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geodan85

geodan85
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  • The U.S. oil boom is bad news for the business of hauling crude oil across the oceans, and isn't likely to pick up any time soon. It means a poor outlook at best for the stocks in the sector, Jefferies says, which projects Frontline (FRO) will lose $2.33/share this year in earnings and $2.09 next; North American Tankers (NAT) also is expected to lose money this year and next. [View news story]
    Jefferies is just figuring this out know? Brilliant. Volumes to China to Asia will continue to grow. Also, petroleum product exports from the U.S. are growing as well (the U.S. has been a net exporter of products for two years), this was highlighted at the Shipping conference in NYC a few weeks ago. Tankers that can carry products are already benefiting.
    Apr 26 08:22 AM | Likes Like |Link to Comment
  • Peabody's Q1 Results And Coal Outlook [View article]
    BTU is too cheap at these levels, but the sector is essentially dead money. When the interest returns to this sector, BTU will rise quickly.

    I still question why management didn't issue additional equity in conjunction with the Macarthur coal acquisition (or even before when they were obviously contemplating growth strategies and the stock was riding high), but they seem focused on working down the debt and hopefully don't do an issue at these levels. This potential/belief of an equity issue may also be holding the shares down as well.
    Apr 24 11:09 AM | Likes Like |Link to Comment
  • Bank Of America: Why It's Going Higher [View article]
    I hope your forecasts are right, especially with the dividend. However, do not forget the Tarp A warrants adjust for the dividend, so BAC management may still go slow on increases since they seem intent on reducing the massive amount of shares outstanding.

    Also, litigation/settlements is a variable that can lay waste to any forecast, conservative or aggressive. Unfortunately, litigation costs/settlements are still an unknown issue for BAC and will likely hold the stock back.

    Finally, I believe one reason BAC is performing better this week is simply that they are now executing the stock buyback, which is governed by 10b-18 rules that stipulates blackout periods around earning announcements as well as other significant transactions such as mergers, acquisitions/divestitu... Other restrictions apply such as tick rules (need to buy on minus or zero plus ticks) and percentage of volume restrictions (no more than 25%).
    Apr 24 10:16 AM | Likes Like |Link to Comment
  • Not So Fast With The Countrywide Settlement [View article]
    TBV

    I agree with you, until the litigation piling on ends against the banks, the economy essentially goes no where since credit will be restricted. BofA should have obtained better terms from the government, if as exbofa states, a not so subtle threat was made. The real toxic stuff could have been put to a Maiden Lane type deal with the Fed as was done with AIG.

    The question that remains is if the litigation against the Countrywide toxic assets goes massively against BAC, can the Countrywide holding still be put into bankruptcy thereby protecting the rest of BAC. This question has never been properly answered and is open to legal questions/attacks and would bring even more litigation since there would be no value to seek restitution if Countrywide was put into bankruptcy at the subsidiary level with no legal claim on the rest of BAC. The legal issue is over the conveyance and value of asset transfers between the different entities. I am not even sure BAC's senior management knows how this would play out (likely why it hasn't occurred) if they attempted it since it would almost certainly be challenged in court.

    Regarding the other so called forced acquisition, Merrill has been integrated and banded on the BAC platform, so any spin off of Merrill to raise capital would be difficult (if needed), although not impossible. Merrill is back to being a very profitable machine and I doubt BAC wants to part with it and are glad that one of the two financial crisis acquisitions is paying off. However, the Countrywide losses dwarf any of the Merrill contributions and Countrywide still creates the uncertainty in forecasting anything regarding BAC's earning power moving forward and will continue to act as a brake on any meaningful share appreciation.
    Apr 22 07:10 PM | Likes Like |Link to Comment
  • A Few More Reasons To Be Skeptical About Bank Of America's Management [View article]
    From the article "With shares trading in the teens for the last four years, many investors believe that now is the time for a significant rebound."

    Most traders/investors in BAC would welcome the "teens" rather then the pre-teen years we are currently in for almost two years.

    The issue for BAC is as Tim Travis mentions above, litigation and legacy assets, favorable resolution and the stock becomes a teenager ready to graduate high school.
    Apr 22 12:48 PM | 2 Likes Like |Link to Comment
  • AT&T: Financial Shenanigans, Painful Truth Coming [View article]
    T Mobile would have been a help to growth, but it failed to gain DOJ approval (big misread by T's management) and it cost T billions in real cash in the penalty payment to the Germans which could have used part of that payment to fund the pension.

    Interesting read on the preferred treatment for funding the pension gap, sounds like government accounting, so maybe DOL will approve it since they can relate to these type of transactions.
    Apr 22 09:54 AM | 4 Likes Like |Link to Comment
  • It's the dreaded "impossible trinity." Commodities, stocks, and bonds are all giving conflicting signals on the global economy, says BAML's David Woo, and their resolution could be a source of a "major realignment" of prices. Commodities (DBC) signal slow down, stocks (VTI) price in strong consumer spending, and bonds have completely lost it - government paper (TLT) says run for the hills, while credit spreads (LQD, HYG, JNK) say things are rosy. [View news story]
    To address the "impossible trinity" comments. First government bonds (GSEs) are currently not a reflection of real market sentiment since the FED is distorting those markets directly with purchases.

    Second, Commodities are more interesting since real demand/supply issues are drivers. However, the Chinese play a major role in demand and it would be no surprise overblown fears over a severe slowing in their economy may be somewhat by design (does anyone real believe Chinese official data?) to enable opportune purchases at lower prices. On the supply side, producers are cutting production due to lower prices and slower demand (read Europe as a primary driver of slowing demand). However, these actions will stabilize prices and eventually allow for future rises since money is being printed globally faster than any commodity production can or will be ramped up when increased demand returns.

    Third, Stocks (Junk bonds as well since they tend to trade more with stock market sentiment) have and likely will continue to benefit from all the liquidity being produced by central banks. Profitability has been good due to lower financing costs and cost controls (read layoffs for most industries) which has allowed the market to trade higher on valuation which has been inline with historical averages. The key will be top line growth going forward since most of the cost side gains have been realized. If topline growth disappoints, the slide can continue, but likely will be limited since when you run to cash and realize it still yields next to nothing it is hard to justify staying there too long, especially if you are being paid to manage money (institutions will likely be buyers on further downdrafts).

    Finally, the real test will come when QEs stop globally, although they likely won't stop until Europe is able to pull their weight. My guess is when QEs are wound down the inflation begins since the money that has been put into the banking system will really start to be released and then it makes sense to be long some commodities, stocks and short bonds.
    Apr 19 04:49 PM | Likes Like |Link to Comment
  • Peabody Ignites Coal Trade [View article]
    As natgas rises coal becomes more attractive and switching will continue. BTU's international comments were very interesting as well with growth both in China and India. BTU also generates very decent cash and continues to work down debt associated with the Macarthur Coal acquisition, which incurred more debt when AcelorMittal backed out on the joint purchase with Peabody.

    BTU is a great long term buy and in my opinion will double (and likely higher) over the next few years. The current U.S. leadership will not be around forever (thankfully) and their incompetence on energy policy will fade. Also, has anyone noticed that Germany is burning more coal as well as they attempt to move away from nuclear.

    Patience is required with BTU, but ultimately I see these shares much higher when the realization that a cheap abundant stable supply for the power industry isn't going away anytime soon.
    Apr 18 07:04 PM | 2 Likes Like |Link to Comment
  • Bank Of America: With No Dividend Hike Shareholders Are Fleeing [View article]
    Definitely not. For a large cap like BAC they have volume restrictions (25%), tick rules for buying (minus or zero plus), have to conclude buying by 3:50 pm (not to influence close) and blackout periods around earnings release as well as other meaningful news (acquisitions/mergers). Also, they can negotiate private market transactions as well. I know they wouldn't be working any buyback in the week (or two) before the earnings release, but can't remember if they are allowed back in right on the day of the release. I used to work these type of orders for corporate clients when I traded for a major investment bank (currently retired and wish my memory was as good as it used to be).
    Apr 17 02:46 PM | 2 Likes Like |Link to Comment
  • Bank Of America: With No Dividend Hike Shareholders Are Fleeing [View article]
    BAC is now below the level (prior to the announced buybacks of preferred and common shares with no dividend increase) and long term investors in the stock (if they didn't sell any shares) are no longer benefitting from those post stress test moves (at least in the short term). Any dividend increase would have been a better way to reward investors (as I outlined in previous comments) rather than traders.

    Also, I don't believe BAC can be buying their stock back today under 10b-18 rules which restricts buybacks to volume restrictions, minus or zero plus ticks and blackout periods around earnings announcements. Therefore, longer term investors don't benefit from the company buying at deeper discounts to book on a weak trading day as today (of course further weakness during non blackouts periods, in theory could further benefit value if it occurs and they are buying back stock).
    Apr 17 12:38 PM | Likes Like |Link to Comment
  • Nokia Becoming More Ambitious [View article]
    It is surprising NOK is still below $4.00 and not moving back toward $5.00 given what was just pointed out concerning the sooner then expected market share increase. I guess the brand name investment bank security analysts are not as attentive to details as the author, but it seems they will likely acknowledge this when the earnings release / conference call highlights are announced next week (I guess they will wake up and do their job then) and likely recommend a move back into the stock AFTER a decent move higher.

    Good work by Jacob Steinberg in noticing the fact they are now more specific regarding a timeline.
    Apr 12 02:46 PM | 3 Likes Like |Link to Comment
  • Most U.S. consumers remain either unfamiliar with or unenthusiastic about Nokia (NOK) and BlackBerry's (BBRY) latest hardware, according to an MKM survey of 1,500 people. While 51% of respondents owned a smartphone, only 6% plan to buy a BlackBerry in the next 12 months, and just 1% a Nokia phone. Moreover, in spite of the Z10 and Lumia 920/820 launches, 63% of respondents had no idea when BB10 would launch in the U.S., and 61% were unaware WP8 (MSFT) phones are available. BlackBerry is counting on a fresh marketing push to raise its U.S. profile. [View news story]
    I don't believe the issue is to position the phone as a gaming platform (smartphones are that to many young people), but is the slow roll out of apps (gaming or anything else) for WP8 that is slowing sales and maybe why marketing is not as aggressive as it should be.
    Apr 11 09:16 AM | Likes Like |Link to Comment
  • Bank Of America First Quarter Earnings Preview [View article]
    I agree with some comments above how hard it is to evaluate BAC. With that in mind, check out the annual report pages 207- 215 for issues I believe still holding this stock back and more specifically reps and warranties. The potential claims/liabilities went up last year, but the provision went down therefore the potential for future disappointment to earnings (and earnings potential) exists and will likely keep the stock in the current range until these claims/litigation are ultimately resolved.

    One other point, I don't agree with the author's comments about large losses stacking up from Merrill Lynch (Countrywide definitely is a major drag on the bank). Merrill Lynch is a cash generating machine (John Thain cleaned up a lot of O'Neal's mess prior to the BAC acquisition) and the BAC purchase (with all stock) was a good one, although some further mortgage CDOs needed to be written off immediately after closing the deal. This was discovered after the fact when BAC tried to back out of the deal and was pretty much told not to by U.S. Treasury and the Fed (BAC and all major money center banks are in essence operating subsidiaries of the Fed and likely to remain so). However, since then Merrill contributed significantly to the holding companies earnings in the subsequent years after the acquisition and continues to be a positive contributor to cash flow and earnings (likely why Tom Montag is compensated higher then Brian Moynihan).

    Apr 11 08:45 AM | Likes Like |Link to Comment
  • Most U.S. consumers remain either unfamiliar with or unenthusiastic about Nokia (NOK) and BlackBerry's (BBRY) latest hardware, according to an MKM survey of 1,500 people. While 51% of respondents owned a smartphone, only 6% plan to buy a BlackBerry in the next 12 months, and just 1% a Nokia phone. Moreover, in spite of the Z10 and Lumia 920/820 launches, 63% of respondents had no idea when BB10 would launch in the U.S., and 61% were unaware WP8 (MSFT) phones are available. BlackBerry is counting on a fresh marketing push to raise its U.S. profile. [View news story]
    Ty, yes Temple Run, I just asked him. I guess it is popular, and that is what WP8 needs to do to get better traction in the younger market..
    Apr 10 03:48 PM | Likes Like |Link to Comment
  • Most U.S. consumers remain either unfamiliar with or unenthusiastic about Nokia (NOK) and BlackBerry's (BBRY) latest hardware, according to an MKM survey of 1,500 people. While 51% of respondents owned a smartphone, only 6% plan to buy a BlackBerry in the next 12 months, and just 1% a Nokia phone. Moreover, in spite of the Z10 and Lumia 920/820 launches, 63% of respondents had no idea when BB10 would launch in the U.S., and 61% were unaware WP8 (MSFT) phones are available. BlackBerry is counting on a fresh marketing push to raise its U.S. profile. [View news story]
    WP8 needs more advertising by MSFT and NOK to raise awareness. However, they need more apps before they aggressively market.

    Case in point, I have three sons (triplets) in high school. Last year we upgraded to smartphones, one got the I phone, one the galaxy and one the Nokia 920. My son with the Nokia 920 recently told me a game app (can't remember the name of the game) became available on his WP8 920 Nokia phone and he was very happy.

    The problem for WP8 phones is still the lack of apps/games for this younger target market. He tells me hardly anyone has Nokia WP8 phones in school (or any other manufacturers of WP8) with I phones and android phones dominating. Until popular apps/games become more available it seems marketing and increasing operating system awareness will be similar to pushing on a string for certain segments of the market.
    Apr 9 05:09 PM | 2 Likes Like |Link to Comment
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