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  • CapitalSource: Tremendous Opportunity or Value Trap? [View article]
    As part of their bank requirements, they have to retain their earnings for 2.5 years. Even if they could distribute their earnings to the parent, they would be much better served to pay down debt as quickly as possible.

    On Mar 31 10:31 PM dreamer67 wrote:

    > Also key question, if they have (the potential) of 80,000,000.00
    > a year in income in only one of 4 legs of the company with a value
    > of 4 billion, why is the dividend so skimpy. It would seem that
    > a modest dividend would change the game for this stock in a huge
    > way
    Mar 31, 2009. 11:36 PM | Likes Like |Link to Comment
  • CapitalSource: Tremendous Opportunity or Value Trap? [View article]
    I was looking at that last night. This analysis will be part of Part IV of my analysis. Obviously, this is the biggest concern with capitalsource. If I had to guess, this situation likely was part of the resignation of their CFO.

    On Mar 31 10:22 AM James Beam wrote:

    > What about liquidity? If you look at the non-bank business you will
    > see that they don't have cash to payback all of their debt.
    Mar 31, 2009. 12:01 PM | Likes Like |Link to Comment
  • Yamana Gold: Finding Value [View article]
    I haven't looked lately, but Yamana has typically hedged only copper prices. Management counts copper as a sort of by-product from their Chapada mine and uses revenue here to offset productions costs. Their strategy in the past has always been to remain unhedged on the price of gold, and I haven't seen anything to indicate a change in that strategy.

    On Feb 20 11:21 AM MateoJoe wrote:

    > Dan,
    > Good write up. I've owned since six and change and keep researching
    > so your work is appreciated.
    > One question: Do you or any other posters know how much of AUY's
    > production is forward hedged?
    > Thanks.
    Feb 20, 2009. 03:07 PM | 1 Like Like |Link to Comment
  • Yamana Gold: Finding Value [View article]
    The press release linked above from Yamana indicates that they are forecasting $800/ounce in 2009 and $825/ounce in 2010.

    On Feb 18 06:13 PM arlin wrote:

    > I believe AUY's estimates are based on $700 gold.As already stated
    > Energy is 25% of the cost of minning gold and its down from $147
    > bbl to $35bbl,Also Auy is a Money maker in the currency swaps between
    > their operations and selling gold in dollars, roughly 20%.
    Feb 19, 2009. 12:08 AM | 1 Like Like |Link to Comment
  • Yamana Gold: Finding Value [View article]
    Thanks, silverwood.

    Who knows what gold will do over the next couple of years. I know problems in the banking sector are only just beginning. With unemployment rising very rapidly, banks are now starting to deal with problems that usually occur in a down economy.

    One would think that continuing government intervention and an unstable banking environment would only cause the price of gold to rise further.

    On Feb 17 11:03 AM silverwood wrote:

    > Dan, good analysis and very conservative. There is a strong possibility
    > that gold can rise to $1200 and hold a floor of $1000 after that
    > this year. That would make AUY a $20+ stock. I'm also glad to see
    > someone who is commenting on a company that has some skin in the
    > game...Disclosure: I currently hold shares of Yamana Gold. I am also
    > long AUY.
    Feb 17, 2009. 02:31 PM | 3 Likes Like |Link to Comment
  • Lexington Realty Trust: High-Yield Opportunity, Ready for 2009 [View article]
    Mr. Rufus

    Thanks for your comments. I have to admit, my first reaction is that I'm wrong and you have found a flaw in my analysis. This is what is great about this forum. If people approach these articles with intellectual integrity, a great deal of learning can occur.

    So let's step through the numbers and see where we end up...

    I see where you get $376MM. You take reported gross rental revenue in the 3Q of $94,166M and multiply by 4. Fair enough. This represents gross revenue for the third quarter less vacancy. My cash flow analysis is equal to $442MM on this basis.

    I will point toward the annualized cash rent in their consolidated portfolio of $387,868M on page 23 of their supplemental report. I then added $48,256M from their strategic asset portfolio. This looks like a mistake, because Lexington only owns a portion of this entity. I couldn't find the exact ownership interest, but their claim after preferred returns is 35%.

    So gross revenue (assuming properties are fully leased) is as follows:

    $388MM + 16.8MM = $404.8MM in Gross Potential Rent
    Less Vacancy (6.4%) = ($25.9MM)
    EGI= $379MM

    So we're not too far off here. $376MM was based on annualized rental revenue, and $379MM is based on grossed up rents less vacancy. I want to do this so I have an accurate vacancy factor in my stressed cash flow.

    Keep in mind that we have both excluded tenant reimbursements to this point. This would be about $44 million annualized. I left it out initially to be conservative. They get about half of their operating expenses back in reimbursements. Add this back and you get:

    $451.6MM GPR
    ($28.9MM) Vacancy
    $422.7 EGI

    This looks pretty accurate. The expenses aren't really disputed. You did manage to apply vacancy to operating income, which already included vacancy. I assume you took 7% vacancy against $304MM, which already included vacancy, to get your $278MM in operating income. The rest of my income statement looks like this:

    Operating Costs: ($81 million)
    Management and Admin: ($34 million)

    Net Operating Income: $307 million
    Debt Service: ($149 million)
    Net Cash Flow After DS: $158 million, FFO/Shr = $1.44

    DSCR: 2.07x
    Implied value at 8.0% = $3,838MM. LTV~66%.

    $452MM GPR
    ($90MM) Vacancy
    $362MM EGI
    ($115MM) op costs
    $247MM NOI
    ($149MM Debt)
    DSCR=1.66, FFO=$98MM, $0.90/shr

    I still feel pretty good about my analysis. No doubt the market looks difficult this year, but I do not believe that the numbers look as dire as you indicate.

    Thanks for your comments!

    Jan 7, 2009. 04:38 PM | 3 Likes Like |Link to Comment
  • Dawson Geophysical 4Q Valuation: Plenty of Upside Left [View article]
    Revenue and earnings were pretty flat quarter over quarter. No new crews. Channel count is the growth story going forward, but this quarter no growth was the story.

    If you look at my intrinsic value table, the market is thinking more along the lines of 6% growth than 9% or even 12%. I think this is a bit premature. So, yes, I'm still holding this sucker. I'd buy more, but I already have a pretty full plate of Dawson. Full enough, anyway.
    Feb 6, 2008. 10:06 PM | Likes Like |Link to Comment
  • Netflix Looks Like a Bargain Again [View article]
    I would be out of Netflix in a second if they made a play for Blockbuster. Blockbuster has two major issues. First, they have quite a bit of debt. Second, they have all the stores hanging like an albatross around their neck. Better to let them suffer on their own than befriend them...
    Feb 1, 2008. 10:32 PM | Likes Like |Link to Comment
  • A Closer Look at Apple Stock [View article]
    I'll respond first by pointing to Blah123 and saying, "Exactly!" I admire Apple as much as many of the posters here. I just don't want to rely on them repeating their amazing past performance in the future. They already have a market cap of $100 billion+. Are they going to be worth $300 billion in five years? Or $500 billion. What's realistic?

    User146420, I don't think it's arrogance to assume that Apple will never come up with another hot product, I think it's conservative not to make an investment that requires them to produce multiple hot new products. I'm trying to tilt the probabilities in my favor.

    Pat S, you make a very convincing bull case. I think the stock is a buy as well. I am just waiting for my price.

    Feb 1, 2008. 10:31 PM | Likes Like |Link to Comment