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geodan85

geodan85
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  • Nordic American Tankers Is A Sucker's Bet [View article]
    While there are no guarantees the company will be sold, why would the CEO sell his management company for mostly shares rather than all cash? Hansson is in position to best access the value and potential value for this company. No one knows the future for spot prices and volumes (as one post correctly states) in the suezmax tanker market, but you would think he is in a better position than most to gauge the potential and more importantly back up the belief with an equity stake rather than sell the management company for 100% cash.

    I am a retired institutional trader for a major investment bank (actually traded NAT for the bank for while, although mostly spent my career there trading Europe which included Norway) and always try to determine multiple reasons for transactions by companies other than the stated ones. Furthermore, I have a very good friend who is a retired investment banker who spent his career working on many deals in Norway and Russia and when I mentioned this transaction by NAT, it was his observation that he has seen these type of transactions prior to companies being sold. I also interpret Hansson's statement after the deal that he plans to be CEO for many years to come as twofold. First, he likely thought about cashing out his stake, but believes NAT is worth more than current share price (hence the equity stake increase). Second, the statement was to stop speculation (before it happened) he was bailing out of a sinking ship (sorry couldn't resist) to prevent a potential sell off.

    Finally, when I look at NAT's full year numbers I make the following calculations for cash (all in millions and numbers rounded): Rev $92-Opexp $64- Gaexp $15- Netintexp $5.5 +Noncashexp $7.0-Divpaid$63.5=($49.0) for the year. Certainly not great numbers, but if adjusted for the lower dividend payment going forward and all other numbers stay unchanged (of course unlikely with longs looking for improvement this year and next as is Hansson, shorts further industry weakness) the cash burn drops to ($19.5) which hardly puts the company in dire straits (again,sorry for pun).
    Feb 13 10:46 AM | 5 Likes Like |Link to Comment
  • Nordic American Tankers Is A Sucker's Bet [View article]
    The so called dividend has been classified a return of capital the last couple of years. The company seems to be run as a limited partnership rather than a traditional corporation regarding payouts/distributions. Obviously, tanker rates have hurt them and every other tanker company that operates in the spot market. Fleet expansion only works if spot rates rise and shipping volumes increase.

    The recent buyout of their management company (owned by the CEO and his family) was predominantly done with stock (price at ~$8.90), giving them ~5% of the company. Transactions like these can proceed sales of the entire company and a profitable way for the current CEO/Family to cash out. While NAT was as the author stated a "suckers bet" (chasing yield usually is), I am not sure it is now, given the potential for a sale of the entire company in the next few years.
    Feb 12 02:57 PM | 1 Like Like |Link to Comment
  • The Good And The Bad From Nokia's Earnings [View article]
    The article you linked highlights last year's cash flow, which the article above points out was negative and a reason for the dividend cut (rating agencies are always slow to react, so pay little attention to them). It is old news and Nokia will likely improve cash flow this year as their turn around continues. All stocks trade on future prospects, not past so discount last year's performance. Also, the quoting of SocGen's analyst is probably self serving for that bank, since they are a very large derivative player (too large and were bailed out via the back door when AIG was rescued) and probably long Nokia's CDS and getting hammered since Nokia's bonds have soared since last spring.

    Finally, reverse stock split is a sign of failure by management and is admitting they can't get the stock to rise any other way. Citigroup had way to many shares outstanding (close to 30bil) after the government bailout and had little choice. If you adjust Citi's stock price for the reverse split it is ~$4.20, not exactly close to pre crisis levels.
    Jan 29 11:07 AM | 2 Likes Like |Link to Comment
  • Does Nokia Really Need To Sell 12 Million Lumias To Break Even? [View article]
    Sounds like the Barclay's analyst is a good contrary indicator. Ironically, analysts like this provide a service, although not in the way they would think.
    Jan 16 01:57 PM | 6 Likes Like |Link to Comment
  • Bank Of America: More Trouble On The Way? [View article]
    As mentioned in a previous comment, the BAC rally was mainly driven by improving real estate. The Countrywide acquisition was terrible and as mentioned cost BAC plenty. It has been written (last year) that BAC allocated ~$40bil to resolve the Countrywide mess. If claims/losses are to vastly exceed that number, Countrywide is still a separate subsidiary and could be put into bankruptcy to protect the rest of the bank (still some debate on whether this is a real option or not). However, since it seems that this isn't going to happen, BAC must believe the worst is behind for this operation and value exists going forward with the Countrywide platform. The Merrill Lynch acquisition (while expensive) has been fully integrated into BAC's platform and has been profitable (helped provide most of BAC's earnings in 09 and 10), although some still see a chance some sort of monetization of Merrill (tracking stock?) could occur if needed.

    Finally, it seems that if we are ever to get a real recovery, the major banks need to get back to what they are supposed to do, make loans to businesses and individuals. The longer the litigation drags on in this sector, the longer a real recovery is delayed and we all pay the price.
    Jan 14 09:32 AM | 4 Likes Like |Link to Comment
  • Nokia: Take Home Lessons From The Latest Guidance [View article]
    Yesterday's selloff on large volume indicates, in my opinion, that there are still nervous longs that don't believe fully in the turnaround. It is interesting that it happened a day before a pre-announcement, which may indicate some investment houses heard that a pre-announcement on the quarter was coming (Europe tends to be a leaky ship at times with information), and obviously guessed wrong as to the contents.

    Given the positive release, I expect NOK will trend higher into the actual detailed earnings report later this month as buy the anticipation sell the news mentality takes hold. A move toward $5.00 is possible given the demand is growing (284mil shares traded so far today with stock near the day high). It is a fact big buy side institutional investors wait to see confirmation a company has regained profitability (fiduciary's responsibility and job security main drivers), before buying back sizeable positions which today's volume likely indicates (remember it isn't their money and they don't mind missing the move off the lows as long as it was a true bottom).

    Finally, Nokia's bonds are back near par after trading in the low to mid $70s last spring, further indication confidence in Nokia has returned by large institutions.
    Jan 10 03:54 PM | 3 Likes Like |Link to Comment
  • Bank of America (BAC) settles for about $10.3B with Fannie Mae over repurchase claims on $1.4T of mortgages. The bank will pay Fannie $3.6B in cash and repurchase for $6.75B certain mortgages. BofA expects to take a $2.7B charge in Q4. Shares +2.4% premarket. (PR[View news story]
    BAC now can sell the $6.75bil mortgages they bought from FannieMae to the Fed. I would not be surprised if other money center banks did similar purchases with the federal agencies, since $40.0bil a month is still being bought by the Fed.
    Jan 7 09:13 AM | Likes Like |Link to Comment
  • Will 2013 Be The Year Of Nokia? [View article]
    Nokia's smart phone problems of the last two years are fading and will soon be forgotten by traders/investors since stock analysis is forward looking, not backward and the trend is up.

    The shares will be above $5.00 in Q1, providing no major market selloff occurs when the U.S. debt ceiling/spending cut circus starts in Washington in the coming weeks. The institutional selling is long over and they will likely add shares back this year if the sales figures of the Lumia line are trending higher when reported as well as channel checks.

    Finally, it is possible that Nokia will maintain a dividend payment this spring (usually announced in Q1), which is not expected by many analysts and this may trigger a gap move higher, hence my belief $5.00 is achievable early this year.
    Jan 3 04:46 PM | 4 Likes Like |Link to Comment
  • Nokia Is A Win-Win for Investors [View article]
    "the profit generated at worst would be €255 billion, at best € 511 billion."

    The above mentioned numbers exceed the market cap of almost all publicly traded companies and are usually talked about when the U.S. government is spending and taxing. I think you need to re-visit your numbers.
    Dec 14 09:38 AM | 4 Likes Like |Link to Comment
  • Analysts Start Attacking Nokia Again [View article]
    Most sell side analysts are not very good stock pickers and certainly not traders (their primary focus is to help pitch investment banking deals/services). Also, to support your observation that bankrupcty is off the table, Nokia's bonds are now trading in the $90s up from the $70s six months ago.

    Nokia is consolidating the recent move in a trading band of ~$3.50-$3.90. I would be surprised if the stock trades below $3.00 (maybe a major market selloff would get it there) given that sales of the Lumia WP8 phones are going well and more carriers are adding these phones. I wouldn't be surprised if the price gets a $4.00 handle before yearend and back over the $5.00 level next year when sales data likely confirms what many find hard to believe, that the WP8 phones will be a growing part of the smartphone mix going forward.
    Dec 11 04:57 PM | 10 Likes Like |Link to Comment
  • Nokia: Is The Lumia 920 Selling Well, Or Encountering Supply Issues? [View article]
    I went into a new Microsoft store over the weekend. Very good crowds and I asked a rep if they had the Nokia 920 lumia in stock and was told they did. Also, he mentioned three people bought the 920 earlier and had switched form their IPhones.

    I believe this phone is selling well and will continue to gain traction and sales will increase. The amount of advertising for WP8 by AT&T, T Mobile, Verizon, HTC, Nokia is huge (the advertising on the lumia 900 last spring was almost non-existent) and on multiple cable channels as well as the networks' primetime broadcasts of the NFL and other major sports broadcasts.

    The marketing behind WP8 will help increase market share in smartphones for the Windows operating system, I don't see how this can't help Nokia regain their footing in this growing segment of the total mobile phone market.
    Dec 4 03:17 PM | 6 Likes Like |Link to Comment
  • Initial reports of sellouts for Nokia's (NOK) Windows Phone 8 Lumia hardware are "misleading," thinks Deutsche's Kai Korschelt, since they have much to do with supply issues. "Anecdotal evidence suggests that many stores have only received 5-20 devices/store with wider carrier distribution delayed in some countries," Korschelt writes, while speculating 28nm chip shortages are to blame. He also claims U.K. retail survey and Google search interest data for the Lumia line is underwhelming. (Raymond James[View news story]
    Goldman reminds me of the old S.G. Warburg in London they always seemed to have their analysts recommend or pan stocks that suited their trading positions.

    Look at Goldman's recent downgrade of CLF, it seems they are very late to the sell recommendation, but are attempting to drive the stock down another 10% to establish a very attractive entry point for themselves if they get any institutions to dump stock.
    Nov 30 01:40 PM | 1 Like Like |Link to Comment
  • Silver miners (SIL -0.6%) are struggling with low prices, as evidenced by Q3 results from Hecla Mining (HL -4.8%) and Coeur d'Alene (CDE -18.8%), where prices were down 23% and 5.5% Y/Y respectively; a 14% drop was blamed for falling revenues and profits at Silver Wheaton (SLW -0.5%). Pan American Silver (PAAS -2.3%) is scheduled to report Thursday. [View news story]
    Hecla silver production +19% to 1.6mil ozs, with costs at $3.52 per oz and Lucky Friday mine still out with return expected Q1 next year. Somehow this doesn't look like a struggle. Stock down with a so called earning miss, but revenues beat and production will bounce back next year with return of Lucky Friday mine. HL no debt pays small divi based on silver price, today looks like a buying opportunity.
    Nov 6 12:17 PM | Likes Like |Link to Comment
  • Shh! Analysts Are Quietly Upgrading Nokia [View article]
    NOK volume fairly light (avg 3 month vol ~57mil) and lower price likely residual selling from arbs setting up spread against convertible bond issue this week. Also, the fact that they issued eur 750mil in convertible bonds shows they access to capital and not heading to a BK anytime soon, hence the change in sentiment from analysts.
    Oct 26 04:43 PM | 1 Like Like |Link to Comment
  • Is Alcoa's Report Bullish Or Bearish? [View article]
    It seems like most of the negative scenario is priced into AA. The current CEO Klaus Kleinfeld (was a former CEO of Siemens) is cutting costs and focusing on growth areas (downstream and midstream) and recognizes the slower global growth environment.

    I believe the current price presents more upside than downside (decent risk/reward metrics) for longer term investors, although it doesn't mean you won't get the opportunity to buy AA cheaper if the overall market corrects over the next six months to a year.
    Oct 10 11:19 AM | Likes Like |Link to Comment
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