Kevin Feeney

Long/short equity, value, event-driven, special situations
Kevin Feeney
Long/short equity, value, event-driven, special situations
Contributor since: 2011
Hello Ms. Suarez,
Thank you for taking the time to respond and for providing your insight on COSI Costa Rica. I do agree with you that Costa Rica and other Central American counties are a great place for COSI's expansion but the Company's success in Costa Rica is not very indicative of how the brand is faring in the United States or as a whole. COSI lost over $15 million last year off of $77 million in revenue and if something doesn't change in the US, the Company will continue to lose money for investors. It would take much longer than 5 years for Company growth in international markets to make up for this lack of profitability especially if the new stores are franchise locations. In the first quarter of 2015, franchise fees only rose $54,000 year over year to $701,000. Although this represents decent 8% growth, it clearly isn't contributing enough to the top or bottom line for COSI as a whole. The Company's lack of success and stale brand in the United States is only a part of the reason why the Company is hurting financially and I don't believe international franchise expansion will help this as shown above. Mr. Dourney has done a pretty good job so far of making advancements in revamping stores and bringing some customers back, but he has failed to make any headway on the worst issue the Company has faced: its high costs. The main reason the Company hasn't been a investment success is that no CEO has been able to find a way to bring the Company's costs down to a level where the Company could make a profit. In Mr. Dourney's first year, there wasn't any improvement in the EBITDA margin (it actually got worse) which is crucial to the Company's success. I also wouldn't say the food is exceptional; personally I think a couple of the sandwiches are good but I wouldn't buy the salads or pizza due to competitors who make a better product at the same price. In the US, competition is fierce for companies such as this and COSI is trying to have the best sandwich, salad, and pizza. However, many companies focus on just one and do it very well. Unless I see the overall Company show that it has the ability to increase its profitability (not just revenue or food taste), I don't think the Company has a very bright future even if it sees continued international success. Mr. Dourney still has time to save the brand by reducing the costs in the United States but I'm not sure this is going to be possible without damaging food quality/taste/etc. I'll keep following COSI to look for margin improvements but I'm not sure it's going to be as easy as Mr. Dourney tries to make it out to be. I wish you and your family continued success with your franchise locations in Costa Rica. I'll also send you an email in case you have any questions about the comment or article. Again, thank you for taking the time to reach out.
Regards,
Kevin
Hi Nazarbaz,
Due to new reactors coming online and older ones being restarted, demand will grow at a faster rate than supply (helped in part by declining secondary supplies) which should result in at least some upwards pressure in uranium prices. If we were to reach that deficit, then uranium prices would skyrocket because reactors absolutely need it to operate. A lot of people think a large uranium price increase is going to occur shortly because that deficit is only a few years away, but I think the carryover from uranium oversupply, currently non-operating uranium producers, and new mine projects will keep pushing it back.
No problem - thanks for reading
Thanks! I see SDRL as a very good and stable long term player in the industry. It's hard to beat that steadily increasing 8% yield.
I see where you're coming from with the lower highs (valid for the past couple of months) but I think the longer term trend here still signifies accumulation. Thanks for the feedback!
I don't believe 55% is too optimistic of a goal for 2015 with all of the growth factors associated with Noble. My talk of a a stop loss in the $36 range stems from the fact that this would mean a break in the current trend of accumulation, meaning it would be wise to re-assess the short term direction of the stock at this point. The stock should continue to reach higher lows every time it falls. But please make sure to do your own DD and choose a stop loss that fits you personally if you intend to invest in Noble.
I generally do not take up positions in stocks I write about because this usually leads to bias. If I do not have any money in the stock around the time of the publication, I am more inclined to give a fair assessment as I have no emotional connection to the stock. Also, I am planning to add cash to my brokerage account in the next couple of months - it's possible that I could initiate a long position in Noble Corp after this. 
Hello,
I'm not too informed of the business dealings of Noble Energy (NBL), as this article was written about Noble Corp (http://bit.ly/N0itJu). However, I did find this press release which might give you a little more insight on Noble Energy's rights in the Falklands: http://bit.ly/19Cy0qj
By boosting vehicle production from 2750 to 4900 , Tesla reduced its average COGS on each unit from $103,000 to $95,000. If production has continued to increase and become more efficient then I don't see any reason why the average COGs would not decrease to a range which would produce reasonable margins for the company. Yes I was aware that this money was lent from Goldman and it was a part of the plan to pay off the DoE loan early. However, I don't see why it would matter whether or not the money was his or if it was loaned. He is still placing a large bet on the future of the company and he will need to make that money back in order to repay the loan. As for the insider selling, it isn't unusual for insiders to want some pocket change after major share appreciation. They understand that the share price will probably be rather volatile in the short term so they decided to lock in some gains. They receive compensation in the form of stock and options, so why not put some of them to use? The insiders have plenty more left to sell in the future.
That is my assumed average per week production for the whole quarter. Recent production is probably closer to 500/week although it probably started slightly under 400 at the beginning of the quarter.
UDC will have higher earnings in the second and fourth quarters of this year due to the semi-annual Samsung payment. Analysts estimate EPS of ~ .27 for the next quarter (Q2). FY 2013 estimates are ~ .50 so 28.52 / .50 = P/E of 57 and FY 2014 estimates are ~ $1.22 so 28.52 / 1.22 = P/E of 23.
Hello sidney,
I did mention that the reason for the fluctuation in earnings was due to the semi-annual royalty payments from Samsung, and I do agree that the swings could be considered a "feature" because they occasionally lower the stock price to allow for additional buying opportunities. However, my main problem was not just that the stock fluctuates, but that the fluctuation is between a profit and a loss. I would like to see UDC fill in the quarterly gaps/losses between the Samsung payments so that they have consistent quarterly profits, even if the Samsung payments still provide higher profits in two quarters. I do believe that they will be able to do this and achieve four quarter profitability within the next year as the OLED market grows. As for the sentence mentioning "accurately," I most likely could have used the word "optimally" to best describe my opinion. I think that UDC should work to find the optimal price for licensing/royalties that will allow them to grow with the market. If the market grows 400% in the next few years, then I would like UDC's pricing to allow itself to grow at a similarly high rate. I hope this clears up a few things and thank you for the feedback!
Oil was always over $75-80 during their consistent earnings streak. I think the concern here is that oil dips below $75, 70, 60, (etc.) and what the effect on the stock price would be. When oil collapsed from almost $150 to $60 in 2008, Brigham's EPS suffered. And although the price was battered down for a while, it quickly recovered. The possibility of this happening again is pretty low considering many of BEXP's wells are now de-risked, but if oil did dip low enough, the stock price may still be affected.
As Jeep said below, the main reason the EPS has been revised is because of oil prices. When the only thing you sell is oil (and/or natural gas), then the EPS estimates will be pretty fluid. And considering we've been had a pretty large range of prices over the last year, from $80 to $120, and other unpredictable events have occurred, analyst estimates were probably off on future oil prices. Management may not be buying in now due to the lowering oil prices and the likely effect it will have on the stock. The P/E is a little high (but reasonably priced for future valuation) at 35, and oil prices are plummeting (10% over the last week), which means that this probably isn't your best short-term play, and you might have a chance to buy some lower. But as soon as oil prices turn around, this could be a fast mover to the upside. Not exactly sure what you mean by "talk to" but Bud did state the other day that he believed Q3 production levels could possibly be in the high range of analyst estimates. Hope this helps.
1) The battery swap would be done at some type of service center and would most likely be automated and done fully by machine. You wouldn't be exchanging the battery for an "old and decrepit" battery, unless you already have an old and decrepit battery in your car. Also, the battery wouldn't get you just an extra 10 miles. If you have a 300 mile battery in your car, then it would be swapped for a fully charged 300 mile battery. If you'd like to see an example of how fast a battery can be changed then watch this video: www.youtube.com/watch?...
2) Actually, the Tesla Roadster can go a lot further than 250 miles if you drive at 25mph. When driving at only 25mph (with two passengers), the Roadster holds the record for longest distance driven on a single charge at 347.2 miles.
Also if you're looking a car strictly for speed performance, then why would you ever be dealing with an electric car? They still have a way to go before they can compete with the speeds of cars that use gas. What is most important now is to extend range and charging times, in which Tesla has been doing an excellent job. Also, comparing the White Zombie to the Tesla Roadster just doesn't work. Try comparing a Factory Five GTM (around $60,000) to any type of Ferrari. The GTM wins for price and performance, but is Ferrari bankrupt or out of business? No, they're bringing in a large profit. With any other electric vehicle it would be almost impossible to drive from Philadelphia to New York, but with Tesla it isn't. Most electric vehicles could fit the bill as being daily drivers, but only Tesla can give people security in knowing that if they ever have to go city to city, they won't need another car. And I have seen Elon Musk say little to nothing that would make him an egotist. He does have a very futuristic mindset, but that has no relation to being an egotist. But truthfully, we're not really going to be able to tell if Tesla will be a success until the Model S is released. We have nothing to compare this release to.
@jf355
Apologies that it seems I stated the $50,000 model went 300 miles per charge. The base price was supposed to be unrelated to those specs, but after re-reading I clearly didn't imply that. I also compared the Nissan Leaf to the Model S because the Model S doesn't have any direct competition, only competition in the sector. And I know that my articles are not very "in-depth" because that is not my goal. I write to peak investor's interest in companies or sectors that they may not have looked into before. I also haven't seen many EV haters except for "tesla-gonna-tank" but thank you for the heads up. Constructive criticism is always welcome on my articles.
Well if this article turns out to be the truth instead of a rumor (www.businessweek.com/n...), then it appears that they are quite motivated to sell. I don't know if "three people with knowledge of the matter" are credible sources but both companies appear to be avoiding all commentary instead of just saying "No." Apparently the writer of the article, Zachary Mider, is a merger and acquisitions reporter for Bloomberg News so he could have a few reliable contacts.
I agree that a buyout offer will probably arise before the end of the year but I'm thinking the price would be around $35-40 a share. Either way, it's a safe investment and offers a good return for investors.
I haven't done much research on BEXP and I already have a topic picked for my next article but I will look into the company and possibly prepare an analysis on it for the following week. Stay tuned and thanks for your input.
Thank you for pointing that out! It appears to have slipped past me but the article will be updated.
I totally agree with what you have said and that something currently doesn't look right. I have inquired to management as to approximately when they will provide their "proof of operations" and am still waiting on a response. Hopefully when they release this "proof," (if they ever do) it will be sufficient enough to regain investor's confidence in the company, which has been severely battered down over the past few months.
During the CC and Q&A, management discussed plans to release photos and videos of the companies facilities, although they could possibly face the same scrutiny as SCEI's videos. Even though I don't believe this to be enough on behalf of management, it appears that they could be becoming more transparent on the companies activities. But all-in-all, I really do think that a dividend would seal the deal and have investors flooding back into Gulf.
Their explanation for the name change was to better reflect the company name, GU for the first two letters of Gulf, and RE for the first two letters of Resources.
I agree that these are great points. If I ever write another article about the company I will ensure that this information is included.
The problems lie with management (not the rest of the company) and their inability to keep investors updated on the activities of the company. We rarely hear any information from management regarding events aside from in the quarterly reports. Management giving updates on activities such as the Daying County project during the quarter would be a great improvement. The company also missed their August 15th deadline to report earnings. The buyback is a whole other story. The company hasn't given a really definitive answer on what they're looking for in the buyback. They just keep saying that "they're monitoring the stock price" which isn't what investors want to hear. They want to know what exactly in the stock price management is looking for. I see good potential with management though as they said they plan to release pictures and videos of their facilities on the Q2 Q&A. This and a little bit of improvement with PR could really show investors that GURE is where they want to put their money.
"The U.S. capital markets are based on trust and faith in public financial statements." - I guess someone forgot about audits...
Savori pointed out another major flaw in this report. You listed 30/100 companies and their output's and the lowest output on there was 300 tonnes. Do you really think that
a) Gulf Resources produces less than 300 tonnes of bromine per year
AND
b) There are 70 other companies other than Gulf Resources that PRODUCE less than 300 tonnes a year. Does everyone and their mother own a bromine plant in China?
Savori pointed out another major flaw in this report. You listed 30/100 companies and their output's and the lowest output on there was 300 tonnes. Do you really think that
a) BDO would sign off on Gulf Resources finances if they over-inflated their production numbers by well over 100x
AND
b) There are 70 other companies other than Gulf Resources that PRODUCE less than 300 tonnes a year. Does everyone and their mother own a bromine plant in China?
Another flaw in your numbers. According to my source: www.indexmundi.com/min... (Funny how I actually include a source! Unlike Kerrisdale)
The annual output of bromine in China for 2009 was 140,000 metric tonnes. According to this, the top 30 produced 107,665. If we add in 70 more ALL producing 300 tonnes, (hypothetical and 100% not likely. If you averaged out the other 70 that apparently exist it would probably be around 100-200 tonnes each) then that adds 21,000 tonnes which = 128,665 tonnes total, well below the 140,000 mark. If all of the other bromine companies besides the top 30 were producing an average of 200 tonnes each, you would need approximately 161 more companies producing bromine in China. That's 191 companies in China producing bromine. This article sounds like total bull to me. OH by the way Kerrisdale, I would love if you could respond to this post. And also, someone on here should really post a positive article about GFRE, but then again we might be stooping down to the level of the shorts if we did that.
I wrote this last night but it wasn't posted so I'm posting it again. It seems there have been more developments about this article. I assume you can't read because the CCM article on bromine in China is NOT the top 30 as you seem to state.
1. There is no a table regarding Top 30 bromine producers but the Table II-1-2.5 Situation of 30 active bromine producers in China, 2009~2010E in our bromine and bromides report.
^ It's not a table of the top 30, just 30 producers. So that means you lied when you labeled your chart as the "top 30 producers"
2. Gulf Resource isn’t included in our bromine report and we haven’t done a research about this company in our bromine report.
^ So how would you know that their output is below 300 tonnes and shouldnt be included in the "top 30" list if CCM didn't even include them in their 30 company report
According to a previous article here on Seeking Alpha: "China now has only issued six license for bromine exploration in Shandong province." According to the list you just provided, there are easily over 20 from Shandong not including what you didn't list. Also, your numbers look more staged then you accuse GURE's of being. There are "around 100" producers of bromine. OH REALLY? Around 100, nice made up number, must've taken you awhile. Also, all of your bromine amounts are rounded except for one. You could've been a bit more exact when making up the amounts. Maybe you can show us your "oh so amazing" 130 page report and people might believe you. This one page report of BS isn't going to do anything. You also only made the stock move down 8%. Remember those days when you could make it go down 30% with one of these pathetic articles? Yea, those days are over. There's more money to made on the long side so how about you go do some REAL DD and stop these patheticly incorrect hit pieces.