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  • The End Of The Correction-Less Fantasy Land [View article]
    If you are so sure that the S&P is going to continue moving lower, why would you waste time on LTL and FXA instead of buying out of the money SPY puts (let's say the June '14 $180 strikes for $4 and change)? If you are betting on the market heading to a 10-20% pullback/correction in a fairly short period of time, it would seem more cost effective to buy puts, no? You can go long at full price and hope your thesis pans out. Or you can use much less cash and bet fully against the index. Less money at risk while seeing leveraged returns through the options exposure. If your goal is trim exposure by selling 10% if the S&P closes below a certain level, I would assume you would not want to roll right back in at full price.
    Apr 11 04:54 PM | Likes Like |Link to Comment
  • General Electric: Increasing Backlogs Is Just One Side Of The Story [View article]
    I should expect the services backlog to make a big jump in the next few years as the recent orders for turbines, locomotives, and jet engines begin entering the global fleet. They need to expand into as many areas as possible where they have a chance to make large-scale equipment and infrastructure that become long-lived assets in customer fleets. That is the only way they will be able to effectively displace the cash flow they are losing with the Capital downsize.

    Build and sell the product- make money.

    Service the product over the life of the product-- make more money.

    Offer services and solutions to help extend the life and efficiency of the product== make even more money.

    They are selling the razor to get the future razor blade sales... and then they offering services and solutions to get the blades to stay sharp longer.


    The other growing icing on the cake are the equity positions they have in energy projects tucked away in Capital within the energy financial divisions. As they slowly add to the portfolio there (among other infrastructure areas) they are further padding cash flow.

    A terribly large number of moving parts, but they sync nicely along identifiable lines.
    Mar 26 05:04 PM | 3 Likes Like |Link to Comment
  • Why Jacobs Engineering Will Probably Beat The Market [View article]
    Early Retiree-- completely agree. Also, they are relatively under the radar compared to their peers Fluor and CB&I which helps to keep the momentum guys and traders out of the ranks. One point of caution though-- the growth of sales in Europe has some explanation in their acquisitions versus organic growth. I would have liked to see both work in their favor up to now, but if Europe ever makes the turn out of recession, they should do well on their legacy businesses as well as catch the rising tide on their newer businesses.

    Good hunting.
    Mar 8 01:52 PM | Likes Like |Link to Comment
  • Ukraine: How Bad For Capstone Turbine? [View article]
    Mike-- I would add that demand for technology like that from CPST will only accelerate in Western Europe because of situations like this fully exposing their vulnerabilities because of overwhelming dependence on Russian natural gas supply. They will certainly want to reduce dependence through either new supplies, new import sources, reduced demand. Since the US is still a few years off from large scale LNG exports, and they have yet to fully back natural gas fracking in Europe, the third option of conservancy and increased efficiency will be the winning route. Long CPST, GE, and any/all other producers of high efficiency natural gas generators, turbines, and associated equipment.

    What they could potentially lose in Russia could, and I stress "could", very well be made up in the rest of Europe (especially places like former Bloc countries along the East Europe frontier-- Poland, Hungary, Romania, etc. I would expect Germany and France and Italy to follow suit as well. Siemens will likely get a boost for large scale projects, and GE's new push for distributed power lines will certainly catch a very significant portion as well. Cummins and Caterpillar divisions will likely see some interest from (bio/green)diesel generating installations. CPST will likely get some interest as well. Or at least these things should take place if the West truly wants to put a crimp on Russia's cash cow nat gas export operations.
    Mar 3 04:22 PM | 2 Likes Like |Link to Comment
  • Berkshire Invests $600M For Its Reputation [View article]
    TAS-- Keystone only runs North to South. Even if passes, will still need huge tank car fleet to service oil demand from East and West Coast refineries. Plus, Keystone will be bringing in Canadian blends-- not light sweet that these coastal refineries depend upon.

    Buffett could be leading the charge for other shippers and carriers to do the same. He is creating a new moat that others will not have to play catch up with. He can place a $600 million order with ARII or TRN or the like. The other companies just might saddle up with orders at Union Tank Car-- which he owns.

    That $600 million cost will be made up for in more ways than one.
    Feb 21 12:39 PM | 3 Likes Like |Link to Comment
  • High Yielding GE Is A Buy Again [View article]
    GE has a tendency to bottom first and peak first. They are already at the 200 dma... the market is not yet there. Might be the lowest it goes unless they want the DOW to retest the 365.
    Feb 2 10:02 PM | Likes Like |Link to Comment
  • High Yielding GE Is A Buy Again [View article]
    riggle99-- difficult to link direct benefits of spin offs to shareholder value when they are spinning off segments that bring lower P/E multiple than their industrial businesses. If they spun off Transportation or Healthcare and the shareholders received zero benefit, different story.

    As it is, the benefit to the shareholder comes from de-risking the company. While this might not add to the share price, it works to putting a more solid foundation UNDER the share price in the event of financial market problems returning.
    Feb 2 05:53 PM | 2 Likes Like |Link to Comment
  • I Bought The Boeing Dip [View article]
    Hey jtguy01, that makes sense then. Just a question for verification, where are you getting that info-- are you looking at numbers posted in order press releases or do they break out that information in their financial reporting somewhere?
    Jan 31 05:52 PM | Likes Like |Link to Comment
  • Boeing - Is A Cautious Guidance The Start Of Profit Taking? [View article]
    You would hope so-- CAT management hurried along $1.7 billion as announced today to quickly take advantage of depressed prices-- they may have messed up though. Price is up on the news and the technical indicators on the stock show it is approaching overbought. If CAT turns over and hits $90 and lower, they just wasted some cash on that hyper accelerated buyback. Should have kept things a bit more quiet.
    Jan 31 01:32 PM | Likes Like |Link to Comment
  • GE Picks Some Low-Hanging Fruit [View article]
    I don't think they know how they want to do the full deal. They mentioned spinning it off partly in an IPO and then either selling off other assets or fully divesting ownership through sale of the stock. I think it will depend on whether they can get buyers for their assets. If not-- full IPO sale to current holders + public. If they get buyers, sell off more to raise cash for the buyback or possibly to make some big acquisitions-- possibly the DRC and DRQ you are talking about.
    Jan 31 11:17 AM | Likes Like |Link to Comment
  • Boeing - Is A Cautious Guidance The Start Of Profit Taking? [View article]
    Yes, I was wondering about the engine part too-- there are variants whether they are the CFM engines from the GE joint venture, straight GE, or P+W engines or even Rolls Royce engines. Perhaps list for an aircraft includes the default engine option, but if the buyer changes, maybe they pay 3/4 price for the plane and then sign separate contract with the engine manufacturer. We see huge order numbers with GE announced at the Air Shows regularly that don't line up with the orders from Boeing-- engine model changes, spares ordered, retrofits and change-outs, etc.

    I think you might have it there.
    Jan 31 11:09 AM | Likes Like |Link to Comment
  • GE Picks Some Low-Hanging Fruit [View article]
    Agreed that CPST is small potatoes currently on a needle-moving factor. If they didn't already have Waukesha engines, CPST would be a greater play for GE to round out the product line alongside the Jennbacher line.

    Maybe a Honeywell acquisition to leverage their connections to oil and gas majors from the refining and petrochemical standpoint. That would then give them a foot in the door for products at the upstream and midstream segments. Also could use them to tie into their energy efficiency product offerings.

    Or UTX to be in their alongside OTIS and Carrier-- building a new structure? Use our HVAC, and elevators, and escalators, and fire control/sprinkler systems, and our distributed generation heat and power (or heat and cooling and power) offerings. One stop shopping for all your infrastructure needs.
    Jan 30 05:52 PM | Likes Like |Link to Comment
  • GE Picks Some Low-Hanging Fruit [View article]
    What do you think about them buying Core Labs? GE is hot on services right now and integrating technologies into the Oil and Gas space for resources extraction. They are building their tech center in the US for that. The data that Core Labs has on file would be a very nice addition to that effort above and beyond their income from providing services.

    It would turn GE upstream into something akin Schlumberger. Provide the tech, the know-how, the data, then provide the tools and infrastructure to get the job completed.
    Jan 30 05:46 PM | Likes Like |Link to Comment
  • Boeing - Is A Cautious Guidance The Start Of Profit Taking? [View article]
    Point taken Joe. Future demand is an unknown variable.

    Perhaps you could shed some light on the backlog issue-- any thoughts on the avg. price of planes on the backlog? Am I miscalculating something here or overlooking something in their reports? Thanks.
    Jan 30 05:39 PM | Likes Like |Link to Comment
  • Boeing - Is A Cautious Guidance The Start Of Profit Taking? [View article]
    Maybe, but I'm not convinced. The facts presented to us is X number of backlog aircraft valued at $x... simple division is all that is needed. If they have options that aren't included that would then raise both sides of the list-- X planes + Y options, $x value + $y options value. Still comes down to simple division. I don't think the carriers are going to pay more for their option aircraft.

    The only other explanation is that possibly the backlog only represents the "value" of the aircraft, i.e., the costs of inventory and hours, and not the selling price? The problem here is that why would a company tout a lower number for their backlog when they have a larger one at hand, especially when they break out that data point as being a victory for the company?

    In the meantime, my guess is we trade down to lower $120's and test the 200 day average. After that who knows. If they don't start announcing some significant orders soon that backlog will be decreasing at the rate of 10 787's and roughly 40 737's per month....

    And truly, at a run rate of 42 planes per month, they need some serious orders coming through. Everything looks great seeing an order for 75 planes... until you remember those planes will take less than 2 months to be built (5 years from now! but still..). Need a lot of orders to maintain to that production rate going forward.

    For longs-- that is a sticky point in the future. What happens to the stock when they announce down the road that they are having to start cutting back on 737 production because orders aren't coming through fast enough? We certainly have plenty of time before we get there (2017/2018). Just as the 777X is ramping up production, 737 could very well be coming down. Will there be enough 777X orders to fill the gap?
    Jan 30 05:20 PM | Likes Like |Link to Comment