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Bob Carl

Bob Carl
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  • The Potential End Of An Era For Exxon, But What Does The Smart Money Think? [View article]
    Sort of like when S&P downgraded the United States. A lot of sound and fury signifying absolutely nothing.
    Oct 6, 2015. 06:53 PM | 14 Likes Like |Link to Comment
  • Assets Matter - The Speculative Case For Penn West [View article]
    They might survive, but probably not on terms to your liking. There will be a major reverse split, maybe 1:20, then a sale of new equity. Current stockholders might own 5-10% of the company.
    Oct 3, 2015. 06:32 PM | 2 Likes Like |Link to Comment
  • PH Glatfelter: Steady As They Come [View article]
    GLT owns a currently undisclosed amount of timberlands, carried on its books at $3.325 million as of 12/31/14. The company once owned about 100,000 acres, but has been selling off these holdings for years. The company does not disclose current acres owned. I estimate it is down to about 10,000 acres. In many cases, when it sold timberland, it entered into management contracts with the purchasers.
    Sep 30, 2015. 11:47 PM | Likes Like |Link to Comment
  • Is Chesapeake Doing Enough To Keep Its Doors Open? [View article]
    Sorry to partially spoil your liquidity theory, but CHK has an undrawn $3 billion committed credit facility that has no specific borrowing base attached. I think they can handle a $500 MM maturity in Q1 2016.

    Still, the market has decided that these companies are heading into bankrupcy. I am on the opposite side of your put trade - I sold naked puts in size. Right now, you are winning, but time will tell.

    A lot depends on the quality of CHK's current management. If Doug Lawler can keep CHK afloat through this down cycle, then he will deserve the hoopla associated with his hiring.
    Sep 29, 2015. 11:22 PM | 1 Like Like |Link to Comment
  • Winter Is Coming For Upstream Oil And Gas Companies In 2015, Part 1 - Exxon Mobil [View article]
    I totally agree with your observation on the timing of buybacks. Oil companies (including XOM) are terrible about their timing and naively assume the good times will last forever. I am sure Rex Tillerson would love to have the >$100 billion in cash on hand that XOM has spent buying back stock during his tenure right now. If so, XOM would have no net debt and really great flexibility to buy back stock now when it is cheaper; or, more importantly, buy assets from distressed sellers.
    Sep 6, 2015. 11:42 AM | 5 Likes Like |Link to Comment
  • Winter Is Coming For Upstream Oil And Gas Companies In 2015, Part 1 - Exxon Mobil [View article]
    A 10% discount rate on a reasonably secure cash flow stream is way too high in a world where 30 year treasuries yield 2.88%. The 10% SEC 10 discount rate is a relic of an era of high inflation and interest rates. Prolonged low oil prices in the $40-$50/bbl range indicate deflation and continued low interest rates. Indeed, there are few, if any, opportunities to return 10% per annum within the relatively low risk parameters that XOM offers. I think sophisticated investors are using expected rates of return in the 7-8% range when discounting XOM or its peers. Rerun your model using 7.5% discount rate and see what it returns.
    Sep 4, 2015. 10:55 PM | 6 Likes Like |Link to Comment
  • Can Exxon Mobil's Dividend Weather The Oil Storm? [View article]
    I would not worry too much about XOM reducing its dividend. Long before that were to occur, the company would stop all stock repurchases and cut capital spending. It is true that, in CEO Tillerson's words, "we might have to lean on the balance sheet a bit" and they have by about $1 billion a quarter. XOM can add about $32 billion to its debt levels and still retain its AAA credit rating. At the current spend rate, that is 8 years of dividends at the current rate. I think oil prices will have recovered by then.
    Sep 1, 2015. 08:02 PM | 7 Likes Like |Link to Comment
  • Crude Oil: Where Is The Bottom? [View article]
    In 1986 oil went for around $10/bbl, so adjusting for inflation, $21.78 is the inflation adjusted price for 2015.

    Who knows? But remember, markets turn at the point of absolute pessimism and we are not far off.
    Aug 20, 2015. 01:05 PM | 21 Likes Like |Link to Comment
  • All Hail Kocherlakota! [View article]
    I totally agree. The Fed, like the French Generals prior to WW II, is insistent at fighting the last war. Where in hell is the inflation they are so scared of? Commodity prices are in a free fall - not exactly a sign of inflationary excess. The Fed wants to be able to have tools to conduct monetay policy and feels that it lacks the ability to cut interest rates if necessary in a recession so it wants to raise interest rates now which will cause that very recession! Idiotic at best.
    Aug 20, 2015. 12:13 PM | 3 Likes Like |Link to Comment
  • Inflationary Expectations And Federal Reserve Expectations [View article]
    Commodity prices are in a giant downdraft that is persisting. Like the French Generals at the start of WW II, the Fed is fighting their ancient war against inflation. Problem is, there being no inflation, if the Fed raises rates to fight this spectre then rising real rates will cool economic expansion.

    Perhaps, our current economy can be best compared with that of the "Gilded Age", the latter part of the 19th century. Then, as now, new technologies (steel, railroads, electricity, petroleum products, telegraph and telephone) were driving economic growth. With the money supply expanding by less than GNP growth, deflation ruled. Inequalities of wealth (like today) became profound. Today, the new technologies driving down costs are fracking and horizon drilling opening up vast new supplies of oil and gas, the rise of software- information enterprises (Google, Uber, Amazon) challenging traditional retailers, and I could go on and on.

    Bottom line: until we actually see inflation, we should not fear or fight it.
    Aug 11, 2015. 03:39 PM | 2 Likes Like |Link to Comment
  • Arch Coal's Active Approach Helps Overcome Challenges [View article]
    ACI is history, or at least its equity is. There could be some value in the bonds if bought between $5-$10 (5 cents/10 cents on the dollar) and assuming ACI makes another interest payment or two.

    I will give ACI management credit for fighting hard. But they are facing overwhelming odds and the chances of a Chapter 11 filing within a year are about 99 to 1.
    Aug 11, 2015. 02:15 PM | 1 Like Like |Link to Comment
  • Exxon Mobil: It's All About Free Cash Flow [View article]
    I think it is safe to say that all markets go through their bull and bear phases. Oil is certainly no exception. Assuming oil remains at, say $50-$60/bbl for many years, the inevitable response of XOM would be first to eliminate all buybacks (saving $2 billion/year at the current rate), then cut another 20-30% in capital expenditures (saving $6-$9 billion/year), then freeze the dividend at its current levels. Taking these steps keeps the company cash flow neutral. Some growth could come from expanding production, possibly better natural gas pricing, chemicals and refining. Exxon could last a long time in this state. Can its competitors? The stock would sell to yield 5-6% or $50-$60.

    I think the smart money is discounting this into the stock price now. I remain a buyer as the smart money is often wrong and moves no more intelligently than a herd of ruminants.
    Aug 9, 2015. 02:32 PM | Likes Like |Link to Comment
  • PH Glatfelter - Key Takeaways From Q2 Results [View article]
    As a long time student of GLT, I fully concur.
    Aug 6, 2015. 08:11 PM | Likes Like |Link to Comment
  • PH Glatfelter: Steady As They Come [View article]
    Good company, competent management. I owned 225,000 shares years ago. Made good money. Start buying at these levels, add more at $17.50, much more at $15.
    Jul 30, 2015. 03:55 PM | Likes Like |Link to Comment
  • Exxon Mobil: It's All About Free Cash Flow [View article]
    Standard Oil, i.e. Has been around for 145 years. They have the best management in the industry. They will take advantage of others' distress. They can always halt the buybacks if necessary. They have a AAA credit rating and could add about $33 billion to debt and stay within that rating.

    I see XOM making a huge contracyclical acquisition within the next 12 months.
    Jul 23, 2015. 03:45 PM | 9 Likes Like |Link to Comment