Marc Courtenay

Don't Give Up on Oil Stocks as Markets Rebound

It is for people like you and Nanacat that I "keep on keeping on". Thanks for your gratitude and your feedback...sincerely!


On Jun 26 01:47 PM vpratt51 wrote:

> Wow! No comments yet? Not even a thanks for the info? We can be
> such a rude bunch. I have been foolishly expecting the usually dependable
> run up in spring and summer for my shares in COP. It looks like
> it will be late, if at all. Meanwhile my reinvested dividends buy
> more shares.
>
> So that's my comment, and my thanks.

Dow 10,000 and More Irrational Exuberance

DEAR COMMENTS:
When I read all your comments I'm humbled by the fact that you all have contributed some important considerations and views that make the total value of all your comments even more helpful than the article I wrote. But frankly, that's why I write these articles. I'm just a facilitator and catalyst to bring our combined experiences and perspectives out on the table for us all to see. Thank you for your contributions, patience and candor.

Dow 10,000 and More Irrational Exuberance

I appreciate your thoughts. The evidence is "massive" indeed. Thanks


On May 01 08:11 AM dcb wrote:

> There is massive evidence of market manipulation all over the place.
> The fact that I can so easily see it means it's there. If you want
> a more rational market for trading compare the action of the FTSE
> with the S&P. It went up, dropped back to 50 day average (the
> long term buying Opportunity). never happened with S&P. Why,
> because one firms trading desk has greatly increased the Var of its
> trading portfolio and it trading 50% more than the next lower desk.
> SEC ain't going to do a thing, and they will keep running it up until
> the retail customer joins in the rally and then will sell.

Natural Gas Companies Increasingly Important

I haven't been able to follow Peyto Natural Gas for a quite a while. I do own my original shares and plan to hold them until I can do further research. If I come up with new conclusions I hope to let you know. In the meantime keep a close eye on their web site and company annoucements.


On Apr 06 03:19 PM dino33ca wrote:

> Mr. Courtenay,
>
> Are you not recommending Peyto Nat Gas fund any longer? Just curious,
> thanks for the great article.

Natural Gas Companies Increasingly Important

Thanks for your straight forward comments Skip. Go to their web site and read their 8-K and their presentation. My friend Richard Wendling Bearfactsspecialistrep... wrote the following that might be useful to you: 3) APL is carrying 1.5 Billion in debt on their balance sheet. While this is a major negative it is also a positive. APL had five major projects over the last several years related to pipelines and pumping stations, which caused that debt load. As the chart below indicates four of the five are now
completed (see their web site or email Richard for his charts at
comments@bearfactsspec...
The debt load can now be reduced.
4) APL has a current book value of $13.73 per share, which means that at its current price it is trading at 1/3 of its true value making its current stock price a steal.
5) APL has just agreed to a joint venture with Williams Company. Under the terms of the agreement they are to receive $90 million dollars up front, an additional $25 million in obligation rights and a 49% equity stake in any product produced in the Marcellus Shale project. This $115 million plus the moneys generated by the 49% equity stake will go directly to paying down debt. Couple this with the fact that they are selling two processing plants to the joint venture for $12 million each and you have $135 million immediately pared from your debt balance sheet which reduces it by 10%.
6) Couple that with the fact that earnings are expected to increase for the remainder of the year and well into 2010, (expected earnings of $600 million) the majority of which will be put against debt and their negative balance sheet becomes much more positive. The projected earnings for APL are listed at the top of the next column. Why is this chart important? Look at the last quarter of 2008, a terrible quarter for the markets yet APL’s consensus estimates were for $.35 and they generated $.66 nearly double estimates. If this holds true, and I expect it will and more than likely will increase then APL can be virtually debt free by the end of the year.
7) APL is also looking to sell two minor stakes it has to pay off the remaining debt currently owed without the earnings money listed above. If that happens 65% of that money listed above as earnings is returned to shareholders as dividends. $600 million time 65% equals 390 million divided by 50 million shares and that is a net return to us of $7.80 in dividends without any price appreciation in the issue.
Now having said all of this look at the chart (again, ask Richard to send it to you)
You will see that as the issue neared its lows in early November volume increased dramatically. It actually increased by 10 times daily average for those four plus months. Why? Simple, this specialist knew that oil and natural gas prices would rise again, he knew that APL’s build outs were near completion and that there were potential mergers and joint ventures on the horizon.
Knowing all of this he needed to accumulate as much stock as cheaply as possible. Since their were so few shares outstanding he needed a prolonged slump in oil and the markets to drive his issues price low enough to scare investors from the stock so he could accumulate those shares for his personal long term investment accounts.
Now as the chart above indicates the stock has been moving slowly higher. It has been moving along the current support/resistance green/orange lines drawn off of the gap at the $4.00 level. If I am correct in my expectations for this stock it will move up and close the next gap in the stocks price at the $7.60 level.
It can then move higher until it reaches its next level of technical overhead resistance, the green line at the $12.80 to $13.00 level. Depending on the severity of the increase in oil and natural gas prices in the coming months due to inflationary pressures the stock could move up to the $18.00 orange line before pausing. After that I expect it to breakout next year and move up to and through the next levels of resistance at the $50.00 range.
While many say I am overly optimistic in my judgments on where this issue will move to I actually believe that I am being conservative in my expectations.
With the way that the current president and his administration are spending money like “drunken sailors on leave” they are going to create massive inflation in the world. This inflation will raise commodity prices dramatically; oil, gas, natural gas, aluminum, precious metals and gold all will advance by leaps and bounds.



On Apr 05 03:27 PM Skip Olinger wrote:

> Marc,
> You are long on opinion and short on detail here. How much cash is
> APL getting from Williams to pay down their debt? Is not the goal
> to pay down debt to avoid covenant breech? I see no mention of that.
> How did you or your mentor come up with $400M for the sale of NOARK?
> What effect on Adj EBITDA will that sale have. NOARK is one of their
> few assets that generates revenue from fee or toll contracts so the
> sale further exposes the company to commodity risk. And, could you
> please enlighten us all as to why your favorite pick of all the NG
> transportation companies is APL? If you like transportation and
> distribution, why on Energy Transfer or Enterprise Products. They
> are bigger, not in financial peril. They make much more of their
> revenue from fee based contracts, not keepwell contracts. I have
> to be blunt here in the interest of trying to keep high quality analysis
> on SA; I don't care about your "feelings" about a company. I am interested
> in hard analysis as to why APL is now a deep value play with little
> downside risk and very large upside. I see nothing here that tells
> me how and when APL will raise sufficient capital to pay down debt
> to avoid default. It won't matter how much they earn if the bank
> defaults their loan. This is an interesting story so do some real
> analysis before you publish. There is no value in putting up a piece
> that tells readers to look at the company's powerpoint.

Kraft, Kinross and ConocoPhillips: A Stock Banquet

These comments about the debt and the intangible assets on KFT's balance sheet should not be ignored by investors.Respected brand names, net operating profits, book value, and levered free cash flow always support to a stock's price and image. But things like "goodwill" and "intangible assets" makes must of us look for other companies with the healthiest balance sheets. Anyway, your comments are most helpful and I thank you.


On Feb 25 04:40 PM Marcap wrote:

> I realize that brand names indeed have value that generic products
> do not have. After all, who wouldn't take a Kraft branded product
> over a generic one, especially if it was being offered at roughly
> the same price? But that is where the value ends. Value ends with
> the consumer. When Shareholder Equity is made up of nothing more
> than Goodwill and other Intangibles, there really is no concrete
> value in the company for shareholders....only pure speculation.<br/>...
>
> Take Kraft for example... If Kraft wrote off 100% of its Goodwill
> and other Intangibles, what would change? It would still be Kraft.
> It would still offer the same Kraft branded and co-branded Products.
> It would still have the same consumer base. It would still enjoy
> the same revenue and profits. It would still have the same "Net"
> Shareholder Equity. All that would change is that its shares would
> likely be trading for much less than they are now. So what benefit
> is there really in artificially inflating shares? To give the impression
> of the company being worth more than it is? To inflate the company's
> Market Capitalization to deceive investors into believing that company
> growth is more than it really is. No doubt, this is one of the main
> reasons why the markets are falling as they are. Investors are waking
> up to these facts. They are starting to realize that with few exceptions,
> the market price for most companies is way beyond reasonable.
>
> On Feb 25 03:30 PM Tatertot wrote:

Kraft, Kinross and ConocoPhillips: A Stock Banquet

Thank you for your comment and insights Jack.


On Feb 25 01:02 PM jack kreg wrote:

> I'm on board with your general opinion, I just bought Kraft and Heinz,
> for essentially the same reasons as you described.
> Another take is as follows; consider the future cashflow, earnings
> and dividends, these are at the core. Is the cash flow sustainable?
> earnings and dividends flow from cashflow. I like the food co's,
> I am also buying the big oils, but some of these may have trouble
> with $30 barrel, maybe COP is in this bunch. still, they look pretty
> solid at current prices, 5xCF.
> Marc, thanks for writing.

Hecla Mining: Caught in a Bad Market

You are certainly right about HL Bill. Their management has proven their fiscal incompetence in spite of the fact that they now own such great properties. I hope they have an ace up their sleeve and can restore confidence soon. Thanks for your article.

Is Valero a Better Buy than Exxon Mobil?

I certainly agree with the premise of the article, and also many of Steve's comments above. This might be a smart time to take a contrarian view to all that seems obvious for the short-term. In the longer-term the safer monetary havens like gold and silver will most likely outperform VLO and XOM combined. Just my opinion.