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  • Trinity Industries Shows Value Despite The Noise [View article]
    Trinity is going to contact the DOJ for information via outside council.
    Apr 25, 2015. 06:46 PM | 1 Like Like |Link to Comment
  • Trinity Industries Shows Value Despite The Noise [View article]
    Posted above:

    Federal False Claims Act case:

    "The District Court has not yet entered a final judgment or determined a civil penalty amount. While the Company believes the District Court does not have the evidence required under the law to quantify civil penalties, the total range of loss in this case, based on the jury’s verdict and Mr. Harman’s calculations for civil penalties, is $525.0 million to $709.0 million, exclusive of attorney's fees, costs, and interest."

    "Pending entry of a final judgment and completion of the Company’s post-trial and appellate activities in this matter, we currently do not believe that a loss is probable, therefore no accrual has been included in the accompanying consolidated financial statements."

    Everyone here should read Note 18 from the new 10-Q.
    Apr 25, 2015. 05:24 PM | Likes Like |Link to Comment
  • Helmerich & Payne - More Pain Is Arriving, Stay Cautious For Now [View article]
    Good job Shelby, you must have gotten in below $60/share near the bottom. I'm up around 20% including dividend. It's always a good thing to have something in the game when things are going well.

    James
    Apr 25, 2015. 03:24 PM | Likes Like |Link to Comment
  • Trinity Industries Shows Value Despite The Noise [View article]
    Trinity has an average stock price return of 10% per year since 2007. Worst performance is if an assessment is taken from 2006 (Trinity's previous peak before the recession and 6% CAGR to date). Every time period prior to this since 2001 Trinity has consistently averaged 10% per year for stock price returns to date. This of course assumes long-term positions in the company. Dividend now is currently at 1.4% adding increased real gains.

    Long-term, prospects are still looking good, but the current litigation risks are not something to just overlook....

    I bought in a little above $29/share in Feb. After digesting the risks versus opportunities, I'll take another add sub $29/share on Monday (depending on how it opens).

    But I will reserve capital and will be prepared for sub $25/share through the summer.

    Good luck to all! (even shorts)

    James
    Apr 25, 2015. 03:22 PM | Likes Like |Link to Comment
  • Trinity Industries Shows Value Despite The Noise [View article]
    Just to be clear:

    "Revenues from sales of the ET Plus in the United States, included in the Construction Products Group, totaled approximately $35.1 million and $46.0 million for the years ended December 31, 2014 and 2013, respectively, and 0.6% and 1.1% of the Company’s consolidated revenues, respectively, for those years."
    Apr 25, 2015. 01:53 PM | 2 Likes Like |Link to Comment
  • Trinity Industries Shows Value Despite The Noise [View article]
    Let's make sure we keep a transparent understanding of circumstances from the recently filed 10-Q.

    Note 18:

    "Revenues from sales of the ET Plus in the United States, included in the Construction Products Group, totaled approximately $35.1 million and $46.0 million for the years ended December 31, 2014 and 2013, respectively, and 0.6% and 1.1% of the Company’s consolidated revenues, respectively, for those years."

    Federal False Claims Act case:

    "The District Court has not yet entered a final judgment or determined a civil penalty amount. While the Company believes the District Court does not have the evidence required under the law to quantify civil penalties, the total range of loss in this case, based on the jury’s verdict and Mr. Harman’s calculations for civil penalties, is $525.0 million to $709.0 million, exclusive of attorney's fees, costs, and interest."

    "Pending entry of a final judgment and completion of the Company’s post-trial and appellate activities in this matter, we currently do not believe that a loss is probable, therefore no accrual has been included in the accompanying consolidated financial statements."

    Crash testing and FHWA assessments:

    "A second FHWA-AASHTO joint task force is doing further evaluation of the ET Plus. The FHWA has reported that this evaluation is expected to be completed early this summer. When the findings of this second task force are released, the Company will perform a thorough analysis regarding the resumption of any shipments of the ET Plus to customers."

    State, county and municipal actions:

    "Trinity is aware of 41 states that have removed the ET Plus from their respective qualified products list." One less than from the 10-K filing disclosure.

    "The Company believes each of these class action lawsuits is without merit and intends to vigorously defend all allegations. While the financial impacts of these three actions are currently unknown, they could be material."

    Product liability cases; law firm investigations:

    "The Company carries general liability insurance to mitigate the impact of adverse verdict exposures in these product liability cases."

    "The Company is aware that several law firms are investigating whether the Company and certain of its officers and directors breached their fiduciary duties relating to modifications made to the ET Plus and/or violated federal securities laws. We believe these investigations will be concluded without substantive results. However, the Company will incur legal expenses and related costs in responding to these investigations."

    DOJ Investigation:

    The company has engaged outside council to contact the DOJ to find out information.

    The only thing that has fundamentally changed from the 10-K filing is a new class action lawsuit so there are now 3, and the DOJ news.

    Good luck to all!

    James
    Apr 25, 2015. 12:42 PM | 1 Like Like |Link to Comment
  • Helmerich & Payne - More Pain Is Arriving, Stay Cautious For Now [View article]
    "I am puzzled why the company continues to make huge capital investments."

    New rig technologies are going to help HP take further market share regardless of what type of oil price environment we are in over the next decade. HP's capex will reduce more significantly during the next FY.

    Similar trend was prevalent in the last down cycle.
    Apr 25, 2015. 11:50 AM | 1 Like Like |Link to Comment
  • Trinity beats by $0.17, beats on revenue [View news story]
    What was said on the earnings call regarding the DOJ allegations? This is most likely why the stock is dropping today.

    I'm assuming Trinity didn't say much at all so the market thinks to sell rather than take the risk of the worst scenario.
    Apr 24, 2015. 12:05 PM | Likes Like |Link to Comment
  • Freeport McMoRan considers IPO of U.S. E&P business, vindicating skeptics [View news story]
    I don't get Freeport's strategies at all...
    Apr 23, 2015. 08:04 PM | 6 Likes Like |Link to Comment
  • Illumina: And The Beat Goes On [View article]
    SQNM is on a good streak, I got in around $3.77/share March 9th including transaction cost and am up near 20%.

    I always wondered since the recent agreement went through via both ILMN and SQNM's patents, that maybe ILMN would acquire them outright.

    James
    Apr 23, 2015. 11:45 AM | Likes Like |Link to Comment
  • Gilead, Biogen, Caterpillar And Trinity Updates [View instapost]
    DR,

    I've had some good success with TRN, buying last year and selling near the top and buying again this year around $29/share.

    Is your primary concern that if criminal actions are indeed prevalent, that this will impact the other business segments based on customer demand?

    Thanks,
    James
    Apr 23, 2015. 11:31 AM | Likes Like |Link to Comment
  • I Upgrade My View On Helmerich & Payne After Rig Count Data [View article]
    fred,

    I believe that the dividend is stable through fiscal year 2016 based on the debt raise. I also believe that HP has the capacity to raise more debt and still remain below their long-term 20% debt/capital ratio into 2017 to keep the dividend in-line.

    I don't see immediate needs to reduce labor during this time, but your point is well taken and there are no guarantees even if HP has this debt capacity.

    Considering the last volatile cycle of oil prices, HP lagged on a performance perspective and didn't get their earnings growth back up until after 2010. I would think that by 2017, the company should be back on an up-trend irrespective if oil prices are not going back to $100/barrel anytime soon.

    HP's goal is to take market share during these events and come out stronger.

    Thanks,
    James
    Apr 23, 2015. 10:25 AM | Likes Like |Link to Comment
  • WhiteWave Foods: Should You Pay 25 Times EBITDA For This High-Growth Flyer Like I Just Did? [View article]
    colin,

    In the U.S., the company owns/leases 9 production facilities of which only two are within California. Additionally, the company utilizes 3 co-packing companies in the U.S. The California production facilities include City of Industry (County of Los Angeles) for Americas Foods & Beverages and San Juan Batista (San Benito County) California for Americas Fresh Foods operating segments.

    To be clear, the Los Angeles facility supports Horizon, Silk, So Delicious, International Delight and Land O Lakes products, while the San Benito facility supports Earthbound Farm products.

    In order to specifically address your question, we would need to know the geographic U.S. breakdown of these product lines and respective operating margins. I do not think that management would disclose this type of information.

    I certainly do not have that info to answer your question. Based on the fact that WhiteWave internally produced about 70% of their units shipped during 2014 within the Americas segment and that the company has stated that they believe they will be able to lower their cost basis points through their distribution networks, I would think that they will be able to mitigate higher water consumption costs in the event they occur. This can be performed by third-party production, distribution efficiencies, and/or cost pass-through to consumers.

    http://bit.ly/1yUeYN0

    If you review the recent March presentation at the New York event, slide 15 displays that the company's products consume less water than conventional ones. While this does not eliminate higher costs in the future, the company is already more efficient than some of its peers.

    Hope this helps some.

    Thanks,
    James
    Apr 22, 2015. 08:37 PM | Likes Like |Link to Comment
  • Netflix Virtuous Cycle Is Intact, But Stock Is Fully Valued [View article]
    This was a good overview, thanks Eric.

    What is interesting to me is that Netflix now relies upon debt more than equity as the debt to capital ratio stands at 56% currently, to sustain and operate the business.

    Considering cash flow operations, this simply means that earnings, depreciation, etc. are not able to support the business growth and Netflix is becoming more dependent on debt.

    This leads to more risk (not necessarily a bad thing). For instance if Netflix is able to get an eventual higher return on the bottom-line in the near-future for those investments, this would theoretically bring the debt component in line. At a minimum we should hope to see a reversion.

    However, if Netflix continues on this path of leverage-need, and competitive factors evolve, or more greatly emerge, then these obligations may pose more of problem.

    I owned Netflix way back at $9/share and earlier as well in the $75-100/share range and sold out prematurely so it is one of my poorest decisions from a long-term investment perspective. But I would need to reassess the major content owners (Disney, Comcast, Discovery, CBS, Fox, etc.) and compare their growth prospects versus leverage across the board to get a better sense of Netflix's risks. Most notably, is the increase in leverage part of Netflix's maturation or is it a result of growing the business at any cost - those are key items to consider.

    Thanks,
    James
    Apr 22, 2015. 03:53 PM | Likes Like |Link to Comment
  • Illumina: And The Beat Goes On [View article]
    AP,

    I tend to agree regarding the top-line. Are you relying upon Illumina's non-GAAP information to come to your EBITDA comparison (53% +).

    I have recently updated my spreadsheet for Illumina to include GAAP and non-GAAP income and EPS. But I'm using conventional EBITDA by taking GAAP operating income and adding depreciation and amortization back in.

    I get a 71% increase quarter over quarter based on this.

    Thanks for the article.

    James
    Apr 22, 2015. 12:33 PM | 1 Like Like |Link to Comment
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