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Stanley Barton  

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  • Dead Cat Bounce Or Next Leg Up For Homebuilders? [View article]
    I do not yet see a bubble in housing, for following reasons:

    Buyers are under much more scrutiny for credit-worthiness...bu... occur when people start speculating that have no business in the market, as in the crisis.

    The cost to build a house is more than the cost of existing homes in most cities. The cost of materials are rising and builders' gross margins are less than 20% typically. The housing market has to catch up on years of commodity and labor increases.

    I am not sure there is a lot of long-term profit left in these stocks compared to other sectors, but that is why we limit our bets to options.

    Hope that helps
    Jun 29, 2013. 12:53 PM | Likes Like |Link to Comment
  • Finally, A Reason To Buy Gold Miners [View article]
    I always keep some precious metal exposure in diversified portfolios, just as I keep exposure to energy, healthcare, etc., so I am holding on to HL and AUNFF as I believe their cost is low and have opportunities for growth. I cannot see silver much lower, although short-term anything is possible. As a long-term investor, I bought some cheap options to purchase both gold and silver miners in the event of a bounce back. I think this is a way to not get left behind, without committing too much capital.

    Hope this helps
    Jun 29, 2013. 12:11 PM | 1 Like Like |Link to Comment
  • Advice For The Lovelorn Investor: 2 Stocks That Cherish Shareholders [View article]

    I am a long-term holder of MIL and continue to hold. I like the little 3% divvy and even though it has disappointed in last earnings report, I do not think that is a trend. It is still under book and CEO Smith has a history of good deals. It is not a good trading stock, but I expect it to gradually grow in both price and dividend from here.

    I like the PMD dividend at 5.5% and I think it is safe. However, it looks like their latest initiatives are slow to pay off. I am inclined to watch this one until the next quarterly report in August.

    Hope that helps.
    Jun 28, 2013. 02:00 PM | Likes Like |Link to Comment
  • Beware The Trap Door Under Miners' Silver Reserves [View article]
    I am now holding a small position in RVM and I plan on holding for the long term. I do think that the latest announcement of additional structural damage at the Troy mine is very serious. Management is even shading the PR to open the door to possibly abandoning the mine. I do not think that will happen, but the layoffs probably mean no revenue this year and that likely means dead money investing in RVM this year.

    Having said that, the company has some cash and potentially valuable properties. The silver is not going anywhere, so I can see RVM back around $5 in a few years. I would rather have a little spare money sitting in RVM than low interest money market or bonds during that period. Long-term, I think that silver will rebound, so the present price looks like good value from that perspective.

    May 24, 2013. 11:27 AM | 1 Like Like |Link to Comment
  • Beware The Trap Door Under Miners' Silver Reserves [View article]

    If the Shafter mine produces as expected, I believe it will be the third most productive silver mine in the US, after HECLA's Greens Creek and Lucky Friday mines. With the production from Mexico, AUNFD will indeed be a major producer. That is one reason why I am anxious to find out if the Shafter mine will meet expectations.

    May 18, 2013. 05:12 PM | Likes Like |Link to Comment
  • Beware The Trap Door Under Miners' Silver Reserves [View article]

    I did catch most of the RVM conference call. I must say it was not very encouraging. Basically, they put off providing any specifics about the Troy mine situation until a report they will issue at the end of the month. The fact that they are still "evaluating" tells me that the mine closure may extend longer than the current quarter. On the upside, RVM has not laid off anyone, and they responded that the problems were related to "logistics" of moving material, which presumably is better than a problem that would affect the resources. I guess we will have to wait until the end of the month, but I suspect that the report then will address delays in getting the mine open.

    Rock Creek was not discussed, other than to say they are continuing their plan to develop that property. I think that everyone assumed that the Rock Creek progress depends first on the cash flow from the Troy mine, so that mine was the focus of the call.

    I am holding RVM at this very beaten down price, but I think I am going to wait for the month-end report to decide what to do regarding this company.

    Hope this helps,

    May 14, 2013. 11:27 AM | 1 Like Like |Link to Comment
  • Beware The Trap Door Under Miners' Silver Reserves [View article]

    I have been bogged down in business consulting work lately and had to postpone my trip to the Shafter Mine. I hope to put it on the agenda soon. The stock dropped a little after the consolidation, as I mentioned often happens. The good news is once the initial drop is out of the way, there may be an upward bias. Unfortunately, the price of silver continues to drop as I write this, so we may need to wait for a rebound in the metal. I still like the fundamentals and prospects for two low-cost silver mines operating on all cylinders. I continue to think that the Shafter Mine is the key, but I am continuing to hold until I can find out if there is any reason why that mine will not meet expectations.

    May 12, 2013. 09:45 PM | Likes Like |Link to Comment
  • Beware The Trap Door Under Miners' Silver Reserves [View article]

    Thank you for correcting me...I was referring to the Rock Creek property....old age is teaching me that my memory is no longer infallible. I think the political climate depends more on who controls Montana, and even the overwhelming Republican majority in that state has not silenced the local environmentalists. The federal government and courts have supported RVM in the Rock Creek project at every dispute to date. However, I do agree that it is only a matter of time and the project will be a go. I think mostly RVM wants to get the Troy mine back in shape so that they and potential partners can count on uninterrupted cash flow for the new project development.

    I am very familiar with SVLC, as the Santa Elena mine is one of the Sandstorm streaming properties. SAND gets 20% of the gold production for $350 an ounce. This is not insignificant and is not included in the $8 cash cost for that mine. Nevertheless, I have liked SVLC, but my investment in it is through SAND. I think that SVLC's price is partly supported by large "inferred" resources, and as mentioned in this article that is no guarantee that those resources exist or can be mined profitably. For instance, price to book for SVLC is 2.0 while for RVM it is only 0.57. For another Mexican silver miner, Excellon Resources, this ratio is 1.43. Personally, I do not put much value on "inferred" resources in this market. SVLC also has touted the new discoveries of limited meters of silver at a very nice 8 ounces silver equivalent per ton. However, EXN.TO is currently averaging 17 ounces per ton, while clearing areas for higher grade ore of 26 ounces per ton. The result is lower costs per ounce than most junior miners. The downside for EXN.TO is that it has been impacted by a labor dispute with a renegade union that even their workers did not support. I have worked on such issues in Mexico for 19 years and it is outrageous the way some of these "sindicatos" try to muscle their way into profitable operations, while doing nothing for the workers. EXN.TO fought back and that dispute appears to be resolved. Before that, the stock was a junior miner favorite of the market and management was under-promising and over-delivering. Bottom line, as good as SVLC is, my preference as a speculative play would be Excellon Resources, as it has the highest grade silver in Mexico, low cash costs, no royalty burden and recent discoveries of high-grade gold in its properties.

    Thanks for reading my article.

    May 12, 2013. 07:19 PM | Likes Like |Link to Comment
  • Beware The Trap Door Under Miners' Silver Reserves [View article]

    I would be lying if I said I was not disappointed with RVM, and you are correct that the mine has been closed in the first quarter for repairs. I guess if there is any good about this is that all mines need maintenance sooner or later, and it is better to suspend production when silver is at a very low price. RVM is a proven producer and I suspect will generate positive cash flow in Q3. I originally was attracted to RVM because it had the added asset of the Bear Creek property, which could be a giant resource for silver in the US. Unfortunately, the environmentalists are fighting hard to keep that mine from being a reality, even though RVM has won all the court battles. It would also be a good boost for the local economy. If you believe, as I do, that silver will trend higher over the long term, RVM looks like a good contrarian play. I am going to listen to the conference call on May 13 and see if the insiders drop any clues why they are buying shares.

    Hope this helps,

    May 10, 2013. 01:53 PM | Likes Like |Link to Comment
  • Latest Tetra Technologies Buyout Clues [View article]

    I think TTI is a good long-term buy at the price. I base that on the fact that I think that the services they provide are always going to be needed, and will be more necessary as oil fields are seeing their production falling...this happens pretty quickly in shale plays in particular. The drop was due to lower earnings and management's prediction of relatively slow rebound in production testing. The entire oil service sector is not very popular, but if you believe that oil is not going to drop drastically, and alternate energy forms have yet to make a meaningful impact, it is a sector that I think should be represented in my portfolio.

    I also think the buyout prospects are not dead. Finally, the recent drubbing of COMPRESSCO may be making GSJK the best current option in this group.

    Hope this helps,

    May 10, 2013. 01:06 PM | Likes Like |Link to Comment
  • Derby Extra: Updating The Angles On Our Horse Racing Investments [View article]

    I have loved horse racing longer than the stock market...which is five decades. I took the Delta Queen paddle-wheeler from Cincinnati to Louisville for the Derby a few years ago. The only major US track I have not been to during racing season is Saratoga and I think I may go this summer.

    To appreciate the sport, it helps to understand the factors that go into handicapping, and in the computer age it is easier than in the past. Unfortunately, my grandsons do not have the patience to wait 25 minutes or more between races...they are used to instant action of video games. It requires a lot of thought and analysis to pick both stocks and horses, and it is lost on many in the general public in both their detriment.

    Thanks for reading my article.

    May 4, 2013. 05:42 PM | Likes Like |Link to Comment
  • Beware The Trap Door Under Miners' Silver Reserves [View article]
    A Trautman

    Thanks for reading my article. I should mention that I own call options on PZG. I think it has legitimate resources, although the report of a billion in cash flow from San Miguel is based on resources, none of which meet the requirements to be called "reserves" as explained in this article. It also uses $29 silver, which is $5 more than the current price. It will also will take $500MM to start mining and processing these resources. Therefore, the current market value of the company is $240MM and so the present value is actually maybe triple that in theory. PZG in very rough numbers is running through about $16MM a year ($12MM in exploration and $4MM in overhead). It has $16MM in current assets. I think PZG can continue to sell assets to get cash but it needs to be acquired in the next two years or this company will be a fire sale.

    I think there is not much likelihood that they will be acquired this year, as all the miners are treading water until prices improve. However, I do think that 2014 could be the year for both price acceleration in silver and acquisition activity. I am using the Jan 15 calls at $.35 per contract. My thought is that by then PZG will be acquired on good terms or sold off for peanuts. At any rate, I can only lose $.35 and possibly gain 10 times that in an acquisition.

    This is a very speculative company, but in the right economic environment it could be one of the more desirable targets for acquisition. It is my only silver explorer investment and it is quite small.

    Hope that helps.

    Apr 29, 2013. 01:25 PM | Likes Like |Link to Comment
  • Beware The Trap Door Under Miners' Silver Reserves [View article]
    You can go to this site and read the various articles, whose headlines indicate the subject of share consolidation. Essentially it is an 8 for 1 reverse split, intended to help the stock qualify for more institutional investors that avoid "penny" stocks.

    It is hard to say if this will help the stock price or not. Frequently, in these cases, the stock price drops a little immediately after the consolidation and then rebounds higher.
    Apr 24, 2013. 03:58 PM | Likes Like |Link to Comment
  • Beware The Trap Door Under Miners' Silver Reserves [View article]

    1. I am not sure of the 15:1 ratio, as the ratio was distorted for years by the 1979 attempt of the Hunt Bros. to corner the silver market, sending it to $95 per once. However, in the past 2 years silver has declined 15% more than gold, so I would say that silver could improve 15% more than gold, based on that perspective.

    2. In my opinion, gold enjoys more speculative play as a hedge against paper money collapse, inflation and world doom. Also, I think countries buy more gold,. as it is accepted more widely and is more easily stored and delivered. Personally, I think silver is less likely to become a bubble, as about half is used in industrial use, as opposed to gold.

    3. If you do not trust managements, the ETF is one way to play silver. I personally prefer to take the risk on silver mining companies as they are more leveraged and likely to get better appreciation with a silver rebound, and maybe even pay a dividend. Of course, I have a hoard of scrap sterling silver hollowware accumulated over the years on Ebay and garage sales at an average price of about $6 per ounce. I store it in pacific cloth with my wife's out of season clothes and shoes at a storage facility. Something like that may be the best way to assure that you own the silver you pay for.

    Thanks for reading my article.

    Apr 22, 2013. 12:31 PM | Likes Like |Link to Comment
  • Beware The Trap Door Under Miners' Silver Reserves [View article]

    Attached is the company presentation indicating the "Total" cash costs per ounce at the La Negra mine as $6.43 and the Shafter mine as $10.00:

    If we use the method described in the article the 2012 all inclusive cash cost should be about $20. If we use the cash flow method, the cash costs would be about $17. You can take the time to calculate with more precision by getting the info from the company website. The cost should be better in 2013 as the company had substantial costs associated with the Shafter start up.

    Hope this helps.

    Apr 19, 2013. 12:51 PM | Likes Like |Link to Comment