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  • A Rebuttal Of The Sarepta Bull Rebuttal [View article]
    Surely time to write another rebuttal of the bulls who offer "scientifically ungrounded arguments"
    Apr 22, 2014. 10:09 PM | Likes Like |Link to Comment
  • Taking A Contrarian Stance On Barrick Gold [View article]
    Great level to go long. Technicals (pretty much the chart you present) look good IMO. This is a disliked stock/sector at this point.

    Also worth pointing out that this company is in transformation and in the coming quarters a lot of the mine construction CAPEX (DomRep and Argentine mines) will be phased out and FCF will pop.
    Jan 14, 2013. 06:43 AM | 1 Like Like |Link to Comment
  • Pitney Bowes Has Nearly 14% Dividend Yield But Sagging Sales [View article]
    I would really like this stock despite the declining business: mail will not go to zero anytime soon. The one worry however is the capital structure - on my numbers NetDebt/EBIT is 4.6x (EV/EBIT is 7.7x).

    If we get another couple of quarters of 5% Revenue decline (sales have declined from over 6bn in '07 to under 5bn annualized recently), a dividend cut and/or capital raise may become necessary.

    But we should be on the look-out for signs of stabilization, as there is potential for a big bounce from these levels with doom and gloom evident.

    If you pushed me, I would rather be a buyer here. The valuation of the overall business looks undemanding even if there is some risk to the equity.
    Dec 9, 2012. 08:42 AM | Likes Like |Link to Comment
  • Buy The Post-Earnings Sell-Off In Western Union For Rebound Potential, 4% Yield [View article]
    It's a great value play, but as Petrarch mentioned, the call was terrible, and one question that you should ask yourself is whether the competionion from Paypal+Xoom is not taking marketshare/putting too much pressure on pricing of WU, which would have an impact on margins for years to come (not just next year's guidance).

    Having said all this (and it needs to be said, because it's not a no-brainer-long), I would buy WU here. It's super cash-generative and cheap on most measures. Some margin deterioration must be in the price by now. But I wouldn't believe in a quick bounce - rather a 1-2 year view.
    Nov 3, 2012. 11:32 PM | 1 Like Like |Link to Comment
  • Natural Resource Partners, L.P. Revisited, 9.65% Yield Hard To Beat [View article]
    I get the point that they are not a coal miner, but they do own coal assets, in which case their future is still tied to the future of coal. ANR - a proper coal miner - has lost ~90% since the peak in '11. Another coal miner (Patriot Coal) recently declared bankruptcy. These are not good times for the sector, and although this may be a low-beta coal play, these sector developments are clearly affecting the value of NRP.

    I do not know this company well, but the market clearly thinks this dividend payout is not sustainable. Otherwise, I would agree with the author that 10% is better than 0.99% on 7-year treasuries.
    Jul 17, 2012. 12:40 PM | Likes Like |Link to Comment
  • Why The Spanish Bailout Is A Game Changer [View article]
    Game changer is a big word. Only one solution would be a clear game changer, and that is a political and fiscal union - something that European democracies can not accept as they are unwilling to give up their sovereignty. A bank bail out in Spain (even if carried out properly, which is a big if), is not a game changer, because there is fires burning all around us, here on the old continent.
    Jun 11, 2012. 03:42 PM | Likes Like |Link to Comment
  • ATP Oil & Gas: Looking For Improvements [View article]
    I would only invest in this company via the senior bonds (11.875 2015), which are offered at 63% (YTM~30%), but I am hesitant... You guys mentioned the management needing replacing - yes, it really seems so... but if the founder owns 15% of the company, it won't happen easily. The cash burn is impressive, and really it's hard to see where they will get more cash later this year as debt+funny super-senior arrangements to sell products forward are maxed-out.
    May 16, 2012. 09:53 AM | Likes Like |Link to Comment
  • 10 Scary Charts: May 10, 2012 Update [View article]
    A bit of a mixed bag without a specific theme I find, and many of these observations were as 'disturbing' 12 and 18 months ago as they are now, so really nothing new (yes, this recovery is sub-par - the question is if it's muddle-through or worse). In fact bank credit and Loans&Leases look like private sector credit growth is finally picking up, which would be a big positive, if confirmed. Fiscal deficit and outlays, really should be shown as a percentage of nominal GDP.
    May 11, 2012. 07:20 AM | 1 Like Like |Link to Comment
  • A Closer Look At Inergy's 2011 Distributable Cash Flow [View article]
    Great article Ron! Your accounting adjustments are very useful.

    I wonder if this episode doesn't reflect poorly on the management and if the stock will not trade at a discount going forward given this string of negative surprises. Not a stock I would want to buy at "fair value" - only if it gets very cheap.
    Apr 20, 2012. 01:33 AM | Likes Like |Link to Comment
  • The Age Of The Dollar Is About To End [View article]
    Hi Shaun,

    The FT article is recent, but I don't think any of the other observations are. The Federal Reserve is deliberately pursuing a weak dollar policy. The US treasury is doing its part by running 10% budget deficits. So far so good.

    But the USD is very widely used and most (if not all) commodities and many goods are traded and valued in USD. Part of the reason why foreign central banks are still buying US treasuries is that they are one of the few very deep and liquid markets. And we can also be relatively sure that the dollar will still be around in 20 years time (not so sure about the Euro...).

    China holds less than 1% of its reserves in gold, and the very simple reason is that they would not be able to buy quantities large enough to make a difference.

    So before we say goodbye to the USD - which frankly has been a recurrent story for a few years - let's find a replacement. And I don't think we have any credible candidates. Gold and the renminbi are not realistic possibilities. Iran and their bizarre actions are not proof to the contrary.
    Mar 25, 2012. 05:17 AM | 11 Likes Like |Link to Comment
  • Earnings Multiples At Market Peaks [View article]
    Dear Ploutos, I suggest you look at normalized PE's - ie. earnings adjusted for average economy-wide margins. Currently margins are at multi-decade highs, and if you agree that they will mean-revert (which they always have) then the E will roughly halve, and the PE will roughly double. It depends on your horizon, but on 2-3 years view, one should assume margins revert to the historical norm.
    Mar 5, 2012. 11:14 PM | 1 Like Like |Link to Comment
  • Why The Market Is Not Necessarily Cheap [View article]
    Hi FinancialLex, congrats on a good piece.

    A lot has been said already in the discussion, let me just add 3 points:
    1) higher economic volatility (inflation/growth volatility and as a result profit volatility), that you have pointed to in the article leads to lower multiples.
    2) For 20 years the system debt levels have been pushed to the limits, and we're now in the deleveraging phase - this will not be good for top-line growth or margins.
    3) Margins/GDP is a highly mean-reverting series and is currently at 100-year (or so) high. When it moves to the mean (and frankly nobody knows if it's this year, next year or in 2014), then our low P/E multiple of 14 will suddenly go up to over 20. So much for cheap stocks. (I'm sure this data is available in the excellent FRED database)
    Feb 25, 2012. 11:12 PM | 2 Likes Like |Link to Comment
  • The Bond/Equity Disconnect [View article]
    I would add the following points to this discussion:
    1) the bond market is manipulated by the FED, so prices/yield levels should not be relied upon as a point of reference (especially for equity valuation).
    2) Historically, bonds are more often right than equities when divergences emerge.
    3) For 15 years central banks around the world (ie China) have been buying up most of the treasuries issued, and this is coming to an end (more balanced external accounts) just as debt reaches new highs. US private investors will have to step in to finance the US government, and I'm not sure they will be willing to do this at this level of interest rates, and I believe the medium-term implications for other assets are not positive. The US private sector will have to either save more or sell something to lend to the government.
    Jan 22, 2012. 09:12 PM | 3 Likes Like |Link to Comment
  • Teekay LNG Partners Pullback Offers Chance At Quality For A Discount [View article]
    Hey Elliott, thanks for this piece. I come a bit late with my question, but I don't fully understand this bit: "Teekay LNG Partners leases these vessels to customers for a daily fee, and virtually all the company’s ships–including those soon to be delivered–are booked under long-term charters that guarantee cash flows for the duration of the contract".

    What is the pricing on these contracts? Is it the "spot" freight rates on a daily basis or is it a fixed price for the 16-year term or some combination of both? Are the distributions directly linked to movements in the spot charter rates for LNG tankers?
    Jan 8, 2012. 05:56 AM | Likes Like |Link to Comment
  • A Closer Look At MLP Cash Flow Sustainability - Inergy, L.P. [View article]
    Hey Ron, thanks for a good piece of work. One has to go into the details and make adjustments to the reported numbers as you did. Time-consuming, but certainly a necessity to get a clear picture. I spotted NRGY on a dividend screen, and clearly there is good reasons why the price has fallen so far - the market expects a dividend cut or other fudge (equity/debt issuance).
    Jan 8, 2012. 05:43 AM | Likes Like |Link to Comment
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