Tyler Peglow

Tyler Peglow
Contributor since: 2010
Yes those are good points. Thx.
Marc--any thoughts thoughts on whether the Euro will hit parity with the dollar in late 2015 or sometime in 2016.
To make that less of a rudimentary question what factors or events heading into the fall would make you more bullish and/or bearish Euro relative. With relatively stagnant economies and the unwillingness of the players involved to right size peripheral European debt how can they meaningfully afford to raise interest rates (of course it seems the whole world is in that same conundrum).
Also--is the EUR a funding currency a little bit now like the Yen? I've noticed some EUR strength seemingly out of nowhere on days when the equity markets have come under a little pressure. Maybe just a coincidence?
I am referring to the unemployment rate. I understand the whole inflation argument but then why hasn't that worked out for Japan? I know the whole "Japan is different" argument but 0% rates for years hasn't led to a whole lot of inflation over there.
Do you think FED Yellen and Co. will pay attention to this whole plea of the IMF to not raise rates until early 2016 or will stay their "data dependent" course IMF be damned?
Of course their "data points" seem to move around a little bit.
Marc---out of curiosity if you were Janet Yellen would you hike rates now? In reading your book and going back through history when I look at periods of strong dollar it doesn't really equate at all to a weak economy (in some cases the opposite).
Is the FED worried about equity valuations that much? Why are they so afraid of a strong dollar? Emerging markets??
I realize they keep saying they are waiting for a pick up in the labor market but they keep moving the carrot lower the past couple years as the economy has generally trended upwards towards their "previous" targets or bullet points to hike rates.
Couldn't agree more DanielJRoche... Marc what is your take on an RBA rate cut in May? Do you think rising home prices in Australia could be a reason the RBA doesn't cut in May? With the Chinese economy and mining industry in particular (Iron Ore etc.) having a big slowdown I remain bearish the Aussie dollar. Just trying to gauge what I need to be on the lookout for in terms of data in which the RBA would keep rates where they are or the Aussie dollar would strengthen (I know the monetary policy committee feels they have an overvalued exchange rate).
Ron great analysis I appreciate the information. Question I have: BWP's yield is well below it's peers but it is trading cheaper on a DCF multiple (15.6 vs. 11.6). Don't you think these metrics will converge once BWP reaps the proceeds of their capex projects in the next 2-3 years?
Secondly--in 2-3 years when BWP starts reaping whatever benefits come of the recent investments don't you think BWP could potentially trade at a premium to the peer group--won't the peer group at some point in time need to re-invest (cut dividends to fund growth) etc. like BWP is doing now? Obviously I realize a lot of that depends on where your current pipelines are and what fields are gushers in the future.
Marc what is your basis for JPY97 at the end of Q3? I can agree the Yen can stay range bound for some time but simply knowing all the statistics out there (debt to GDP, income to debt ratios etc.) for the Japanese government is there a plausible scenario whereby Japan could actually come out of this WITHOUT some sort of currency/gov't bond crisis? Logically I don't see how any scenario plays out whereby they could avoid some sort of fate like that long term?
Kathy,
What is the timeframe on your analysis--you mention the USD/JPY to hit 103 and likely 105 but 110 seems to be a stretch. Are you predicting this price movement in the next 3, 6, 12 months etc.?
Thanks for the info.
No doubt it is a fraud. There will be no repurcussions for the Chinese directors obviously. Mike Toups undoubtedly belongs in jail (chance he gets there 1 in 100). Industry is littered with snake oil salesman but if you're playing the game you have to know that. Unfortunately I overlooked red flags and vague answers in CC's and put faith in the acqusition of the 3rd fuel storage facility and the SAIC/SAC reconciliation--both faked--but both faked with Toups (American) knowledge undoubtedly.
1/3 of your net worth--hahaha--that's a bullish bet--appreciate your articles. I remember reading one of your bullish AAPL articles last year when the stock was around $340 or so--your net worth must have had a heck of a bounce the past year. Thanks for the piece and research tidbit.
Cameron--just out of curiousity do you solely trade penny stocks?
I like the trade. Possible way to make money while AAPL consolidates. Thanks for sharing!
Good article, respect your opinion but if you want to make money in the market--trade PRICE not OPINION... Price at 52 wk highs with hedge funds underperforming SPY says we go HIGHER in the short term.
To be honest whether they hedge their inventory or not is really a moot point until this company gets valued for what it is--good or bad... That should be the only question right now trying to be answered by investors--which this article is trying...
That and the handling thus far of the 3rd acqusition has been fishy to say the least when taking into account U.S. investors nerves for Chinese small caps.... If indeed it goes through and it's legit I think it's been totally mishandled by management and investor relations...
Great article, Great work! The problem for institutions is that even if they believed this article and the business of LPH the float is so small and avg. shares traded daily so miniscule they couldn't build a meaningful position in LPH....
It's like working in institutional RE... If a deal comes around that is worth $400k that a big fund could buy for $100k--they could make a massive IRR that would be very meaningful to a little guy--but in a billion dollar organization nobody cares because nominal profits are so small...
Also not sure why bigger players wouldn't be looking at something like LPH to take it to Hong Kong where investors are more comfortable with China....
Excellent insight Camden--didn't look at it that way--thanks... Another big problem with these numbers is I assume Aapl releases i5 in the 3rd quarter. If we run into the same problem we had last year where consumers wait for the i5 until q4 q3 will probably be to weak to get apple to $64 eps in 2012... I think they need at least 1.5 quarters of i5 to get there...
I'm not short but I see Joe's point--if LPH truly is "clean" or as clean as a Chinese company can be this has to be one of the poorest managed jobs in terms of shareholder expectations. How many more promises can CFO Toups "make and break"--absolutely pitiful performance. Of course the flipside to that argument is there is something going on behind the scenes here we (miniority investors) aren't aware about that could possibly explain why the CFO continually falls short?
I'm not an AAPL bull from this valuation but I think well said... Difficult to compare AAPL to precious metals in terms of sell-offs etc. Remember AAPL 1Q earnings are coming up--catalyst to drive stock price up on speculation whether or not earnings are any good.
Dude you're just trying to milk the Seeking Alpha system with this article---I hope Seeking Alpha does not pay you for this because clearly you wrote this just to try and see how many clicks you could get on your page to make $$$...
Whatever--it's kind of a clever way to make some $$$---I'll give you some props for that...
Jason are you worried at all the iphone 5 announcement will be a buy the rumor sell the news event.... I'm a bull heading into 3Q ER but worried that the announcement of the 5 which everybody already knows is coming might be a slight sell-off after Oct. 4th before a run again into the ER??
AMZN and NFLX benefit greatly over Apple by having much smaller market caps--i.e. funds don't have nearly as much money allocated to AMZN and NFLX as they do Apple whose market cap now stands something like 2 to 3% of the entire outstanding market cap of the S&P 500. Consequently when one looks at future prospects for companies like NFLX and AMZN investors (the big funds) may see a much broader audience and growth prospects (rational or irrational) than when they look at Apple (with a $320 billion market cap) and see that they are generating over $100 billion in sales annually (or $14.77 in revenue per capita of the world population which is made more unbelievable by the fact that Apple only makes high-end LUXURY GOODs that logically only the wealthest 5% or so of the worlds population can really afford to buy). Those numbers are insane when you put them into perspective but somehow Apple keeps KILLING it quarter after quarter but Wall Street doesn't want to buy a company with a half trillion dollar valuation period no matter how fast they are growing earnings... Once Apple has a major product launch in the future that misses--i.e. a new iphone or new ipad with sales that dissapoint--look out below--even though from a textbook valuation perspective it will be completely irrational--it won't matter.
Not to pick on Goldman but they do have a price target on AAPL of $470 yet sold 65 million shares or so in Q1 at prices ranging from $320-$350... Those are the type of players that control the stock price and if they want to sell into a quarter where AAPL reports 100% YOY EPS growth then the stock price will not react to fundamentals plain and simple because their aren't big enough "Boys" anymore to take those positions out and lead the stock higher...
The market can stay wrong longer than you (retail trader) can stay solvent...
Great article, nice call on earnings last quarter as always-wall street should give up on analyzing apple and leave it to you and tello.
Tough to guess where the stock price will end up but your fundamental estimates are excellent...
haha, ok phinance101--but if you read the article I question Longwei the whole time--I'm not recommending it saying buy, buy, buy, just giving thoughts on why I'm long--I was long before all these Chinese names went down the trash--put too much faith in the exchanges clearly.
A poor start in the real world? Where do I go from here? Are you serious, haha, it's like you're trying to pick a fight for no reason? It's amusing yet ridiculous...
Yes I did get research I should have done from the git-go by writing the article and yes that was a reason for writing the article, so what, does that make me lazy? smart? How about a combination of both?
What's your story--you sound bitter?
And just because Business Economics Analyst has found shady dealings regarding LPH (of which I knew about the stock swapping) doesn't prove that LPH is a complete fraud here... Sure China's business practices have a long ways to go to catch up to ours but that doesn't mean LPH simply has no operation and doesn't exist? Albeit it might not be the operation the financials are reporting and hopefully somebody will end up paying for that (not just shareholders). It will be interesting to see what happens to all these companies and the players involved via stock promoters, IRs, attorneys, bankers involved--they should go to jail.
How about you head that task force up? You sound like you would be good for the job, haha...
Yes Phinance 101, I saw the news on CBEH... It's insane, I know... Have you shorted the entire space? Once the entire space goes down will you take us all on a trip around the world in private jets and in 5 star luxury with your profits?? haha, I'm kidding but partially serious--I'd take a free trip around the world in 5 star luxury... Just sayin keep me in mind...
Wrote the article to see if there more knowledgeable people about the company who have done more due diligence. I appreciate your thoughts Business Economics Analyst. I was hoping you would share what you found when you looked into LPH long ago from your post:
"haven't looked at LPH in a long time, but when I looked they seemed to be an obvious fraud, although I didn't take the time to ascertain that for sure."
How to did you come to the conclusion that they were an obvious fraud, what evidence did you see? I am just wondering, I'm trying to find more information. I'm going to order summary reports to look at the SAIC figures they've filed.
You may by confused by my writing because I'm still "long" Longwei yet questioning their numbers. I'm almost never a stock pumper--if I take long positions I'm very skeptical trying to look for every reason on why I might be wrong and if I take short positions vice-versa...
I mean to say accusations of fraud... With some of those companies proven to have been reporting fraudulent numbers in some way.
I remain invested in LPH because of the simple business model I think it would be very hard to "fool" the numbers.
LPH reports that 5 refiners represent nearly 80% of all their supply--which I think would be very easy to audit. LPH's profit margins aren't out of whack for the industry and the $230 million in net assets reported on the balance sheet should be very easy to verify for auditors as well.
That being said when you hint to the market you're looking to raise more equity capital (while you have no debt) from Joe Schmo Average Retail US Investor in a sector mired in fraud while you're trading at a $200 million dollar market cap claiming 230 million in net assets and that revenue is projected to be $925 million in FY 2012--something is not exactly right with that picture?
Would you disagree?
John,
Waldo is not saying LPH is necessarily doomed, he is saying their are shorts out there finding legitimate frauds that have made a lot of money and they are going to keep with their strategy and keep pounding the sector--which they should because I still believe there are frauds that still exist out there. Until management can step up and prove that LPH is a legitimate company that protects shareholder interests I think even if this company is legitimate its stock will be doomed for some time.
Plain and simple if the cash that LPH reports is being generated quarterly is legit and what is reported on the balance sheet is legit, from these levels LPH is not "doomed". The problem is that as of yet managment has done nothing to rise above the fraudulent accusations surrounding Small Cap China... If this were my company and I was doing everything by the book and my stock was getting thrashed because of fradulent claims surrounding my industry you can bet I'd be at the forefront insuring investors my accounting was legititmate as well as taking steps to strengthen corporate governance and internal controls well beyond required levels (as well as using cash generated internally and financing my current assets) to rectify the stock price to a more proper valuation.
One of the last things I would do is to let investors buy into MY company at half price or less by selling more equity at such depressed prices in an environment when the Chinese small cap sector is in such turmoil (that is what fraudulent ponzi scheme companies do)--ie. like when LPH hinted to the market they were looking to raise more equity capital with that S-3 filing...
Not to mention the fact that right now LPH's strategy is to "try" and sell LPH to the average US Joe Schmo investor (there is very little institutional interest in this stock) who shouldn't trust ANYTHING right now coming out of small cap China with their hard earned capital!
If Waldo and his gang find fraud in LPH and shorts it for profit--good for them--they were smarter than us!
If you want facts John--ask mangement, unfortunately I don't think you'll get much of anywhere because the two Directors don't speak English and Toups is "CFO" of quite a few different companies.
ALL, below is a comment I received from Waldo Mushman--I know some of you longs were not to fond of him before, hopefully with some of these RTO's has proven frauds you're now listening... Just thought I would share a quick line from him...
Waldo, I respect your Chinese RTO track record... Do you have any thoughts or done any due diligence on Longwei Petroleum (LPH). I would love to hear your thoughts.
Also where do you go to get the SAIC filings? I assume they are free in English somewhere on the internet?... Would also love to know what companies you're looking at with suspect financials that might be the next CCME to blow up?

Waldo Mushman March 23 at 4:32pm...
The SAICs are Chinese documents and are written and filed in Chinese. Any of the credit bureaus can get you copies but a simple credit report will be in English and contain summary numbers extracted from the SAICs. I use Inter-Credit as my vendor for most of the documents I get from China.
I am only familiar in passing with Longwei but it is considered an attractive short by several people I respect. At this stage of the game I expect every RTO traded in the US to fall off a cliff. There have been such a large number of successful attacks that you are now looking at 7 or 8 big winners with a taste of blood in their mouths. They aren't taking the money and going home. If your favorite didn't get selected this week, just wait for next week. They are all doomed.
Yes, the article was thrown together fairly quickly but my net income figures didn't come from GAAP net income... I strip out stupid variables the bean counters account for quarter to quarter that are non-cash and don't have much to do with the business long term. I'll get back to you on this one as I'm pretty sure I got those figures from LPH's 10-K that reported non-GAAP figures that stripped out stupid variables.
Interesting you don't think companies can finance their current assets?
I just think it's too high for many institutions to feel comfortable with, I would feel better if it was something like 50%... But then again will the directors sell blocks of stock to "unkown" third parties for a $1 so their cronies can turn around and sell it for $2.40 in the open market and siphon off money from this possible great ponzi scheme?? haha, maybe??