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Ian Bezek  

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  • Ignore Buffett: Refiners Are A Low-Quality Industry About To Plunge [View article]
    Book value is interesting for refiners. I was long WNR in 2008 and again in 2010 when it was near bankruptcy. They had a troubling amount of debt. Some people were saying liquidate the company since it is trading way under book, but of course when the company actually tried to shop refineries to pay down debt, there were no takers anywhere near what the asset was market to on paper.

    And nowadays, you could probably sell refineries above their stated book value. WNR almost went BK in 2008 because they overpaid like crazy to buy Giant in 2006 right at the cycle top.
    Sep 3, 2015. 10:31 AM | Likes Like |Link to Comment
  • Ignore Buffett: Refiners Are A Low-Quality Industry About To Plunge [View article]
    WNR for example:

    "Our operating results for the years ended December 31, 2014 included realized and unrealized net gains from our commodity hedging activities of $289.8 million and realized and unrealized net losses from our commodity hedging activities of $1.0 million and $374.1 million for the years ended December 31, 2013 and 2012, respectively."

    As such hedging accounted for roughly half of WNR's 2014 net income, and subtracted roughly half of 2012's net income. So yes, it's a huge driver of income year to year. Unfortunately I have no way of knowing how effective hedging programs will be in the future.

    Tesoro, in 2008, for example took a massive loss on hedging, at a time when the crack spread collapsed. You'd have think hedging would have helped rather than hurt them there.
    Sep 3, 2015. 10:28 AM | Likes Like |Link to Comment
  • Procter & Gamble: Fairly Valued, Even Assuming A Bad Upcoming Decade [View article]
    "Core earnings per share were $4.02, a decrease of two percent. Diluted net earnings per share were $2.44, including a one-time charge of $2.1 billion, or $0.71 per share, for a change in the method of accounting for its Venezuelan operations from consolidation to the cost method, discussed later in this press release. Organic sales grew one percent as a two percent pricing benefit more than offset a one percent reduction in shipment volume. Net sales were $76.3 billion, a decrease of five percent versus the prior year, including a negative six percentage point impact from foreign exchange." http://bit.ly/1ijbI6s

    Earnings were $4.02 minus a couple of extraordinary FX events. Revenues grew 1% not counting the FX debacle. These are by no means great results, but it's not falling off a cliff either.

    As a global products company, not sure how you can avoid the occasional Venezuela. Should we dump our shares for the "falling" EPS due to the occasional socialist dictator stealing the money?
    Sep 2, 2015. 08:58 PM | 1 Like Like |Link to Comment
  • Kinder Morgan, Inc.: Come On, Admit It, This 6% Yielder Is A Steal At $32 [View article]
    High yield stocks beloved by this article's author that subsequently collapsed? Seem like a bunch of apples to me.
    Sep 2, 2015. 02:30 PM | Likes Like |Link to Comment
  • Procter & Gamble: Fairly Valued, Even Assuming A Bad Upcoming Decade [View article]
    Please ask yourself if those numbers pass the smell test? Do you really believe PG's earnings power dropped 40% in one year, or perhaps is there a large swing from currency translation that hit once, and will revert when things go the other way?

    Since you are using $2.44 as a valid EPS figure for PG, which it's not, and basing 10-year growth rates off that not meaningful figure, the whole analysis is pointless. In a world where PG's ability to sell basic staples dropped 40% overnight, this would be meaningful...

    Earnings will be around 3.80 for the current fiscal year. Try rerunning the numbers with that and you'll see there's no shrinkage, just an absence of growth.

    ---

    To try putting it another way. Do you REALLY believe that PG is trading at 28x earnings?
    Sep 2, 2015. 02:09 PM | Likes Like |Link to Comment
  • Kinder Morgan, Inc.: Come On, Admit It, This 6% Yielder Is A Steal At $32 [View article]
    I agree with you the long-term capital appreciation likely isn't that great, though if they manage to get the dividend up to where promised in 2020, a $60 share price wouldn't shock me at that point.

    I disagree only in that Enron also had tons of physical assets. It originally was a pipeline company that kept adding on more and more financial layers on top of a very real physical business. Look at some of the gigantic plants they built overseas in places like India. Indisputably a high-value asset (though not particularly profitable).

    KMI was the first to undo the MLP structure, first to issue European bonds despite not having European revenue. Leading edge financial stuff...
    Sep 2, 2015. 01:42 PM | 2 Likes Like |Link to Comment
  • A Safe 11% Yield With 4.3X Dividend Coverage: RSO Preferred C [View article]
    Probably because the underlying was undergoing a reverse split and sometimes brokers halt a symbol for a day or two around splits.
    Sep 2, 2015. 01:39 PM | Likes Like |Link to Comment
  • Procter & Gamble: Fairly Valued, Even Assuming A Bad Upcoming Decade [View article]
    Thanks for the read and comment.
    Sep 2, 2015. 01:14 PM | Likes Like |Link to Comment
  • Procter & Gamble: Fairly Valued, Even Assuming A Bad Upcoming Decade [View article]
    Thanks for the comment and the read.

    Yeah, I was surprised I was able to get PG at what seems to me a fair value. And yes, market could certainly value this lower yet. Which would be fine -- I'm happy to own the core business at 13x, 15x, or 18x earnings. If this ends up being a utility, it's a rather attractive one.
    Sep 2, 2015. 01:14 PM | 2 Likes Like |Link to Comment
  • Procter & Gamble: Fairly Valued, Even Assuming A Bad Upcoming Decade [View article]
    Yeah, it is surprising how fast the tide turned here. There wasn't a single negative PG article in the month of December 2014, when the stock topped. In fact, we got this from Josh Arnold, who has subsequently published bearish after bearish article on PG once shares started tanking.

    Procter & Gamble: Value And Yield Makes It A Great Retirement Holding
    Josh Arnold • Dec. 22, 2014, 12:38 AM • 3 Comments

    Now it's no longer a "value" but instead a company that pays too much executive compensation or whatnot.
    Sep 2, 2015. 01:12 PM | 3 Likes Like |Link to Comment
  • Kinder Morgan, Inc.: Come On, Admit It, This 6% Yielder Is A Steal At $32 [View article]
    Complicated debt-heavy balance sheet, extremely complex operations that few people understand, and run by a former Enron exec.

    Unlikely to happen again, but it's a risk worth factoring into bond valuations.
    Sep 2, 2015. 12:00 PM | Likes Like |Link to Comment
  • Kinder Morgan, Inc.: Come On, Admit It, This 6% Yielder Is A Steal At $32 [View article]
    Better to have sold half than to have sold none. You made a good decision regardless.
    Sep 2, 2015. 11:41 AM | 1 Like Like |Link to Comment
  • Kinder Morgan, Inc.: Come On, Admit It, This 6% Yielder Is A Steal At $32 [View article]
    I wouldn't own their bonds because of the Enron risk. Moderate interest rate but chance of sudden loss of most of your capital. Bad risk/reward.

    With the stock, you at least have a chance of large upside if the energy sector recovers and investors get euphoric for KMI again like they were in the Spring.
    Sep 2, 2015. 11:40 AM | Likes Like |Link to Comment
  • Kinder Morgan, Inc.: Come On, Admit It, This 6% Yielder Is A Steal At $32 [View article]
    They're issuing new stock. Nowhere near having enough financial capacity to buy back stock. Without new capital, they can't raise the dividend, which is the reason everyone is long here in the first place.
    Sep 2, 2015. 11:37 AM | Likes Like |Link to Comment
  • Profit From The Biotech Craze: Long Gilead Sciences And Short Taro [View article]
    I agree. People see GILD's low PE and respectable dividend and think it's a value stock. But much of the ownership base, in fact, are momentum players and flippers who are selling the stock at the first sign of wider market trouble.

    Keveyis, do you know how much they're pricing it at? 5,000 patients in the US is a very small market, so $500m sounds a bit high, but I haven't looked too deeply.
    Sep 2, 2015. 09:34 AM | 2 Likes Like |Link to Comment
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