Blackstone (BX +4.3%) parties as the company holds its investor day - (webcast) (presentation) - with global real estate chief Jonathan Grey saying he expects to close a $4B Asia real estate fund (BX's first) this quarter. Performance fees, says CFO Larry Tosi, are set to hit pre-financial crisis levels - when the stock was a whole lot higher. [View news story]
The distributions are going to continue to increase as the economy improves and performance fees move higher, this is a name to own. Congrats on a solid pick up
American Capital Agency (AGNC -7%) is not far off session lows as the earnings call is set to get underway momentarily (webcast) (slides). Anybody selling or short may want to prepare themselves for CIO Gary Kain laying out very clearly how the rise in rates and the large secondary hurt Q1, but that book value has already strongly rebounded in Q2. [View news story]
Net spread income was stable, don't think the div is going anywhere
American Capital Agency (AGNC -7%) is not far off session lows as the earnings call is set to get underway momentarily (webcast) (slides). Anybody selling or short may want to prepare themselves for CIO Gary Kain laying out very clearly how the rise in rates and the large secondary hurt Q1, but that book value has already strongly rebounded in Q2. [View news story]
Exactly, we'll see where this closes today, I'm guessing well off the lows
More on American Capital Agency (AGNC) Q1 earnings: Comprehensive loss of $1.57/share includes $0.64 of net income and $2.21 loss on marked-to-market investments. Book value dives to $28.93 from $31.64 on Dec. 31. CIO Kain: "Specified mortgage securities also materially underperformed ... (and) led to the decline in our book value." Shares -2.4% to $32.32 AH. (PR) [View news story]
Literally the previous quarter. BV reported as $32.49 at 9/30/2012, $31.64 as of 12/31/2012, $28.93 as of 3/31/2013.
More from AIG's Q1 earnings: A slight miss on revenues ($8.56B vs. $8.64B expected) isn't damping AH enthusiasm with shares up 2.5%. Q1 after-tax operating income of $2B compares with prior-year $3B - which had included pretax income from investments (including Maiden Lane) disposed of in 2012. Insurance operating income of $3B is up 28% Y/Y. "Our priority this year is to improve operating fundamentals and reduce costs," says CEO Robert Benmosche. [View news story]
Buyback with shares below book is a much wiser use of capital
American Capital Agency (AGNC): Q1 "comprehensive" EPS of -$1.57 may not be comparable to profit estimate of $1.08. Shares -1.8% AH. (PR) [View news story]
BV is $28.93, the stock is down hard, but still at $30.88 AH...thats above book, so they'll def be offering, probably sooner than later
More on American Capital Agency (AGNC) Q1 earnings: Comprehensive loss of $1.57/share includes $0.64 of net income and $2.21 loss on marked-to-market investments. Book value dives to $28.93 from $31.64 on Dec. 31. CIO Kain: "Specified mortgage securities also materially underperformed ... (and) led to the decline in our book value." Shares -2.4% to $32.32 AH. (PR) [View news story]
More from AIG's Q1 earnings: A slight miss on revenues ($8.56B vs. $8.64B expected) isn't damping AH enthusiasm with shares up 2.5%. Q1 after-tax operating income of $2B compares with prior-year $3B - which had included pretax income from investments (including Maiden Lane) disposed of in 2012. Insurance operating income of $3B is up 28% Y/Y. "Our priority this year is to improve operating fundamentals and reduce costs," says CEO Robert Benmosche. [View news story]
Its soo far below book, i think its got room to run
More FOMC: Other than the pledge to adjust QE as necessary, there's little changed language in the policy statement. The one dissenting vote is again KC Fed Chief Esther George. The S&P 500 is marginally higher now than before the statement, (SPY -0.7%). Treasurys (TLT +0.6%) lose a little ground, but the 10-year yield is sharply lower on the day, down 5 bps to 1.63%. The dollar (UUP -0.2%) remains down for the session. [View news story]
The S&P closed at a record high yesterday, that doesn't seem like the market being sick of QE to me.
American Capital (ACAS -4.9%) bulls may be getting a buying opportunity post-earnings. A $47M sequential decline in revenue is largely the result of non-recurring factors, according to management (CC transcript). Of a $49M increase in non-accruals, CFO John Erickson reminds the company is often in a "very" junior position and weaker performance can force a loan into non-accrual status, but that doesn't mean the return disappears. (presentation slides). [View news story]
The company's buyback is also still in place, they're likely in the market today buying shares, since the average price paid for the 9 million they bought last quarter was $14.24. BV is over $19, ACAS is a winner.
More FOMC: Other than the pledge to adjust QE as necessary, there's little changed language in the policy statement. The one dissenting vote is again KC Fed Chief Esther George. The S&P 500 is marginally higher now than before the statement, (SPY -0.7%). Treasurys (TLT +0.6%) lose a little ground, but the 10-year yield is sharply lower on the day, down 5 bps to 1.63%. The dollar (UUP -0.2%) remains down for the session. [View news story]
Fed says they would consider increasing QE, thats got to be good for another 50 points in the S&P right?
Bakken Update: An Overview Of World Refining And How To Invest In 2013 [View article]
Michael,
We do a fair amount of ethanol valuation work. The industry saw capacity basically grown 10-fold between 2002 and 2009, and corn prices went through the roof, margins collapsed, and a lot of the ethanol producers went bankrupt. VLO bought some of Verasun's assets out of bankruptcy (I believe) after Verasun got caught hedging the wrong way (again, I believe - havn't looked at the transaction data in a few months).
Long story short the industry is highly levered to the price of corn. Assuming the price of ethanol stays at $2.50/gallon, unless corn gets down under $6/bushel, it won't be worth it to run the facilities. If corn ever got down to $3 or $4 a bushel with ethanol at $2.50, these things might as well be printing presses. There's a lot of idled capacity in the industry, and the facilities dont suffer from the not in my back yard stigma like the oil refineries, so if margins ever get really high again, like the 2002-2005 period, you might see another construction boom.
Reduction In State Renewable Energy Requirements Could Give Natural Gas Companies Big Boost [View article]
States arent cutting back on the amount of green energy, they're cutting back on the mandates for green energy. Anything already producing will continue producing. Power prices have dropped 50% since 2007, thanks to a reduction in demand, and a huge influx of natural gas. However, most of these renewable projects of utility sized scale have long term PPAs at high electricity prices, meaning they will be profitable over the course of their lives.
According to the WSJ, Dynergy is the most leveraged to rising gas prices - CHK says if gas goes from $4 to $5, EBITDA only increases 10.3%. Dynergy's EBITDA would increase 120% http://on.wsj.com/181yIxd
If Verizon (VZ +2.2%) is serious about buying Vodafone's (VOD +2.8%) Verizon Wireless stake, $100B isn't going to cut it, thinks Jefferies. The firm values the stake at $121B based on a 7.7x estimated EV/EBITDA multiple for the March 2014 fiscal year, and notes a Sunday Times article discussed a possible valuation of $135B (others have suggested $115B). There's also the question of how keen Vodafone is on selling when its stake has been appreciating considerably, and is now yielding giant cash distributions. On the flip side, a sale could fuel a massive M&A-driven expansion into growth markets. (Reuters report) [View news story]
Because if they sell the most valuable asset, does anyone really want to own a company that is so massively exposed to the European consumer, as the EU slides back into recession?
GE Capital (GE +2.5%) cuts off lending to gun shops in response to public backlash since the Sandy Hook shootings. Though the company isn't the first financial firm to back away from involvement with the gun industry, the development puts the spotlight back on sellers such as Dick's Sporting Goods (DKS -0.4%), Wal-Mart (WMT -1.2%), and Cabela's (CAB +0.9%) which could see more foot traffic. It's also of interest to gun manufacturers Smith & Wesson (SWHC +0.8%) and Sturn Ruger (RGR -0.8%) - wallowing around with relatively low P-E ratios with future demand tough to forecast. [View news story]
The bill isnt really even stricter laws, it just applies the law uniformly and closes the gun show loophole. Either way, law didn't pass, and the public does not care it didn't.
Blackstone (BX +4.3%) parties as the company holds its investor day - (webcast) (presentation) - with global real estate chief Jonathan Grey saying he expects to close a $4B Asia real estate fund (BX's first) this quarter. Performance fees, says CFO Larry Tosi, are set to hit pre-financial crisis levels - when the stock was a whole lot higher. [View news story]
American Capital Agency (AGNC -7%) is not far off session lows as the earnings call is set to get underway momentarily (webcast) (slides). Anybody selling or short may want to prepare themselves for CIO Gary Kain laying out very clearly how the rise in rates and the large secondary hurt Q1, but that book value has already strongly rebounded in Q2. [View news story]
American Capital Agency (AGNC -7%) is not far off session lows as the earnings call is set to get underway momentarily (webcast) (slides). Anybody selling or short may want to prepare themselves for CIO Gary Kain laying out very clearly how the rise in rates and the large secondary hurt Q1, but that book value has already strongly rebounded in Q2. [View news story]
More on American Capital Agency (AGNC) Q1 earnings: Comprehensive loss of $1.57/share includes $0.64 of net income and $2.21 loss on marked-to-market investments. Book value dives to $28.93 from $31.64 on Dec. 31. CIO Kain: "Specified mortgage securities also materially underperformed ... (and) led to the decline in our book value." Shares -2.4% to $32.32 AH. (PR) [View news story]
More from AIG's Q1 earnings: A slight miss on revenues ($8.56B vs. $8.64B expected) isn't damping AH enthusiasm with shares up 2.5%. Q1 after-tax operating income of $2B compares with prior-year $3B - which had included pretax income from investments (including Maiden Lane) disposed of in 2012. Insurance operating income of $3B is up 28% Y/Y. "Our priority this year is to improve operating fundamentals and reduce costs," says CEO Robert Benmosche. [View news story]
American Capital Agency (AGNC): Q1 "comprehensive" EPS of -$1.57 may not be comparable to profit estimate of $1.08. Shares -1.8% AH. (PR) [View news story]
More on American Capital Agency (AGNC) Q1 earnings: Comprehensive loss of $1.57/share includes $0.64 of net income and $2.21 loss on marked-to-market investments. Book value dives to $28.93 from $31.64 on Dec. 31. CIO Kain: "Specified mortgage securities also materially underperformed ... (and) led to the decline in our book value." Shares -2.4% to $32.32 AH. (PR) [View news story]
More from AIG's Q1 earnings: A slight miss on revenues ($8.56B vs. $8.64B expected) isn't damping AH enthusiasm with shares up 2.5%. Q1 after-tax operating income of $2B compares with prior-year $3B - which had included pretax income from investments (including Maiden Lane) disposed of in 2012. Insurance operating income of $3B is up 28% Y/Y. "Our priority this year is to improve operating fundamentals and reduce costs," says CEO Robert Benmosche. [View news story]
More FOMC: Other than the pledge to adjust QE as necessary, there's little changed language in the policy statement. The one dissenting vote is again KC Fed Chief Esther George. The S&P 500 is marginally higher now than before the statement, (SPY -0.7%). Treasurys (TLT +0.6%) lose a little ground, but the 10-year yield is sharply lower on the day, down 5 bps to 1.63%. The dollar (UUP -0.2%) remains down for the session. [View news story]
American Capital (ACAS -4.9%) bulls may be getting a buying opportunity post-earnings. A $47M sequential decline in revenue is largely the result of non-recurring factors, according to management (CC transcript). Of a $49M increase in non-accruals, CFO John Erickson reminds the company is often in a "very" junior position and weaker performance can force a loan into non-accrual status, but that doesn't mean the return disappears. (presentation slides). [View news story]
More FOMC: Other than the pledge to adjust QE as necessary, there's little changed language in the policy statement. The one dissenting vote is again KC Fed Chief Esther George. The S&P 500 is marginally higher now than before the statement, (SPY -0.7%). Treasurys (TLT +0.6%) lose a little ground, but the 10-year yield is sharply lower on the day, down 5 bps to 1.63%. The dollar (UUP -0.2%) remains down for the session. [View news story]
Bakken Update: An Overview Of World Refining And How To Invest In 2013 [View article]
We do a fair amount of ethanol valuation work. The industry saw capacity basically grown 10-fold between 2002 and 2009, and corn prices went through the roof, margins collapsed, and a lot of the ethanol producers went bankrupt. VLO bought some of Verasun's assets out of bankruptcy (I believe) after Verasun got caught hedging the wrong way (again, I believe - havn't looked at the transaction data in a few months).
Long story short the industry is highly levered to the price of corn. Assuming the price of ethanol stays at $2.50/gallon, unless corn gets down under $6/bushel, it won't be worth it to run the facilities. If corn ever got down to $3 or $4 a bushel with ethanol at $2.50, these things might as well be printing presses. There's a lot of idled capacity in the industry, and the facilities dont suffer from the not in my back yard stigma like the oil refineries, so if margins ever get really high again, like the 2002-2005 period, you might see another construction boom.
Reduction In State Renewable Energy Requirements Could Give Natural Gas Companies Big Boost [View article]
According to the WSJ, Dynergy is the most leveraged to rising gas prices - CHK says if gas goes from $4 to $5, EBITDA only increases 10.3%. Dynergy's EBITDA would increase 120% http://on.wsj.com/181yIxd
If Verizon (VZ +2.2%) is serious about buying Vodafone's (VOD +2.8%) Verizon Wireless stake, $100B isn't going to cut it, thinks Jefferies. The firm values the stake at $121B based on a 7.7x estimated EV/EBITDA multiple for the March 2014 fiscal year, and notes a Sunday Times article discussed a possible valuation of $135B (others have suggested $115B). There's also the question of how keen Vodafone is on selling when its stake has been appreciating considerably, and is now yielding giant cash distributions. On the flip side, a sale could fuel a massive M&A-driven expansion into growth markets. (Reuters report) [View news story]
GE Capital (GE +2.5%) cuts off lending to gun shops in response to public backlash since the Sandy Hook shootings. Though the company isn't the first financial firm to back away from involvement with the gun industry, the development puts the spotlight back on sellers such as Dick's Sporting Goods (DKS -0.4%), Wal-Mart (WMT -1.2%), and Cabela's (CAB +0.9%) which could see more foot traffic. It's also of interest to gun manufacturers Smith & Wesson (SWHC +0.8%) and Sturn Ruger (RGR -0.8%) - wallowing around with relatively low P-E ratios with future demand tough to forecast. [View news story]