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Josh Young  

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  • 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
  • Kinder Morgan Buys Harold Hamm's Hiland Partners - Should Continental Have Benefited? [View article]
    Its weird no one has been talking about this...
    Jan 23, 2015. 01:54 PM | 1 Like Like |Link to Comment
  • Kinder Morgan Buys Harold Hamm's Hiland Partners - Should Continental Have Benefited? [View article]
    Charles, thanks for the comment. The problem is that Highland was a public company and it got bought out for a fraction (1/20 !!!) of its ultimate resale price by Hamm, its Chairman.

    If you own CLR and its stock falls, it would appear there would be a risk that he might do the same thing. How would you feel if oil prices stayed low, CLR fell to lets say $10 per share, and he bought it out for $20. Then in a few years, oil prices went back up and he resold it to a PE firm or oil major for the equivalent of $80...

    I'm not saying the above will happen, but the equivalent DID happen to Hiland unitholders.

    I've gotten more interested in these types of conflicts recently. See La Quinta, where management is claiming no exposure to oil prices while they dump their stock. Despite 50% of the hotels being in oil producing states like Texas and North Dakota! That type of occurrence doesn't seem to me to be a good setup for long term outperformance.
    Jan 23, 2015. 01:33 PM | 1 Like Like |Link to Comment
  • Kinder Morgan Buys Harold Hamm's Hiland Partners - Should Continental Have Benefited? [View article]
    While they are separate companies, being a CEO and a board member involves fiduciary duties. I think its an interesting question how those duties were fulfilled, particularly considering the huge stakes.

    Ironically it might have been more lucrative for Hamm to have had Continental buy Hiland in 2009. Imagine how much CLR stock would go up if it was getting $2.5 billion in the door today. With his large CLR stake, he might have made more than $2.35 billion mark to market on his CLR position. Obviously lots of "might haves" versus $2.5 billion in his pocket. But it is another consideration.
    Jan 23, 2015. 01:23 PM | 2 Likes Like |Link to Comment
  • Morgan Stanley Sees Oil Exposure Risk, Lowers La Quinta's Price Target [View article]
    Thanks Kay. Can you talk about why you own puts?
    Jan 23, 2015. 12:14 PM | Likes Like |Link to Comment
  • Cheniere Energy: A Scary Midstream Stock To Avoid [View article]
    Very interesting, thorough writeup. Have you thought about what you might be missing? Seth Klarman has his reputation for a reason...
    Jan 22, 2015. 08:50 PM | 3 Likes Like |Link to Comment
  • Profit From The Oil Price Crash And Follow Blackstone: Short La Quinta Holdings [View article]
    Cramer and thestreet.com pumping it? LQ hotel rates certainly aren't at 52 week highs!
    Jan 22, 2015. 05:36 PM | Likes Like |Link to Comment
  • Exxon Mobil: Slow But Steady, Value Erosion Is Underway [View article]
    Retired Aviator, marginal cost of production is an interesting metric. Are you asking what Exxon's first barrel costs or its last barrel or what an incremental barrel would cost?

    My bet is that there is a HUGE variance, and that Exxon's true marginal cost of incremental production is higher than many other public oil and gas companies.
    Jan 20, 2015. 11:14 PM | Likes Like |Link to Comment
  • Exxon Mobil: Slow But Steady, Value Erosion Is Underway [View article]
    Great article Richard, and interesting insight Michael. I wrote about this, albeit in a lot less detail, almost exactly a year ago. - http://bit.ly/1Bd0e8V - I think the oil majors are challenged. They were at $100 oil and they will be even more so at current oil prices. Obviously their stock prices have held up, but their fundamentals have not. Thanks for adding detail and depth to this conversation.
    Jan 20, 2015. 11:11 PM | 6 Likes Like |Link to Comment
  • Hotel Exposure To The Oil Crash [View article]
    The numbers for the Texas comptroller tie with the numbers from La Quinta's filings, that is a non issue. Hyatt and Hilton don't disclose their number of Texas hotels because they don't have to - they are much less exposed to Texas than La Quinta on a percentage basis, so I found another source.

    La Quinta has something like 50% of its hotels in oil states like Texas and North Dakota. It will get hit by both the direct impact of a drilling slowdown as well as the wealth effect lower oil prices have on those states - look at what happened to hotels in Texas in the 1980s. La Quinta is the most exposed to that.

    Note management's selective disclosure today - http://seekingalpha.co...
    And make sure to read the article where I lay out my full thesis - http://seekingalpha.co...

    At the very least, the aggressive sales by Blackstone AND by the CEO and CFO should catch your attention. Is it ever a good sign when a controlling shareholder and the executive team all sell a large portion of their holdings in a company?
    Jan 20, 2015. 08:55 PM | Likes Like |Link to Comment
  • Update: Selective Disclosure Highlights La Quinta's Oil Exposure [View article]
    Thanks Michael, well said. Their disclosure was absurdly, obviously selective. To the point where it makes you wonder what they aren't disclosing.

    Also, no one is saying Q4 will be disastrous. The bigger question is run rate, Q1 and then what things look like going forward. Q4 could have been great and it wouldn't mean anything - the worst movement in E&P stocks and in the oil price was from Thanksgiving to the end of the year, and capex budgets have come down much farther than expected already, but those cuts are only now starting to be seen and felt.
    Jan 20, 2015. 08:46 PM | Likes Like |Link to Comment
  • Bakken Update: 2015 Oil Prices Are Key To Bakken Rig Movement [View article]
    Douglas, marginal wells are used to delineate areas and to discover new resources and hone new drilling techniques. Also, 30%+ IRRs were high enough to justify capital investment, so with projected $100 oil whole companies were built around developing assets that are uneconomic at current sub $50 oil prices.
    Jan 19, 2015. 08:27 PM | 3 Likes Like |Link to Comment
  • La Quinta's Follow Through Of Operating Excellence And Free Cash Flow Generation Make It A Growth Favorite In 2015 [View article]
    It is mentioned but understated. Why else do you think insiders and the controlling shareholder are dumping their stock?
    Jan 19, 2015. 07:22 PM | Likes Like |Link to Comment
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