Christopher Owens's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/1678791/comments http://seekingalpha.com/article/1448461/comments?source=feed#comment-19051811 19051811 Mon, 20 May 2013 20:45:46 -0400 http://seekingalpha.com/article/1183581/comments?source=feed#comment-14984411 14984411
I think he said he is getting 8 billion in pref stock and only putting in 4.5 billion in straight equity. They are levering the company quite a bit by borrowing 14 billion ($8 billion of which is Berk pref) which will lever the returns on the equity portion. So although the multiple is high, returns on 3g/berk invested capital could still be pretty high. Still some unknowns on pref term/syndicates financing terms.]]> Thu, 14 Feb 2013 10:40:44 -0500
I think he said he is getting 8 billion in pref stock and only putting in 4.5 billion in straight equity. They are levering the company quite a bit by borrowing 14 billion ($8 billion of which is Berk pref) which will lever the returns on the equity portion. So although the multiple is high, returns on 3g/berk invested capital could still be pretty high. Still some unknowns on pref term/syndicates financing terms.]]> http://seekingalpha.com/article/1145051/comments?source=feed#comment-14397471 14397471 Thu, 31 Jan 2013 08:42:52 -0500 http://seekingalpha.com/article/1145051/comments?source=feed#comment-14397411 14397411 Thu, 31 Jan 2013 08:41:52 -0500 http://seekingalpha.com/article/1145051/comments?source=feed#comment-14397281 14397281
No business can invest at a 1000% return as the market is implying AMZN is. ]]> Thu, 31 Jan 2013 08:39:34 -0500
No business can invest at a 1000% return as the market is implying AMZN is. ]]> http://seekingalpha.com/article/1145051/comments?source=feed#comment-14387961 14387961 Wed, 30 Jan 2013 23:36:00 -0500 http://seekingalpha.com/article/1058551/comments?source=feed#comment-13917451 13917451 Sat, 19 Jan 2013 13:28:24 -0500 http://seekingalpha.com/article/1115131/comments?source=feed#comment-13783711 13783711
Again, I agree with the financial logic - perhaps it is too logical!]]> Wed, 16 Jan 2013 12:35:46 -0500
Again, I agree with the financial logic - perhaps it is too logical!]]> http://seekingalpha.com/article/1114791/comments?source=feed#comment-13781571 13781571 Wed, 16 Jan 2013 11:52:07 -0500 http://seekingalpha.com/article/1058551/comments?source=feed#comment-13457991 13457991 Tue, 08 Jan 2013 17:09:03 -0500 http://seekingalpha.com/article/1087751/comments?source=feed#comment-13172241 13172241 Mon, 31 Dec 2012 22:20:48 -0500 http://seekingalpha.com/article/1058551/comments?source=feed#comment-12957891 12957891 Mon, 24 Dec 2012 19:48:04 -0500 http://seekingalpha.com/article/1058551/comments?source=feed#comment-12834571 12834571
Float = Liability
Cash Provided By Float = Asset

We are saying that the float, while counted as a GAAP liability, has an NPV of zero because it is held forever and doesn't cost anything to hold. Therefore, for our purposes, we just don't subtract the float as a liability when thinking about intrinsic value. We already account for the cash provided by float as an asset elsewhere. You can't add the float liability back as an asset and include the cash that is derived from holding float - that is double counting.

Thanks. ]]> Thu, 20 Dec 2012 16:14:44 -0500
Float = Liability
Cash Provided By Float = Asset

We are saying that the float, while counted as a GAAP liability, has an NPV of zero because it is held forever and doesn't cost anything to hold. Therefore, for our purposes, we just don't subtract the float as a liability when thinking about intrinsic value. We already account for the cash provided by float as an asset elsewhere. You can't add the float liability back as an asset and include the cash that is derived from holding float - that is double counting.

Thanks. ]]> http://seekingalpha.com/article/1058551/comments?source=feed#comment-12542961 12542961
I don't disagree with any of your valuation points. I tried to write this for the skeptic rather than the believer and ended up taking a pretty conservative, but I don't think unreasonable, stance. I didn't want to get bogged down in saying Black Scholes is wrong or trying to forecast underwriting.etc. I also think the impact of a residential construction recovery on the operating businesses deserves more analysis and a bigger brain than mine.

I don't know Mr. Shields so I will reserve judgement there.

Best]]> Wed, 12 Dec 2012 19:34:09 -0500
I don't disagree with any of your valuation points. I tried to write this for the skeptic rather than the believer and ended up taking a pretty conservative, but I don't think unreasonable, stance. I didn't want to get bogged down in saying Black Scholes is wrong or trying to forecast underwriting.etc. I also think the impact of a residential construction recovery on the operating businesses deserves more analysis and a bigger brain than mine.

I don't know Mr. Shields so I will reserve judgement there.

Best]]> http://seekingalpha.com/article/1058551/comments?source=feed#comment-12535181 12535181 Wed, 12 Dec 2012 16:15:39 -0500 http://seekingalpha.com/article/1058551/comments?source=feed#comment-12534991 12534991
However, you cant add float back as an asset because you are already accounting for the assets purchased with that money elsewhere in the operation. Hence, float just becomes a non-liability, not an actual asset.

I think you can get to numbers substantially above what I arrived at in this article but I'll let you make those assumptions.

I hope that helps.]]> Wed, 12 Dec 2012 16:12:47 -0500
However, you cant add float back as an asset because you are already accounting for the assets purchased with that money elsewhere in the operation. Hence, float just becomes a non-liability, not an actual asset.

I think you can get to numbers substantially above what I arrived at in this article but I'll let you make those assumptions.

I hope that helps.]]> http://seekingalpha.com/article/1058551/comments?source=feed#comment-12527821 12527821 Wed, 12 Dec 2012 13:15:06 -0500 http://seekingalpha.com/article/1058551/comments?source=feed#comment-12517371 12517371 Wed, 12 Dec 2012 09:45:52 -0500 http://seekingalpha.com/article/1058551/comments?source=feed#comment-12517341 12517341 Wed, 12 Dec 2012 09:45:18 -0500 http://seekingalpha.com/article/1058551/comments?source=feed#comment-12517231 12517231 Wed, 12 Dec 2012 09:42:43 -0500 http://seekingalpha.com/article/1058551/comments?source=feed#comment-12517051 12517051 Wed, 12 Dec 2012 09:39:15 -0500 http://seekingalpha.com/article/1058551/comments?source=feed#comment-12517031 12517031 Wed, 12 Dec 2012 09:38:48 -0500 http://seekingalpha.com/article/1054461/comments?source=feed#comment-12445651 12445651
The deal will likely not be accretive to earnings near term given non-cash amortization and banking fees, but it does appear accretive on a cash flow basis - which is what you are ultimately paying for. Not my favorite idea, but I like it more 20% cheaper. ]]> Mon, 10 Dec 2012 12:31:25 -0500
The deal will likely not be accretive to earnings near term given non-cash amortization and banking fees, but it does appear accretive on a cash flow basis - which is what you are ultimately paying for. Not my favorite idea, but I like it more 20% cheaper. ]]> http://seekingalpha.com/article/1054461/comments?source=feed#comment-12445311 12445311
FCX's operating cash flow should increase from 7 to 9 billion, or 28.5% - 20% on a per share basis after factoring in the shares issued to PXP. Given the stock has fallen 20% since the announcement, investors are now valuing a dollar of FCX cash flow at a 25% discount versus pre-deal.

I cannot prove this, but I am guessing the PXP assets that they bought from BP might have some low hanging fruit as BP obviously had others issues to deal with post macondo.

I generally dont like commodity stocks, but I think FCX just got much more interesting if you can get past the emotions. ]]> Mon, 10 Dec 2012 12:18:19 -0500
FCX's operating cash flow should increase from 7 to 9 billion, or 28.5% - 20% on a per share basis after factoring in the shares issued to PXP. Given the stock has fallen 20% since the announcement, investors are now valuing a dollar of FCX cash flow at a 25% discount versus pre-deal.

I cannot prove this, but I am guessing the PXP assets that they bought from BP might have some low hanging fruit as BP obviously had others issues to deal with post macondo.

I generally dont like commodity stocks, but I think FCX just got much more interesting if you can get past the emotions. ]]> http://seekingalpha.com/article/1047751/comments?source=feed#comment-12425601 12425601
Do you think they would ever tender for their own stock? Seems like this move, depending on the tender price, would have a much higher return on incremental capital than purchasing other companies at a premium. It appears that deals may be hard for them to come by as cheap debt obviates some of the advantage of their cash hoard while bidding. Additionally, all the cash they are sitting on is returning negative purchasing power. This negative return increases the longer they sit on it.

Nice article. ]]> Sun, 09 Dec 2012 17:16:53 -0500
Do you think they would ever tender for their own stock? Seems like this move, depending on the tender price, would have a much higher return on incremental capital than purchasing other companies at a premium. It appears that deals may be hard for them to come by as cheap debt obviates some of the advantage of their cash hoard while bidding. Additionally, all the cash they are sitting on is returning negative purchasing power. This negative return increases the longer they sit on it.

Nice article. ]]> http://seekingalpha.com/article/901091/comments?source=feed#comment-12301431 12301431 Wed, 05 Dec 2012 21:24:57 -0500 http://seekingalpha.com/article/1044521/comments?source=feed#comment-12258141 12258141
The second half of this sentence is an acknowledgement that the first half is incorrect.

Maybe you should get in touch with Warren and express your deep skepticism about his 50 billion and consistent returns. I am sure he is as concerned as you are. He'll probably want to sell everything after reading the deep insights in this article.]]> Tue, 04 Dec 2012 21:47:19 -0500
The second half of this sentence is an acknowledgement that the first half is incorrect.

Maybe you should get in touch with Warren and express your deep skepticism about his 50 billion and consistent returns. I am sure he is as concerned as you are. He'll probably want to sell everything after reading the deep insights in this article.]]> http://seekingalpha.com/article/1029771/comments?source=feed#comment-12171951 12171951
Again, I am not defending amzn but want to point these issues out to investors. I think Paulo has made some good points on the stock in the past but objectivity has declined as has the a marginal value of incremental articles.]]> Sun, 02 Dec 2012 13:15:32 -0500
Again, I am not defending amzn but want to point these issues out to investors. I think Paulo has made some good points on the stock in the past but objectivity has declined as has the a marginal value of incremental articles.]]> http://seekingalpha.com/currents/post/693661?source=feed#comment-12129321 12129321 Fri, 30 Nov 2012 16:48:09 -0500 http://seekingalpha.com/article/1029771/comments?source=feed#comment-12129151 12129151 Fri, 30 Nov 2012 16:43:36 -0500