Seeking Alpha
View as an RSS Feed

Josh Young  

View Josh Young's Comments BY TICKER:
Latest  |  Highest rated
  • La Quinta Currently At Fair Value But Still A Long-Term Growth Story [View article]
    Both management and now you have constructed a straw man "bear" thesis. The issue isn't oil and gas corporate accounts. Its over exposure to oil states like Texas, Oklahoma, North Dakota, etc. Few people stay at La Quinta on a corporate account - it is "select service" - essentially a motel.

    But when GDP in Texas falls (not just in Midland, but across Texas), room rates and occupancy will fall (again not just in Midland, but across Texas). Midland is just the most egregious example.

    With 50% of revenue exposed to these states, we'll see how these revpar numbers look later in 2015. The rig count is down ~40%, most of which is in the past 6 weeks.

    Blackstone sold. Management sold. You sold. Blackstone will sell more. Lets see where this settles out.

    The short thesis came out at a stock price around the current price, so showing a stock chart from an IPO that priced below expectations doesn't show much, other than that your recommendation to buy the stock at that time has turned out to be correct.
    Mar 3, 2015. 12:53 PM | 2 Likes Like |Link to Comment
  • Time To Sell? Insiders Dump La Quinta Stock [View article]
    Hi, thanks for the comment / question.

    No, they did not answer the specific question asked by an analyst in this regard. The rig count only collapsed in the last 2 months, so there has been a lag in economic impact on oil producing states. But the collapse has been dramatic, it hasn't stopped yet, and economically sensitive service providers such has lodging businesses will feel it.
    Feb 27, 2015. 01:03 PM | Likes Like |Link to Comment
  • When To Buy Energy Financings - And When Not To [View article]
    Interesting article. Thanks for sharing your perspective on Canadian capital markets for oil and gas companies.
    Feb 26, 2015. 12:35 PM | Likes Like |Link to Comment
  • Chesapeake Energy: Panic Selling Is A Promising Buying Opportunity [View article]
    Interesting approach
    Feb 25, 2015. 05:22 PM | 2 Likes Like |Link to Comment
  • Profit From The Oil Price Crash And Follow Blackstone: Short La Quinta Holdings [View article]
    There were numerous contradictory statements on the call. They don't actually have numbers for why visitors are staying at a particular hotel, which they said, but then they also said that oil and gas represents a smaller industry representation than other industries for them. With 30% of their hotels in Texas and another ~20% in oil states like North Dakota, that is a bold statement for them to make considering their admission that they don't really know their customers.

    They also seem to think that most of Texas will be immune from this oil price decline. JP Morgan disagrees, citing risk of a broader statewide downturn in 2015. The impact of this may be amplified by the increase in hotel rooms across the state, meaning there could be both more supply and less demand. This may also play out in other oil exposed states like North Dakota.

    I also struggle with the math of a slowdown in places like Midland not impacting margins. Room rates of $290 per night are way higher than the sub $100 average across the chain. Obviously margins at that hotel (considering the same size rooms, etc) were likely higher than average, as will other higher than average room rate hotels in other oil areas like Odessa. Already rooms are available in that area on hotwire for $100 per night for the same star level, indicating substantial excess inventory and perhaps signalling a likely posted rate price drop.

    Also, what utility rates are going down due to a drop in oil prices? Really? Oil is not a factor in electricity rates, and if anything my understanding is that electric rates across the country are going up, not down!
    Feb 25, 2015. 01:12 PM | Likes Like |Link to Comment
  • Update: La Quinta Insider Selling In Size Opens The Door For Questions And Concerns [View article]
    Not just Texas, also Colorado, North Dakota, Oklahoma, Louisiana, etc. Across those states, you're talking almost 50% of hotels and revenue base. Could be a material slowdown this year, especially now that 400+ rigs have been dropped already in 2015!

    If it was at an "attractive multiple" Blackstone wouldn't be selling here. Also, La Quinta motels are not of comparable quality to Hilton, Hyatt, etc. Inappropriate to award a similar multiple to a lower revpar, margin, etc business
    Feb 20, 2015. 01:31 AM | Likes Like |Link to Comment
  • Exxon: Please Lord, Don't Buy BP [View article]
    In an interesting turn of events, Berkshire Hathaway / Warren Buffett just sold all their shares of Exxon Mobil
    Feb 17, 2015. 06:34 PM | 6 Likes Like |Link to Comment
  • Update: La Quinta Insider Selling In Size Opens The Door For Questions And Concerns [View article]
    You may have 65 stocks in your portfolio, but you've only ever commented on one.

    Downstream capex is smaller and in areas better served by competitors to LQ than upstream heavy areas like Midland.
    Feb 16, 2015. 10:33 PM | Likes Like |Link to Comment
  • The New Kid On The Block Is Generating Controversy [View article]
    Interesting article. Pricey stock considering the large amount of debt and equity it will need to issue to develop its assets
    Feb 12, 2015. 12:22 PM | Likes Like |Link to Comment
  • Bellatrix Exploration Trading At 23% Of Its Fairly Valued Price [View article]
    PE and share price are not meaningful metrics for evaluating upstream energy companies. Analysts generally use EV/EBTIDA, if they are are using a multiple, as EV better captures the total capital structure and EBITDA avoids earnings distortions from depreciation, hedging, etc.

    In terms of using numerical stock price - share price is nearly meaningless without factoring in number of shares and calculating a market cap. Sure if it were a 2 cent stock, that would tell you something, but a $2 stock versus a $5 stock tells you nothing while comparing market caps or enterprise values tells you a lot more.
    Feb 11, 2015. 09:28 PM | 2 Likes Like |Link to Comment
  • Hotel Exposure To The Oil Crash [View article]
    Thanks for the comment. Room rates were over $400 during the peak last year. They are far lower now. I just checked on hotwire and there are LQ-quality rooms available for $100 right now. I may write an article about this, highlighting how far and how fast room rates have fallen.
    Feb 10, 2015. 06:35 PM | Likes Like |Link to Comment
  • Hotel Exposure To The Oil Crash [View article]
    Yes, LQ still owns ~50% of their properties. Thats partly why it deserves a lower multiple than its comps. That and it having lower end properties which tend to be lower margin.
    Feb 10, 2015. 05:11 PM | Likes Like |Link to Comment
  • Does Wizard World Provide Magic For Investors? [View article]
    If its too speculative, why do you call it a "unique investment opportunity"?

    And if its an investment opportunity, why not try to value it using some kind of metric or approach?
    Feb 9, 2015. 08:21 PM | 1 Like Like |Link to Comment
  • Update: La Quinta Insider Selling In Size Opens The Door For Questions And Concerns [View article]
    mk, you should look at occupancy rates for the past month and particularly for the past 2 weeks, during which the rig count has fallen by 20%! 6 months old numbers won't help you much in figuring out how bad its going to be for West Texas, North Dakota, North Colorado, South Texas, Oklahoma and Louisiana hotels.
    Feb 9, 2015. 08:20 PM | Likes Like |Link to Comment
  • Does Wizard World Provide Magic For Investors? [View article]
    Interesting article, but no real discussion of valuation
    Feb 9, 2015. 02:20 PM | 1 Like Like |Link to Comment