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noni moose

noni moose
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  • Chicago Bridge And Iron Says It's Solid [View article]
    This stock has been a moonshot since mid-Nov. Do you not think the positives you highlighted are already factored in?
    Have you gone back and looked at the history of Shaw and analyzed the volatility/difficulty of operating in the power plant construction space?
    JEC, which I consider best in class in the E&C space, has long avoided the power plant construction space owing to a skewed risk-reward in favor of the utility customer. Does this not give you pause to see CBI entering this sector after having solely focused on energy and chemicals for more than the last decade?
    If we do experience improvement in global economic growth, are you not concerned about the many fixed price projects in both companies' backlogs that could be subject to both materials and labor cost inflation? Was not this one of the reasons for the recent earnings problems at KBR?
    Do you know what Jim Bernhard, the CEO of Shaw up until the merger, has done with his equity stake in Shaw?
    When looking at E&C companies, it is easy to get caught up in the excitement of management commentary about the many multi-billion dollar projects that are "coming to bid". The investment reality, however, is to spend your time fully understanding the risks and investing in those instances where the Street is too bearish. Good luck!
    Feb 22 10:57 AM | 2 Likes Like |Link to Comment
  • Canadian Pacific Stock Should Return To Earth Over The Next Year Or Two [View article]
    I do not know much about the railroad industry but a few questions as I read your initial paragraphs.
    1. Did you check your capx math, because I get CN spending 95k per mile, about the same as CP? So it seems like your underinvestment argument does not hold.
    2. Dont railroads spend on more than just track? Why is it appropriate to compare the rails capx to track if spending on locomotives and railcars is a part of the capx budget too? Do you know what the mix of spending is among these 3 railroads between track and other areas like equipment? Why didn't you include the capx for the other public railroads too?
    3. I would imagine that rail track is a long-lived asset. Does it make sense to compare railroads capx for 1 or 2 years? I would think you should compare over a much longer time frame, one that is closer to the estimated economic life of the asset.
    Mar 24 10:23 AM | 1 Like Like |Link to Comment
  • Lindsay Corp.: Strong Balance Sheet, Reasonably Valued, And Rapid Dividend Growth [View article]
    Good write-up. LNN is a gem in a globally growing sector truly dominated by 2 companies. But the turbulence that is coming in the next 2 quarters (minimum) should be notable. I am patiently waiting (a Munger strength) for a much cheaper valuation. As you noted, the earnings yield is very attractive, which only means something when you can be reasonably sure that the earnings are stable/growing. That is unlikely to be the case over the next couple/few quarters.
    Jan 30 07:42 AM | 1 Like Like |Link to Comment
  • Caterpillar: Making Money Alongside Oberhelman [View article]
    From your conclusion--"After my examination I rate Oberhelman as an above average CEO and will definitely include this as a positive factor into my valuation of the company"--you have got to be kidding me. Please do some in-depth research involving CAT's acquisition of Bucyrus at the top of the mining capex cycle. Talk about one of the largest examples of destruction of shareholder value that I have seen in years. He may be a solid operating exec, but when it comes to allocating capital, he is clearly one of the worst. I only wonder how long it will be before the board takes matters into its own hands.
    Jan 13 05:24 PM | 1 Like Like |Link to Comment
  • Translating Apple Inc.'s Guidance Into An EPS Number [View article]
    Need to adjust the share count down for the share repo activity that occurred during the 3Q--down 11m according to the cfo. Up to you to determine if want to assume another accelerated sh repo--co is generating notable free cash, so not a real stretch imo.
    Jul 23 07:58 PM | 1 Like Like |Link to Comment
  • American Greetings Waiting To Greet A Higher Bid [View article]
    This family makes the Dolan clan look downright charitable.
    Apr 30 09:34 PM | 1 Like Like |Link to Comment
  • Book Ideas For The Thoughtful Investor [View instapost]
    I agree with your selections, have read and benefitted from them. Also might want to look at:
    Value Investing--Greenwald
    The Most Important Thing--Howard Marks
    Margin of Safety--Klarman
    Thank you for your write-ups, very thoughtful ideas. Good luck to you.
    Feb 18 09:49 AM | 1 Like Like |Link to Comment
  • Shale: This Time It's Different [View article]
    Thanks for the history, I did not know that this was the 3rd or 4th redux. I am and have been short CRR (and others) for a time on the belief that shale gas E&P will have to slow materially. I have also started to look at some of the gas dependent chemical cos. CERA, I believe, regularly updates shale gas basin economics and there are few (1-2) that appear to make economic sense. And this has been the case for an extended period. US shale gas economics do work if we are talking about export to, say, Europe, but not for domestic consumption. Technology has certainly improved over the decades, but still not there yet. Interesting that the EIA recently materially lowered its estimate of recoverable gas in the lower 48. Thanks again, I enjoy reading your pieces.
    Feb 8 08:36 AM | 1 Like 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?
    Mar 25 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 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 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 10:36 AM | Likes Like |Link to Comment
  • Lindsay Corp.: Strong Balance Sheet, Reasonably Valued, And Rapid Dividend Growth [View article]
    Any new thoughts? I assume you saw the VMI results and comments--the level of weakness that mgmt indicated for the next 1-2 quarters took the sell-side by surprise. Conversely, I see that drought in So Amer seems to be worse, increased work in the near-term conceivably smooths the valley for the irrigation names.
    Mar 18 10:02 AM | Likes Like |Link to Comment
  • MYR Group Is Undervalued Against Its Peers [View article]
    I think you have done a decent, basic job. A few things to consider;
    1- MYR does not operate in the pipelines space, which is experiencing a notable uptick in spending--most of its peers operate in this space. I think this is showing up in the multiples for the other stocks, in particular PWR, MTZ and WG.
    2- MYR is weak/strong in T&D regionally. Its backlog and recent awards activity highlight that T&D work is shifting to areas where MYR does not have a strong presence, or at the least has not received awards recently. Look at the company's recent awards and backlog trend.
    3- Without a notable expansion in its C&I capability, C&I will likely remain too small of a segment to drive MYR's earnings in a material fashion.
    4- Your valuation argument holds up only if MYR's earnings do not reverse in the coming year. That is a big question at this point given its weak awards trend. MYR management says that awards will pick up in 2H14 (which will impact 15 earns), but it sounds like awards will be weak in 1H14. I believe the stock will remain under pressure pending stronger award activity.
    Mar 11 08:44 AM | Likes Like |Link to Comment
  • Lindsay Corp.: Strong Balance Sheet, Reasonably Valued, And Rapid Dividend Growth [View article]
    Thanks for the reply. A few points on what you wrote. First, I do not time anything. Either the stock gets down to a valuation that I find attractive or not. If it doesn't, that is ok with me, I will invest elsewhere. Second, you highlight the future is uncertain--obvious. The question is whether downside uncertainty is reflected in the current price. Does the stock/story appear stressed? Not to me, and that is critical whether I am holding for 10 minutes, or 10 years. Third, you point to a reasonable valuation. A valuation decision based on TTM can be dangerous. This is particularly true in this case where the last year's financials benefitted from massive drought conditions across most of the farm belt. I suggest you determine a normalized earnings level, and then an appropriate fair value based on that earnings level. Lastly, do not rely on the company to support the stock. Management gets high marks for managing the ops, but not so good at capital allocation. Plus, model earnings assuming corn prices stay in a $4/bu range and recognize that there may not be a great deal of financial flexibility.
    Jan 31 11:12 AM | Likes Like |Link to Comment