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  • Assessing The Value Of Sears Stores In General Growth Properties' Malls [View article]
    From what I've seen from the property list, I don't think the REIT is underpaying for the properties by much, if at all.

    Also: http://reut.rs/1ceYmoA mentions that the price needs to be a pretty fair one. So the REIT is not going to get $5 billion in properties for $2.5 billion. Probably can be some leeway, but not in the billions of added value.
    Apr 9, 2015. 04:36 PM | Likes Like |Link to Comment
  • Emerald Oil: Debt Covenant Appears To Have Prompted Filing To Sell Up To $100M In Shares [View article]
    So I think the main differences between our calcs are:

    The differential vs. WTI.

    Hedges - EOX monetized all its 2015 hedges at the beginning of 2015 and received $5.3 million for them.

    Those two items would bring my revenue calc down to around $69 million.

    As well, I've generally been including stock-based compensation in my EBITDA calcs for the purpose of calculating the debt covenant ratio. Not 100% sure if that's the correct way to do it, since I asked EOX about the EBITDA calculations for the covenant, but didn't get a response. Stock-based compensation wouldn't affect EOX's cash flow, so there's a good case to be made for not including it, but at the same time the covenant would seem to be in compliance if stock-based compensation didn't affect the EBITDA number. Which would make the December and February moves quite overkill if that was the case.
    Apr 9, 2015. 04:28 PM | Likes Like |Link to Comment
  • Emerald Oil: Debt Covenant Appears To Have Prompted Filing To Sell Up To $100M In Shares [View article]
    I'm not saying that the revolver gets terminated - more that they won't be able to access the funds due to the covenant issue and their lower EBITDA numbers.

    If they can get the covenant relaxed, that would be great. However, that's proven to be challenging so far, and without a relaxed covenant, the credit facility is probably not much use.
    Apr 9, 2015. 04:07 PM | Likes Like |Link to Comment
  • J.C. Penney: Sentiment Nearing Overly Optimistic Area Again [View article]
    Also, how much EBITDA would JCP need to make to justify a $15 share price?

    You've mentioned a number of expected price targets in the past, but I'd like to see what financial performance you'd think would be required to achieve that price target.
    Apr 9, 2015. 03:58 PM | Likes Like |Link to Comment
  • J.C. Penney: Sentiment Nearing Overly Optimistic Area Again [View article]
    I think the problem is that you want cheerleading, not analysis. Pretty sure that if I wrote a demonstratably factually incorrect article that mentioned a $20 target price that you would either not highlight the mistakes or write a positive comment.
    Apr 9, 2015. 03:55 PM | 3 Likes Like |Link to Comment
  • J.C. Penney: Sentiment Nearing Overly Optimistic Area Again [View article]
    Direct question to you Fast Lane:

    Does it make logical sense for an analyst to lower earnings estimates and increase price targets simultaneously multiple times.

    Yes or no.
    Apr 9, 2015. 03:50 PM | Likes Like |Link to Comment
  • J.C. Penney: Sentiment Nearing Overly Optimistic Area Again [View article]
    I did the math above and mentioned that it slightly improves JCP's EBITDA and minimally improves its cash flow. It really doesn't make a huge difference to JCP's expected share price. Maybe $0.60 per share over 4-5 years, which is going to be swamped by other factors such as JCP's ability to gain market share or not.

    If a mall closes, people go to different malls to buy clothes and/or from the Internet. It's a fact that the malls that people are going to more often are the A/B+ malls that J.C. Penney are less represented in. JCP's Internet sales are growing, but it is still a relatively small part of their business (Internet growth translates into +1% growth on its entire $12.3 billion revenue base).
    Apr 9, 2015. 03:48 PM | Likes Like |Link to Comment
  • Lumber Liquidators: Gross New Orders Showing Trend Improvements To -11% During Latter Part Of March [View article]
    I'm thinking those are captured under net adjustments.

    LL mentioned "The open order balance is increased each day by gross new orders and decreased by invoiced sales and "net adjustments, including returns", so I think anything decreasing open orders (such as cancellations before invoice) would fall into that latter number.
    Apr 9, 2015. 03:19 PM | Likes Like |Link to Comment
  • Emerald Oil: Debt Covenant Appears To Have Prompted Filing To Sell Up To $100M In Shares [View article]
    RE: EBITDA - for starters, EOX mentioned a first half differential of $9.50, so $50 WTI oil = $40.50 realized oil = approximately $40 per BOE when factoring in natural gas sales.

    They may get some production tax relief in the latter half of the year, but that's not going to get them near $40 million EBITDA. How exactly did you calculate your EBITDA numbers? I'm not seeing $40+ million in 2015, even with a tax break and $45 Bakken oil.
    Apr 9, 2015. 03:11 PM | Likes Like |Link to Comment
  • Emerald Oil: Debt Covenant Appears To Have Prompted Filing To Sell Up To $100M In Shares [View article]
    How would you explain the debt for equity swap in December then? Also the common share offering in February. Those would be absolutely terrible moves if EOX could have just gotten its covenant relaxed and still had access to borrow more under its credit facility.

    In the December example, why would EOX issue 10.7 million shares to take out debt that cost them $420,000 in annual interest unless they needed to reduce debt to comply with the covenant since they couldn't get their covenant relaxed?
    Apr 9, 2015. 02:40 PM | 1 Like Like |Link to Comment
  • J.C. Penney: Sentiment Nearing Overly Optimistic Area Again [View article]
    An inflation based argument doesn't work very well since it would affect costs as well as revenues. A 7% increase in revenues and costs adds only $30 million to JCP's EBITDA and maybe $10 million to cash flow due to the effect of inflation.

    The increased population is cancelled out by the decline of malls (not all malls, but the grade B and C malls that JCP has a large footprint in). That's why despite the population increase and the turnaround efforts, JCP is *still* doing negative year-over-year mall store traffic. That doesn't bode well for the future.

    The traffic issue for JCP is probably somewhat due to Sears closing tons of stores each year. I thought before that JCP might benefit from Sears closing stores, but it turns out the the effect on JCP is probably slightly negative since they are in a lot of the same malls. The gains from taking some of Sears's customers is outweighed by the effect of the anchor loss helping to kill that mall.
    Apr 9, 2015. 04:47 AM | Likes Like |Link to Comment
  • Assessing The Value Of Sears Stores In General Growth Properties' Malls [View article]
    I'll start off with saying that I am far from an expert on this matter, and I'm not sure that I'm correct on what happens in this case, so please take this with a grain of salt and get other opinions too...

    I was short SHLD when it did its late October rights offering, so I ended up short SHLDZ rights, which I ended up paying some cash to settle. So it does seem that you'll end up short the REIT rights and may have to pay out. I'm not sure if you could potentially end up short the REIT shares if the rights get exercised too (get some cash, end up short the REIT), but my experience with the SHLDZ rights was that it got settled at the open market price and I didn't end up short the warrants/bonds.
    Apr 8, 2015. 02:16 PM | Likes Like |Link to Comment
  • Assessing The Value Of Sears Stores In General Growth Properties' Malls [View article]
    I believe the $100 million is just a common number that gets put down for registration purposes. The actual money raised via equity can be quite different.

    For example, the Paramount Group REIT put down $100 million too, but ended up raising $2.3 billion from equity.

    http://bit.ly/1It35k3
    Apr 8, 2015. 01:52 PM | 1 Like Like |Link to Comment
  • Sears: The Majority Of Its Top Real Estate Is In The REIT [View article]
    I read through the S-11 again, and it looks like Seritage has a limit of 9.8% ownership for one shareholder. It also appears that Eddie and Fairholme are getting around this by exchanging some of their subscription rights for operating partnership units, which can be exchanged for Seritage common units in the future (which is still subject to the 9.8% limit at any given time).
    Apr 7, 2015. 02:21 PM | 2 Likes Like |Link to Comment
  • Sears: The Majority Of Its Top Real Estate Is In The REIT [View article]
    It isn't quite akin to buying more stock on the open market of a company you already own. That would increase your ownership percentage.

    This is closer to a company doing a dilutive offering, and then you buying additional shares to maintain your ownership percentage.
    Apr 4, 2015. 08:15 PM | 3 Likes Like |Link to Comment
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