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noni moose

noni moose
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  • Update: ValueVision Media Q3 Earnings And Activist Bow Out [View article]
    I suggest you listen to the CEO's presentation at Goldman conf from earlier today-11/20. Very enlightening, and potentially very powerful. I remain long. Good luck.
    Nov 20, 2014. 05:15 PM | Likes Like |Link to Comment
  • Berkshire Ups Their Bet On Chicago Bridge & Iron [View article]
    I think the 2 hedge fund analysts that started the firm are LSU alums. On the most recent conf call, one of the sell-side analysts specifically asked the CEO to address the report, but he refused. Plus, the CFO was absent citing illness-very convenient. If anything positive came of the report, CBI's disclosures are clearer in their 10Q filings. The result is a better picture of the issues--almost $1b of billed/unbilled receiveables on the 2 nuke projects, and material non-cash reserves running through the P&L that boost oper income, but do nothing for operating cash flow. The accounting is not fraudulent, it is GAAP. That does not mean that the company is as profitable and financially healthy as believed-as evidence of that, look at this report's rec to buy the stock. There is much that could go wrong with CBI, and imo the current price does not adequately reflect that.
    Aug 20, 2014. 08:58 AM | Likes Like |Link to Comment
  • Berkshire Ups Their Bet On Chicago Bridge & Iron [View article]
    Sorry, I checked, and you are correct, a 13G filer. Again, good post. I also found it interesting that the short report firm is based in Baton Rouge, which is also the headquarters of the Shaw Group (the company that CBI acquired), which was the company that was originally awarded the 2 nuclear projects that were the subject of the short report.
    Aug 19, 2014. 08:39 AM | Likes Like |Link to Comment
  • Berkshire Ups Their Bet On Chicago Bridge & Iron [View article]
    I agree with your comments, though the downside may be notable should one take into account the need for additional equity in the face of increasing nuke project losses. I note the credit downgrade of SCANA on Friday as another storm cloud on the horizon. Also, BRK is a just under 10% holder. I believe any holding over 5% puts them as a 13D filer. Good post.
    Aug 19, 2014. 08:10 AM | Likes Like |Link to Comment
  • Berkshire Ups Their Bet On Chicago Bridge & Iron [View article]
    yes, thanks, spaced on the over 5% position reqs. I believe the req is a filing is required within 10 days, and I believe it is either direction, not just selling a material amt.
    Aug 18, 2014. 07:55 AM | Likes Like |Link to Comment
  • Berkshire Ups Their Bet On Chicago Bridge & Iron [View article]
    have you never heard of a quarterly filing? Please go to the SEC website and educate yourself.
    Aug 17, 2014. 03:46 PM | Likes Like |Link to Comment
  • Berkshire Ups Their Bet On Chicago Bridge & Iron [View article]
    I can't view your piece as credible or of value.
    -You state that BRK "just upped its stake" in CBI. Actually, it did so at the end of June. This was before the face plant by the CEO on the conf call noting that cash flow was poor, but would improve as CBI reaches milestone payments on other large projects, not the nuke projects, which were the central focus of the short report.
    -Oh yeah, and this was the same conf call in July where the CFO conveniently became ill earlier that day. What a joke.
    -You, and everyone else, has no idea how many shares BRK now owns. You will have to wait until the next filing. You assume that the ownership position has not changed, but clearly some large holders exited in July and August (after the conf call) to push the stock down from 70 to the high 50s. Was it BRK? Who knows.
    -Why did you not address the issues as highlighted by PP? Your article would have carried weight if you at least made an attempt. Instead, you disparage the research firm. Your piece brings little value to the debate.
    Aug 17, 2014. 02:36 PM | 2 Likes Like |Link to Comment
  • Chicago Bridge & Iron Is A Steal (Get It?) [View article]
    That is the 64m question. problems with the nuke projects and now talk that they hugely underbid the competition on Cameron LNG. Good luck, stay close to the exit if you own it.
    Aug 12, 2014. 01:06 PM | Likes Like |Link to Comment
  • Chicago Bridge And Iron - Speculative Buy [View article]
    I believe it was a review of the 10Q, which had increased disclosure (though it remains insufficient), that was the cause of the stock price decline. Plus, the CFO's convenient illness/absence on the call. The stock began to drop on the open while the PP comments did not come until later in the morning. Though the disclosures in the Q were not great, investors could clearly understand how much of reserves (non-cash profit adjustments) were being run through the P&L. Additionally, it was clear for all to see the extent of the disputed change orders that are outstanding (and growing). Lastly, the CEO's comment that cash flow would improve in 2H 14 because of advance payments on new projects (and not collection on the nuke projects) was an important distinction that many had not understood up until this point. You initially published when the stock was $71/72, it is now $10 cheaper, but still not cheap enough.
    Jul 26, 2014. 02:28 PM | Likes Like |Link to Comment
  • Chicago Bridge And Iron - Speculative Buy [View article]
    No, the buyside understands the cyclicality very well. As long as commodity prices do not roll over, CBI is a momentum trade well positioned (to be awarded energy and chemical projects) owing to cheap domestic gas. And the sell-side analysts love growth, which CBI should provide given its energy/chemical/power exposure. So they will continue to be cheerleaders.

    But the issue at current is not about cyclicality. It is about fundamentally altering the risk profile of the company through a strategic acquisition-Shaw Group and its 2 nuclear projects-Vogtle and Sumner-all-in construction and financing costs of $15b each. Neither project is even 2 years along and CBI has already adjusted the project reserves by about $800m. Hence, the difference in trend in 2013 between reported earnings (which are subject to favorable reserve adjustments) and cash flow, which is not. Projects that deteriorate tend to continue to deteriorate. And as noted above, liquidity (deteriorating cash flow) potentially becomes a major issue. Shaw found itself in a similar situation in the early 2000s and had to raise additional equity. Could CBI mgmt obfuscate and outrun these issues by signing on more multi-billion $ lump sum projects? Anything is possible, though that just delays the day of reckoning, it does not avoid it. But as I noted above, after running worst case, middle and best case scenarios, this stock does not even come close to being attractive at current.

    As an aside and no offense, but you need to do thorough research. The current management was not involved in doing the majority of the acquisitions dating back to the late 90s--they deserve no credit for those past successes. Further, past management was laser focused on project execution (self performing all of the work), cash flow and risk, the current CEO and CFO could not be bothered. Lastly, if I am even remotely correct, your pretty FAST graph valuation charts are not meaningful given the risk profile of the company has been altered versus the past--the valuation ranges of the past have little meaning. Good Luck!
    Jun 22, 2014. 10:05 PM | 2 Likes Like |Link to Comment
  • Chicago Bridge And Iron - Speculative Buy [View article]
    It is interesting that the accounting has garnered all of the attention--is it correct or not? As outsiders, we are not going to be able to understand all of the cross-currents that are occurring due to cost of completion accounting and reserve-related merger accounting. But I have a suggestion for anyone willing to play this name. Think about the track record of E&C companies operating in the utility power plant construction segment--how have they done historically? Go back and look at Shaw Group's track record, which is the company that CBI acquired. Shaw's performance is at best poor. And the nuclear power industry does not have a good on time, on budget track record.

    In my mind, regardless of whether the accounting machinations are deemed appropriate, CBI will have a liquidity event at some point in the future. But I have no idea when this will occur. So, if you decide to own this name, I would suggest you make the position small and stay close to the exit door.

    Investing in the E&C space is truly an exercise in understanding both risk and investor perception. I do not think the valuation adequately discounts for the potential downside.
    Jun 20, 2014. 11:21 AM | 2 Likes Like |Link to Comment
  • Canadian Pacific Stock Should Return To Earth Over The Next Year Or Two [View article]
    Your comments on carloads is interesting, but clearly confusing, particularly your last sentence--"carloads is a better indicator of capacity". So a carload of feathers and a carload of rock have the same impact on a rail system's capacity? A carload of autos being transported 10 miles and a carload of autos being transported 2,000 miles have the same impact on the system's capacity? Is it not clear to you that utilizing a carload metric is prone to drawing the wrong conclusions?
    Also, could you explain what "since commodities even out over time" actually means?
    Thanks
    Mar 25, 2014. 11:17 AM | Likes Like |Link to Comment
  • Canadian Pacific Stock Should Return To Earth Over The Next Year Or Two [View article]
    Your underinvestment argument looks really questionable. I moved on to your other arguments and have a couple questions.
    1. On the revenue front, you argue that it is price increases that are actually driving the $1b in revenue growth '13 v. '11. You use carloads and revenue per car to make your argument about price with carloads flat over the past 2 years. Why did you use those metrics? Many analysts and industry execs use revenue ton miles (rtm) and revenue per rtm as the appropriate revenue metrics since distance then is appropriately included in volume, not price. In the case of CP, revenue ton mile growth was 7% and 5% in 2013 and 2012. This implies that volume, and not price, was the primary driver of the revenue growth. Why did you not address this conflicting information?
    2. You state that CP's revenue growth was a reflection of industry health, not management effectiveness. Why does it matter whether it is one or the other? Do you have an issue with the managment team as opposed to the stock?
    Thanks in advance for addressing my questions.
    Mar 24, 2014. 09:22 PM | Likes Like |Link to Comment
  • Canadian Pacific Stock Should Return To Earth Over The Next Year Or Two [View article]
    If I use 2 years worth of capx for CP, I get spending of $2.5 billion divided by 15,000 miles of track--this is based on what you wrote above in the article. That works out to $167k per mile for CP. This compares to $154 for BN and $183 for CN. So CP is spending a bit below CN (and above that of BN), but it is not half of what CN is spending. So, again, I ask how it is that you argue that CP is underinvesting in its business? Also, can you answer my other questions? Thanks.
    Mar 24, 2014. 10:59 AM | Likes Like |Link to Comment
  • Canadian Pacific Stock Should Return To Earth Over The Next Year Or Two [View article]
    OK, thanks. So, just to be clear, if CN is spending at 95 per mile and CP is spending at 93 per mile, then how do you argue that CP is underinvesting? Plus, can you answer my other questions. Thanks
    Mar 24, 2014. 10:36 AM | Likes Like |Link to Comment
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