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Guy Ausmus  

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  • Cheniere Energy: A Riddle Wrapped In A Mystery Inside An Enigma [View article]
    "Iron clad rock sold can't break contracts"? For Cheniere's sake, I'd hope so! But - and this is the big "but" - Midstream contracts are getting renegotiated right now. Take a look at the Chesapeake/Williams renegotiation that was just consummated. This is hardly the first or is it likely to be the last instance of midstream transport contract renegotiation.

    I'll grant you - these LNG contracts are of such a magnitude that sovereigns (or their first cousins, or S&P 500 companies) are the counterparties to Cheniere. So you have a greater (but not absolute) assurance of performance by Cheniere's counterparties.

    Second, as C&C I notes in his analysis, about 1/2 of the capacity (existing, in construction, and proposed) is subscribed, the balance is proffered as bundled merchant LNG capacity. All capturing a $3.00/MMBtu spread. Hmmm. Transatlantic arbitrage may be there, may not. Unarguably, there is no guarantee of recovery at any rate for about 1/2 of the capacity that's on the drawing board.
    Sep 28, 2015. 01:37 PM | Likes Like |Link to Comment
  • Cheniere Energy: A Riddle Wrapped In A Mystery Inside An Enigma [View article]
    A wonderful deep drill article. I landed on this name as a short a couple of weeks ago (stay tuned for the SA article to be released next day or so). Basically, I think the entire midstream space is a short, with certain names rising to the top as being the best for shorting. LNG is one, CPGX the other, but you could hit almost all of them. LNG is, if you stop to think about it, the functional equivalent of a natural gas pipeline. It ships gas from the field to some other point on the globe. That's it. No different than Transcanada or any of the others. Entire space is under pressure.
    Sep 28, 2015. 10:38 AM | Likes Like |Link to Comment
  • Conversation With Kinder Morgan's Management Re: Distributable Cash Flow [View article]
    An excellent article on the topic, as per your usual.

    I am very concerned about ALL pipeline companies at this time given the depressed state of oil and gas prices. Apart from the accounting intricacies (which you've dealt with admirably), one has to be concerened about the counterparties to the pipelines, ie the oil and gas producers. a) These prices are causing great stress/bankruptcies in the space, and a bankrupt is not going to pay its demand charges to the pipe. b) apart from default risks, present pricing stymies new drilling, and new drilling is the precursor to pipeline expansion projects. Most PL's tout their growth, not so much.

    It shows, too. Take a look at the competitors of KMI. In general, they are flat to down. I'm not the only one making the observations above.

    Disclosure: Long CPGX, and not liking it much at present.
    Aug 28, 2015. 08:57 AM | 3 Likes Like |Link to Comment
  • AK Steel Q2 Results: Not Bad At All [View article]
    Great summary. In re: Magnentation...I continue to be amazed by the fact that most steel execs fail to understand that their business is similar to oil refining, you take raw materials (crude oil, or Iron ore/coke) and turn it into product (gasoline or hot rolled sheet). Again and again, steel companies try to lock their input costs, usually near to top of the commodity price cycle. AKS did it in a minor way (Magnentation), MT did it in a major way. And the shareholders suffer. IMHO, one of the great advantages of the minimill model is the covariance of input costs (scrap) and product sale prices.

    Dear steel execs: STOP IT!!! Lock the conversion spread, not one end or the other.
    Aug 11, 2015. 09:46 AM | Likes Like |Link to Comment
  • NiSource Is Overvalued And Speculative [View article]
    Josh makes good points. To that I will add that there identified growth projects that support forward growth @ historic rates, and the post split NI will be a 100% regulated rate company. On the negative side, NI's power company sells about 50% of its output to heavy industry (steel, refining) and the financials on some of the steel customers are AWFUL. Will they be NI's customers in their present form? Methinks unlikely. A great analysis, however!
    Jun 26, 2015. 04:46 PM | 1 Like Like |Link to Comment
  • U.S. Steel: It's A Bloodbath [View article]
    Selling Minntac?
    May 6, 2015. 04:34 PM | Likes Like |Link to Comment
  • Chevron - Downstream Brings Temporary Relief As Cash Outflows Continue For The Foreseeable Future [View article]
    All of the names are "oil indexed bonds". CVX mngt recognizes the situation; selling peripheral assets. Conservative leverage. They can go on like this for a long time. I own there's names for the yield, little more
    May 3, 2015. 08:38 AM | 1 Like Like |Link to Comment
  • Q1 Business Economic Losses Charges Could Mean An Earnings Miss For BP [View article]
    Wall Street climbs a wall of worry. There's been a stealth rally in OilCos. BP is participating. Macanado is not settled, but is following the course of Exxon Valdez, et al. That is, dragging on, and on, and on. This works to BP's favor, as they can sit longer than any claimant. Maybe there's other OilCo's with a more settled business, but I like the div and potential for appreciation. Long with a tight stop.
    Apr 21, 2015. 12:06 PM | Likes Like |Link to Comment
  • Harvoni Continues To Dominate Hep C Market, Market Continues To Undervalue Gilead [View article]
    While GILD is a Hep C Story, an evaluation of the balance of the company + what's in the pipeline, when done at the average multiple of industry peers, seems to indicate that the Hep C franchise is free or nearly so.
    Apr 13, 2015. 02:09 PM | 6 Likes Like |Link to Comment
  • Gilead Expands Hepatitis C Generic Licensing Agreements to Include Investigational Pan-Genotypic Agent [View article]
    And this is why GILD owns, and will continue to own the hepatitis space. Their offering is becoming better, better, better.

    Think about it. The article cites efficacy in the "Developing world". Really? Think about it. If a clinician can prescribe a drug that will work, regardless of the genotype, why wouldn't they prescribe that? It becomes "hepatitis for dummies", ie, a lower risk regimen. It is possible to get the genotype wrong in testing, I imagine. This would short circuit that.

    Presuming success, this will become the new standard WORLDWIDE. Take it to the bank.
    Jan 26, 2015. 11:52 AM | Likes Like |Link to Comment
  • My Top Auto Components Stocks For 2015 [View article]
    Nice analysis, but you seem to have excluded a few names at step 1 and step 6 without justification. For example, Gentherm in step 6. If you are eliminating a name, say why please.
    Jan 6, 2015. 07:45 AM | Likes Like |Link to Comment
  • The Insider Sales Brief: Palo Alto Networks [View article]
    Yes, they are selling. What do you expect? The PANW receive stock as part of their comp; the stock is appreciated, and their portfolio's get VERY unbalanced. I should know - about 1/3 of my net worth is stock granted by my former employer. When you have a big winner, and you are in with size, take some$ off the table.
    Dec 31, 2014. 10:04 AM | 2 Likes Like |Link to Comment
  • Gilead Sciences: Buy On The Drop? [View article]
    It strikes me that ESRX is creating the perfect class action suit - with ESRX as the defendant. Any patient with a failed treatment, any patient with severe side effects will be contacted, the class certified, and it's off to the races. ESRX a will eventually have to defend their decision while under oath, and subject to discovery. ESRX a has smart leaders; they are certainly aware of this. For their sake, I hope they correctly assess the $ they are likely to pay out
    Dec 24, 2014. 10:15 AM | 2 Likes Like |Link to Comment
  • Gentherm Inc.: One Of The Few Undervalued Stocks In Today's Market [View article]
    The only other negative I can think of is a bearish view of automotive unit sales. THRM will clearly gain "share" (heated vs. unheated) seats, etc. as time goes on. This is a new "must have feature akin to automotive air conditioning. Don't know if you've built this into your modeling of the firm, but would appreciate it if you do in later SA articles. Agree in your overall directional assessment, long THRM a.
    Dec 18, 2014. 01:15 PM | Likes Like |Link to Comment
  • I Never Thought I'd Say This About Airline Stocks [View article]
    LUV and ALK typically pop out of the mix when I run my weekly screens. Both are nice trending channel trades. Right now (11/14) LUV is at the top of the channel, looking soft, so out for now, but will rejoin the fun in a few weeks, I suspect. Nice review of the major players in this space.
    Nov 15, 2014. 12:13 PM | 1 Like Like |Link to Comment