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Island_Dweller

Island_Dweller
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  • Transocean Smashes Estimates Once Again [View article]
    Appreciate the article. I share a similar sentiment as the author in that one shouldn't attempt to time a bottom here but instead take a disciplined approached to what the market gives you, in this case take a contrarian stance and buy selectively then average in. The move in oil of this magnitude unprecedented except for the huge spike followed by the huge plunge of '08/'09.

    RIG's punishment has been relentless, and some of it is definitely warranted, however I think the market overshot this company's prospects going forward, particularly when the words like 'default' and 'bankruptcy' are being thrown around like the company has never been down this road before.
    Mar 1, 2015. 05:37 AM | Likes Like |Link to Comment
  • Transocean - 3 Things Investors Need To Know [View article]
    In terms of actual substance for a company's ability to pay it's obligations, I regard downgrades and upgrades by Moody's and the others as empty concerns. Why? The rating oligopoly of S&P, Moody's, and Fitch gave triple A ratings to worthless mortgaged back securities, Enron, and Lehman's. These are facts. Their track record is as tarnished as an old trumpet from a garage sale.

    On top of this they have stronger political agendas rather than fiscal responsibilities. While this is my opinion, but one that's shared by many retail investors, it no less warrants dubious consideration when the timing of their downgrades serves to exacerbate rather than serve any meaningful warning.

    Further, how can a company with close to $3 billion in cash, generating $3 billion in operating cash, with less than $1 billion in debt repayments in the next 11 months possess any real risk for the short term? For the long term things would have to get much much worse and for an extended period of time for RIG to feel pressure to tap the $3 billion credit.

    So many "experts" who missed the 50% plunge in oil are now predicting $30 dollar oil when demand is expected to tickup and supply is going to feel the pressure from huge cutbacks in, what has become, unprofitable shale oil drilling and lower rig operations. This is exactly how the Saudis are playing their hand, waiting for the low price to put pressure on the shale oil boom, while keeping their production stable in order to maintain their market share, and watch America's boom turn into less competition. They fully expect the price to rise again, perhaps they won't admit that in order not to show their hand, but I'm willing to bet they expect a rebound, as do I.

    Admittedly, investing in oil rig companies is the riskiest place to make your bets, but if in fact there has been an overshot move to the downside in oil, these companies stand the most to benefit IMO. You have to go back more than 20 years to find RIG trading at these levels, and this isn't their first time to the rodeo of low oil prices. Once default swaps calm down, oil stabilizes back above $60, and the stock price moves above $20, the yelling of debt defaults and bankruptcy will turn into whimpers.
    Mar 1, 2015. 01:20 AM | 1 Like Like |Link to Comment
  • Transocean - 3 Things Investors Need To Know [View article]
    And? You follow debt ratings to make investment decisions because...?

    Moody's cut SNE's debt rating to junk back in January 2014, the stock traded at 15.78, where's SNE now?
    Feb 28, 2015. 07:18 PM | Likes Like |Link to Comment
  • Transocean Releases Its 4th Quarter And Full Year 2014 Results - Commentary [View article]
    @Saratgoa

    Appreciate your post.

    Completely agree with 13. People say "if" there's a black swan event, I think it's only a matter of time, more of a "when." The countries controlling an influential amount of the world's oil are unstable and that's being generous. How can analysts and investors who are bearish at this stage of the game consider Libya will always be a producer, or the Mid-East will stop being a center for terroristic activities.

    I think in order for oil to fall below $45 it will take a significant catalyst, like a world recession, or demand to deteriorate, and I just don't see these things happening. Certainly if oil were to fall from the recent rally to new lows, it's going to take more than analysts touting late calls on new bearish price targets.
    Feb 27, 2015. 07:53 PM | 1 Like Like |Link to Comment
  • Transocean - 3 Things Investors Need To Know [View article]
    @ SE

    Bottomline is no one knows when oil will rebound, but there's little doubt it will. Given the fact that RIG is trading at 1995 prices and has endured oil prices in the low 40s before, specifically during the subprime meltdown of '08, how much room does being short give you? Riding the stock down is one thing, but it's pretty late in the game now, the real meat and potatoes of the trade is gone, now all that's left is the scraps, which means smarter bets are being made on the pendulum swinging the other way.

    I'm not looking to chase a trend, but get in front of one.

    Waiting 2 years for a double is the kind of line I have no problem standing in.
    Feb 25, 2015. 10:38 PM | 1 Like Like |Link to Comment
  • Don't Buy Mr. Softy's Bonds, Or Its Stock For That Matter [View article]
    Saibus, welcome back from your long MSFT-article-writing hiatus. You we're wrong back when you flooded SA with negative articles about the stock, and MSFT was trading in the upper 20s, so pardon me if I look at your bias arguments with a helping of skepticism.
    Feb 24, 2015. 06:56 AM | 13 Likes Like |Link to Comment
  • Transocean Downgrade Incites Investors Into Mini Panic [View article]
    Couldn't resist on RIG's weakness, bought a position and have more ready to deploy should it fall further.

    I think the bad news priced in this stock has reached a crescendo. Oil prices plummeted, CEO left, dividend slashed, and analyst ratings are coming in late as usual. Signals are swinging to mixed rather than flat out bearish.

    $20 dollar oil Citi? $6 price target on RIG? How many standard deviations are we talking about here? Extremes are starting to take center stage spooking retail investors when in fact they should be viewed as opportunities.
    Feb 23, 2015. 11:11 AM | 9 Likes Like |Link to Comment
  • Rig count falls again, but rate of descent slows [View news story]
    What I keep in mind is that these moves in oil are of the bloom moon variety.
    If you try and target a bottom, good luck.

    Averaging into stocks that are heavily correlated to oil (drillers) at even these prices is taking advantage of the risk/reward ratio. If oil falls further average down with it. These prices per barrel are erratic and present some opportunities that don't come around very often as in once every 10-20 years.
    Feb 21, 2015. 05:20 AM | 2 Likes Like |Link to Comment
  • Twitter: Strong Growth Worth The Price Of Admission [View article]
    your* =)
    Feb 10, 2015. 06:38 PM | Likes Like |Link to Comment
  • Twitter: Strong Growth Worth The Price Of Admission [View article]
    One of the no-nonsense writers on this site. Thanks for you work BM.
    Feb 10, 2015. 06:14 PM | Likes Like |Link to Comment
  • Conn's Has Been Deemed A Perfect Short [View article]
    You're welcome. How's that trade working out for you?
    Feb 9, 2015. 09:35 PM | Likes Like |Link to Comment
  • Don't Get Tricked With Conn's Select Data [View article]
    I find it hard to believe that huge activist hedge funds would be tricked into investing 10s of millions of dollars in a failing (cooked the books) business. If anyone, they are the ones that have inside access to data we aren't privy to. Why would they dumps tons of money into a doomed company? I don't always follow the big boys into stocks, but there are additional reasons why I chose to go heavy weight into this stock.

    The story with the company has yet to play out and with so many shares short, and the business not contracting even with tighter lending practices, a return to growth is highly likely. Out in left field is the possibility of a buyout, taking the company private, or something else.

    On a side note, I am expecting margins to remain strong.

    The stock was one of the biggest dogs in 2014, but I have a feeling 2015 will be different, a lot different.
    Feb 9, 2015. 08:42 PM | 1 Like Like |Link to Comment
  • Conn's Has Been Deemed A Perfect Short [View article]
    North of 32% gain in two days. It's pretty clear that some who had a negative bias have decided to move on.

    You can plug in all the numbers and figures to support your thesis, what I look at for a stock like CONN is:

    1. How's the business model? Terminal? Recoverable? Is it reflective in the stock price?

    2. Short interest? What % of the float is it sitting at?

    3. Insiders are selling or buying, and how many shares do they own?

    4. Activist positions have increased or decreased?

    5. What has management done to correct the problem? Is it working?

    I'm not on this website to sound smart, but to gather data on both sides of the argument. I make a decision based on as much empirical evidence as I can find coupled with my interpretation of the market inefficiency. It's not glamorous. You can cherry pick data to support your argument, but you can do that for nearly any company. Fact of the matter is how much weight does your arguments have against arguments from the opposing side?

    I think, and still do even after the recent moves, that the company is doing the right thing and making the right moves.

    There's something brewing here, huge activist positions from not one but two activist hedge funds, management's willingness to explore strategic alternatives, huge short interest, very depressed stock price, enormous amount of negative sentiment in the company, and a stabilizing business model. It's a prefect storm for those who are short.
    Feb 7, 2015. 06:11 PM | Likes Like |Link to Comment
  • Last Chance To Dump Twitter [View article]
    No profit jet? How annoying!
    Feb 7, 2015. 05:44 PM | Likes Like |Link to Comment
  • Twitter +6.6%; Q4 ad growth strong, MAUs at 288M [View news story]
    I think the focus here is investors and the community at large are starting to shift their definitions of how to value this company. MAUs while a useful metric doesn't apply to TWTR the same way as FB. There are content originators and content consumers. Regarding tweets from this perspective, you see tweets in many places other than the website itself, with FB, you don't. I think both companies will do well.

    What I really like about the quarter is the monetization, and this I feel is why the stock is reacting positively. I think the initial drop AH was when investors saw the MAU growth and then the pop was when they saw the monetization numbers.

    •Twitter’s revenue per US user reached $4.41 in the quarter vs. $2.88 a year ago (up 53%) and from $3.33 in the September quarter (up 33% in three months)

    •Revenue per International user reached $0.68 vs. $0.34 a year ago (up 100%) and from $0.50 in the September quarter (up 37% in three months)
    Feb 5, 2015. 07:40 PM | 2 Likes Like |Link to Comment
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