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  • Here's The Alarming Table Kinder Morgan Doesn't Want You To See [View article]
    I want to express my appreciation for knocking KMI down to 31+- where it was too stupid cheap not to buy unless one believed everything HE alleged. Has been, and will continue to be, a solid investment.
    Aug 12 02:20 PM | 5 Likes Like |Link to Comment
  • Greystone Logistics: An Undervalued Stock With Considerable Optionality [View article]
    I complement you on the thoroughness of your analysis. I purchased a 0.5% portfolio position last spring which is inching close to 1% and that purchase was largely driven by my analysis of Wayne Kruger's financial commitment and proven management skills. While there is a good deal of risk with this stock, I believe there is a lot of upside if the shareholders are not taken out early in a merger with TriEnda. On a longer term basis, there is the potential additional of substantial financing income from the leasing business.
    Aug 1 12:45 PM | Likes Like |Link to Comment
  • Kinder Morgan: The Worm Has Definitely Turned [View article]
    Kinder companies most recent presentation shows that capex projects for 2014 are now funded at levels well above budget which means future growth should be above guidance of 5% dividend with 8% dividend growth for next three years. The Kinder companies are experiencing exceptional demand for new natural gas infrastructure and are capitalizing on the opportunities.
    Jun 4 02:43 PM | 4 Likes Like |Link to Comment
  • Kinder Morgan Warrants Aren't Trash For Shareholders [View article]
    "Well researched" is not the way I would describe a one-sided article which ignored the fact that the outstanding warrants had been reduced by 40%+. A corrective piece would not have been necessary had the author made any attempt to balance his anti-GS agenda with additional considerations presented here. A price target of $40 in three years is not at all unreasonable given Richard Kinder's guidance to 8% annual dividend growth.
    May 8 10:05 AM | 3 Likes Like |Link to Comment
  • Kinder Morgan Warrants: Trash Courtesy Of Goldman Sachs [View article]
    The article lost all credibility in my eyes when the author conveniently failed to mention the fact that nearly 200M warrants have been retired with just 317M outstanding.
    May 6 07:03 PM | 5 Likes Like |Link to Comment
  • As Annaly And American Capital Disappoint, This MREIT Rises - Don't Short It [View article]
    This $2.35 dividend looks like a case of pure smoke and mirrors.

    They will pay out a maximum of 80 cents a share for all shares which is a reduction of 10 cents from 90 cents. ("The expected cash portion of the dividend may be viewed as comparable to the Company's regular quarterly dividend.") The 80 cents is paid out of book value.

    Additionally, they will issue fresh shares and send them to each stockholder ... that sounds like a split. At the end of the day, the shareholders will own the same assets represented by more shares.
    Dec 20 06:07 PM | 5 Likes Like |Link to Comment
  • Kinder Morgan Guidance Is Troublesome [View article]
    I think you have missed the real opportunity here which is a merger of EPB into KMP.

    Neither MS nor EPB's previous SEC filings break out SG&A expense so we are left to use a SWAG. MS estimates Operation and maintenance at $309,025 for 2013. Let's assume that 10% of O&M could be eliminated by merging EPB with KMP. That's $30.9M.

    MS estimates distributable cash flow at $784,401 to which we add $30,900 for a total addition to KMP's DCF of $815.3M.

    Let's assume a takeout at $39 or $8,472,750,00 total for the 217M units and see if it works. KMP is trading at $79.30 so KMP would issue 106,844,262 units on which it is paying a dividend of $1.35/quarter. The dividend payable on the newly issued units would be $576,959,016 ($1.35 * 4 * 106,844,262) compared to the addition of $815.3 in DCF.

    That looks accretive to me. In fact, the addition of $784,401,000 in DCF without the 10% savings would be accretive. As a bonus, KMI no longer has to deal with "fairness" issues surrounding the allocation of drop downs or a second set of ankle biting shareholders.

    Admittedly, this is a very simplistic approach which did not require a complex model, but I think it makes the point. The total return for EPB over the next year could be 10%+- on the stock plus the 7.3% dividend in the case of a merger.
    Dec 5 02:05 PM | 1 Like Like |Link to Comment
  • Gasfrac Energy: Fractured Dreams And The U.S. Potential [View article]
    I generally agree with the information you have provided; however I think you have omitted the single most important aspect of Gasfrac's business ... its finances. Gasfrac's bank lines are tied to EBITDA which are dropping and it has burned a great deal of cash while supporting equipment and crews which it does not yet need. Previous management did a "Hail Mary pass" in which it bet the company on immediate adoption and lost. In fact, some Canadian customers appear to have gone elsewhere. New management has the more difficult job of doing the basic blocking and tackling necessary to assure a solid future on a much more limited balance sheet. That is what makes Gasfrac a more "iffy" situation.
    Apr 17 09:57 AM | 3 Likes Like |Link to Comment
  • The Human Element  [View instapost]
    I would agree that when one buys into a business, one buys into the management and it is the management which will make it a success or failure.

    That said, models serve a purpose in forcing one to order and organize the elements of the business in a way which reflects understanding of the most important revenue, expense, and capital relationships of the business. Models allow one to judge the potential if management executes (or fails). Models also provide benchmarks for progress and alerts the investor to investigate when there are misses.
    Feb 1 10:29 AM | Likes Like |Link to Comment
  • Gasfrac Energy Services: Fracturing Game Changer [View article]
    I did a bit more fact checking and found this in my 3Q CC notes:

    "Comparative cost is about 20% more expensive than water with propane recovery. Without recovery, it can look to be as much as double the amount of water; however NPV beneficial to the customer based on product recovery."

    However, in the same CC, management appeared to shift course a bit on the propane recovery unit (portable fractionating plant) by indicating that propane recovery is a concern to a "subgroup of customers".

    Of particular interest was the statement that US customers generally have gas fractionating plants nearby which can recover the propane. This would also be true of established Canadian fields which produce significant amounts of NG in addition to crude. There is also an option of capturing the early "dirty mix" with high propane content in trucks and hauling it to a fractionating plant.

    Generally, I think the reader can expect E&P customers in remote fields to incur full propane costs (the double) while most customers will see somewhere between partial and full propane recovery.
    Jan 3 05:41 PM | 3 Likes Like |Link to Comment
  • Gasfrac Energy Services: Fracturing Game Changer [View article]
    Excellent article on Gasfrac does a superb job of pulling the pieces together. Only disagreement is on the double costs. Gasfrac in their 2Q CC indicated LPG frac costs were 18% above water net of propane. I've also spoken with the CFO who has told me that the "typical" hydro frac costs about $500K and "typical" propane frac $700-$750K including propane. Costs are per frac and not per well which generally involves multiple fracs.
    Jan 3 03:16 PM | 4 Likes Like |Link to Comment