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charliezap

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  • 6 Reasons Exxon Mobil Is Currently A Buy [View article]
    """There is no such thing like solar cars that you can buy . ."""

    I think you made my point. I was being sarcastic, of course.

    Nor did I say we should rely solely on fossil fuels. But we currently have a surplus of natural gas, and of coal, so that there is no restraint on growth through a lack of fossil fuels. And why should "big oil" be helping clean energy when "big government" is attempting to do just that?
    Jun 27 05:11 AM | Likes Like |Link to Comment
  • 6 Reasons Exxon Mobil Is Currently A Buy [View article]
    """ Oil executives continue to maintain a very dim view of solar energy for no reason other to maintain energy dominance regardlessly [sic]."""

    Yes, I thought of buying a solar car. But then I wondered, what about night time? Or rainy days?

    The fact is that wind and solar only provide a small part of our total energy needs. This is especially the case in the transportation sector. And although wind and solar are growing rapidly, they will remain a small part for years to come.
    Jun 26 11:13 PM | Likes Like |Link to Comment
  • Legacy Oil & Gas: Dramatic Discount To Book Value With A Prosperous Future Ahead [View article]
    The main issue that I have with this article is the use of book value, tangible or otherwise, to value the stock. Book value is merely the depreciated accounting cost of the company's efforts to explore for and to produce oil and gas. Sometimes a company may spend a lot to find oil, and not find much. And sometimes, the accountants may take a while to write off the unsuccessful efforts.

    I would put more credibility in the NAV, which is based on the present value of what is actually found. In this case, that value, according to the article, is US$6.78 per share. And, according to mcdep dot com, companies typically sell at a discount to NAV (mcdep bases the discount on EV -- Enterprise Value). Applying a 20% discount to the NAV, I think $5.42 would be a reasonable target, versus the current price of $4.67.
    Jun 26 09:24 AM | 1 Like Like |Link to Comment
  • Natural Gas: The Fastest Growing Transportation Fuel In The U.S. [View article]
    Frankly, I don't see how ethanol, dumb as it is, keeps CNG out of the picture for passenger cars. And I don't see the "US government . . . working with big oil . . ". What's the point? -- They're at odds in most other things!

    I do see a case for trucks and limited distance municipal vehicles to use CNG, and, as I have already indicated, Shell has announced a program to put CNG facilities in truck stops. But for ordinary passenger cars, there are hurdles to overcome, not the least of which are heavy tanks and low energy density. Here is ExxonMobil's take on the topic:

    http://tinyurl.com/lpx...
    Jun 24 01:22 PM | Likes Like |Link to Comment
  • How The Price Of Oil And Gasoline Could Crash [View article]
    Regardless, Keystone will lower input costs for Gulf Coast refineries, which should have an overall beneficial effect for gasoline prices east of the Rockies.
    Jun 20 10:45 AM | Likes Like |Link to Comment
  • How The Price Of Oil And Gasoline Could Crash [View article]
    Mick, Keystone XL is for crude oil, not products. Keystone will reduce the need for Brent based imported crude, and will reduce supply costs for most of the US east of the Rockies. As of the latest month (March), the US still imported more crude oil than it produced. Canada is the largest source of imported crude, followed by Saudi Arabia and Venezuela.

    http://1.usa.gov/11lYJVi
    http://1.usa.gov/TdUp8q

    Net-net, the US domestic oil market is still dependent on imported oil.

    US DEPENDENCE ON IMPORTED OIL
    (THOUSAND OF BARRELS DAILY) Mar '14
    Total Products Supplied 18,476
    Less: Exports (mostly products) -3,111
    Equals:
    Total Supplied to Domestic Market (A) 15,365

    Imports (Crude & Products) 9,456
    Less: Exports (mostly products) -3,111
    Equals:
    Net Imports for Domestic Market (B) 6,345

    Import Dependence (= B/A) 41.3%

    Memo: Crude Oil Production 7,124
    Crude Oil Imports 7,460

    Data Source: US Energy Information Agency
    Jun 20 08:33 AM | Likes Like |Link to Comment
  • Add Some SALSA To Your Intelligent REIT Portfolio [View article]
    I believe the risk is fairly minimal, if UMH sticks to the basic business plan. While UMH has a sales agency that sells the houses as a side business, the basic plan is to rent the lot. Once a manufactured house is moved to a site, it hardly ever leaves the site. If an owner falls behind on the rent payments, UMH can place a lien on the house. If the lien is not satisfied, UMH can repossess the house -- and sell it to someone else!
    Jun 17 05:24 PM | 1 Like Like |Link to Comment
  • This Undervalued High Dividend Stock Is Oversold And Goes Ex-Dividend Soon [View article]
    The difference between mortgage REITs and equity REITs is like the difference between dogs and cats. CLNY is somewhere in between, a "hybrid" REIT, but that is not clear in the article.

    Also somewhat misleading is the use of the PEG ratio to assert that CLNY is undervalued. Conventionally, in the PE / Growth Rate formula, the analysts' long term (5-year) growth rate is used. The analysis above uses a 1-year growth projection. Based on Yahoo numbers, the PEG ratio for CLNY is 3.84, and not the "2014 PEG" given as 0.46.

    CLNY -- Price = 20.50 (current)
    CLNY -- Earnings = 1.32 (2012)
    CLNY -- P/E = 20.50 / 1.32 = 15.53
    CLNY -- 5-year growth = 4.0%
    CLNY -- PEG ratio = 15.53 / 4 = 3.88 (based on current price).

    http://yhoo.it/11KMizj

    CLNY may or may not be a good value, but I could not determine that from the analysis above.

    Note: Some of the exhibits, such as the trend in home rentership, are lifted directly from a recent investor presentation:

    http://bit.ly/11KMizl
    Jun 17 02:41 PM | 1 Like Like |Link to Comment
  • Add Some SALSA To Your Intelligent REIT Portfolio [View article]
    Brad, I agree with your analysis. The main reason for caution is that the dividend level recently has exceeded FFO. But demand for this type of housing is once again on the increase, and UMH has done a good job making acquisitions that add to the lot portfolio. I expect to see FFO increases and am adding to my position.
    Jun 17 12:17 PM | Likes Like |Link to Comment
  • Add Some SALSA To Your Intelligent REIT Portfolio [View article]
    How much upside potential is there if you are 96% occupied (MNR), vs 81% occupied (UMH)? A lot of shale drilling workers will be moving into UMH's territory to take up those empty lots.
    Jun 17 12:11 PM | 3 Likes Like |Link to Comment
  • O Is A Buy, Not A Bargain [View article]
    pbanik

    You need to get a deeper understanding of REITs. Ratios such as P/E, P/B, P/S, debt/equity are virtually useless when analyzing equity (or property) REITs. Plus, you can't compare equity REITs with mortgage REITs -- its like comparing dogs and dodos. Equity REITs own property, i.e., land and buildings as their main assets, and collect rents as income. Mortgage REITs own paper securities, are heavily leveraged, and collect on the interest spread.

    If properly maintained, the land and buildings owned by equity REITs appreciate in value and the rents go up. Yet the accountants, under GAAP rules, insist on writing down the value of the assets through depreciation. This distorts both the balance sheet and income statement, rendering useless the ratios listed above. Instead, REIT analysts look to FFO per share as a valuation metric. FFO = Funds from Operations, which is net earnings with depreciation added back (plus other adjustments, such as for asset sales). Instead of book value, the analysts look to NAV (Net Asset Value), which replaces the depreciated asset base with the market value of the properties.

    To find FFO estimates for an equity REIT, go to the Yahoo Analyst Estimates page. Even though it says "Earnings" on the page, the estimates are, in fact, for FFO per share. The consensus view of 9/10 analysts is that O will have FFO peerr share of $2.38 for 2013 and $2.50 for 2014. The FFO multiple is 18.9. The reciprocal is 5.3%, which represents the net leveraged cash flow yield on the properties, only slightly more than the dividend.
    http://yhoo.it/WMFpv8

    Good luck doing your DD.
    Jun 16 11:40 AM | 3 Likes Like |Link to Comment
  • 7 Secular-Growth REITs To Generate Income Now [View article]
    Amazing! An article on REIT's without any reference to valuation metrics such as FFO per share or NAV. A lot of discussion of yields without any discussion of payout ratios or dividend sustainability.
    Jun 14 08:15 AM | 5 Likes Like |Link to Comment
  • Cliffs Natural Resources (CLF +6.4%) is surging, as Credit Suisse revises its earnings estimates for the next three years and lists potential strategic actions - including AsiaPacific iron ore disposal and a halt to Bloom Lake Phase 2 expansion - and balance sheet remedies the firm thinks could raise CLF's long-term normalized valuation by as much as $6-$19/share. [View news story]
    CS has an extremely bearish view of iron ore prices. They forecast $80-100 per ton in the next 12 months. Earnings forecast is $1.49 for 2013 and losses for 2014 and 2015. Target price is $10. In addition to selling AP mines, and curtailing Bloom Lake, the report recommends selling more stock.

    Have an enjoyable evening!
    Jun 13 07:03 PM | 1 Like Like |Link to Comment
  • 6 Reasons Exxon Mobil Is Currently A Buy [View article]
    XOM is always the "safe" choice among the major oils. Institutions automatically buy XOM when they want to increase exposure to the oil industry. For some, XOM is a bond substitute. XOM is also one of the few corporations with a AAA bond rating.

    For all of the above reasons, XOM tends to sell at a lower discount to intrinsic value than other oil companies. Intrinsic value is not book value. What does $37 per share mean when XOM's stock price is $92? Book value only represents the depreciated cost of XOM's stock (less liabilities), according to the accountants, under various arcane GAAP rules.

    More to the point, what is the value of the oil and gas reserves that XOM has discovered, and the other assets? One source is mcdep dot com. Their June 9th report has a 'Buy' on major XOM subsidiary Imperial Oil (IMO), which sells at a 31% discount to Present Value. XOM meanwhile only sells at a 14% discount.

    See mcdep dot com for detail.
    Jun 11 12:47 PM | 2 Likes Like |Link to Comment
  • Don't Overlook Exxon Mobil [View article]
    Silly article. One of the few corps with a AAA bond rating. Largest market cap. Very large company operating in over 60 countries. Some use XOM as a bond substitute. It doesn't take a genius to make XOM a stock pick, even though a spill can occur at any time (and they've had a couple recently). Other major oils may be a better value (e.g., CVX and RDS), but XOM will always be a safe choice.
    Jun 10 04:00 PM | 1 Like Like |Link to Comment
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