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  • Synergy Resources: E&P With A Premium Valuation That Could Decline 80% [View article]
    Synergy just announced a monster equity offering. Up to $172.5MM.

    http://bit.ly/1BlbOfV

    This is a joke.
    Jan 27, 2015. 05:28 PM | 2 Likes Like |Link to Comment
  • Synergy Resources: E&P With A Premium Valuation That Could Decline 80% [View article]
    sure thing - the hedge book is laid out based on number of barrels hedged per month. i get 675k by multiplying the number of barrels for each hedge times the number of months they cover in fiscal '15.
    Jan 22, 2015. 11:33 AM | 2 Likes Like |Link to Comment
  • Synergy Resources: E&P With A Premium Valuation That Could Decline 80% [View article]
    The source was first hand conversation with the company. If you'd like confirmation then I'd suggest sending IR an email. They are responsive.
    Jan 22, 2015. 08:33 AM | Likes Like |Link to Comment
  • PrairieSky: Highly Valued Canadian Oil And Gas Trust Faces Potential Distribution Cut [View article]
    Good question.

    When I started following PSK I was nervous that they would acquire Range. They did. The acquisition added 20% to production and it was only 4% accretive. I've generally thought that there is a much lower likelihood for acquiring CNQ or CVE's royalty assets since they are perfectly capable of doing their own IPO.

    Furthermore, I think it's very unlikely that an acquisition would make sense for either party in the current commodity environment.
    Dec 23, 2014. 03:01 PM | Likes Like |Link to Comment
  • PrairieSky: Highly Valued Canadian Oil And Gas Trust Faces Potential Distribution Cut [View article]
    That's a good point.

    One of the primary goals of PrairieSky is to make their lands more attractive than Crown leases to encourage more development. In a lower commodity environment Crown leases with sliding scale royalties will be significantly more attractive that PrairieSky's fixed royalties. They will either need to renegotiate leases so that they are taking a lower percentage or accept minimal activity.
    Dec 23, 2014. 10:15 AM | 1 Like Like |Link to Comment
  • PrairieSky: Highly Valued Canadian Oil And Gas Trust Faces Potential Distribution Cut [View article]
    Almost all of their sliding scale royalties are oil based.

    There may be some differences between their sliding scale and Crown leases, but the point about declining oil price resulting in lower production is still valid.
    Dec 18, 2014. 12:59 PM | Likes Like |Link to Comment
  • PrairieSky: Highly Valued Canadian Oil And Gas Trust Faces Potential Distribution Cut [View article]
    I really don't have a strong sense for timing. It's certainly dependent on commodity prices and management's commitment to the dividend.

    However, at today's pricing, I think PSK does around $0.15/share per quarter in cash from operations. Their dividend is $0.325/quarter. Given 149MM shares outstanding, they would use $26MM in cash to fund the dividend. That's about 46% of their 9/30 cash balance. While I suppose it is possible that management would run with <50% coverage for a quarter, I don't think it's very prudent. Unless they plan on tapping credit facilities, which I think changes the story.

    After posting this, Bonavista announced a 30% cut to their 2015 cap ex plans. All of this cut will come from the Glauconite and Cardium.
    Dec 17, 2014. 03:06 PM | Likes Like |Link to Comment
  • Ladbrokes: Bet Against The Weakest Horse [View article]
    i like this idea. i would be inclined to think that the FOBT business could face some "secular" challenges. i agree that in the 21st century there are probably more interesting ways to waste time and money. to that end - have you come across any research that puts some more thought to this notion?
    Aug 1, 2014. 06:22 PM | Likes Like |Link to Comment
  • Nexstar: Correction To My Mistake After A Conference Call With CFO [View article]
    you deserve more recognition than you're going to get here. you've done good work on this space. thanks
    Apr 21, 2014. 12:40 PM | Likes Like |Link to Comment
  • Why I (Still) Believe Swisher Hygiene Will Decline Dramatically [View article]
    Here is a link to Swisher's original prospectus. http://1.usa.gov/YfeZq7

    I'm going to go out on a limb and guess you haven't been through it.

    There are eight years of analyzable financials. The business has never been profitable.

    How is a debt free balance sheet in any way related to management's focus on the operations?

    This isn't rocket science. It's soap selling and toilet bowl cleaning.
    Mar 27, 2013. 10:43 AM | 2 Likes Like |Link to Comment
  • Why I Believe SunPower Will Decline Dramatically [View article]
    Thanks for the question.

    A cut on Chinese subsidies for domestic projects would not have any effect on my SunPower view.

    There are several different kinds of Chinese solar subsidies, but they all have the shared effect of permitting Chinese manufacturers to sell their products below cost. Whatever the true Chinese production costs may be, they are certainly less than SunPower's. Removal of these incentives might make SunPower's cost structure "less non-competitive", but it will not make them cost competitive.

    This specific incentive relates to the payments that local solar developers get for developing new projects. SunPower does not sell panels in China, so in direct terms this is a non-event. The secondary effect may actually be negative for SunPower. If domestic producers find that local demand is not sufficient then they may be more competitive in markets where SunPower does have a presence.
    Mar 19, 2013. 06:11 PM | Likes Like |Link to Comment
  • Why I Believe SunPower Will Decline Dramatically [View article]
    You need to look at the financials.. In 2012 SPWR's US cost of sales was $1.486B. They recognized 470 MW of capacity. That's $3.16/watt. FSLR's cost of sales was $2.516B. They recognized 1,875 MW of capacity. That's $1.34/W. The difference is $1.82/watt. The +$2 figure was for FSLR's numbers through Q3; I just got around to updating.

    You're cherry picking with your degradation numbers. SunPower suggests modeling their projects at a 0.25% degradation. First Solar suggests 0.5%. No, I don't think this is a significant difference.

    Here's a link to FSLR's degradation discussion, using NREL numbers. http://bit.ly/NPjvV1~/media/Files/Products...
    Mar 15, 2013. 02:47 PM | 2 Likes Like |Link to Comment
  • Why I Believe SunPower Will Decline Dramatically [View article]
    Well they won't be installing any SunPower panels.
    Mar 15, 2013. 10:47 AM | Likes Like |Link to Comment
  • Why I Believe SunPower Will Decline Dramatically [View article]
    For the utility projects, do I think that a $0.35-0.40/watt cost difference matters for a business that has low double digit gross margins on a $2.27/watt all in delivered price? Yes, I do. I also think it matters that after the delivery of their existing utility scale pipeline, significant new projects will be few and far between.

    Understand that the total gross profit potential of the US residential solar market is less than half SunPower's overhead expenses. What I say next about residential shouldn't really matter. At any rate, residential installation prices have been declining +15%/yr and soft costs (marketing, installation, permitting; which are the same for a SunPower system as anyone else) are +$3/watt. (Here is a study about solar soft costs: http://1.usa.gov/15PhlgU). So, when talking about the relevant system cost, you should think in terms of $2/watt. So again, yes, I think a $0.35-0.40/watt difference is significant.

    At the end of the day, if you compare SunPower's total cost of sales with First Solar you will notice that they are +$2/watt higher. I'm sorry, but you can't "efficiency adjust" your way out of that comparison.
    Mar 14, 2013. 05:36 PM | 1 Like Like |Link to Comment
  • Why I Believe SunPower Will Decline Dramatically [View article]
    Thank you. I'm sorry you don't agree.

    SunPower is a high cost producer, even after adjusting for efficiency. Tariffs will not benefit high cost producers. Any shift in the marginal cost curve will still be below SunPower's costs. Also, tariffs are only relevant in markets where they are charged.

    SunPower's US business will decline after they deliver their existing utility pipeline. New utility scale projects will be few and far between, and they will be completed at lower margins. This is very observable if you speak with industry participants.

    Without a growing pipeline, SunPower will not increase production. They will therefore not be leveraging any fixed costs. High cost producers generally do not gain market share when an industry is in oversupply.

    The high efficiency panels are already accepted. There is no support for a thesis that maintains SunPower will benefit from greater acceptance.

    There is a tremendous amount of oil and natural gas in North America. We are importing less foreign oil by the day. I do not think that a black swan monetary policy meltdown is a good reason to own a high cost solar panel producer.
    Mar 14, 2013. 02:31 PM | Likes Like |Link to Comment
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