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charliezap

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  • American Realty's Properties Are Worth 70% Over The Current Stock Price [View article]
    """The other aspect is more of a backdrop / opinion on interest rates. I for one believe we won't see the 10y note very near 3% in a very long time. The Fed _will_ get what it wants, which are negative real rates."""

    That may be what you believe, but what if you are wrong? With 2% to 3% inflation, the 10-year would be, based on historic norms, at 4% to 5%. While it may not happen in the next 12-18 months, rates have to get back to "normal" some time. I would not be making my investing decisions on the assumption of the 10-year staying below 3%.

    And just why would the Fed wish for negative interest rates?
    Jun 12, 2015. 08:18 PM | Likes Like |Link to Comment
  • American Realty's Properties Are Worth 70% Over The Current Stock Price [View article]
    Yarak,

    The major flaw in the author's thesis ("American Realty's Properties Are Worth 70% Over The Current Stock Price") is that the assets are not unencumbered -- they are all subject to 10-year or longer leases. This means that asset valuation is determined, not by comparables with other commercial real estate, but by applying a cap rate to the NOI that the buildings generate. (NOI = Rent Revenue - Cash Expenses, but for a triple net lease the expenses are minimal.) The escalators in the leases are probably just 1% or 2%, or perhaps CPI. In any event, it means that NOI is increasing at a minimal level, and nothing like the 40% the author bases his argument on.

    David Kay threw out an NAV estimate of $13.25. That was probably an overly optimistic assessment. The biggest hit to value since then has probably been taken by the Cole Capital entity. Since then other estimates of NAV that I have seen range in value from $8.17 (Oppenheimer, see the link below) to $10.30.

    $18.20 is a preposterous number, and I say that as someone who is considering buying the stock in the coming week.

    http://tinyurl.com/ouf...
    Jun 12, 2015. 08:05 PM | 1 Like Like |Link to Comment
  • Here Is Why I Am Buying Exxon Mobil And Selling Statoil [View article]
    Yes, and the returns are diminished even further if STO decides to start developing this field five years in the future rather than now!
    Jun 12, 2015. 04:55 PM | Likes Like |Link to Comment
  • Here Is Why I Am Buying Exxon Mobil And Selling Statoil [View article]
    """ . . think about the extra CAPEX needed to get this oil discovery to run."""

    This comment borders on the _____ic. [No, I won't use the word, or you will get my comment removed.]

    This is like saying: STO spent a lot of funds and were rewarded for their risk taking with a discovery of a big field; now let the discovery just sit there, even though spending funds to develop the field will result in an almost certain high rate of return.
    Jun 12, 2015. 02:32 PM | 2 Likes Like |Link to Comment
  • Great American Net Lease Company Begins To Claw Back Its Brand [View article]
    And the dividend will get reinstated at some point if ARCP is to keep REIT status!

    That's the first point. The second is that if Rufrano executes on the plans he has outlined, most of the news coming in the next 18 months should be positive. The third point is that this is an equity REIT. The underlying intrinsic value of the company is defined by the value of the real estate. Whether that underlying NAV is $8.50 or $9.00, it does provide something of an anchor, especially if the Fed holds off on raining interest rates.

    My conclusion is that there is much more upside potential than downside risk here. Further, given the relative FFO multiples and ratio of price to NAV, ARCP is very undervalued compared with O and NNN. I plan to initiate a small position with some of my surplus funds.

    To Brad: A very good article, BTW.
    Jun 12, 2015. 10:04 AM | 1 Like Like |Link to Comment
  • Shell No! I Won't Go Back To Rule-Changing Oil Giant [View article]
    Repeating the above. Due to a tax agreement with the UK, there is no WH tax on dividends from B shares, whether held in an IRA or a taxable account.
    Jun 12, 2015. 08:03 AM | 8 Likes Like |Link to Comment
  • Exxon Mobil's Backwards Mindset Will Present Problems [View article]
    The biggest thing going on in Exxon's research labs is finding ways to extract more oil more efficiently. Yes, there is probably some work on refinery processing, and some applied research to test applications for their chemical products. These 3 things would utilize 90% of their R&D spending, I am sure.

    It would be extremely surprising to me to see them come out with something competitive in the solar energy sector. Other companies have not only developed the products, but they have been installing them at a rapidly increasing pace. SunEdison (SUNE) is an example.

    http://tinyurl.com/q4f...
    Jun 11, 2015. 04:47 PM | 1 Like Like |Link to Comment
  • Exxon Mobil's Backwards Mindset Will Present Problems [View article]
    ""Exxon did battery and solar research way back in the late 70/early 80s.""

    We've come a long way since the 70's/80's and Exxon would have a lot of catching up to do to get up to speed with where solar is today. Mobil had a unit doing solar research before it was taken over by Exxon. They probably got rid of it, either before or after the merger.

    The only mention of research on renewables on Exxon's current website has to do with making biofuels from algae.
    Jun 11, 2015. 01:29 PM | Likes Like |Link to Comment
  • Exxon Mobil's Backwards Mindset Will Present Problems [View article]
    THREE SCIENTIFIC FACTS:

    1. At a given location, the wind does not blow all the time.

    2. At a given location, the sun does not shine all the time.

    3. To store electric power economically and efficiently, a major technology breakthrough is required. Battery technology is still inadequate for the task.

    Renewable fuels will grow more rapidly than fossil fuels, but from a practical point of view, we will continue to rely a great deal on fossil fuels for transportation. Here is Exxon's forecast on fossil fuels:

    http://tinyurl.com/ncu...

    Note also from the Exxon website, they believe "the risks of climate change are real and the risks warrant action." Exxon also believes that " market-based efforts to reduce greenhouse gas emissions – like a revenue-neutral carbon tax – are more economically efficient policy options than regulations, mandates, or standards."

    http://tinyurl.com/qcq...
    Jun 11, 2015. 12:33 PM | 1 Like Like |Link to Comment
  • Citigroup Breaks Out To New Highs [View article]
    Jason, let me refresh your memory.

    In October 2008, Citi struck a deal, via a letter of intent, to acquire the collapsing Wachovia for $2 per share. Citi intended to issue new stock to do the deal, even though Citi's stock price was down to $18 from a high that had been over $55. A day later, Wells came in with a bid of $7. The Wachovia board had to accept the Wells offer. Wells acted independently and had been looking at Wachovia for some time.

    http://tinyurl.com/qya...

    A month later, Citi found itself on the verge of collapse, and the Feds put together a bailout plan.

    http://tinyurl.com/pev...

    Do you really believe that Citi could have been saved from bankruptcy by acquiring the bankrupt Wachovia?
    Jun 11, 2015. 08:07 AM | 1 Like Like |Link to Comment
  • Here Is Why I Am Buying Exxon Mobil And Selling Statoil [View article]
    nicholas,

    1. On the foreign dividend withholding tax, you can take it either as a credit or as a deduction. Usually, it is better to take it as a credit. See the link in Alexander Alechine's comment above.

    2. If you take the foreign tax as a credit, you will usually recover it $ for $. There is no $1000 limit. However, under some circumstances, there are limitations that may apply. On a joint return, you can simply take the credit on line 48, if it is reported on your 1099B, and if it is $600 or less ($300 if filing single). Above this, you must file Form 1116 to get the return, which makes your tax filing slightly more complicated.
    Jun 11, 2015. 07:44 AM | Likes Like |Link to Comment
  • Sasol President/CEO Constable to step down next year [View news story]
    As I said, gasoline and diesel prices in South Africa are set using a formula that is based on the $ price of Brent crude oil. South Africa has no crude oil production of its own, and the other refiners there, BP, Shell, Chevron, Engen, and Total use imported crude oil. Sasol's main feedstocks are oil and gas converted to liquid fuels though the Fischer-Tropsch process.

    Here is a table showing the sensitivities of Sasol's EPS to changes in the Brent crude price and the Rand/$ rate. The table comes from a 2010 report by Citigroup. (I was not able to get a newer report, but the table illustrates the point I made above.):
    ----------------------...
    Figure 25. Sasol Basic Headline EPS sensitivity to changes in ZAR/USD and crude prices
    Showing EPS in US$
    Average ZAR/USD rate
    6.50 6.75 7.00 7.25 7.50 7.75 8.00 8.25 8.50 8.75 9.00 9.25 9.50 9.75 10.00
    Brent Crude Price (U$/bbl)
    40 -2.38 -2.12 -1.87 -1.64 -1.42 -1.22 -1.03 -0.85 -0.68 -0.52 -0.37 -0.23 -0.09 0.04 0.16
    50 -1.14 -0.87 -0.62 -0.38 -0.17 0.04 0.23 0.41 0.58 0.75 0.90 1.04 1.18 1.31 1.44
    60 0.11 0.38 0.63 0.87 1.09 1.30 1.49 1.67 1.85 2.01 2.17 2.31 2.46 2.59 2.72
    70 1.36 1.63 1.89 2.12 2.35 2.55 2.75 2.94 3.11 3.28 3.44 3.58 3.73 3.86 3.99
    80 2.61 2.89 3.14 3.38 3.60 3.81 4.01 4.20 4.38 4.55 4.70 4.86 5.00 5.14 5.27
    85 3.21 3.49 3.74 3.98 4.21 4.42 4.62 4.81 4.98 5.15 5.31 5.47 5.61 5.75 5.88
    90 3.86 4.14 4.39 4.63 4.86 5.07 5.27 5.46 5.64 5.81 5.97 6.13 6.27 6.41 6.55
    100 5.11 5.39 5.65 5.89 6.12 6.33 6.53 6.72 6.91 7.08 7.24 7.40 7.55 7.69 7.82

    60 0.74 2.59 4.44 6.31 8.17 10.05 11.93 13.81 15.70 17.60 19.50 21.41 23.33 25.25 27.17
    70 8.86 11.03 13.22 15.40 17.60 19.80 22.01 24.23 26.45 28.68 30.92 33.16 35.41 37.67 39.94
    80 16.98 19.48 21.99 24.50 27.03 29.56 32.10 34.65 37.20 39.77 42.34 44.92 47.50 50.10 52.70
    85 20.87 23.53 26.20 28.87 31.55 34.24 36.94 39.65 42.36 45.09 47.82 50.56 53.31 56.06 58.83
    90 25.10 27.92 30.76 33.60 36.46 39.32 42.19 45.07 47.95 50.85 53.76 56.67 59.59 62.52 65.46
    100 33.22 36.37 39.53 42.70 45.88 49.07 52.27 55.48 58.70 61.93 65.17 68.42 71.68 74.95 78.23
    Source: Citi Investment Research and Analysis

    For greater clarity, you might want to copy or convert the data to an Excel file.
    Jun 11, 2015. 12:17 AM | Likes Like |Link to Comment
  • BP: U.S. becomes world's biggest oil producer, among major energy shifts [View news story]
    """ I could go on and on."""

    Please don't. Unless, that is, you can substantiate some of the statements you made above.
    Jun 10, 2015. 10:22 PM | Likes Like |Link to Comment
  • Citigroup Breaks Out To New Highs [View article]
    Emerald, forget the old Citi. The old Citi went bust in the 2008 financial crisis. They (Citi) were dancing recklessly; they tried to keep dancing but the music stopped. By buying new shares, the feds bailed Citi out when no one else was willing to do so. The old shareholders were diluted by a factor of over 5 to 1, but if the feds had not stepped in, the old shareholders would have been wiped out completely.
    Jun 10, 2015. 10:12 PM | Likes Like |Link to Comment
  • Here Is Why I Am Buying Exxon Mobil And Selling Statoil [View article]
    A slight correction: I meant to say, "STO's RECENT NEGATIVE net income margin is not due to taxes, but to writeoffs.
    Jun 10, 2015. 07:31 PM | Likes Like |Link to Comment
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