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Simon Moore, CFA

 
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  • A Once-In-A-Decade Buy In Corporate Bonds [View article]
    Thanks for the article, certainly direct bond investment can present broader opportunities than equity alone, but are you sure about this statement as it relates to Geokinetics?

    "The good news – the sell-off has nothing to do with the credit worthiness of the bond issuers."

    I was just looking at the newsflow of of GOK (ticker for Geokinetics), they have potential legal liability after a fatal accident in September which has lead to a credit rating downgrade, they have negative earnings and negative book equity and they recently issued more debt. I'm not claiming to be an expert on the company, that's just the results of a few minutes of analysis, but I'm not sure lack of market liquidity is necessarily the main driver, the stock is off 77% over the past year. I realize you're talking about a bond not an equity investment, but are your sure there is sufficient equity cushion there? I suspect bond investors might be getting worried about default risk and what they'd recoup in the event of default, rather than more technical liquidity issues.

    To be clear, I haven't looked enough to advocate a position in either direction, but suspect there's more to Geokinetics than just a potential liquidity issue and company specific issues/risk should be examined.
    Jan 20 03:59 PM | 8 Likes Like |Link to Comment
  • Top 10 Stocks Most Owned by 'Super Investors' [View article]
    I agree with Poortorich's comment, fundamentally the strategies employed for creating wealth are quite different to preserving it.

    I think Warren Buffet has even said he'd love to own more small caps if he could make it scale, but of course, with a portfolio of his size, he can't.
    Jan 17 12:54 AM | 5 Likes Like |Link to Comment
  • Phillips 66: A Lot Of Upside Potential [View article]
    Trapper, your dividend number is correct and has been confirmed by management. At their April 9, 2012 analyst update they make the statement "We'll pay an $0.80 annual dividend to start off with. It's about $500 million a year." The link to the transcript is here: http://bit.ly/IAJPmy
    May 10 12:35 PM | 3 Likes Like |Link to Comment
  • BP agreed to an uncapped settlement with thousands of plaintiffs in the Deepwater Horizon oil spill trial, estimating its costs will come to $7.8B - this as the delayed trial was set to begin on Monday. Claims against codefendants RIG, HAL and CAM are unaffected by the settlement.  [View news story]
    I view this as a positive for the stock, if BP can meet the class action costs from their $20B fund, then that's upside from the analysis I did on their legal costs month.http://seekingalpha.co...
    Mar 3 12:34 PM | 3 Likes Like |Link to Comment
  • BP Still Cheap 2 Years After Gulf Spill [View article]
    Thanks very much for the detailed comment, since I'm using per share number it's harder to audit in terms of billions, but in "other spill related costs" I'm adding the cash payments to the $20B fund to get to about $37B (slightly different to your numbers as I'm looking at cashflow not the earnings provision). But with my $20B in the trust fund, $17B in other costs and $9.5B in court costs I think we're getting to the similar numbers you're at roughly $17/share, I'm at closer to $14/share. But you're really taking worst case, whereas I'm a little more optimistic and not sure gross negligence will be proven based on prior reports. I think the stock is still cheap under both our assumptions actually, if you believe that BP should have participated in the general rally in the oil and gas sector since April 2010, and it hasn't. That's the key point I think as that should have been about $16/share in upside from BP participating in a broader sector rally over the past ~2 years which just about offsets all the spill costs.
    Feb 15 11:29 AM | 3 Likes Like |Link to Comment
  • Apco Oil & Gas: Unjustified Selling Leads To Unjustified Valuation [View article]
    I own this stock,and agree there's fundamental upside here, but to Alan's point it's all about the political environment in Argentina. There's definitely clear political risk that's tricky to forecast. Personally I think there's enough margin of safety to offset it.
    Jun 8 05:24 PM | 2 Likes Like |Link to Comment
  • Two Near Term Catalysts For Phillips 66 [View article]
    The dividend is in the works, the CEO made the comments about a buyback assuming the dividend was in place. I wrote an article on their likely dividend here: http://seekingalpha.co...
    Jun 23 03:04 PM | 2 Likes Like |Link to Comment
  • Phillips 66 Offers Opportunity After Spin [View article]
    There's an article that explains the principle here based on a former split: http://usat.ly/IzDRxa and another one here: http://bit.ly/J1Yubf. It appears you pro rata your COP tax basis across the new shares according to their "fair market value", and the allocation ratio.Therefore, based on a 2:1 ratio COP:PSX and prices of $56.51 and $36.72 respectively (closing on the first day of the split) it appears 24.5% of your former COP tax base should be in PSX leaving 75.5% in COP. Of course, seek professional tax advice to get the precise numbers. The issue of 'fair market value' is ambiguous so I'm using the closing price on May 1, but either the company or a tax professional would be able to offer precise guidance.
    May 6 12:46 PM | 2 Likes Like |Link to Comment
  • Phillips 66 Offers Opportunity After Spin [View article]
    At their April 9, 2012 analyst update they make the statement "We'll pay an $0.80 annual dividend to start off with. It's about $500 million a year." The link to the transcript is here: http://bit.ly/IAJPmy
    May 5 02:48 AM | 2 Likes Like |Link to Comment
  • BP Still Cheap 2 Years After Gulf Spill [View article]
    Stuart,

    True, I didn't included dividends as a 'drain' on equity value, and I suppose to the extent BP has paid a lower dividend vs. peers in the past 2 years that may be further upside given peers have rallied 20%+ and distributed cash. That could be another $1-2/share, but bear in mind there are some negatives I have not excluded too e.g. damage to brand, potential loss of value in selling assets etc. So be careful about just focusing on the positives that I have missed because we could end up with a valuation that's a little too positively skewed.
    Feb 19 01:22 PM | 2 Likes Like |Link to Comment
  • City Telecom - Dramatic Change Increases Risk [View article]
    The source links are in the article, but if you just want one source read the SEC document here: http://1.usa.gov/StJMbd.
    I was long CTEL before they did the disposal, then they did the special dividend and I sold. My short position is small, and I don't typically short, but this whole situation is so bizarre and the logic of a short made sense to me as I've outlined above. I think more detail (in terms of balance sheet and income statement run rate) will come to light when the company next reports which I think is November. I was slow to publish, simply because it took me a while to research and write this relative to other priorities, frankly, I'd assumed someone else would comment on it, but they never did.
    Sep 17 10:46 AM | 1 Like Like |Link to Comment
  • City Telecom - Dramatic Change Increases Risk [View article]
    If you disagree with the negative investment thesis, then it's probably more helpful to other readers (and me) to explain why, as others have done in the comments. Thanks.
    Sep 15 11:59 AM | 1 Like Like |Link to Comment
  • City Telecom - Dramatic Change Increases Risk [View article]
    I was surprised by that article too, although the company hasn't actually stated its dividend policy going forward, so conceivably they may maintain it, but not sure it would get board approval given the high level of investment going into the media business.
    Sep 15 11:35 AM | 1 Like Like |Link to Comment
  • WPX Energy - A Natural Gas E&P Spin-Off At A Discount [View article]
    I suspect it could go either way, but there are four reasons Argentina may hold back:
    1. The reaction to the YPF seizure was strongly negative from the US and EU. Predictable yes, but perhaps harsher criticism than Argentina expected.
    2. Apco is a much smaller company than YPF in terms of both size and awareness, it may not be worth the additional hassle fo further seizure for a much smaller gain
    3. The government could have seized Apco in April 2012 and they did not do so.4. Apco appears to have taken actions to pre-empt seizure such as cutting the dividend to fund investment (the apparent reason YPF was seized)
    Now, none of the above are overwhelming arguments and I have very little knowledge of Argentinian politics, but I'm not sure the Apco seizure is the foregone conclusion the market may be discounting.
    Aug 6 12:48 PM | 1 Like Like |Link to Comment
  • Analyzing The Stock Buyback Kings [View article]
    Indeed, I agree RRD has something of an image problem, but I'm also tempted to believe management when they say they can leverage their customer relationships to grow a more digital centric business. The stock is up slightly with the broader market, since I wrote this article, but I wouldn't want to trivialize the risks inherent in repositioning the business.

    On SWY I totally agree with you, the leverage looks risky when growth seems fundamentally absent. I'd avoid that one.
    Jul 31 05:02 PM | 1 Like Like |Link to Comment
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