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Michael Connellan

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  • When Royalty Trusts Cease To Be Royal [View article]
    10 percent discount rate
    Aug 30 03:08 AM | Likes Like |Link to Comment
  • Teekay LNG Partners Is An Attractive Energy Name With A 6.8% Dividend [View article]
    The 6 leading LNG owners globally, in order, are: QatarGas, Petronas (Malaysian government), NYK (Japanese), MOL (Mitsui, Japanese), Teekay, and Shell.
    Aug 14 03:06 PM | Likes Like |Link to Comment
  • Teekay LNG Partners Is An Attractive Energy Name With A 6.8% Dividend [View article]
    Milton - TOO does storage, but does overlap TGP in that both have conventional oil tankers. I may be wrong but I believe TGP straight charters them, while TOO incorporates them into services for storage clients, mainly.
    Jul 22 09:23 PM | Likes Like |Link to Comment
  • Teekay LNG Partners Is An Attractive Energy Name With A 6.8% Dividend [View article]
    Hohum - Good comment. I believe older ones are at different, presumably lower, rates. I was unable to find a listing of all their ships and the rate for each individually. Their special focus helps them; NYK is the largest, for instance, but they're a general cargo carrier overall with major container ships. Given that there are a finite on order, and LNG demand is growing steadily, rates are likely to stay high.
    Jul 19 03:31 PM | Likes Like |Link to Comment
  • Is Philip Morris Still Best Of Breed? [View article]
    Good article...and if memory serves, PM is generating close to $5 Billion a year in free cash flow - $400 million a month! Camilleri recognized the exceptional international opportunity when he left Altria as CEO to take over PM when it was spun off.
    Jul 18 06:32 PM | Likes Like |Link to Comment
  • Alliance Resource: Strong Mid-Cap Income Holding In Core Industry [View article]
    Author's update: After this article the stock rose from $73 to $82 early in 2012, but then the entire coal sector began a precipitous slide through early April when it touched $52. This has been caused by a combination of EPA anti-coal proposed rules, coupled with the alternative utility fuel of natural gas going down in cost. Through it all ARLP has continued to pay and raise the dividend. As I write this the stock is at $57. Paraphrasing Wilbur Ross, 'there's little prospect of meaningful improvement in coal' for years to come. That said, one strategy would be waiting until the next ex-dividend date in early August, then selling ARLP. Including dividends, at $57 this will be about a 19% loss. Another approach is to simply hold for the very long term. This has appeal, but with the risk that ARLP is forced to reduce it's dividend in time when it's long term fixed rate contracts re-price, especially the one major utility customer.
    Jul 17 05:43 PM | Likes Like |Link to Comment
  • Alliance Resource Partners: Safe 7.5% Yield With Significant Unit Price Upside [View article]
    Good analysis, and I too like the stock. However, in ARLP's 10-K it states that a very large portion of their coal is sold to a single utility - Louisville Electric, if I remember correctly. If the utility has to shut down the unit due to EPA carbon regs, ARLP will lose what may be its single biggest customer. To date there's no indication they'll close the unit, but I believe this risk is weighing on the stock.
    Jun 26 10:40 PM | Likes Like |Link to Comment
  • Dow/Gold Ratio: Too Early To Buy Equities [View article]
    I'm a gold bull, but we need to also be cognizant of the 21 year Bear market in gold from 1980-2001, during which the price dropped 60%.
    Mar 8 09:26 AM | Likes Like |Link to Comment
  • A Note On The Ability Of Banks Sustain Dividends (Jan 22, 2012) [View instapost]
    Hi. I'm impressed at your effort and detailed analysis; nice work! With the dividend reducers, was there anything which indicated what was going to happen, especially so far in advance? A trend, maybe? I worked for a large commercial bank once, and internally they felt Return on Average Total Assets was the single most important metric, with 1% or higher being the mark of excellence.
    Jan 23 12:15 AM | Likes Like |Link to Comment
  • Bank Of New York Mellon - Speculating A Triple Over Several Years [View article]
    Given that BK's clients are institutional investors, it's surprising that their pricing - I understand they used the low of the day when on the buy side, and the high when on the sell side - wasn't challenged right away by clients whom, as you point out, reconcile their trades daily. Maybe the intra-day changes weren't transparent to clients. It'll cost BK, but in time the suits will be settled.
    Jan 2 08:57 PM | Likes Like |Link to Comment
  • A Quality Income Portfolio For 2012 [View article]
    Good comments about fixed income. My own approach is conservative, and I follow Ben Graham's advice to maintain about a 50-50 split between fixed income and equities, going up to about 60% equities when the market is really cheap. I hold virtually all bonds to maturity, and rarely sell a fixed income instrument. The other comment I'd make is to applaud those who say a sreening list like this is simply a starting point for further study of those stocks which seem to complement your portfolio. However, given the regularity of "Black Swan" events in recent years, I do strongly favbor high quality, financially strong companies.
    Jan 1 02:04 PM | Likes Like |Link to Comment
  • A Quality Income Portfolio For 2012 [View article]
    Good point about the yield on these stocks. But note that we pre-qualified them by limiting it to only those with both the highest financial strength ratings and the highest safety ratings. Had we gone lower in either category we would have picked up some higher yields.
    Dec 30 02:22 PM | Likes Like |Link to Comment
  • A Quality Income Portfolio For 2012 [View article]
    You're absolutely correct - it's a good starting point! But as an exercise it's interesting to see what VLIS will produce from their screens.
    Dec 29 11:37 AM | Likes Like |Link to Comment
  • 4 Overvalued Tobacco Stocks To Avoid Today [View article]
    Good point about the brewer. That might make an attractive sale or spin off at some point.
    Dec 26 01:37 PM | Likes Like |Link to Comment
  • 4 Overvalued Tobacco Stocks To Avoid Today [View article]
    Looking at tobacco stocks the way a private equity fund would view them, here are their EBITDA multiples, in order: BTI 12.0x, PM 10.6, MO 10.6, RAI 9.7, and LO 8.3. Clearly, market valuation is differentiating between those who operate internationally and have growth, and those in the shrinking market/raising prices cash distribution phase.

    From my limited perspective I would say BTI is a bit ahead of itself. It's been surprising that since the end of 2008, MO has actually outperformed PM though both have done well. For those who feel anxious, either selling covered calls or buying puts would offer price protection.

    As for me, I've owned MO for many years and PM since the split, and will continue to own them although recognizing price risk. Nevertheless, PM especially is simply a cash machine, almost an ideal business franchise and very well-run.
    Dec 26 11:51 AM | Likes Like |Link to Comment
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