beegdawg007

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    • Tue Nov 11th 17:22 PM | Rating: 0 0
      Commented on:
      Junior Gold Miners Are Dirt Cheap
      Good post. Thanks for the info and research. One comment in regards to your statement that many of the junior gold miners are trading below book. That is true, but it is true because the asset valuation is based on the price of gold when the companies acquired the right to mine a given area. If the price of gold were to drop a lot.. which could happen in a deflationery environment... the assets for many of these companies would actually fetch a far lower price than is their current book value. That of course is relavent because the theory behind buying a stock based on a BV of less than 1 is that, even if the company is liquidated, the stock would make money.
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    • Fri Oct 10th 12:18 PM | Rating: 0 0
      Commented on:
      Dryships: The Saga Continues
      "DRYS has rigs and bulk vessels, plus perhaps some additional value from its organization and customer relationships."

      You glossed over a very important asset. The two drill rigs owned by DRYS are chartered via long term charters (one charter is 3-5 years) at an average day rate of $600K/day. In addition, about half of DRYS vessels are now booked to long term charters some as long as 10 years. And finally, DRYS has a lock on 4 new build Ultra Deep Water - Nasty Weather Drill Rigs. The waiting que for these is 4 years. Two of the Drys drill rigs are set to be delivered in 2010. There are now only 89 of those in existance. Those assets could be easily turned today for a $200M profit given that the day rate less operating cost is $500K/day. I have worked through several valuation exercises based only on an estimated real liquidation valule. Using various figures for the ships, rigs, contracts and new build holds, I conclude that the minimum liquidation value is $60/share. It is interesting to note that at this moment, newer used ships available for immediate delivery are selling for more than the contract price of a new build similar vessel to be delivered 2 years down the road. With the exception of 2 vessels, all of DRYS vessel are newer vessels.
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    • Thu Sep 25th 13:10 PM | Rating: 0 0
      Commented on:
      Reducing Coal Position As Hedge Funds Punish the Sector
      >>>Another option is of course simply buying the coal ETF (KOL) [New Coal ETF (KOL) Introduced from Van Eck Global]<<<

      Careful. Right now KOL is trading at a significant premium NAV to the underlying. This has all happened only since the beginning of Sept.. The logical trade going forward is for the hedge funds to soon flip and short KOL and go long the underlying components. This trade will make money even if both sides decline as long as the KOL goes down more than does the component parts.
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    • Mon Jul 28th 16:51 PM | Rating: 0 0
      Commented on:
      More Drama at Cleveland-Cliffs: Harbinger To Block Deal?
      Here's a thought. Say I'm a hedge fund who would like to get max profits from this CLF buyout of ANRl. I already have a 16% postition in CLF so I might just act as though I'm going to scuttle the deal. As a result, ANR would trade below the offer of ..95 shares of CLF + $22 because the market does not believe it will happen. Meanwhile, I acquire either options or shares of ANR to a maximum level before I have to declare a position in the company. I than agree to allow the deal go off at the current offer! Just maybe I would have locked in a really nice premium of $25 or so on all of those ANR shares. Naw.... not possible ... nice hedgies don't do that sort of thing!
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    • Mon Jul 7th 09:55 AM | Rating: 0 0
      Commented on:
      A Look at Four Polysilicon-Based PV Manufacturers' Funding
      You fail to acknowledge a fundamental and basic bit of reality here... right now short term debt financing is a lot cheaper than is longer term financing, and, short term rates are continuing to fall. Until short term interest rates have clearly bottomed, there is little incentive for these companies to even seek longer term financing.

      My bet is that these companies will all engage in significant secondary offerings once their stock prices rebound. And, since that is probably their plan, why would these companies engage in longer term financing now! A company like YGE could issue 12 million shares (a 10% increase in outstanding shares) with a stock price of $30, and the company would have virtually no debt at all.
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    • Sun Mar 16th 17:43 PM | Rating: 0 0
      Commented on:
      DryShips Deserves More Love
      >>>>PE of 3? Please - that's based on the earnings they spoon feed the gullible folks - and clearly there's enough that actually believe it. <<<

      Do you have any evidence of this?? It is pretty hard to rig the earnings for a company which has a business model that is as simple as the model used by all of the dry bulk shippers. geez.. the daily charter rates are posted every day.. the cost of operations can easily be compared between companies because they all site that information. What's left.. depreciation.. pretty straight forward.. and iterest on the dept.. 6.5% X current debt load provides a very close annual estimate of the debt. These companies are not like banks or investment brokers who employ complex models and who use 30:1 leverage schemes. But, if you have any proof that the earnings quoted by GE are wrong, bring in on!!
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    • Sun Mar 16th 02:07 AM | Rating: 0 0
      Commented on:
      DryShips Deserves More Love
      stockcharts.com/h-sc/u...

      OOPs.. I linked to the wrong chart. This is the right link.. My argument is the same..
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    • Sun Mar 16th 01:58 AM | Rating: 0 0
      Commented on:
      DryShips Deserves More Love
      Doctor Doctor...

      stockcharts.com/h-sc/u...=$INDU&p=60&yr...

      Look for yourself. This URL is a link to a stockcharts.com 60 minute chart of DRYS (solid line) vs. S$P 500 (dashed line). Can you see that they are moving like sychronized swimmers? That is because short term traders are using DRYS as a vehicle to trade the ups and downs of the market. They do this because DRYS has a very high BETA, so they get more bang for the buck. Your eyes do not deceive you. The price swings have nothing at all to do with the business fundamentals.
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    • Sat Mar 15th 15:53 PM | Rating: 0 0
      Commented on:
      DryShips Deserves More Love
      finance.yahoo.com/q/ae...

      See for yourself, For the seven analysts that follow DRYS, the lowest EPS estimate is $16.56/share. Using the lowest estimate still yields a PE of 3.6. Not trusting others to do my homework, I did a detailed analysis of DRYS 2008 EPS. My conclusion is that there is better than a 60% chance that DRYS will earn between $16 and $20/share. So, I get a PE range of 3.0 to 3.6. This stock is cheap, cheap cheap....

      Why is the stock now so cheap? The stock is cheap only because the beta for DRYS is 2.3. Traders are using this as a proxy for trading the market because they get more bang for the buck in the short term. That sword will cut both ways. If there is a market rally, DRYS will go up 2.3 times faster than the market.

      The DRYS CEO has taken a lot bashing following a highly critical Forbes article. The guy is anything buy dumb. George Economou is an MIT graduate who has spent the last 20 years of his life in the shipping business. For any who care to do a wee bit of research will see that his foray into purchasing and leasing rigs for ultradeep water drilling makes perfect sense. These rigs are in extreme short short supply for the foreseeable future. The latest Ocean Rig setting price was $637,000/day for a 3-5 year contract. FYI, the operating cost for that rig is less than $150,000/day. There are enormous profits to be had from this industry. In addition, because this business does not at all correlate with the Dry Bulk shipping industry, the deep water drilling industry provides sensible diversification from the dry bulk shipping business.

      The only thing that most people know about George Econonomou is what they read in that Forbes Hatchet-Job of an article which was written by a bush-league reporter who is simply trying to use sensationalism to promote his own care! DRYS traded for $131 in November, given that 2008 is shaping up to be a stellar year for dry bulk shippers, DRYS should at least revisit that price this year.
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    • Mon Mar 10th 03:39 AM | Rating: 0 0
      Commented on:
      Chesapeake: A Top Energy Play
      U.S. natural gas is not yet being exported, at least not in any significant amount, simply because there is a shortage of the special kind of ships needed to transport NG. However, when there are enough of those ships, U.S. NG prices might actually decline because there are many sources of NG in the world which are much cheaper than the NG being produced in the U.S. We are actually likely to become an importer of NG.
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    • Mon Mar 10th 03:23 AM | Rating: 0 0
      Commented on:
      Cement 75% Gains With Cemex - Barron's
      Be careful... it takes a lot of coal to make cement... the paste, not concrete... COAL prices are going to at least double in 2008. Do some homework. Google coal to get a feel for what is going on here. Operating expenses for cement manufacturers are going up a bunch in 2008.
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    • Sun Mar 9th 11:18 AM | Rating: 0 0
      Commented on:
      Marc Faber: Short Emerging Markets - Barron's
      If in fact Faber's view of DRYS is as simple as he says... "tanker rates have plunged, while dry shippers have not", then he will be wrong about DRYS. The shipping rates for dry bulk shippers did drop quite a bit during Jan. But, that was do entirely to short term issues. For example, coal could not ship from Australia do to flooding. Iron ore was not shipping from South America because of some port issues. Etc. However the demand is clearly there. The Baltic Dry Index - a handy index which, on a daily basis, tracks the dry bulk charter rates for shipping for the major shipping routes - has been steadily increasing since late January.

      www.dryships.com/index...

      These dry bulk shippers break even at rates which are less than half the current charter rates. Analysts est. that DRYS will earn between $18 and $20/share this year. My own analysis is a bit higher. DRYS is currently trading with a forward PE of 4!!!

      Now, short sellers have been all over DRYS recently, so perhaps Faber new something other than what he said! The earnings however are really quite easy to calculate. Many have done so. And, the lowest forecast I have seen to date for 2008 is $13/share. I figure EPS to be closer to $22/share. It is also worth noting that DRYS has recently put more of its ships under longer term charters. Now, 40% of the fleet is locked in for a year or more. The largest of the DRYS fleet, the cape size vessels, are now chartering for over $140,000 PER DAY!!

      I should conclude by saying that thus far Faber has been right about shorting DRYS. So if his comment in Barron's was for the short term, he was right. However, if he meant to short this for the longer term, he will get burned by that short because there is no quetion that 2008 earnings for DRYS will be stupendous. FYI... DRYS earned over $4.00, during the fourth quarter of 2007.
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    • Sun Mar 9th 10:56 AM | Rating: 0 0
      Commented on:
      3-Pronged Profits from China's Worst Winter
      Another way to play China is with U.S. and Canadian mettalurgical coal. China's demand for met-coal combined with other factors - flooding in the coal mining area of Australia, extreme port congestion at the Aussie coal ports, etc. - will result in met-coal (vs. thermal coal, a completely different issue) 2008 - 2009 contract prices which are up from an average of $95/Tonne in 2007 to over $200 Tonne for 2008. Since the cost of mining the coal does not increase with the price of coal, all of that price increase flows directly to the bottom line. Met coal pricing is no longer a local issue. When the price of coal goes up in China, it goes up by just as much in Alabama, Calgary and West Verginia. An added benefit for U.S. miners is the weak dollar, which now makes U.S. coal looks very cheap when compared to the rest of the world. Some stocks which will benefit from China's need for coal are FDG, WLT, WTN.to, and TCK.

      I own both WLT and WTN.to. WTN.to is located in Western Canada. I like this company now because it almost all of its production of coal for 2008 is free to price at the new rates. Many other companies can not benefit from the coal price increases until 2009, because of existing contracts at much lower prices for the current production. WTN.to also has access to a good port in Western Canada. Coal is shipped from this port to Asia for about the same cost of coal that is shipped from Australia.

      WLT sells most of its coal to Europe and Brazil. But the price per ton will still be up over 100% this year. WLT also manufactures COKE from Coal. WLT's COKE is all being sold at 2008 prices in the range of $370/ton, vs. $225/ton in 2007.

      Another play which results for the coal trade combined with the iron ore trade - the are mixed together in blast furnaces to create steel - is driving dry bulk shipping prices through the moon. Investors might be interested in looking at a few of the drybulk maritime shippers like GNK, DSX, EXM and DRYS. All of these companies are now bouncing off of recent lows after soaring in value last year. Very low PEs exist here. For example, both DRYS and EXM are trading at PEs that are less than 6 times 2008 estimates.
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    • Sun Mar 9th 10:10 AM | Rating: 0 0
      Commented on:
      Browsing the Sale Rack for Tech Bargains
      Right now the entire tech sector is a value play. The PE ratios for all of the tech biggies, MSFT, HPQ, IBM, ORCL, INTC, CSCO, etc. are all near 10 year lows. My take on this... simplify. Simply buy either QQQQ or XLK. Or, even better yet, buy an ETF which goes up twice as fast as the stocks. There are a few of these. One example is symbol ROM.
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    • Sun Mar 9th 10:04 AM | Rating: 0 0
      Commented on:
      Chesapeake: A Top Energy Play
      There are near term problems with natural gas. First realize that NG is used in the U.S. for two primary purposes. Heating homes and, as a fuel source for some cleaner power plants.

      First heating homes... the problem here is the current very low rate of new home construction, now the lowest in a decade, means new customers for natural gas are signing up at a much lower level now then in the past few years. Growth for that portion of the market is stagnant right now. That may change in a few years, but for now, there is very little GROWTH comming from the residential side of that market.

      Power generation... Here much is made of how dirty coal is vs. NG. That is true. However, in the U.S. a BTU from Coal costs 1/5th as much as does a BTU from NG. And, contrary to what some would have us believe, new coal powered electric plants are still being approved and built in the U.S. Second, in regards to power generation, NG has a new competitor. If a plant is going to be built and powered by NG (not coal), wind power is now cost competitive and cleaner. This is why Mr. Oil himself, T-Boon Pickens, is now building the largest U.S. wind powerer plant in West Texas. This is a 2 gigawatt monster which derives energy from 600 large wind turbines. This plant, when completed will supply electricity to 200,000 homes. And, this is but one of dozens of Wind Projects being constructed in the U.S. right now.

      The other issue with NG is that supply is not at all in jeopardy. Inventories may be comming down, but all that needs to happen is for the spigget to be cranked up on the pipeline to resupply the storage. During the past few years, new NG wells were drilled at an enormously high rate, and this is still going on. AS a result, it is very unlikely that we will see a shortage of supply of NG in the near term. I am not predicting a crash in NG prices, but I see no reason to expect much of an upside either. To me, it appears as though the demand/supply curve is really in limbo for now. Now coal... that's a completely different story, but one to be told some other time. And then there is solar... the fastest growing industry in the world right now!!
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