ACapitalist

17 Comments

    • ON: Wed Jun 18th 15:54 PM
      Commented on:
      Buy Opportunities Like These Do Not Come Along Very Often
      Alex,
      Thanks for the local color. I will keep my eye on this over the next few months.
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    • ON: Wed Jun 18th 15:12 PM
      Commented on:
      Buy Opportunities Like These Do Not Come Along Very Often
      Tim, Alex& Remington,
      I was very interested in CTBK, read their 10q & K and could not find where their construction exposure is located. I called them and they told me that all of their exposure was local, nothing out of Washington and most in a couple of counties where they are located. I only have a general idea of what is going on in the Washington real estate market, but from what I read it is still one of the best markets in the country with little or no drop in prices due to the strength of tech and aerospace industries. Therefore it would seem that their construction book would be better than most banks in other regions? However, their nonperforming loans have been going up quite rapidly over the past 3qs. On the positive side, they have 17+% capital and a 6% net interest margin. Not many banks like that sell for 80% of book value. Any other thoughts or perspectives on the Washington market?
      Thanks
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    • ON: Wed Jun 18th 13:15 PM
      Commented on:
      Buy Opportunities Like These Do Not Come Along Very Often
      Jack,
      An investment in any of the Can Trusts is a bet on continued high oil/gas prices. If you are convinced that prices will stay high, you will have made a good investment. If prices drop, you probably will not. Why will a drop in energy prices result in a fall in the price of these stocks (as well as Penn)? The dividends include a return of capital and they do not retain enough cash to sustain production on a flat energy price basis. The trusts have to keep issuing more shares to buy more producing properties to keep their production growing or even flat. What investors should always look at with these stocks is the production and cash flow per share. In the near term, there is nothing to worry about as the numbers you present suggest. In the longer term it’s all about the price of Oil and gas. I am not saying you should not buy Penn. I may just do so.
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    • ON: Wed Jun 18th 12:55 PM
      Commented on:
      InterOil: Uncertainty Fading
      Well with the short interest at 45%, it looks like someone is taking the short argument seriously. I call 15 million shares short serious. The short argument is simple in concept. Simple does not make it right or wrong. The geology is complex. The fact is they have no proven reserves yet. My point that other readers may want to think about is that an investment in Interoil is really a binary investment based on the gas find at Elk. If it is big enough to support a LNG plant, the company will succeed, if it is not, the stock will drop like a rock. It is either A or B. Binary investments are risky.
      A word to the wise in investing, pay more attention to those that oppose your viewpoint rather than making personal attracts on them. An investment in any company should be dispassionate.
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    • ON: Tue Jun 17th 18:18 PM
      Commented on:
      InterOil: Uncertainty Fading
      Actually, I do have a degree in Geology but I still think that the truth is difficult to know here. I agree with you about Picken’s investment. A bet against him on his home turf seems risky and is a big reason I am not short here. I think there is an old short thesis right up on Value Investors Club. Good luck to you and enjoy your steak or baloney sandwich, whichever it is.
      View article »
    • ON: Tue Jun 17th 17:53 PM
      Commented on:
      Precision Castparts: an Abandoned Growth Story, Part I
      Although your PE target of 25 is very optimistic, your summary of the investment spot on
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    • ON: Tue Jun 17th 17:44 PM
      Commented on:
      Economics of Oil Futures Trading, Part II
      I agree with Muddling. This issue is not speculators; they clearly help keep markets rational just as Mr. Perry argues. The issue is index fund commodity investors which have been very large net buyers of futures for a number of years. This is simply supply and demand at work, except that this is a paper market and not the delivery market. More and more investors coming to the futures market as buyers only. Sure they have to close their positions before they expire, but as soon as they do, they reestablish new ones with even more money. The futures market was never set up to handle this kind of influx of one sided activity.
      Muddling is right, if they, the index fund investors start exiting the market in droves, we might see the reverse happen with prices. What will happen if congress forces the federal overseers to limit the index fund buyers? I do not see congress being smart enough to figure this out so nothing will probably happen and this bubble will reach a natural popping point at some higher price.
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    • ON: Mon Jun 16th 18:26 PM
      Commented on:
      InterOil: Uncertainty Fading
      I find the co very interesting, mostly from a learning standpoint. The geology is beyound me to know which way this one is going to go. Too risky for me to go either direction on it. The short argument is rather simple. The gas find is in highly fractured rock that gives very powerful early flows but then blows down quickly thus not giving long term production. With out a long term flow rate, no LNG facility and you just have another worthless stranded gas find. The rest of the company has zero net value. Time will tell if management is blowing a lot of smoke or the independent geologist will confirm this "whale". Be careful on either side. The risk is huge on being "wrong".
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    • ON: Thu Jun 5th 15:33 PM
      Commented on:
      Plane Lessors Are Headed to the Desert
      Just look at what the major US airlines are taking out of service. They are all old generation 737's. A320 and MD80's. Those leasing the more modern planes should do well. The modern ones are still in high demand.
      View article »
    • ON: Mon Apr 28th 14:30 PM
      Commented on:
      Genesis Lease: Picking Among the Rubble
      Sorry to nit pic as I think your article is very good and I agree with it but you are wrong on the 8 year depreciation. I did read the 20-F to be sure (page 65,F-9, F-11). You are mixing GAAP and tax information. The 8 year deprec is for tax purposes. For financials, they use US GAAP accounting and the planes are depreciated over 20 years, the book basis you refer to is based on the GAAP numbers. I still agree with you that the value of the planes is greater than book but that is because of the devaluation of the dollar and the the good market for used planes, it does not have anything to do with tax deprecation rates. The 8 year tax life is valuable because it makes the T in EBITDA poistive operating cash flow to the company as the tax is all, or mostly, deferred for many years.
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    • ON: Tue Apr 22nd 15:53 PM
      Commented on:
      Manitowoc-Enodis: Not a Poison Pill, But Not Good Strategy Either
      The problem is most investors own this company for the Crane biz. They just complicated the picture and the market has voted. The food service biz may be great but MTW is not a conglomerate in the market's view. They are a Crane company. The market did not care much about the food service biz. Now they have too.
      View article »
    • ON: Fri Apr 18th 12:12 PM
      Commented on:
      Genesis Lease: Picking Among the Rubble
      I think you should check your calc on the depreciation. I have looked closly at AYR and just did a quick check on GLS and it looks like book deprec is running at about 4% year, or a 20 year life for both. This is still conservative as actual deprec is probably closer to 3%, but not in stright line. Your reference to 8 years may be tax deprec. In the US it is 7 years which creats better cash flow and a large deferred tax liab for plane owners.
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    • ON: Fri Apr 18th 11:36 AM
      Commented on:
      Apple to Experience Market Share Madness
      "The ipod has done its job and done it well. It planted the Apple seed to a new generation of users." This says it all. I normaly do not buy companies with PE's like Apple, but I just looked at all those millions of young Ipod users who would be buying PC's in the next few years and just could not see how Apple would not continue to grow.
      View article »
    • ON: Mon Mar 17th 12:00 PM
      Commented on:
      Dryships: Undervalued Compared to Competitors - and the Market
      Looks like to me that they have issued/ plan to issue 10.8 to 11.4 million new shares when I read the 3/07/08 filing. As a shareholder, this makes no sense to me as they are projecting a $800 to 1,000 million cash flow for 2008. Unless they have some major purchase in the works, they will have no debt at the end of they year. These guys just suck at investor relations. They don't explain what they are doing and repeatedly do things to piss off thier shareholders. I know this company is very very cheap, but the market is voting every day on managment's ability. I hope they redeam themselves shortly.
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    • ON: Mon Mar 10th 09:30 AM
      Commented on:
      Mr. Market Trips on Mark to Market, Gives REITs Away
      I agree. I have only looked at Newcastle in detail but in Newcastle's case, they only have 16% of their debt in recourse warehouse lines, still have $200 mil of unencumberd assets and $120 mil in cash to meet any further margin calls. They have sold down assets to raise cash. My analysis shows that they will have to cut their dividend this month because their cash flow has been reduced by 10%, at the most 20%. But with paying over a 30% dividend to the current market of $8.50, a cut of the dividend from 72c to 50c or 60c will be seen as positive. In the last earnings confernce call less than two weeks ago, they gave no indication that they would have to eliminate the dividend.
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