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  • REX: Overreaction To Brazilian Tax Credit News Bares At Least 26% Upside [View article]
    Tim about a month ago before of this sell off I noticed the much lower futures prices in October/November mentioned it to the short seller on the yahoo message board that he would be absolutely right in time. Although I was hopeful we had another month or two of positive momentum the spot prices didn't cooperate. I also sold out of my profit shares in REX. Its nearly impossible irregardless of an individual company's strengths to hold any company involved in deflationary prices especially one with a small float.

    Trust me I have been pulling my hair with NSU it hard even difficult to fight a trendless copper market.

    I still hold profit shares of MGPI because only one operation is exposed to the weak selling prices and the operation that processes wheat should start to see a major uptick in margins starting this quarter.

    With lower the DDG prices however, I have taken a trading position in CALM believing it will have a major impact in lowering feed costs and I believe they still will continue to see demand improvement from substitution of high cost meat protein for eggs but I think this is a short term trading opportunity under nirvana conditions.

    With regard to REX I think this free fall is likely a seasonal event and has been exacerbated by the free fall in energy prices likely manipulated from the upcoming elections which it seems to always have. The stock will form a bottom and prices should improve once we get through this.
    Sep 19 10:44 AM | Likes Like |Link to Comment
  • Update: Avnel Gold's Earnings And Pre-Feasibility Study Commencement [View article]
    An investor here is really hoping for a sale of the company before the next round(s) of dilution and properly timing it. The PFS is a catalyst but I think it won't have a similar impact in percentage terms as the PEA did as the news is now not at all a surprise.

    Where I would be hopeful for some headway here in the company potentially selling out is activist investor LLoyd Miller III who has a great contrarian/value activist track record has recently taken a stake here. Hopefully, he has enough clout to force a sale of the company but his task will be very difficult to accomplish at a a premium sufficient enough to satisfy the largest shareholder's cost average which is around 30 cents.

    I think the probability of the firm developing this project on its own admittedly is a stretch even though there is a currently large discount of its market cap to the value of the discounted NPV of the project and the ratio of this NPV to capex is acceptable provided you have to sufficient capital to build it which they don't. So I think this project will definitely be built on fairly short order looking at the conservative numbers used in calculating the IRR .

    Aug 21 10:06 AM | Likes Like |Link to Comment
  • Update: Cal-Maine Foods Q4 '14 Earnings With Enlightening Results [View article]
    As an earnings momentum play I think CALM's potential for a few blowout quarter(s) on a short to mid term basis is a 100% given because of the recent massive reduction of dried distillers grain prices since April from $240/ton to $100-120/ton caused by a massive oversupply due to the shortages in the cattle herds and a ban on exports by China who is a big buyer of DDGs. Everything is clicking fundamentally for the company.
    Aug 19 10:20 AM | 3 Likes Like |Link to Comment
  • Update: Orvana Minerals Earnings - Revises Its Resources And EVBC Mine Life Downward; Shares Plunge [View article]
    I agree with your sentiment here of moving on and what I found ironic was the total abandonment of the investment bank participation in the conference call as they already knew what was the outcome here.

    Management has been slowly uncovering the lies for 3 years now with the tremolite problem at the UMZ which horribly hampered recoveries and mothballed the plan for the CIL reprocess and the much lower grade profile at EVBC with this bombshell being the second downward revision of reserves over that time frame. It will be a difficult to restore any semblance of trust with this stock going forward.

    At the current throughput(s) using proven and probable reserves I measured a 13 quarter mine life for EVBC and a 10 quarter mine life for the UMZ.

    You have to measure the valuation here based on what will be the final cash balance of the company at the end of mine life without truly knowing their variable costs and you know much of this improved profitability will require much more exploration capex to keep this shell game going.

    FWIW it appears the company is currently discounting approximately a 75 million cash balance at the end of life of the mine. We'll see if that holds true.
    Aug 17 09:30 PM | Likes Like |Link to Comment
  • Orvana Minerals: Cheaper, Safer, And More Efficient [View article]
    I agree with you the accounting comps are dirt cheap but they always historically been much lower given the ownership structure of the stock. From experience if you don't give an investment bank full control of the equity the comp valuations tend to get penalized.

    I think the worst is definitely over on the operating front and with the major reduction in long term debt to zero in pretty short order I think eventually all of that enterprise value given to debt will eventually be transferred to equity. So that would conservatively imply a minimum 40% upside with no an assumption of no change in the price of gold.

    I also think within the next 4-6 quarters they will be processing the pure sulphide ore at the UMZ at 80% recoveries which should be the sweet spot in the profitability there and should be another operating catalyst going forward.

    I have been a recent buyer of the stock realizing this is a low risk/acceptable return situation. Which is somewhat elusive in an overvalued market.
    Aug 12 10:46 PM | Likes Like |Link to Comment
  • Update: Caledonia Mining's Solid Earnings Trumped By A Q1 Reporting Error [View article]
    The accounting irregularities issue was reported on 8-8. So that issue was already known and should have been priced in the stock.

    I thought the information supplied on the presentation was somewhat vague. Where I was negatively surprised was the immediate shut ins to the Feudal and Lima developments above level 9 for low head grades (how low was not supplied nor did they suggest using a higher mill output to remedy the situation since the mill remains horribly underutilized or if the Alimak method of mining the stopes can alleviate any ore dilution). The potential short term remedy left me with some additional unanswered questions like the access to newer areas involving any development ore and total details of the mine plan now being fast tracked to get access to the Winze project much earlier than 2016.

    I have submitted the company some questions to get more clarity.
    Aug 12 10:24 PM | Likes Like |Link to Comment
  • Mart Resources: It's The Right Time To Buy This African Oil Play [View article]
    The dividend served a very important function here as it has successfully kept the price of Mart's shares well above its NAV of its producing assets that is currently booked as reserves which was my intention when I proposed the idea to them in 2011 given the perceived risk of the investing climate in Nigeria especially in a low rate environment starved for yield.

    With Mart I would estimate about 50% of its growth expectations is already baked into the stock price. However, where I think an investor would hold their shares is the probability of reserves at least doubling at Umusadege is very high on the order of 75% + given the lack of depletion seen in most of its wells over the years.

    OTOH I know the author is very high on Afren as I am with the recent sell off down to NAV of its producing assets and this ignores the potential mega growth opportunities from its proven undeveloped assets. Afren has one big advantage in Nigeria as most of its production has no interruptions or losses since it is based offshore. In an investment today I think the risk/reward favors Afren over Mart at this juncture given no clear picture of the circumstances surrounding OML 18 to base an opinion.
    Aug 9 06:37 AM | Likes Like |Link to Comment
  • Value Gaps Of All Value Gaps - A Tale Of 2 Ethanol Companies [View article]
    Thanks computer (your opinion) has DDG prices stabilized yet? The prices look like another $30-50 /ton lower from average prices obtained at the end of Q2. Any rumors circulating of China lifting the DDG ban?
    Jul 30 01:23 PM | Likes Like |Link to Comment
  • Value Gaps Of All Value Gaps - A Tale Of 2 Ethanol Companies [View article]
    I didn't catch the conference call was anything mentioned about the stabilization of DDG prices or are they still declining?
    Jul 30 01:00 PM | Likes Like |Link to Comment
  • Value Gaps Of All Value Gaps - A Tale Of 2 Ethanol Companies [View article]
    I think the operating margins in Q2 have been mainly negatively impacted from the byproduct side which explained the earnings miss at GPRE . Over the quarter DDG prices have been in a free fall (off 30% from Q1). Prices have been weak because of the Chinese ban on imported DDGs.

    Call me chicken but I am one of the people who has started to take profits in the sector but this is from a huge run up from my purchases a year ago.
    Jul 30 12:29 PM | Likes Like |Link to Comment
  • Phoscan Chemical Corp (H2 2014 Update) [View article]
    I wish I caught your original article I could have told you that is their gig. Even some minor homework of reading some posts on the archived Stockhouse message board could have warned you of this. They have sat on this cash hoard and done absolutely nothing but draw salaries well before the credit crisis. I guess this is their personal reward for their lucky timing of their equity raising.

    At least I commend you on your purchase timing and getting out at a small profit and realized your error(s)- a sign of a great investor.

    I would only perhaps consider owning this if the ag mineral commodities REALLY heated up for some time and this stock lagged badly. The last time I owned shares under these favorable macro conditions in ag minerals was in mid Sept 2010 about 3 months after the initial rally in the sector. This was the last ag stock to actually begin to rally and show volatility and of course it was nothing but a swing trade pump and dump opportunity for me.

    However, with 5 more years of this "shell" game under their belt taking salaries doing absolutely nothing maybe there won't even be that next time when the ag mineral commodities take off again (if they do). The Uralkalai price competition has put a major damper on this ag mineral sector's growth potential.
    Jul 23 12:45 PM | Likes Like |Link to Comment
  • Update: Caledonia Mining Updates Its Dividend Policy [View article]
    I wouldn't necessarily call this a zero growth company going forward. The Winze project should add 24K oz of production to the mix in 2016 and there is another 4K increase of production expected next year.

    I totally agree with you at the current price of gold the window of buying the stock is gone in the shorter term from my perspective but the stock still remains relatively inexpensive on an enterprise value basis.

    The reason for the continued appeal here as a hold -The stock still remains an attractive longer term hedge to hold gold in a portfolio. You buy physical gold you get no return to hold it but Caledonia pays you 5%+ return while you have exposure to the metal. This is the only gold firm that has such a high payout and conservative balance sheet. Isn't a convenient setup like that worth some premium?

    As for the Zimbabwe situation I think it is at worst stable. Allan Gray, a South African investment firm certainly has confidence in the region and probably has a better understanding of the country risk than an armchair institutional investor in the states.
    Jul 14 10:30 AM | 1 Like Like |Link to Comment
  • Why Valero Energy Is A Great Buying Opportunity In A Good-Yielding Stock [View article]
    I have sold out of the downstream oil sector for little over a year now. I much prefer the economics of ethanol at this time but you must exhibit caution since that is a weather market. The knock on VLO is the peak in the favorable crack spread has passed and the environment for improvement IMO looks bleak with the allowance of selling of unrefined condensate and timeliness of getting landlocked crude to the coast, however, in particular to I think ethanol has been a bright spot for the company this year and it appears promising that the attractive crush spread will continue to hold for another year provided the crop reports remain favorable.
    VLO would be the name to hold if I had to make a selection in the sector at this time but I would prefer holding a firm that is in an upswing in all of its businesses.
    Jul 11 08:54 AM | Likes Like |Link to Comment
  • Renewable Energy Group: Undervalued And Ready To Break Out [View article]
    This is a tough one to determine when to start a scale. So far I have held off purchase but I don't feel left behind because ethanol producers are enjoying a healthy margin and I hold a decent position in that subsector for about a year.

    I agree you have to find a point in buying this because the accounting valuation in the stock is very attractive but to my knowledge its operations clearly have peaked for now.

    The issue for me is timing when I saw the latest detailed report margins have contracted big time especially when using hard tallow as a feedstock when I saw the latest 10Q. My theory behind this is from the current shortages in meat products where not long ago this was in great oversupply which drove hard tallow prices down to allow a very healthy margin here that operating advantage has totally disappeared. Currently, the margins using tallow are virtually the same as using virgin soybean oil which explained the challenging quarter and cautious outlook to Q2.

    The company only really saw an operating advantage using yellow grease.

    So the current rally IMO is buying related to blender's credit speculation but I know at some point this stock will shine again.
    Jul 4 01:42 PM | Likes Like |Link to Comment
  • B2Gold Scores High With Fekola Project [View article]
    Political risk means little if you possess multiple high quality assets in different locations. Randgold seems to thrive under similar circumstances. So I give BTO's business plan an A+ but the whole idea of taking these risks is the ability to buy the single asset at a discount not at a premium.

    I give this deal a C even though the asset quality is there it is reliant upon too many variables like higher prices a resource extension and a stable environment to make it add to value. Personally, I think it detracts somewhat of the intended model from a value perspective.

    What I also find ironic is the Kalana and Kobada projects both very high IRR projects in Mali currently trade at 88% and 82% discounts respectively to their 8% discounted NPV but are approximately 1-1.5million oz resource projects. Does a smaller project deserve that sort of penalty?
    Jul 4 10:45 AM | Likes Like |Link to Comment