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  • The Gold Miners Have Probably Bottomed, Even If Gold Has Not! [View instapost]
    RE, your title makes for a very interesting theory. As Gold has moved down from 1300 to 1200, the miners haven't lost as much as I would have anticipated. I see this as because many are still bullish on prices looking longer-term.

    You may be right about what happens, but when I look at the Daily chart for Gold, it appears we may be headed for new lows. If we break well below 1200, that big bullish sentiment in the miners might just break down.

    Certainly this upcoming week should be telling for where we are headed. Thank you again for a nice article.
    Feb 22, 2015. 12:13 PM | Likes Like |Link to Comment
  • DGAZ And Leveraged ETF Performance Analysis [View instapost]
    Interesting strategy and approach. During certain times of the year, that strategy may really work well and hold risk low. 20% returns with low risk on top of being able to work with the trends when they are developing could produce nice returns.
    Feb 14, 2015. 01:31 PM | Likes Like |Link to Comment
  • OPKO Health: Time To Jump In For The Long-Term [View article]
    Samreen, good coverage on OPK in this article. Thanks for the update. This continues to be the largest holding in my portfolio, as the catalysts should continue to drive this company for a long time. Dr. Frost and team continue to develop this company in ways that build long-term value so my expectation is for it to perform well for many years to come. 2015 and 2016 could be some very good years as some of the significant catalysts begin to impact revenues and earnings.
    Dec 30, 2014. 02:54 PM | 3 Likes Like |Link to Comment
  • DGAZ And Leveraged ETF Performance Analysis [View instapost]
    Fracking - I really have not invested more time in this lately but certainly have seen and observed enough of the behavior to better understand how the ETF's function - via feel.

    Volatility is hard to predict. If the benchmarket index goes sideways, or has up and down volatility but not a well-defined trend, the best way to play these ETF's is probably selling options to collect premium and let the decay work for you.

    If however, there is a driver for a good, consistent directional trend and you can determine that trend, then these ETF's can really work for you - even long-term. Look at the UGAZ chart from last November for several months.

    Or, look at what JDST has done with the big Gold move down - even with some volatility, the big trend down made a big payoff.

    Otherwise, volatility can be traded on a short-term - daily or weekly basis if there isn't a clear trend as another option.

    Hope this helps. And, if you continue to work and study this direction, would enjoy seeing what you come up with.
    Nov 2, 2014. 01:51 PM | Likes Like |Link to Comment
  • Halc√≥n Resources: Eagle Ford Update [View article]

    Hopefully you have another article update coming out on Halcon here in the near future. It is always a pleasure to read your articles on top of the research I follow on the company.

    From a technical basis, the stock is now trading at its long-term support. I took the opportunity on Friday to pick up a bull call spread with expiration Jan 2016 and think there may well be value from here in upside between now and mid to late next year.

    After taking some good profits this year from HK, I have continued to hold a core position that I intend to hold until Floyd and this management team sell their shares.

    Will be watching for your next update...
    Oct 4, 2014. 11:27 AM | Likes Like |Link to Comment
  • Kodiak Oil - Barchart's Chart Of The Day [View instapost]
    Raw - Could you be underestimating the growth WLL is experiencing and the upcoming earnings report?
    Jul 25, 2014. 10:49 AM | Likes Like |Link to Comment
  • Apollo's Leon Black Seeks Backdoor Takeover Of Molycorp [View article]
    If folks begin buying back in now, SE will be forced to cover shorts in the near future.
    Jul 8, 2014. 10:58 PM | 3 Likes Like |Link to Comment
  • TNA Turning Bullish [View instapost]
    Hello Zaw,

    I do still hold a position in TZA and today looks like it may be good for that position. These markets have been running up uninterrupted and an exhale is necessary.

    I may write more soon. Busy week with other business things this week, but will plug back in when I can.

    Jun 26, 2014. 09:48 AM | Likes Like |Link to Comment
  • What I Learned From Jake Bernstein's Book, "All About Day Trading" [View instapost]

    Thanks for the thoughts and I too will get a copy of this book and am interested in the "leading indicators", especially if you are finding they provide any kind of edge. Indicators I've been using show what is happening now and are helpful to see a trend change, but there are a lot of fake outs too.

    As for your system of spreading out, I agree on the approach, although the time frames I intend to use perhaps longer-term. There was a nice online trading course covering credit spreads earlier this week and how to adjust the position if price action starts to move against you. There are many thoughts on picking the strikes at different probability levels, how to adjust/when to adjust/how often to adjust, but the principles are the same regardless of the time horizon.

    Look forward to what can be learned from the book and seeing more of your thoughts as you work with these new indicators.
    Jun 19, 2014. 08:18 AM | Likes Like |Link to Comment
  • Oversold Gold & Miners Due For Short-Term Pop, Then Could Roll Over To Lower Levels [View instapost]
    Thanks for the article and analysis, RE. Good stuff.
    May 29, 2014. 04:42 PM | 2 Likes Like |Link to Comment
  • Unlocking Value In The Refining Sector [View article]

    Nice summary review of these companies. Can you describe how you determined the premium or discount calculations on these?
    May 26, 2014. 02:30 PM | 3 Likes Like |Link to Comment
  • Molycorp: Catching A Falling Knife? [View article]
    Shock Exchange,

    I do wonder how you would value the company; otherwise, I don't see how you can rate it a sell based on the bad quarter. I do have some concerns, but:

    - CEO stated at end of last year that expectation is for cash flow even in 2014
    - High priced inventory in a couple segments has been worked through
    - Mountain Pass is increasing volume for lower cost feedstocks to other segments and had one time inventory write down this quarter
    - Q1 has softest demand for a couple of the segments and if sales executes in Q2 with increasing demand, volumes should improve further
    - Management says ASP's stabilizing after 30%+ drops YoY to this quarter. This seems to be the biggest risk but they can't keep falling forever. What if Q2 turn happens as expected?

    The key questions are:
    - What would a reasonable valuation of the company be now
    - What happens to the stock price if Q2 hits or exceeds targets showing - increased volumes, stable or improving prices, improving margins and cash flow?
    - Could we be at or near the bottom on MCP?
    May 12, 2014. 04:26 PM | Likes Like |Link to Comment
  • Molycorp rocked again, -18% as J.P. Morgan piles on with downgrade [View news story]
    I listened to the earnings conference call as well as read the 10Q. Here are some of the key elements I get out of the company:

    1) Management says they have been working on optimization, debottlenecking and transforming to continuous processing of the Mountain Pass facility and looking to boost volume production significantly. Some product produced here is sold to end customers ($3.1MM external revenue this last quarter; $12MM received from intercompany transfers). Appears they are operating MP facility as a profit center to provide raw materials for many of the custom products they create for customers out of other facilities around the world (they price the product for intercompany transfer). Management says the plant is to supply lower cost materials to feed production processes globally.
    > I would like to see how prices of product produced from the facility at intercompany transfer prices compares to market prices from other feedstock producers. Is it really going to provide a lower cost inventory in the future?
    > Average Selling Prices (ASPs) dropped 31% for this segment of the business in the last year. Also, there was a 1 time write down of inventories in this segment that should not be there in future quarters.
    > 10Q says other producing plants have been working through high cost feedstock inventory. If this is true, this should help go forward margins in the other segments, but will be interesting to see if pricing will improve for this Resources segment.

    2) Chemicals and Oxides segment - sales volume grew 3% YoY; ASP's fell 30%! This segment showed decent OIBDA (Operating Income before Depreciation and Amortization).
    > China facilities have worked through all their high cost inventory. This seems to suggest margins will improve - that does assume ASP's remain flat or improve.

    3) Magnetic Metals and Alloys segment - sales volume increased 9% and ASP's decreased by 6%. OIBDA from this unit was solid. Q1 is always a seasonally soft period and other quarters should improve demand. If company executes, that should translate to increasing sales volumes. With prices more stable, this unit may perform well during the remainder of the year.

    4) Rare metals segment - Sales volumes increased by 25% YoY and ASP's decreased by a whopping 38% resulting in negative OIBDA.

    MCP is hurting significantly and this would be a difficult environment for anyone to operate in this business environment considering ASP's in all but 1 segment dropped by over 30%, and in the best performing unit, dropped by 6%. The company has reduced SG&A costs, shut down a Canadian plant, but interest expense increased significantly as well.

    - Selling prices in 3 business segments decreased more than 30% YoY. If prices stabilize (management says they have) or improve, this could be good for go forward performance.
    - High cost inventory has been mostly turned over and written down which should improve margins
    - Increasing production volumes should help the performance of Mountain Pass contributions, although this will only benefit the company if it does in fact help reduce costs of feedstock in other segments and/or allows it to increase sales of product to external customers
    - Pricing and sales/production volumes are going to be key to performance. With improved pricing and margins, along with better performance, perhaps it is possible the company will not be required to raise more funds from equity offerings later this year. The CEO had stated at the end of last fiscal year that they expected to be cash flow positive in 2014. But, that likely is based on some pricing assumptions.
    Stable to improved pricing could drive strong performance and stock price movement up from these levels over the remainder of the year. But, if prices don't improve or keep deteriorating, this could get very ugly for MCP very quickly.

    If ASP's for these products ever begin a long-term upwards trajectory, MCP and shareholders could potentially gain very significant returns. Many risks in 2014, but also, much potential upside over a long-term view, I would think.
    May 11, 2014. 02:50 PM | 1 Like Like |Link to Comment
  • Molycorp's (MCP) CEO Geoffrey Bedford on Q1 2014 Results - Earnings Call Transcript [View article]

    That is part of the issue to me is, I don't think they are trying to hang on to those who haven't jumped ship. Look at the reactions created by the conference call and, from the way this came off to me is, they are not explaining well what is happening in the business and what they are doing about it. The lengthy discussion on production volume and bottlenecks seems like a smokescreen to avoid talking about the real issues.

    If they wanted to keep investors from jumping ship, wouldn't it be more effective to give the view that management knows their business, may be experiencing a difficult business cycle and pricing environment, but has a good sense of how to manage through this?

    For example:
    - We are shifting our product mix to these products where we have strong demand signals in these geographies and stronger margins while reducing emphasis on sales and production of non-profitable and show them
    - Show us the pricing trends in each of their product categories in their presentation so we can see what the market did. And, if they have good forecast models on what expected pricing is for remainder of 2014 based on research sources
    - Then talk about production volumes of the focus product mix and whether they can meet demand or not and what they are doing about this
    - Capital plan - what is needed and what the source options are if more capital is needed (none of these were discussed on the call, in fact, the answer was evasive - we have options available and left us with a sense of we could be diluted out further). Do they have debt financing options available, can they get lines of credit, offer bonds? What is their plan so shareholders can assess? Leaving it vague doesn't work.

    Instead of having the effect of keeping shareholders, it is almost as if their evasive responses had no interest in shareholder retention.
    May 10, 2014. 11:22 AM | Likes Like |Link to Comment
  • Molycorp's (MCP) CEO Geoffrey Bedford on Q1 2014 Results - Earnings Call Transcript [View article]
    Question is: Smoke and mirrors to get this to the buy price of the decade? Or, smoke and mirrors to deflect from a sinking ship?
    May 9, 2014. 10:15 AM | 2 Likes Like |Link to Comment