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  • The Future Of Coal Companies [View article]
    "According to the EPA, 32% of ozone emissions come from electricity generation." - Duane Bair

    Yes. Operating a generator, or an electric motor, creates ozone. Pretty much any electric discharge does the same (lightning, for instance).

    The ozone cited by the EPA is created by running the turbine to generate electricity, not by burning the coal. In fact ozone is unstable at high temperatures and 'self destructs'. Ozone's half life is less than one second at 250 deg Celcius and coal burns a LOT hotter than that. The amount of ozone coming out out of the top of a coal fired smokestack borders on zero.

    However, you would STILL create ozone if you power the same turbine using natural gas, nuclear power, water power, wind power, or monkeys-on-bicycles power. It's the high voltages in the running generator that create ozone, not the fuel being burned.

    The remainder of your line of reasoning is bogus as you have misunderstood how the ozone actually gets generated. The only sure-fire way to eliminate ozone generation at power plants is to shut them all down.

    By the way, why not write an article on the positive uses of ozone. It's a very good oxidizer and is used to help purify water, among other things.
    Oct 1, 2015. 07:35 PM | 4 Likes Like |Link to Comment
  • 5 Reasons To Consider Alliance Resource Partners, Including A 10.98% Dividend [View article]
    "No tax is paid at the partnership level; partnership income passes through and is taxed only at one level – that of the individual partner." - rlp2451

    This is one of the great points of MLPs and REITs. By paying taxes only at the shareholder / unitholder level, the after tax distributions are higher than with even a Qualified stock.

    Avoiding the 35% corporate level taxation puts more money in your pocket.

    A 15% Qualified dividend is taxed at the 35% corporate rate, then again at the 15% personal rate, leaving 55.25 cents of every dollar available to pay out.

    At the top personal tax rate of 39.6% an MLP or REIT leaves 60.40 cents after taxes. The amount left is higher for those in lower tax brackets.

    . Tax ............. Amount
    Bracket ........ Remaining
    39.6 ............... 60.40
    35.0 ............... 65.00
    33.0 ............... 67.00
    28.0 ............... 72.00
    25.0 ............... 75.00
    15.0 ............... 85.00
    10.0 ............... 90.00

    If your total taxable income is below $200,000 you will keep more of the money available to pay out from MLPs and REITs than from C-Corps.
    Sep 27, 2015. 10:28 AM | 3 Likes Like |Link to Comment
  • 5 Reasons To Consider Alliance Resource Partners, Including A 10.98% Dividend [View article]
    Released today: Sept 24, 2015

    Most recent ARLP rating on Sept 18, 2015 by FBR Capital as 'Outperform' with a target price of $34.

    Cash flow coverage of ARLP is 1.7x dividend payment, which seems like a reasonable safety factor to me, though opinions do vary.

    The company seems to think the recent finalization of the White Oak acquisition will add to the bottom line and so one might reasonably expect the dividend to (at least) hold or (probably) increase going forward.
    Sep 24, 2015. 12:34 PM | 1 Like Like |Link to Comment
  • 5 Reasons To Consider Alliance Resource Partners, Including A 10.98% Dividend [View article]
    "At best they are all outdated and at worst they are all wrong. What source do you have for" - rlp2451

    I'll grant you that some of the higher end estimates may be outdated as I haven't checked in a while, but they're available to anyone who can use the Google search engine:

    I see the upper end of estimates has been lowered to $36, which is reasonable given the lower expected earnings in 2015. Historically ARLP has traded for roughly a P/E of 10. It's currently at 6. As a VERY rough measure, a price in the mid 30's would not be out of the ordinary.
    Sep 24, 2015. 09:47 AM | 4 Likes Like |Link to Comment
  • 5 Reasons To Consider Alliance Resource Partners, Including A 10.98% Dividend [View article]
    For a long term income investor, ARLP is as close to a no-brainer as you can get.

    I sold a few Sept 25 Puts that got exercised. My cost basis on those shares is $22.90 (after consideration of the option premiums) which gives me a yield of 11.8% on the initial money I put into the buy. What's not to like?

    Analysts 1 year price forecasts run from $28 to $41 and the current price is a tad over $24. That's somewhere from 14% to 41% undervalued. That's a pretty good margin of safety to sweeten the deal.
    Sep 23, 2015. 07:05 PM | 2 Likes Like |Link to Comment
  • How I'm Reacting To The Ups And Downs Of My Portfolio [View article]
    Nice summary Robert and a good job of outlining the 'disintermediation' effect of DGI.

    The next logical question to ask is:

    What are your thoughts as to which stock(s) will get your next batch of re-invested dividends?

    As you point out with XOM, Mr. Market is presenting some very interesting deals in the energy sector and in raw materials these days. I guess the $64 question is whether he will sweeten those deals even more if you wait a bit.
    Sep 22, 2015. 01:52 PM | 1 Like Like |Link to Comment
  • High-Dividend Stock Yields Over 9%, Goes Ex-Dividend This Week, Has Future 25% Hike [View article]
    "The trouble is that there are so many container ship companies out there that it is truly a crap shoot. I speak from the humble experience of loosing thousands on Eagle Shipping and NAT which at the time I bought shares they were the "golden" selections in this industry. There is virtually no moat for any company in the shipping industry." - Bingo 2

    GSL isn't IN the container ship industry. They own the ships and LEASE them on long term contracts to the companies that ARE in the container ship industry.

    GSL's revenue is a lot more consistent than the shipping companies that lease the ships from GSL.

    The one area where GSL might have challenges is managing their debt while they grow. Buying / building a ship costs a lot of money up front. If they ever have troubles with rolling over their short term debt they might run into cash flow issues and need to reduce or cut the dividend as a result. I'm not saying this is a big risk, but it's one to keep an eye on for sure.
    Sep 21, 2015. 12:01 PM | Likes Like |Link to Comment
  • High-Dividend Stock Yields Over 9%, Goes Ex-Dividend This Week, Has Future 25% Hike [View article]
    Thanks for pointing out another potential up-n-comer growth stock to consider. I have picked up some good undervalued growers from some of your prior pieces.

    That said, I think it would be useful if you would make it easier for your readers to dig into the details, if they are interested.

    For example, why not include a link to the company's website?:

    Or their most recent investor presentation?:

    Other areas to consider mentioning are the company's cash flow, payout ratio, debt, and credit rating. Small companies can make things look pretty rosy for a while by taking on a lot of debt (not saying that's necessarily the case for GSL).

    Thanks again and keep 'em coming.
    Sep 20, 2015. 09:53 AM | 1 Like Like |Link to Comment
  • These Are Future Dividend Champions, My Friends [View article]
    "TSCO ... customer base ... just keep coming back every week and loading the pickup truck with more animal feed, horse fence sections, oil for the tractor etc. They also have virtually no competition for what they do. There is no other nationwide store chain that does this" - Pepsiguy5

    There are regional competitors however. In the Northeast US for instance, they compete with Agway:

    That said, I'll point out that there was an Agway store in my hometown for at least 40 years before TSCO arrived, and yet TSCO appears to be making a go of it anyway. Agway likely competes pretty well in the feed and small equipment areas but it wouldn't surprise me to learn that TSCO has a significant edge in the larger equipment lines.
    Sep 19, 2015. 01:49 PM | Likes Like |Link to Comment
  • No Fed Rate Rise And The Market Dropped Anyway? [View article]
    Everyone and their brother is waiting for an 'official' FED announcement about raising rates at one of their future meetings (usually the next one).

    The trouble with such a plan is that every big bank or hedge fund on Wall Street is waiting with High Frequency Trading computers all revved up to hear what's going to happen. Naturally they intend to scoop up big profits by front-running everyone right after the FED makes a scheduled announcement.

    I would not be at all surprised to see the FED make an unscheduled announcement to start the rate raising party off just so that everyone can start from the same position of hearing the unexpected news. The reason why is less important than the timing at this juncture.

    The author reminds us of an important point. Stick to the plan. Reinvesting the ever-larger dividends received at much lower prices will pay off down the road.
    Sep 18, 2015. 07:57 PM | 2 Likes Like |Link to Comment
  • Looking Beyond The Obvious: Critical Thinking And Investment Decisions (Part 1) [View article]
    No blog updates since July 26. No comments since July 13.

    Nothing but crickets for 7+ weeks now. I wonder what happened?

    First and foremost, I hope everything is OK and there's not anything seriously wrong that's preventing him from posting, like health issues.

    I'm also kind of curious to see how his investments have fared over the interval given the volatile market conditions. If he was buying volatility, he might have done pretty well.
    Sep 15, 2015. 05:05 AM | 1 Like Like |Link to Comment
  • Fasten Your Seatbelt - Natural Gas Is Ready To Blast Off [View article]
    Thanks for all the work documenting your research in the nat gas space. I have come to a similar conclusion. Current nat gas prices should self-correct at some point.

    Here are a couple companies to consider for investing if you have a desire to buy into the beat down energy sector in hopes of brighter days going forward:

    ARLP: Big coal producer with increasing cash flow, an increasing dividend, and a current yield above 10%. Cash flow exceeds payout by 70%.

    USAC: Compression services provider to the pipeline/gas well industry. They are growing steadily and also yield around 10%. Recently increased their distribution.

    GLOP: LNG tanker provider. Long term contracts in place and more specialized ships on order. Yield around 9%.

    The prices on these companies are beaten down due to the energy sector issues, though their business performance is running smoothly. Be aware they are all MLPs and will have the usual issues associated with issuance of K-1 forms at tax time.

    Please do your own due diligence before investing. I'm not Warren Buffett and I might be proven wrong by Mr. Market. Understand what risks you are facing before committing your capital.
    Sep 4, 2015. 12:31 PM | 5 Likes Like |Link to Comment
  • These Are Future Dividend Champions, My Friends [View article]
    "I have been pondering lately whether I will produce a Top 40 DG Stocks for 2016. (I skipped 2015.) If I do, I am pretty sure that I will just do the Top 40 themselves and leave out the how-to-do-it portions, because the latter has become so extensive that it now deserves and requires a separate treatment." - DVK

    If my opinion counts for anything in the decision making process, I'd request that you leave the how-to material in. Even if you simply copy what was in the 2014 version verbatim, leave it in. That material is such a tremendous educational tool that I believe it is actually worth more than your list of 40 stocks (no offense intended). Your detailed explanation of DGI methods and principles is one of the best I've come across.

    Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for life.

    Corollary: Show a man Fish's CCC spreadsheet, and you help him find the premium DGI catches. :-)
    Sep 2, 2015. 07:50 PM | 9 Likes Like |Link to Comment
  • Why I Still Own Gold Resource Corporation [View article]
    "GORO is a silver zinc mine....with residual gold." - IPDaily69

    What difference does that make if GORO is profitable? As Shakespeare would say, "A rose by any other name would smell as sweet." They could be digging up fossilized dinosaur turds for all I care, as long as they're profitable.

    "Regarding Goro's financial position, ... Allow me to point you in the right direction. Go back and reexamine asset sales that have been funneled back into the treasury to artificially prop up the depletion that would have resulted." - IPDaily69

    Based on the recent quarterly balance sheets the "Property/Plant/Equipm... Total - Gross" category increased from $32.3 million to $55.7 million in the past year. They don't appear to be a net seller of 'assets'. In fact they have increased the value of their physical plant by 67%.

    Also in the past year:

    Their Current Liabilities have decreased from $17.9 million to $15.3 million.

    Their Total Long Term Debt has decreased from $1.6 million to $0.1 million.

    Their Total Liabilities have decreased from $22.4 million to $18.1 million.

    Shareholder Equity has increased from $89.0 million to $94.6 million.

    Sure the illegal work stoppage and the unexpected water issues reduced Q2 revenues by $5 million, but that's the sort of thing that happens when you run a complex business.

    Despite that revenue reduction of $5 million, GORO managed to hold Shareholder Equity constant over the quarter, reduce Liabilities by $4.3 million, and with only a $6.7 million reduction in assets. Backing out the "missing" $5 million leaves a 'loss' of liquid assets of only $1.7 million. That's a reasonable cost of eliminating $4.3 million of liabilities. Given the $21 million in cash sitting in the bank, that's hardly what a business person would consider a "tipping point" for complete failure going forward.

    Financial Statements:

    As for drilling, GORO has been working on expanding their resources too, with promising results. Check out their presentation:

    For a company which had a $5 million hole blown in their top line revenue by unexpected events, GORO has done a pretty good job keeping things running. They have almost no debt and $21 million in cash for operations goiing forward. When their revenue returns to normal, as it will, they'll be OK, IMHO.

    Disclosure: Long GORO and dripping.
    Sep 2, 2015. 07:07 PM | 4 Likes Like |Link to Comment
  • These Are Future Dividend Champions, My Friends [View article]
    I love Tractor Supply Co. There was a store in my hometown and I used to wander around inside while Christmas shopping over the holidays.

    Who wouldn't want to see a PTO log splitter for your tractor arrive in Santa's bag? Especially if you can get it on sale.
    Sep 1, 2015. 08:39 PM | 4 Likes Like |Link to Comment