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BillySundance

BillySundance
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  • Is The Alamos Gold Sell-Off A Buying Opportunity? [View article]
    Seems like the recent share price dip may actually put Alamos in play for a larger producer. Buy the Mulatos mine and get Esperanza and the Turkey projects for some nearer term production options and take the $400m cash to pay down the acquisition?

    I do think it's possible that Alamos looks for another acquisition. They had the Aurizon bid fall through last year (almost surely for the better) but shows they are at least open to the idea of a larger acquisition.

    There are tons of possibilities. One thought is Alacer Gold, which is already producing in Turkey - they have very, very low cash costs at their Copler mine, a solid balance sheet after cleaning up their Australian mess last year, cash on the books, minimal debt. It could provide operating expertise in Turkey which may help advance the Turkey projects.

    Allied Nevada would be another interesting play to get U.S. exposure but lots of debt on their books would materially change the balance sheet. That one may have to go to a larger company with more balance sheet capacity.

    Africa seems unlikely although I think there are some interesting acquisitions opportunities. Spreading too far over many countries and jurisdictions may be a risky move though. I think they would go after an existing mine rather than another project that would require capital but you never really know.

    There is also always the chance that Alamos just continues as they have and use the balance sheet to develop their existing portfolio.

    Will be interesting to see what happens!

    As for Alamos, I think the recent negative production news is providing a nice investment opportunity in a high quality management team and operation. Alamos obviously did not prepare the market properly for this news so assumptions about 2014 cash flow have been altered considerably, but I think longer term the story is still strong.
    Jan 23 11:09 PM | Likes Like |Link to Comment
  • Priced For Perfection, This Engine Is Definitely Running Out Of Steam! [View article]
    FNGN has been pretty remarkable at attracting AUM, but I am not convinced their business model provides the customer with much value or provides much of a moat (they basically just have first mover status to this 401k portfolio allocation concept in my mind). Basically, as I can tell, they are suggesting a portfolio allocation similar to a target date fund and slapping extra fees on top and giving access to an over the phone advisor. The stock seems to be pretty handcuffed to the market at this point. If the market gets more volatile I think they may have significant headwinds in both attracting additional AUC and converting AUC to AUM. There are also a lot of similar products popping up that aren't neccesarily direct competitors but can offer similar portfolio allocation tools that don't require 0.5% fees. Wealthfront (fee based) and SigFig (free) are two I'm aware of - there may be many more.

    People are much more willing to part with these extra FNGN fees when they are coming from profit and will (quite possibly) be much less inclined to do so out of any losses. With that said, if we were to see a continuation of this current stock market rally, it's quite possible this upward trajectory for FNGN could continue. A significant pause or pullback and FNGN could really hit a pocket of air.
    Jan 13 04:52 PM | Likes Like |Link to Comment
  • GCVRZ Forum [View instapost]
    Was looking back at some of the history of the GCVRZs and noticed that Sanofi did a dutch tender auction back in 2012 that netted them appx 14% of the outstanding rights at $1.75. Any thoughts on whether they may try something like this again? At this price it could be a nice hedge for them against future milestone payments on international sales even if it didn't receive domestic approval.
    Nov 8 12:19 PM | Likes Like |Link to Comment
  • GCVRZ Forum [View instapost]
    Opened a small position at 0.63 this morning. I tend to shy away from Bio stocks in general due to the short-term binary nature of them but this is a quite interesting play now - $0.63 downside and $12.37 upside still. I'm no expert but it seems to me that even if the short-term payouts aren't received that the chance of hitting some of the other payout milestones down the road (or simply the fact that they will be in play for awhile) more than compensate the potential short-term downside.
    Nov 8 10:36 AM | Likes Like |Link to Comment
  • The Crystal Ball Is Glowing For McGraw-Hill Financial [View article]
    MHFI is now trading above $70! Anyone that would have bought shares around $60 when you published this article (or as low as $58.XX shortly thereafter) would be up about 20% in about two months with very minimal volatility taboot. Alas, MHFI is universally hated by retail investors so very few people likely actually took that advice. As I mentioned, MHFI was also considerably undervalued compared to MCO at the time and that gap has been narrowing ever since. This has been probably my single best investment of the year. Cheers!!
    Oct 25 04:41 PM | 1 Like Like |Link to Comment
  • The Crystal Ball Is Glowing For McGraw-Hill Financial [View article]
    I'll also add, I find it somewhat absurd that MHFI stock gets so little coverage, especially on the retail side, considering its large market cap status. I think the business is very poorly understood by retail investors and thus trading is dominated by institutions. Retail investors only wants to get involved on the short side when MHFI gets bad press!
    Sep 5 12:02 PM | 1 Like Like |Link to Comment
  • The Crystal Ball Is Glowing For McGraw-Hill Financial [View article]
    My take is also that MHFI is vastly undervalued. When the lawsuits dropped earlier this year it created a significant opportunity for investors.

    As far as the price multiple, another thing to consider is that MHFI has over $1 billion net cash which is equivalent to roughly $4 of the share price. Strip that cash out and the P/E multiple looks even cheaper.

    Now that the education segment has been offed, I believe MHFI should trade at a multiple that is comparable or even at a premium to MCO however due to the lawsuit overhang it is trading at a discount. There IS some extra risk with the lawsuit overhang but I am not convinced of the merit of what the DOJ has presented.

    MHFI is in the sweet spot right now, slowly and steadily continuing it's share repurchases, increasing ownership of CRISIL, and leveraging new small acquisitions on a regular basis. The management has its ear to the street and has always made its acquisitions with a large margin of safety. I am constantly impressed with their investments. They even had the inside scoop on LinkedIn alongside Goldman and managed to make a small profitable investment at the IPO. Would have been nice if they had held on! It's just another example of how management is great stewards of shareholder capital.
    Sep 5 11:53 AM | 1 Like Like |Link to Comment
  • BOND's 10% Annual Return Without Any Increased Risk: Will The Good Times Last? [View article]
    Per the April Pimco Total return commentary for instance, Swaps and Liquid rates equal -3% of the portfolio value but are equivalent to -20% share of duration. From what I can tell they appear to be using about 20% leverage, 120% long/20% short (duration basis), equaling 100% net exposure to bonds.

    There is an element of risk to being long/short different maturities but it just changes exposure to the spread rather than direction of the bond market - I think of this as the risk being moved rather than increased/decreased. I'm pretty sure Total Return targets net 100% exposure but I don't have all of the past data to glean from immediately.

    Anyways, I think we are in agreement, Bill Gross is what makes both of these funds worthy of investment dollars.

    Cheers
    May 23 02:57 PM | Likes Like |Link to Comment
  • BOND's 10% Annual Return Without Any Increased Risk: Will The Good Times Last? [View article]
    A couple things. With the "too big to outperform" argument, keep in mind that the PTTRX fund has been large AND outperforming its peers for many years so not sure I agree with this. Also, as far as leverage is concerned, PTTRX can employ leverage however it is typically used to hedge, not magnify a long bond position. Gross can and does go long/short different maturities so to characterize this fund as giving 150% exposure is not correct.

    Anyways, I hope you do see good performance of BOND in the future, however the smaller is better argument and 1-year of relative history seem a little bit presumptuous.

    Either way, they are both under the wing of Bill Gross, which I believe is the most important factor.
    May 23 01:01 PM | Likes Like |Link to Comment
  • There's Something Not Quite Right About InterOil [View article]
    FTH - your arguments repeatedly assume IOC will not be able to secure a JV agreement. Thus you have ignored my discussion of how financing might accomplishable aside from IOC being the sole arranger of a debt financing.

    Here's a news flash - if IOC can't get a JV partner, an LNG plant will never get financed. So your snide comment: "If you really think that Interoil is going to somehow raise $10-$20B via equity then I have a bridge to sell you." is completely irrelevant. No JV partner = No LNG. IOC will not be raising $10B on its own be it debt or equity - that is completely ludicrous.

    As I've mentioned, and you've ignored - in the event of a JV arrangement, IOC is likely receive compensation from a JV partner that will help IOC's portion of any financing. The partner will likely be a much more well financed major that will not have as difficult of a time raising the necessary capital.

    No JV Partner = No LNG = No point in IOC spending their own money to prove reserves before finding a JV Partner. Therefore the only reason to spend large amount of money to prove reserves now would be if it was demanded in order to make necessary arrangements a JV.

    I think we all get it - you think they will never finalize a JV. Only time will tell. Meanwhile you and Gefvert can yell to the hills about all of the unknowns. Yes, there are many unknowns - that's what makes this a high risk/high reward stock.
    Mar 27 12:39 PM | Likes Like |Link to Comment
  • There's Something Not Quite Right About InterOil [View article]
    Feel the Heat

    "Interoil's discovery is worthless unless an LNG Plant is built that will require substantial debt financing. To obtain debt financing, Interoil must have a reserve report done by an approved firm. It is my understanding that GLJ is not an approved firm and thus their report would not suffice."

    Your argument is based on the false premise that IOC will be funding an LNG plant with debt financing. Without knowing the terms of the JV, we don't know how it will be financed. IOC may receive enough in proceeds from the partnership that their portion is funded from cash. They could have a (presumably more well financed) partner own/develop an LNG plant in return for royalty streams, etc. We just don't know how/if the financing will work.

    So, why would IOC spend the money now to prove reserves without finalizing a JV arrangement?

    I am not arguing that not having proven reserves should make YOU feel comfortable about investing in IOC. It is risky and we don't know how/if the story will play out. My point is that there is very well a legitimate reason that IOC doesn't want to shell out tens of millions of dollars RIGHT NOW that would be required for the large undertaking of proving these reserves.
    Mar 25 05:13 PM | Likes Like |Link to Comment
  • There's Something Not Quite Right About InterOil [View article]
    Cove was sold in it's entirety, thus everyone was bidding on the same exact thing and bids could be made public and remain valid for comparison.

    IOC is negotiating a partnership agreement of which the size and scope are not predetermined. They must agree on not only price but ownership terms and development.
    Mar 22 01:49 PM | Likes Like |Link to Comment
  • There's Something Not Quite Right About InterOil [View article]
    If they didn't want to have anything to do with IOC management, they wouldn't be jockeying each other for position to get a piece of the pie!

    The joint venture approach is what IOC has communicated repeatedly to the street. There is zero reason for them to sell the whole enchilada.

    I'm gonna move on here because it is clear you have an axe to grind and are not here to objectively consider the investment merits of IOC. You've posted 7 bearish articles on IOC starting Nov 14, 2011 when the shares were $45 and they haven't been below that since.
    Mar 21 04:03 PM | Likes Like |Link to Comment
  • There's Something Not Quite Right About InterOil [View article]
    Having an ownership interest doesn't mean that InterOil would be doing the development work itself. The whole point in partnering with a major is that this project will require the size and scope of development beyond what IOC could facilitate itself. But that doesn't mean that IOC won't still own a good chunk of the partnership and provide required development capital to fund their stake.
    Mar 21 01:09 PM | 1 Like Like |Link to Comment
  • There's Something Not Quite Right About InterOil [View article]
    You have a point about the lack of proven reserves but that certainly doesn't certify that the resources do not exist. Proving reserves is very expensive and ultimately is just to make investors feel better about a companies prospects. If you have investors lining up to partner with you, it becomes of less relevance whether you prove those reserves to the public.

    Check out GORO in the gold mining space - they never proved reserves and have managed to build a giant gold mine in Mexico. The point is - why spend shareholders money to answer questions you already know the answer to. Most companies have to prove reserves to attract investment - IOC doesn't have that issue.

    And as far as a debt/equity raise, you are way off base. We don't know terms of a partnership agreement yet. If IOC feels strongly of the future of these assets, they may intend to retain as much ownership as possible and fund their share of development, which would require capital.

    "If a major oil and gas operator is supposed to take part in its LNG production, I don't think it would want InterOil to also take a major role. That would complicate its procedures."

    IOC owns the assets. It is their choice what kind of partnership agreement they come up with. Why wouldn't IOC have a major role in developing their own assets?
    Mar 21 12:00 PM | 1 Like Like |Link to Comment
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