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Kevin Quon

 
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  • DryShips Is Risky, As Value Is Eroding [View article]
    How can your ultimate conclusion be that your determined book value ($5.28) is well over double the what the market is trading the company at, and that the company is still a good short? The actual book value only eroded in your own mind in respects to the things you accounted for. Yet even this ignores the concepts of cash flows and the ability to sell ships, etc which the company has clearly done even in the worst of conditions.

    Your last argument in regards to conditions getting worse as industry peers become bankrupt is actually backwards as this would decrease the desperate shipping prices these companies are already clawing at in order to stay alive, thereby reducing the oversupply issue currently being faced by the industry as a whole.

    Last of all, the spin-off of ORIG has created an easy accessible means for the company the sell off its subsidiary if the situation ever got as bad as foretold by this article. This was the beauty of the ORIG spinoff as it created another atm for GE to play with.

    While undoubtedly the company is valued at these levels for a reason, it still makes no sense for investors to believe that a bankruptcy is rounding the corner of inevitability. I too would criticize DRYS for the unpredictable management, and critique the industry as being far from safe.

    But all things considered, this company still remains an undervalued buy even if it still has a bad taste in the mouth of investors. There is clearly no reason to be short at this point in the game, even if you don't want to be long.
    Dec 23 10:36 AM | 5 Likes Like |Link to Comment
  • Highlights From Solazyme's Q2 2014 Conference Call [View article]
    Mikestesla,

    While the initial sales were really just a taste for investors to know that the company is meeting its early expectations, it might be dangerous to hold onto the figure at this point in time. It's also likely the reason why the company isn't willing to update them regularly. ASP's are somewhat irrelevant at this point in time when the company is spending more time sampling product around to prospective customers. ASPs are only really useful when compared to costs too, which are also yet to be established (although they can be relatively predicted based on current data). For that matter, the company has been satisfied in reestablishing the statement that "target margins continue to be inline with prior expectations" again & again & again. Margins are the key after all. Part of the reason is that Solazyme is currently offering upside gains for long-term commitments and long-term partners. You see that in several of their larger agreements. This is especially the case any time you see the idea of setting prices around the cost of production. Even this latest Akzo agreement had that term in there.

    The problem with investors is that we're so focused on profits - (sell product at its highest potential price, make it at its lowest cost, and sell more of it!) But the dynamic of a well-thought out enterprise is about securing a long-term foundation upon which to then expand out. Solazyme is doing that right now. It's why they emphasize that right now its about execution and how they have to show their reliability.

    However, to add to futuretrade's point, its important to understand that Solazyme is in a unique situation from most manufacturing businesses. Their margins will improve over time. To borrow a quote from Painter in my prior visit:

    " If you look at some of these industries where you have a high volume product that coming to the marketplace. What will usually happen is that with more and more volume you'll see your average selling prices coming down. We have this interesting ability with the platform and the ability to tailor the oils in that our expectation is that you will have higher valued oils coming in. So you'll have your average selling price continuing to go up over time. But at the same time, as we continue to gain efficiencies and we start to move into second generation feedstocks as well, those all impact your costs and start to move in an opposite direction. So over time we'll actually see our margins improve." -Tyler Painter (http://bit.ly/NLwWu8)

    The key takeaway about all of this is to understand that ASP's don't really matter. It's all about margins & volume. Solazyme remains confident about their prior stated target margins, and that's good news for investors now. Regardless, they're also believe that their margins will actually improve over time rather than deteriorate. If you're investing for the long-term, that's the key point to appreciate.

    If you're looking for what product is actually selling for, you'll have better luck in understanding the target markets Solazyme is pursuing. Look at the cost of high oleic oils, C8-C10 acids, metalworking fluids, drilling lubricants, food products, cocoa butter, and etc. They're all over the map. Cocoa butter is selling for over $8k/MT for instance. I've found drilling lubes going for $2000-$3000k/MT. Etc.

    As a whole, things are mostly attached to crude oil. But crops are also attached to crude. Again, it comes down to margins - the gap between sugars (dextrose/cane) vs. oil-based products.

    It's too simplistic to think that Solazyme should trade right alongside the price of crude oil. It may be that the market will one day react that way... but it isn't now.

    Best,
    Kevin
    Aug 11 10:55 PM | 4 Likes Like |Link to Comment
  • Why Solazyme Expects To Make An Impact In Food Applications [View article]
    Snake Plissken,

    I would respectfully disagree. The yuck factor I was referring to was the inherent association consumers have with sea sludge or pooL algae. SZYM's algae milk for instance is something people are more willing to initially dare their friends to try rather than presuming it to taste just fine.

    It bears repeating that szym oil is not gmo and there are no gmo components within the oil even if the algae that created the oil was engineered. Unless people start protesting over their cheese and their vitamin c as well, there really isn't much of a concern about the oils acceptance.

    The same goes for the incumbent high oleic oil. If you think high oleic canola oil is any more natural than SZYM's oil, think again. I don't see anyone protesting high oleic canola. People that are scared and willing to boycott the products are a very small portion of the minority. Everyone else just wants a healthy product that tastes good without hurting the wallet.

    Kevin
    Jun 23 03:08 PM | 4 Likes Like |Link to Comment
  • Why Solazyme Expects To Make An Impact In Food Applications [View article]
    N808,

    I don't have that market figure offhand but market depth should cover much of the vegetable oil industry. The development of mid oleic algal oils and the like has to do with offering other attributes not talked about in this article. One thing people might want to read up upon is the concept of solid fat curves. Szym will be unlocking a wide range of sfc opportunities through commodity priced oils. That is a huge opportunity considering the very limited sfc choices available right now due to pricing. (Ie imagine how many products would love to use something unique like avocado oil if it could be made at Palm oil prices. This is just a hypothetical). I hope to talk about this in the future if my editors will allow it.

    And yes I believe that szym will be selling directly to consumers over time. There are patent applications already pending which detail spray oils and the like. I believe it will just be another option on the shelves given enough time. Although I didn't talk about it here a bigger market will likely be in extending product shelf life in packaged goods due to increased stability. Would love to see chips made from this stuff. The switch to sunflower oil was made for the very same reason companies will eventually consider algal oil. I just hope they find a way to mask the yuck factor in the minds of consumers...

    Kevin
    Jun 23 11:38 AM | 4 Likes Like |Link to Comment
  • Did Solazyme Just Patent A Treatment For Diabetes? [View article]
    The patents for encapso aren't out yet. When I was speculating what encapso might be, it turned out that the cited patent was for a different application altogether - although that patent did give us an understanding that szym was looking into the field for oil drilling applications.

    To further clarify, encapso is an encapsulated oil product which can interchange oils based on recombinant technology and distinguish shell thickness based on growing conditions. These are genetically engineered to exert particular properties. Algavia is a natural strain which is grown and controlled by growing conditions. To date, algavia doesn't appear to include any strains that are genetically engineered. Encapso is currently for drilling applications. Algavia is for nutritionals. Hope that helps.
    Jun 17 03:52 PM | 4 Likes Like |Link to Comment
  • Did Solazyme Just Patent A Treatment For Diabetes? [View article]
    Patenting the specific use of chlorella protothecoides biomass that is grown heterotrophically with at least 15% oil dry weight which can be used in food compositions composing of 1-20% of the weight or calories is a little bit more specific of an invention than patenting burnt bread. It wouldn't even be the right color to suggest it was a "green powder" like other variations of the chlorella genus.

    Maybe you should read through the patent first? There's quite a few details I left out in order to keep the article flow and attention of the reader. Just a suggestion. No offense intended.
    Jun 16 07:16 PM | 4 Likes Like |Link to Comment
  • Did Solazyme Just Patent A Treatment For Diabetes? [View article]
    It sounds more like a mitigating effect rather than an outright cure. Combined with ice cream and I personally doubt it'll do more than make ice cream a little bit healthier. Lol. But hey, I'll raise a glass to wishful thinking!
    Jun 16 11:10 AM | 4 Likes Like |Link to Comment
  • What A Successful Moema Launch Means For Solazyme [View article]
    Hi User22517621,

    Honestly, I still have a hard time believing that they will be bought out. The company's model suggests that any potential buyer would have to be very comfortable getting into multiple industries with multiple partners (some of which may be competitors). Additionally, it takes two to tango and I believe the SZYM board knows they have a hit on their hands that hasn't been given the chance to shine yet - especially when you consider the surface has just been scratched in terms of product applications. Just my two cents. Thanks for following by the way.

    Kevin
    Jun 1 10:13 PM | 4 Likes Like |Link to Comment
  • Why Solazyme's High-Oleic Oils Are Needed Now [View article]
    Ridiculous paranoia by little people wanting to fight. They'd have a better argument if the genetically modified protein ended up in the product and we ingested it, but it doesn't and we don't. So until then, hollow arguments based on a hollow concern based off an unrelated & unproven concern between GMO & the foods that we intake. Shame on the NYT was making it sound like a conspiracy was about.
    May 31 02:14 PM | 4 Likes Like |Link to Comment
  • Why Solazyme's High-Oleic Oils Are Needed Now [View article]
    Hi Roger,

    I mean you well wishes. I just don't want you or anyone else leaving here convinced that SG is a tangible threat in food ingredients to SZYM just because it signed up with one of its partners to sell ingredients that have been around in the market for a looooong time. It was ridiculous for anyone to suggest that it ever was. To believe this is the case is pure foolishness. I know I'm just extending the speculation around this false issue by dwelling on this so I'm going to end with that.

    Best,
    Kevin

    P.S. One might want to research James Flatt and his role at Martek to understand why I'm putting my foot in the ground on this one.....
    May 29 09:17 PM | 4 Likes Like |Link to Comment
  • 4 Reasons Why Solazyme Is Pursuing AlgaVia & Encapso Now [View article]
    Nice find. They have been on a roll in terms of presenting to the right audience at the most-accepted trade organizations of each industry. These organizations have been very receptive as well. Heck, I was even given the opportunity to do a small sidebar article for one of them after they reached out to Solazyme's IR in order to contact me. I think it is encouraging that they are going out of their way to find out more about Solazyme. You can find a free copy of my sidebar article at their website here:

    http://bit.ly/1mjiWVo
    May 24 01:47 PM | 4 Likes Like |Link to Comment
  • 4 Reasons Why Solazyme Is Pursuing AlgaVia & Encapso Now [View article]
    Cabeza,

    I'm not in a position to advise anyone on electrical matters. Likewise, if the company says it has implemented "near-term fixes", I'm sure they have quite a few ideas of their own. Based on the numerous people I've talked with, I can tell their experience don't need little old me passing ideas around either. Additionally, the company actually never stated that they installed a backup generator as a result of this issue (although it's reasonable to presume that this might be what a "near-term fix" includes).

    The problem about talking about this issue so much is that we're starting to magnify it in scale more than it likely is. The company has stated at least twice now that this issue has had little to no impact on the ultimate timeline for Moema's ramp and that near-term fixes have either been implemented or are underway.

    Right now is the time to just be patient (or for a person to sell out altogether if it really bothers them). We'll find out the results soon enough.

    Kevin
    May 18 03:49 PM | 4 Likes Like |Link to Comment
  • 4 Reasons Why Solazyme Is Pursuing AlgaVia & Encapso Now [View article]
    This NYT article better be worth my time. I've heard so much fear being stirred up thanks to Maxx's thoughts concerning it that it better cause an uproar in activist circles. Nothing short of a Monsanto-sized protest will be enough to raise my eyebrow. And while it might be a weak comparison to state, it is worth mentioning that Monsanto's stock appears to be doing just fine despite the million man marches around the globe.
    May 16 12:07 PM | 4 Likes Like |Link to Comment
  • Solazyme: Key Takeaways And Insights From The Q1 2014 Results [View article]
    I can only speculate, bay area. I'm sure a few of the months are to provide a more conservative approach and slightly cushion problems. Management has stated the same.

    However it sounds like things are ongoing. Product is sampled at various points of time during the process so it's not like production comes to a halt in the middle of it. It likely just makes sense to run the tanks in a scaling fashion to make sure product spec is being met. This likely means taking several approaches to conditions in order to optimize process. I see little purpose for leaving tanks empty perse for any extended time period. After all it takes like a week to get a batch done. I also doubt they're all run on a full load at a given time in order to expedite turnaround time.

    If it's any solace the fermenter are scaled up versions of the smaller ones in order to keep the proportions similar. I'm sure there was some learning at clinton that might help moema.
    May 8 03:45 PM | 4 Likes Like |Link to Comment
  • The O-Zone: Understanding Oxygen's Role In Making Biobased Companies Rock [View article]
    Glad to have you here, Jim! I look forward to reading more of your well-researched contributions.
    May 6 08:50 AM | 4 Likes Like |Link to Comment
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