southshoreinvestor

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    • Wed Aug 13th 14:59 PM | Rating: 0 0
      Commented on:
      Notes from My Conversation with Cal-Maine CFO Tim Dawson
      According to your previous article you did NOT think CALM was worth adding to a portfolio. In case you thought no one would notice, here is what you said, ...

      "Should You Put Your Eggs in Cal-Maine's Basket?
      by: James Cullen
      posted on: April 29, 2008

      As [James Cullen] argued previously, [James Cullen] do[es]n't believe this is a good time to invest in egg producer Cal-Maine (CALM) because:

      The business is highly seasonal
      The business is highly cyclical
      It is a commodity business allowing for no real competitive advantages"
      ---

      However, in your current article (Aug 12th, 2008) you now state, "From the long pitch that led the BC Investment Club to purchase shares...". This appears contrary to your prior position.

      In fact, your disclosure above says you have "No Position" in CALM. So if your are representing the BC Investment Club, then you should ethically disclose your actual position. If you are not speaking for them, then you should make that clear.

      ---

      On April 18th and 29th, the dates of your previous two blogs on CALM, shares were selling for $30. That's when you said essentially - Don't buy, Don't buy.

      Today's price is almost $44 and you could have collected at least the $0.516/sh dividend. That's about $14.5/sh on $30/sh invested.

      I hope that your Prof's at BC aren't grading you on this stuff.

      Cheers,
      (Disclosure: Long until CALM tops)



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    • Tue Jul 15th 22:12 PM | Rating: 0 0
      Commented on:
      Opportunity Now in Franklin Templeton
      David,

      Well said regarding TROW. I consider buying their shares a better long-term buy than any of their funds. TROW's fees are based on a growing AUM for 401k's, which should continue to grow as pensions are replaced. Also, TROW is building out branches in high net worth locations, which suggests expansion into new business lines. Stable growing dividend. Waiting.

      Cheers,
      View article »
    • Sun Jul 13th 22:05 PM | Rating: 0 0
      Commented on:
      Pennsylvania's Marcellus Shale: Welcome to America's Next Great Energy Boom
      :) Once you've taken profits from the CHK's and XTO's of the world, think about moving some of it into these:

      Bakken, try MDU (E&P unhedged; highway spending bonus)
      and try HLND (Continetal Resource's pipeline company)
      Barnett, try ETE (high splits with excellent growth),
      Marcellus, try MWE (no GP or IDR's),
      Rockies, try EPB or WMZ (drop-down pipeline assets)

      The pipelines will bottom when hedge funds who were playing the spread and buying PIPE shares finish deleveraging. Then the partnerships will provide new investors very attractive tax-deferred growth with income. OOOH AAAH. Check the $AMZ index, KMP, etc., if you think pipes can't get the job done over time. Hope to see a few 10% distributions outside of the E&P partnerships before the bottom arrives.


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    • Thu Jul 10th 11:49 AM | Rating: 0 0
      Commented on:
      Review of Current Losing Positions: NZT, ACAS, SKM, GE
      The above assesment of ACAS is off the mark. I would challenge the Einhorn book and refer anyone to the following link: www.deepcapturethemovi.../ for an alternate view.

      ACAS is no different than any other company holding private businesses and loans in their portfolios. With the implimentation of fas157 level 3 assets (those not readily traded) are valued based on recent sales. Thus, of course if no one is buying, then the values of these investments must be marked down to ridiculously low levels.

      However, the majority of these private businesses and loans will be held long term and provide stable interest or dividends to ACAS. When liquidation by over-leveraged hedge funds ends and the market fear subsides, then there will be a reversal of the valuations. That is when those short will become longs.


      What you believe is up to you........... do your own DD.

      ---------------

      * The actual issue, IMO, is the rising cost of capital.

      REITs, BDCs, MLPs, etc., that pay out most of their income rely on secondary offerings, preferreds and convertibles, and sell-downs of mature assets to pension funds for new capital to fund their business's growth. However, they all have variable ratios of fixed and/or variable rate debt.

      1. New fixed rate debt will be harder to obtain and more costly.
      2. Secondaries will be less accretive to NAV, OR even dilutive if required to capitalize unfunded commitments.
      3. Convertible or preferred share offerings will likely be less attractive.

      On the down side, these businesses may face slower growth prospects combined with decreased demand for their underlying assets (REITs = mortgages, leases, etc.; BDCs = private businesses and loan market; MLPs = pipeline volumes) resulting in decreasing earnings growth, decreasing NAVs, and falling dividend/distribution coverage. Dividends for some securities and CEF's, even while "banked" from prior years may reduce NAV in the short term.

      On the positive side, those BDCs and REITs with capital can take advantage of the more favorable lending environment and distressed securities/loans. Those MLPs with a greater fixed rate debt ratio, longer terms on debt, lower unfunded commitments, and higher regulated percentage of business will benefit. Buying into the best companies at attractive yields will position one for multiple years of attractive gains. Look for a reversal in NAV when the hedge funds have finally de-leveraged / liquidated.
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    • Mon Jun 30th 11:31 AM | Rating: 0 0
      Commented on:
      Isis Pharmaceuticals' Obesity Buster an Enormous Finding
      Re: Bioinvestor. Actually, big pharma invests in most promising new platforms in a rather unique way - in a press release, with a transfer of money, rights to regional distribution, and in exchange for a percentage of the company they're investing in. So they do share in the profits of the successful ventures, and they also lose their investment in those platforms that are not viable. Even the big pharma's were taken during dot.com bubble.

      As you correctly said, upstart biotechs must partner away early products in order to build a revenue stream that will power growth of their future pipeline. Most fail. Also, AMGN and DNA are now struggling as they've picked most of the low hanging fruit.

      A non-oral form of Mipomersen will discourage its wide spread use, but if the formulation can be produced in an extended release form or packaged in a pen-style injection similar to AMLN's Byetta, then this might change.
      --------
      Specifically regarding Mipomersen, a reversal of plaque would be a significant benefit and would provide ISIS with an expanded use. Prevention of cardiac disease surgeries would be a significant savings to the HMO system (not to mention the impact on patients and families).
      --------
      Generally regarding ISIS, they have a potential platform that applies a new drug type to old and new disease targets. The old targets are the most promising since these are already validated, have probably come off patent, and are abundant. Plus, ISIS will not have to spend much money or time on early-phase discovery or legal. Targeting PTP-1b with small molecules for instance was tried to death by every pharma and is the poster child for each new drug platform. The platform for ISIS is the bull case for investing here. Mipomersen is the proof-of-principle product.

      Toxic side effects, drug-delivery issues, competition, and production costs are the bear points.

      Long-term, ISIS is a speculative buy - to me. IMO.





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    • Fri Jun 27th 10:49 AM | Rating: 0 0
      Commented on:
      Isis Pharmaceuticals' Obesity Buster an Enormous Finding
      First, let me say that when AMGN and DNA were just small start ups, the large pharma companies whose focus was on traditional small molecule drugs probably didn't foresee the success of the protein-based drug market. That's likely because a single success doesn't prove a "platform's" potential. Of course, AMGN and DNA over a long time "have" proven themselves to have pursued a successful platform bringing many new drugs to market using it.

      Since it is not the individual drug that will make a start-up or the investment in one have great potential but rather the ability to bring many new drugs forward, then it is important to assess the platform more than the individual drug.

      With that said, companies like ISIS, and to a lesser extent MNTA, stand today at the forefront of a new "platform" for drug discovery and the strength of each remains to be be seen.

      My specific comments are:

      1) Mipomersen is an injectable (not oral) preparation. Thus, the ability to expand its market share to Lipitor-like sales could be held back until ISIS launches an oral formulation. It is my understanding that ISIS intends to pursue this, but that doesn't mean it will be easy, cheap, and/or safe. Competition from generic statins should make marketing shy of attempting to expand here unless the clinical data shows benefits not seen in the statins in general. Perhaps the efficacy in reducing the plaque as stated in your blog will offer cardiologists a new tool used prior to arterial stents and/or bypass surgery.

      The counter argument (a positive) would be that a once per month injection would be preferable to the patient over taking 3 pills a day, every day, along with 3 or 5 other daily medications. This would increase patient compliance. And since many seniors already visit their doctor/HMO frequently, then an injectable formulation might not be black-listed by the HMO's/insurance co's because of increased office visits per patient.

      2) Bayer brought to market (thus passed the FDA clinical trials) the anti-cholesterol drug Baycol, which was later recalled for toxic side effects. Baycol was highly bioavailable (meaning it could be found throughout much of the body's tissues) whereas all of the other statin drugs including Lipitor were retained in the liver. Retaining the drug in the liver prevents the toxic side effects of sterol inhibition elsewhere in the body. As yet, it is unclear if ISIS can effectively produce an oral formulation that is retained by the liver (for Mipomersen) or the reverse, if their formulation technology can be engineered to make other potential drugs highly bioavailable (as they might need to be).

      Thus, can ISIS make oral formulations that are tailored to the needs of the tissue target? This has implication as to how successful the ISIS platform will be - not just how Mipomersen can be advanced or its use expanded.

      Having demonstrated proof-of-concept with Mipomersen and many of the patents in the area is a good sign, though.

      Just my 2 cents,
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    • Tue Jun 3rd 20:46 PM | Rating: 0 0
      Commented on:
      Banco Bradesco: A Brazilian Play Unaffected by US Financial Crisis
      How will Brazil's new financials tax policy affect their Banks? The tax has risen from 9% to 15%.

      Since at least one US hedge funds took a large position in BBD (reported end March), it will be interesting to see if they begin to reduce their holdings in light of the increased tax.

      I like Brazil's opportunities relative to India or China. Perhaps the best way to play any emerging market is via their banks. I also like their utility companies.

      View article »
    • Tue Jun 3rd 20:25 PM | Rating: 0 0
      Commented on:
      Saut: It's Time to Reduce 'Stuff' Stocks, Buy High Yielders
      The credit dislocation has shaken investors, period. As such, many investments are on sale. In a sideways market yield is king.

      Look at the US energy MLP's as they offer an attractive tax-deferred current yield with the all-important distribution growth that protects against inflation.

      Closed-end funds holding MLP's are best for IRA's or for the K-1 averse. Look at FMO, which has avoided the use of auction rate securities that similar CEF's have had issue with recently.

      Linn Energy has a stagnant 11% yield, as hedges limit upside while protecting the distribution. This is generally true for most MLP-E&P's. Nice double-bottom recently as the last of the PIPE shares have been dumped by CEF's/hedge funds getting margin calls. However, I wouldn't look for significant unit appreciation soon. They continue to monetize assets that are poor choices for the MLP structure and recycle the cash. Linn's only downside is that they give up the potential home run deep shale plays that XTO, etc., benefit from.

      ALSK is an Alaskan telecom with wireless operations. AT&T bought into the Alaska market and thus ALSK's moat has narrowed. ALSK hasn't increased its dividend and thus is losing my interest.

      Also, the BDC's such as American Capital (ACAS) will become attractive investments coming out of the credit/recession. ACAS has a 12-13% yield typical for the group now, and their yields will return to the 8% range in a year. The level 3 assets held by BDC's (since they invest in private companies) have been attacked by the shorts such as Einhorn, but then they are biased! The shorts attacked BDC's at least twice prior and their charts and dividend growth tell the real story. Even ALD, Einhorn's favorite target shrugs off the shorts after decades of being a public company.

      Just a few thoughts.

      *I am long the BDC ACAS, and LINE & many other MLP's.
      **FMO is a potential holding for an elderly parent's portfolio and likely will replace ALSK as a holding.
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    • Tue Jun 3rd 19:20 PM | Rating: 0 0
      Commented on:
      Buying Into the Global Infrastructure Build
      Look at MDU Resources (MDU) for the US infrastructure build & fix with an energy hedge built in. They will benefit from the highway spending bill. MDU has a long track record, good dividend growth, and E&P assets in the Bakken.

      NuStar (NS) is an energy infrastructure MLP with an 8% yield. They operate in the US and parts of Europe and just bought into asphalt refining on the US East coast. Road paving asphalt sales will account for up to 20% of revenues and the rest of their biz is regulated storage/pipelines with inflation protection. All MLP's require access to credit and equity issuances for growth. Fear here combined with hedge funds and CEF's dumping MLP PIPE and common shares has provided a timely opportunity to buy into these assets as credit fears subside.

      I agree that American Tower (AMT) is a great infrastructure play. AMT operates in the US, Mexico, and Brazil, and continues to grow. I would expect that AMT will eventually run out of growth opportunities and begin to pay out dividends - as a cash cow. Until then AMT has been consistently buying back shares in addition to expanding their towers. They also just increased the expected lifetime estimates for their towers.

      Also, you seemed to miss the standards, such as CBI, FLUOR, BGC, ABB, etc. Perhaps you could even pair BGC with PCU for a hedge on copper pricing.

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    • Mon Mar 24th 11:58 AM | Rating: 0 0
      Commented on:
      Southern Copper vs. Spot Copper: TA That's Hard to Ignore
      So ... where's the "technical" analysis other than look at "the chart"? Head-n-shoulders top, maybe? Volume picking up, maybe?

      As you point out, this is a global growth story with supply/demand driven support. However, the story has been done to death. Everyone who bought in has done well.

      The risk here is the old "buy high" then "sell low" blogging that hedge funds employ before they unload.
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