Seeking Alpha
View as an RSS Feed

Stanley Barton  

View Stanley Barton's Comments BY TICKER:
Latest comments  |  Highest rated
  • 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]

    If they produce a positive NI 43-101 report, it may be the last positive thing that they do. The market may bid up shares on the news, but I think the old philosophy of "sell on news" applies in this case.

    The company is probably hoping for a buyout more than actually going into production. If they cannot get financing to build out production facilities and no buyout, they have about $1MM to burn, which could be gone pretty quickly....and then they are broke. It costs a lot to do the drilling and hire a firm to produce the reserve analysis. El Tigre issued an optimistic report that did not meet securities rules for disclosure, possibly gambling that they could get enough interest in the company to sell some shares for cash.

    The tailings contain 2 or 3 ounces per ton, while other Mexican miners like Excellon Resources or Aurcana may have 10 - 20 ounces per ton and production equipment in place. I just prefer producers over explorers. Maybe a smaller payoff, but less risk.

    Hope that helps,

    Apr 17, 2013. 11:14 AM | 1 Like Like |Link to Comment
  • $2 Med Stocks With Macro Tailwinds [View article]

    Thanks for the insightful comment. It is likely that the demand will be there as a lot of people get older at the same time, but it is a good point that someone must pay for the services, medicines and devices. That opens the political debate. When I was an undergraduate at Southern Methodist University, a very conservative, Christian-based school, the Economics prof asked the students if they encountered a sick, poor person laying on the sidewalk, what would they do? The majority said they would step over him or go to the other side of the street...bums are responsible for their own problems.

    The reality, at least for now, is that basic services are provided and paid by some government entity when a poor person goes to the emergency room. However, some of the latest drugs are so pricey that it is naive toi think that just because a medical solution exists that people will have the money to take advantage of that. Cosmetic services such as those by SLTM are mostly optional, and the market is the middle-upper income sector. However, you have a point that if a family is paying through the nose for basic services, it is bound to eat into the budget for optional services.

    DHRM is in a different situation, as the Peoples Republic of China is very much controlling healthcare in that country, and DHRM is focusing on working with the government to make sure that their products are the easiest option for consumers.

    Thanks for the comment, and perhaps this is a concept that will open other investment alternatives.

    Mar 27, 2013. 10:11 AM | 1 Like Like |Link to Comment
  • Our Best-of-the-Best Dividend Portfolio Update [View article]

    I like GSJK and own it.

    Since this article it has raised the distribution and provided guidance to indicate maybe further increases:

    "Given our improved financial results in 2012, we increased our quarterly distribution to $0.42 per outstanding unit for the fourth quarter of 2012. On the basis of this financial guidance, we expect that we can achieve quarterly distributions of at least $0.42 in 2013."

    Also, I think it has room to grow in Latin America. The Mexican federal budget gets about 1/3 of revenue from PEMEX, its nationalized oil company. Production has been declining and I think that finally the Mexican government will realize it needs to invest in increasing production. For capital appreciation, one might prefer the general partner, Tetra Tec (TTI), which owns a majority interest in Compressco. It has good growth and value metrics, but pays no dividend. GSJK had 150% distribution coverage last time I looked, and I think TTI depends on that distribution, so you can probably expect them to continue to try to increase distributions.

    Hope that helps,

    Feb 23, 2013. 12:48 PM | 1 Like Like |Link to Comment
  • The Clark Kent Of Micro-Cap Rebound Plays: Superior Uniform Group [View article]

    Thanks for reading my article. I did not find in the company reports indication of hedging. I will try to ask the company. I follow a couple other companies in the medical products field that also had the same surprise hit from the cotton spike, without hedges. I think that the price of cotton has been relatively reliable for so long, as the chart indicates, that noone expected the cost to triple in a short span. Hedges cost money too, so they probably have survived many decades without them. I will try to see if that has changed.

    Nov 25, 2012. 12:22 PM | 1 Like Like |Link to Comment
  • Our Diversified Dividend Portfolio Update: Best Of The Best [View article]

    I know that HCII (now HCI) moved to the NYSE from the OTC, and there was some run-up in front of that event. I do not think that event was a fundamental change that justified much run-up, and it was a "buy on rumor and sell on news" situation. Other than that, I can only speculate that the recent hurricane news on the front page made investors recognize the risk of casualty insurers, although it looks to me that HCI survived the hurricanes in FL without much damage (per last earnings reports). I also think that the fact that the last reported quarter is seasonally the weakest in EPS might cause some knee-jerk selling. However, I noted that the analysts on YAHOO have upped the 2013 EPS to $2.66 from $2.45 in the past week since the earnings report. Finally, the Obama win has increased the likelihood of higher taxes on dividends and capital gains. HCI has seen a steady increase in price and so there are a lot of capital gains...investors can sell to lock in the gains at a lower tax rate and buy back later. It is somewhat crazy to me that dividend investors will sell a solid stock with a 5% dividend to invest in a 1% bond, just because the tax rate is higher on the dividend. Bottom line is that I think the stock is still a good value (forward PE of 7, for example). It is a roller coaster, but I have no intention of selling.

    Hope that helps.
    Nov 14, 2012. 04:11 PM | 1 Like Like |Link to Comment
  • Our Best Romney Stock: Edac Technologies Corp. [View article]

    Thanks for reading my article. You are probably correct about most defense stocks taking a hit with a Romney loss, including EDAC. I do think that EDAC is taking a little break after a good pop since its latest earnings announcement.

    Long-term, I think that EDAC will be OK. favorite barbecue shack in Dallas used to be a little place called "Bob White's"...I am getting hungry thinking about it.

    Thanks for your comment.

    Nov 6, 2012. 05:00 PM | 1 Like Like |Link to Comment
  • REITS Benefiting From The Mom And Pop Boom [View article]
    I think that the Fed involvement in the money supply management will be permanent in some form. I personally do not think that unemployment will fall below 7% ever again, unless a lot of people leave the employment pool, regardless of which political philosophy prevails. Other "robust recoveries" were due to special impetus outside of fiscal policy, most recently the invention of the internet. We do not currently have any such impetus and the increased productivity from technology is now allowing companies to cut out the dead wood. There is the possibility that baby-boomers leaving the pool will help some. If the governments (local, State and Federal) funded programs to accelerate the use of abundant natural gas for vehicles and electricity production, it could have the effect similar to the "New Deal" on employment, creating technical, manufacturing and construction jobs. It would increase energy independence and help the environment also, which should appeal to both political groups. I just don't think that it will happen, and, without that impetus, the Fed will continue to experiment with short-term moves to stimulate employment with increasingly less effectiveness.

    I like REITS in speculative portfolios, and I try to diversify with a few in different segments (RAS - Apartments and Commercial, WSR - Retail, MPW - Medical, CMO - Mortgages). I think even speculative portfolios ought to earn at least 2% dividend yield. Of course, these are small and risky compared to the big REITS, but that also opens opportunity for price appreciation and dividend increases on a more dramatic scale if you have patience.
    Nov 3, 2012. 11:21 AM | 1 Like Like |Link to Comment
  • Politics And 3 'Socially Responsible' Stocks With Game Changing Technologies [View article]

    Thanks for the comment. Actually I did not intend to take a party stance, one way or the other. My experience is that each time I think I am leaning one way, that party does something idiotic to turn me off.

    Coal is problematic and I appreciate your bringing that factor into the equation.

    Sep 17, 2012. 11:49 AM | 1 Like Like |Link to Comment
  • Our Mid-Year Precious Metals Update And What's Next [View article]

    Thanks for the comment. We own plenty of Hecla, and we like that one. Arcana is obviously more speculative, but two large producing mines and a market cap of $350 has potential for appreciation. Shafter was purchased when silver was below $10/ounce and PanAm needed funds. It remains to be seen who got the "shaft."

    Having said that, I am concerned that Arcana was "ahead of schedule" in the Shafter development, but has now pushed "commercial production" to 2013. In the conference call they mentioned labor shortage and removing unqualified workers as a challenge. I am hoping to make a site tour to Shafter in a few weeks and maybe get a better understanding as to what is going on there. I expect to be able to report that in another article.

    PS. I considered the last Hecla call to be positive and mgt. seems pretty confident that they are not going to have more problems with the Lucky Friday.
    Aug 25, 2012. 10:27 PM | 1 Like Like |Link to Comment
  • Our Diversified Dividend Portfolio Update: Best Of The Best [View article]

    Thank you for reading the article.

    Of the three, I consider CIMT to be the most speculative. It does trade thin and so it is not a trader's stock. The following form 20-F has a lot of information about the company:

    I included CIMT for diversification because it has global exposure with 70% of revenue generated outside the US and Israel. Revenue and profits have been on a double-digit growth trajectory, but I like the fact that 50%+ of revenue comes from service and maintenance for installed products. This guarantees some recurring revenue because even in tough times, the manufacturers are not likely to change or eliminate the CAD systems that are incorporated into their manufacturing process.

    I think the company pays big dividends as a way to pay back management and owners of the company. I think management has been fighting for the approval to pay dividends because they own shares and there is more than $1.60 per share ($15MM) locked in cash. The company has high profit margins and reliable recurring revenue. CIMT received approval to pay out up to $10MM in dividends in the next 12 months, and it has more than $5MM in free cash flow annually from operations, so there is no doubt that it can handle the dividend payment of $.40 per year (10%), ..which amounts to less than $4MM. I would not be surprised to see a special dividend before the 12 months expire. I would expect management to seek further approval in following years and obviously they know the process.

    CIMT fills a spot in a diversified portfolio as a long-term holding. As you may have surmised, we look for under-the-radar companies, and if they appear to have good value and solid business prospects and management, we take some risk on the less "popular" stocks in their sector. We have owned TEF as another global play with a big dividend, but feel that because CIMT has limited focus and a simplicity to the business model, it is not only less susceptible to surprises, but also easier to monitor.

    Hope this helps.
    Jul 6, 2012. 07:26 PM | 1 Like Like |Link to Comment
  • Trans World Corporation: The Little Casino Stock That Could [View article]

    I do not think you need to worry about TWOC...if you had read the article you would know that the company is small and the stock trades very thin. Today's listing on the OTC BB is a positive step in the right direction to help remedy that. It will give the company more exposure, and many retail discount brokers restrict trading in pink sheet stocks, but will allow trading in OTC BB stocks. This stock continues to move forward.

    I do think you should be worried about the fact that LVS lost about 20% of its value in the last month or so. I also think that you should worry that it sliced through the 200-day moving average as if it did not exist, and now that has turned into overhead resistance. Today it dropped 3% off the 200-day average. LVS has the characteristics of a "falling knife," and its main growth driver is an economy that is questionable at best. The Shanghai and Hang Seng index have cratered, and these are considered leading indicators of the Chinese economy. We all hope for a "soft landing" for the sake of all markets, but stocks such as LVS will be affected more directly and quite negatively by the Chinese slowdown.

    Pumping LVS on this comment section will not create a safety net under the stock where only air exists. No one knows where the bottom is, and the book value is $12. It is curious that you mention the "free cash flow" as I think you should also be worried that the "levered free cash flow," the actual cash that goes in the bank after debt service, is about $700,000 annually for LVS, according to YAHOO. Tiny TWOC has three times that in levered fee cash flow, and MGM, about 1/7th the size of LVS, has more than $1.2 billion. I never understand why companies think interest expense should not be considered in earnings and cash flow calculations...well, yes I do.

    The philosophy of investing in the best of breed is sound, but is not without risk. People that jump on bandwagons also jump off pretty quickly. You may disagree with my philosophy of mixing in some small under-the-radar stocks that have obvious intrinsic is a free country and I get one-cent for each of your comments.

    TWOC is a real operation with good management and growing despite tough times. The China factor is just now being factored into the LVS stock price, The Euro factor is already figured into the TWOC price, so there is room for improvement. The main negative is the liquidity issue, but this is not a trading stock, and the company obviously is working on that by the OTC BB listing decision.

    Good Luck
    May 31, 2012. 02:03 AM | 1 Like Like |Link to Comment
  • The Final Nails In The Dot-Com Coffin: Facebook And Apple [View article]

    Interesting observation. I guess it could be said that the fact that the market has already made a $100 billion company out of Facebook may be signs of bubble mentality.

    May 20, 2012. 10:31 AM | 1 Like Like |Link to Comment
  • Why Nobody Is Talking About Social Security [View article]
    Thank you for the interesting comment.

    Actually, I included the Krugman quote thinking I needed to provide counter-balance to my own capitalist-oriented views.
    Apr 12, 2012. 12:23 PM | 1 Like Like |Link to Comment
  • Copper May Outshine Gold In 2012: 4 Stocks To Benefit [View article]
    Dear Rec

    I have no crystal ball. I can say that in researching the article I founfd many predictions of under-supply and no predictions of over-supply. I used the Barclay prediction as it was more conservative than most, and I don't think they are necessarily as biased towards metals as some others. One thing that I was not able to completely verify is general claims that the profit margin on copper mining is less than gold and silver, so many miners are preferring to cut back on the copper production areas and invest more in the precious metals. Although I could not exactly verify that common sense argument for reduced supply, I am inclined to believe that. Of course, some have no choice as the process to get the gold or silver produces the copper as a byproduct. It is very possible that in 2013 the supply-demand equation will correct itself, especially if your assessment of the EU situation plays out.
    Apr 2, 2012. 05:43 PM | 1 Like Like |Link to Comment