857m expectation. Mass tables and VIP rolling volume was +58% YoY/+26% YoY versus our market checks of +40%/+23%. While margins at certain properties were slightly below our forecast, mostly due to higher than expected VIP commissions, a larger contribution from mass (higher segment growth creating mix shift) continues to point to a longer-term higher margin profile. LVS’ Parisian, which we believe goes widely unnoticed by investors, remains on track for a late 2015 opening (or thereabouts, in our view) and the ramp at Cotai Central continues – hitting a $1b+ hold adjusted EBITDA run-rate versus $500m in 1Q13.

    Singapore hold-adjusted EBITDA was $372m versus our expectation for $386m. VIP was -17% YoY, though up against a +53% comparison (and close to our forecast). Mass win remains steady and LVS continues efforts to beef up foreign premium mass visitation, somewhat to the detriment of overall property margins – though we agree with the longer-term cost benefit here.

    We raise CY14/CY15 EPS to $3.67/$4.14 from $3.54/3.83. Our price target goes to $88 from $84 based on our sum-of-the-parts valuation.
    Jan 31, 2014. 04:38 PM | 1 Like Like |Link to Comment
  • Asia Entertainment & Resources CEO Discusses Q4 2012 Results - Earnings Call Transcript [View article]
    The HK listing and a pick-up in the biz.........which by the sounds of the comments on the CC is in progress.
    Apr 1, 2013. 08:52 AM | Likes Like |Link to Comment
  • Is A Crackdown On Macau Fact Or Fiction? [View article]
    I think this year the y/e dividend was paid in April so about the same next year. Any thoughts on how much it will be?
    Dec 27, 2012. 08:54 AM | Likes Like |Link to Comment
  • Is A Crackdown On Macau Fact Or Fiction? [View article]
    From everything I've read and been told the updated record keeping requirements are having zero impact on VIP roll in Macau. The significance of the changes are minimal at best and only attracted attention because of all the recent noise created by the WSJ article. An article we now know was inaccurate in its details leading to specious conclusions.
    My take on the listing remains unchanged. They are taking their sweet time with it to make sure the biz has turned around when the shares are offered. There is every indication, based on some conversations I've had with an IR firm who works with Asian clients, that the valuation in HK will exceed that of the US listing. The question is by how much?
    Dec 24, 2012. 03:05 PM | 1 Like Like |Link to Comment
  • Chinese Money Laundering Crackdown Will Likely Impact Macau Gaming Stocks [View article]
    The rest of the note goes as follows.......

    "This morning, the WSJ published a story indicating 3 large junket operators had been detained in Mainland China, with the subject matter potentially being money laundering. According to our checks, the contact with Mainland Chinese authorities took place over a week ago. To date, it has not impacted Macau revenue, evidenced by the last week of November’s GGR result.

    According to contacts, over one week ago, Neptune, Sun City and David Star were questioned by authorities in the Mainland (not Macau police). We are told questions related to an investigation of an individual or business outside of Macau. Our contact suggests that this is not the first time authorities in Mainland China have questioned junket operators as part of an investigation outside of Macau - it happens “from time to time.” We do believe that some arrests were made within one junket operator group related to Internet wagering in Mainland China – however, its VIP division has been unaffected to date.

    Our takeaway is that there is not too much new at this point – this happened over a week ago and Macau GGR maintained its pace. The investigation is related to a person or entity in the mainland, not specifically to business practices in Macau. While there is risk associated with investigations of this manner, at this point, we do not see evidence of a fundamental shift from our Macau bull thesis."

    One needs to show caution before making investment decisions based on media accounts coming to conclusions based on erroneous assumptions and factually incorrect information.
    Dec 7, 2012. 10:00 AM | Likes Like |Link to Comment
  • Chinese Money Laundering Crackdown Will Likely Impact Macau Gaming Stocks [View article]
    Regarding money laundering, consider this from a Sterne Agee note.

    "Note on money laundering. We note that money laundering in Macau is likely somewhat overstated relative to other areas of China/HK. Underground banking has grown to such a massive extent, we believe rates to move RMB outside of China are as low as 0.5%. Versus going through a junket operator and risking 2.85% theoretical hold in Baccarat (and likely losing more), we believe money laundering issues in Macau are at least somewhat sensationalized. However, over time, we do expect to see tighter controls in China and related areas related to money movement, especially as the RMB continues to rise in value. However, given the fragile (and large) underground banking system in China, a quick move toward major enforcement risks destabilization. Therefore, we see baby step progress as more likely occurring in the relative near or intermediate term."
    Dec 7, 2012. 09:40 AM | Likes Like |Link to Comment
  • Asia Entertainment & Resources: Short-Term Weakness Offers Long-Term Potential [View article]
    Now I get where you are coming from. But it's because you think you know more than you do. AMAX's financial troubles go back to 2010 when a combination of overly aggressive credit extension during the global recession and the official 1.25% cap on agent commissions caused them to lose many of their key agents and nearly go bankrupt. They have been struggling ever since. Conversely, AERL recently became more conservative with credit extension (your characterization that they cut back massively is a gross over statement) in the wake of China's slowdown but have indicated they may reverse that strategy in response to China making credit more available to stimulate their economy. You may also not be aware that agents typically cover losses from uncollectable credit rather than jeopadize their standing with promoters. Additionally, AERL's potential bad debt collections are backstopped by the founder's loan. While smaller promoters may be having difficulty during the slowdown, that does not include AERL as a top 10 promoter. Please note that since being a public company none of the founder's loan has had to be tapped to cover bad debt. Net income for the first half of the year was around $34M.

    As for the accounting of cash, their refernces to cage capital or chips receivable in their public documents are a matter of semantics. Were they to be liquidated today they have a positive cash balance of approx $150M US, period.

    There are a number of reasons AERL is under valued, but none that you have mentioned.
    Jul 27, 2012. 11:41 AM | 1 Like Like |Link to Comment