Seeking Alpha
View as an RSS Feed

Josh Young  

View Josh Young's Comments BY TICKER:
Latest  |  Highest rated
  • Morgan Stanley Sees Oil Exposure Risk, Lowers La Quinta's Price Target [View article]
    I don't think they could sell for anywhere close to their current valuation. Who's going to buy a hotel in Midland or Houston today based on peak valuation multiples on peak room rates and occupancy?

    Also, they've given no indication that they are looking to sell.
    Jan 28, 2015. 07:01 PM | Likes Like |Link to Comment
  • Profit From The Oil Price Crash And Follow Blackstone: Short La Quinta Holdings [View article]
    Thanks. Do companies pay Cramer to promote them?
    Jan 28, 2015. 02:42 PM | Likes Like |Link to Comment
  • The Oil Sector Stock I Dream About Owning One Day [View article]
    For the energy companies listed as comps, it doesn't seem like there's much of a relationship between free cash flow yield and recent stock price performance. The free cash flow positive stocks looks like they're down around as much as negative FCF stocks...
    Jan 28, 2015. 02:14 PM | 1 Like Like |Link to Comment
  • Morgan Stanley Sees Oil Exposure Risk, Lowers La Quinta's Price Target [View article]
    Thanks for the long and detailed comment. A few thoughts:

    1) room rates in Midland had been as high as $400 per night, and in similar places in ND and West Texas had been well over $200 per night. So that revpar you were estimating pre-crash should be higher.

    2) room rates are already declining. you can observe this on websites that track room prices, and you can also see this by looking at the room rates available on kayak and also the discounted hotels on hotwire

    3) there are call kinds of insufficient disclosures by LQ that are inconsistent with disclosures by other similar public lodging companies. it makes analysis more difficult and is likely obscuring the impact of the downturn

    4) things are bad and getting worse in West Texas and elsewhere. Room rates have already fallen there and in Houston. Rigs are only down 17% from the peak, but analysts are expecting the rig count to fall a total of 30-50% over the next few months from the peak. So however bad things have been for hotel rates and occupancy, they're about to get considerably worse.
    Jan 28, 2015. 12:48 PM | 1 Like Like |Link to Comment
  • Update: Brutal Texas Dallas Fed Numbers [View article]
    Probably, but companies like Denny's don't have the same kind of cyclical headwinds. In fact, probably the opposite, the lower income customer base of Denny's in places other than Texas is experiencing a wealth effect from lower gas prices. With slightly more money to spend, that customer will eat at Denny's more and at home less. The oil worker in west Texas, however, will stay at fewer hotels near well sites...
    Jan 27, 2015. 08:09 PM | 1 Like Like |Link to Comment
  • Update: Brutal Texas Dallas Fed Numbers [View article]
    Unclear, my crystal ball is broken.

    I prefer to focus on hotels for now, they are shorter cycle. La Quinta room rates in Texas look like they're already down 10%+ and half of their hotels are in oil states like Texas.
    Jan 27, 2015. 07:44 PM | 1 Like Like |Link to Comment
  • Update: Brutal Texas Dallas Fed Numbers [View article]
    You're welcome. I'll point out that my analysis was accurate in terms of Texas's economy slowing down more than everyone was predicting (except JP Morgan, and even they only halfway said it), despite a lack of data beyond oil price movements. I think the investment implication here is to underweight economically sensitive investments. Personally I'm shorting La Quinta...
    Jan 27, 2015. 07:05 PM | Likes Like |Link to Comment
  • BreitBurn Energy Partners: Making Sense Of The 20%+ Rally [View article]
    Look at the forward curve, its not down that much. For example, dec 2016 wti is only down $3 since December 16th
    Jan 27, 2015. 11:21 AM | 2 Likes Like |Link to Comment
  • BreitBurn Energy Partners: Making Sense Of The 20%+ Rally [View article]
    Why own HK and SD? They have less stable production bases than BBEP, less hedging in place, and less certain asset bases
    Jan 27, 2015. 11:12 AM | 4 Likes Like |Link to Comment
  • Do You Believe Me Now? [View article]
    Its going to be hard for the US economy and market to do well with one of its biggest states, Texas, dragging along. Did you see the hugely disappointing Dallas Fed numbers that came out yesterday? http://seekingalpha.co... - Huge surprises to the downside
    Jan 27, 2015. 11:05 AM | 12 Likes Like |Link to Comment
  • Oil: The Biggest Hairiest Guess Out There? [View article]
    Great article. I agree that the majors don't seem to be pricing in the current low oil price. And that it is important to look at the fundamentals of businesses and see how they have changed before investing. In particular, I liked this:

    "the current environment presented "the opportunity of a lifetime." Really? Without knowing the effect of oil prices on company earnings? Buyer beware"

    It made me think of my short thesis on La Quinta (LQ). How is it possible for investors to be buying the stock of a hotel company that has 50% of its hotels in places like Texas without evaluating the likely economic impact of the drop in oil on the company's cash flow?
    Jan 26, 2015. 10:37 AM | 3 Likes Like |Link to Comment
  • Kinder Morgan Buys Harold Hamm's Hiland Partners - Should Continental Have Benefited? [View article]
    Interesting, can you please share where you found that information?
    Jan 24, 2015. 03:40 AM | Likes Like |Link to Comment
  • Kinder Morgan Buys Harold Hamm's Hiland Partners - Should Continental Have Benefited? [View article]
    Chancer, I don't think enough details were disclosed to figure that out. My suggestion to KMI shareholders is to ask management about it. Understanding contract duration and pricing (especially comparative pricing vs other contracts in the Bakken) will be helpful.

    There is another risk for KMI, which is that Continental could turn around and ask for lower rates once this deal closes. Contracts or not, lower rates are being negotiated and agreed to by midstream and service companies across the oil and gas space. This happened in 2009. It benefits both parties by preserve or enhancing volumes, but could be negative if the price paid for the pipeline was set based on no reduction in rate.
    Jan 23, 2015. 03:37 PM | 1 Like Like |Link to Comment
  • Kinder Morgan Buys Harold Hamm's Hiland Partners - Should Continental Have Benefited? [View article]
    Charles, that may be true but is risky with levered companies. The risk is that the stock could fall much further and then be bought out, with the shareholders losing out in the end, similar to what happened with HLND.

    With LQ, I think its exactly that, Blackstone and management are aggressively selling at ~$20, which along with fundamental reasons makes me interested in shorting it.
    Jan 23, 2015. 02:35 PM | 1 Like Like |Link to Comment
  • Kinder Morgan Buys Harold Hamm's Hiland Partners - Should Continental Have Benefited? [View article]
    I have been on a board as well. Frequently board members will only serve on the board of one company active in either a particular region and/or industry, in order to avoid even perceived conflict. I would argue this is obviously not cut and dry, as this was a prior subsidiary of the company and he was the chairman of both boards!

    I am not asserting anything about legality. I am simply suggesting that the question be asked.
    Jan 23, 2015. 02:21 PM | Likes Like |Link to Comment
COMMENTS STATS
877 Comments
618 Likes