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Bryce_in_TX

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  • Raymond James: Linn Energy, LinnCo undervalued with catalysts to come [View news story]
    Food for thought. We may not see $70 barrel of oil again until 2020:

    http://bit.ly/1M1DKMD

    http://bit.ly/1M1DHQW

    http://bit.ly/1M1DKMG

    I was called crazy when I provided a link to Kiplinger's comments back in mid 2013.
    Jul 4, 2015. 12:55 PM | Likes Like |Link to Comment
  • Raymond James: Linn Energy, LinnCo undervalued with catalysts to come [View news story]
    No investment in oil or gas currently. Without an increase in demand for oil to offset the over supply provided by US fracking, a new dynamic in the oil demand/supply situation in the last 6 years, the long term outlook for oil and gas appears more stable to me than it did previously. That would mean not so much volatility when disruptions in supply occur because the US can turn on the spigot during those times. And if demand should increase worldwide, the US has the supply to meet that demand, which we didn't have prior to fracking.

    I think the oil/gas paradigm has been rewritten with fracking.
    Jul 4, 2015. 11:59 AM | Likes Like |Link to Comment
  • Raymond James: Linn Energy, LinnCo undervalued with catalysts to come [View news story]
    Land of M and H,

    Kiplingers Mag forecast a 30% decline in the price of oil 2 years ago, citing the slow down in world demand for oil, coupled with the increased production. I don't see circumstances changing anytime soon. A bet that oil will go above $70 in the next 3 years is a real gamble, IMO.

    That isn't going to change LINE's prospects that much, given its depleting assets, the need to acquire several billion a year to keep growing, and its debt load. Not a pretty picture in my view. To grow the distribution they need the capacity to acquire more assets than what they are able to, IMO. They simply don't generate sufficient internal cash flow.

    Do an analysis of their cash flow from ops, investing cash flows, and amounts borrowed and paid back since they went public. It's an ugly picture of insufficient cash flow from ops to pay for its assets.
    Jul 3, 2015. 09:30 PM | 1 Like Like |Link to Comment
  • Raymond James: Linn Energy, LinnCo undervalued with catalysts to come [View news story]
    Do the math yourself. I provided the link.

    As I have stated several times, the repurchase of senior notes was a swap for more debt, not less. Read the 1st Qtr cash flow statement: Repayments of debt $280.287 million, proceeds from borrowings $395 million.

    Total non-current liabilities at 12-31-14 $10.879 billion.
    Total non-current liabilities at 3-31-15 $10.999 billion.

    Read it yourself.

    http://1.usa.gov/1CeMU8D

    If oil stays about where it is at in 2016, LINE will be hedged 25% less then, which means less revenue.

    LINE is not worth anything close to $14 or $15 a unit. And its assets are being depleted, meaning they are worth less as time passes and oil stays where it is now. Its debt has a current fair market value in excess of its assets.

    FACTS, not FUD. The debt is a time bomb for LINE. Saying they don't need to pay it down, given the current circumstances, isn't credible to me.

    The possibility is a distribution cut or suspension in 2016 if oil doesn't rebound. The rig count is up for the last two weeks. Producers are figuring how to operate at lower prices. Translated that means more supply.
    Jul 2, 2015. 08:32 PM | Likes Like |Link to Comment
  • Raymond James: Linn Energy, LinnCo undervalued with catalysts to come [View news story]
    LINE's energy assets were worth $12.512 billion at 12-31-14. That was with oil valued at $89.95, NGL at $39.50, and natural gas at $4.20. Obviously, those prices are far above the present prices of each product. The hedges add $2.1 billion. LINE's long term liabilities are $11 billion. At present energy prices, LINE's debt is worth more than its assets. LINE's unit (stock) price is not worth anywhere near $14 or $15 per unit.

    http://1.usa.gov/1HzAWZj

    Even if oil recovers to an extent, LINE's is so leveraged that using more debt to acquire assets looks questionable to me. IF oil recovers, the decline in value of its hedges will offset the increase in value of the recovery. What will LINE use to acquire more assets? Equity issues that dilute current unit holders?
    LINE is highly risky. IF oil doesn't recover within 12 months, I think you are looking at the distribution being suspended. The debt has to be paid down.
    Jul 2, 2015. 11:02 AM | 3 Likes Like |Link to Comment
  • Raymond James: Linn Energy, LinnCo undervalued with catalysts to come [View news story]
    " But it doesn't seem as if it's going out of business,"

    Given its debt load, the fact it has never paid debt down since it went public, and the fact its debt is now more than its assets are worth, I wouldn't be so quick to assume it will stay in business. Raymond James is off the wall to me.

    How much do they have invested in LINE/LNCO? 537,500 shares according to Fidelity. Maybe they are significantly underwater with LINE and fear a fall to $5 or so if it breaks support.

    The balance sheet makes no sense that it is worth anywhere near $14 or $15 a share. That's just crazy. A negative value makes more sense because the debt value is more than the asset value.
    Jul 1, 2015. 05:56 PM | 3 Likes Like |Link to Comment
  • Rates tumble, but only marginal relief for REITs; utilities gain [View news story]
    SA is showing OHI at 34.33 when cnbc shows it closed at 34.75. Earlier, SA was showing a similar increase today. What gives?
    Jul 1, 2015. 05:46 PM | 1 Like Like |Link to Comment
  • Tesla's Superior Business Model May Justify Tesla's Stock Price [View article]
    See page 73 of the 2014 GM Annual report in your link:
    "Research and Development Expenditures
    Research and development expenditures, which are expensed as incurred in Automotive cost of sales, were $7.4 billion, $7.2 billion
    and $7.4 billion in the years ended December, 31 2014, 2013 and 2012."

    SFAS 2 requires all of R&D falling under its umbrella to be expensed as incurred. That is US GAAP.
    Jun 30, 2015. 04:36 PM | 2 Likes Like |Link to Comment
  • Tesla's Superior Business Model May Justify Tesla's Stock Price [View article]
    @cparmerlee,

    GAAP and non-GAAP gross margins are close to the same, percentage wise.
    Jun 30, 2015. 04:28 PM | 2 Likes Like |Link to Comment
  • Tesla's Superior Business Model May Justify Tesla's Stock Price [View article]
    "How do you explain on page 118 of General Motors annual report: "Capitalized research expenditures" http://tinyurl.com/n9d...

    That is for taxes, not US GAAP. Looking at the table, a deferred tax asset for capitalized research expenditures would be a current expense under GAAP, but a future deduction under tax accounting. That's my interpretation. Thus for tax amounts accounted for under GAAP, there is a future deduction for taxes which lowers future taxes. For GAAP, it is considered a deferred tax asset because there is a future benefit for GAAP (lowered future taxes).

    I covered R&D under GAAP in this link:

    http://tinyurl.com/pbu...
    Jun 30, 2015. 04:22 PM | 2 Likes Like |Link to Comment
  • Tesla's Superior Business Model May Justify Tesla's Stock Price [View article]
    @Tech Talker,

    It's not an apples to apples comparison of gross margins to Porsche. Tesla reports it numbers under US GAAP, Porsche reports its numbers under International Financial Reporting Standards (IFRS). For gross margin, the two standards have material differences.

    Under US GAAP, all R&D must be expensed. I would argue that some development expenses of Tesla should be capitalized and amortized over 4 or more years, but GAAP takes a very simplistic approach and doesn't allow any capitalization. Under IFRS, capitalization of development expenses is allowed, and Porsche does capitalize some. What is expensed is expensed as cost of goods sold (COGS), which impacts Porsche's gross margin. So, to get an apples to apples comparison of the gross margin of Tesla and Porsche, you need to take out the R&D expenses that Porsche has charged to COGS.

    You state in the article link:
    "However, it is worth noting that Tesla does not actually amortize R&D because almost all of its R&D is not model specific, which is why it reports R&D under OpEx rather than COGS."

    Tesla does not capitalize and amortize any of its R&D because it is not allowed under US GAAP, not because its R&D is not model specific. If capitalization were allowed, Tesla could aportion its development expenses based upon some formula, if it is not model specific.
    Jun 30, 2015. 12:54 PM | 4 Likes Like |Link to Comment
  • Oklahoma Earthquakes: Is There A Liability And What Companies Are Impacted? [View article]
    "I talk with people out here wondering how in the world you put up with tornadoes, and why would earthquakes of that magnitude be a problem."

    With tornadoes, we are talking about something created by nature. Scientists don't believe that is the case with most of the quakes. So, it makes sense to control what you can control. Also, with doppler radar, a person has at least 15 or 20 minutes to protect themselves, and usually 24 or more hours with weather forecasts of today. With an earthquake, do you know when and where it will strike, and do you have any time to protect yourself? I'll take my chances with a twister any day, versus a quake. I've lived in tornado alley, 63 out of 65 years of my life. I have actually seen and felt one twister. You are well protected from harm with a storm shelter built under ground and its inexpensive in relation to the overall price of a home.

    The quakes are viewed as a problem because (1) some, 4 in the past 30 days, have been 4.0 or greater, (2) prior to 2008 less than two magnitude 3.0 or greater quakes occurred each year, now it is two a day, (3) in 2011 there was a 5.6 magnitude quake that injured two and damaged 200 buildings in Prague, OK. Had that occurred in Oklahoma City, it probably would have been much worse, (4) Oklahoma has been slower than Arkansas, Ohio, or Colorado to respond to the increase in the seismicity, (5) the oil and gas industry is downplaying the risk and is still trying to deny they are responsible.

    What will be the response if a 6.0 or greater hits Oklahoma City, with loss of life, as well as significant property damage? Will the oil and gas industry seek to dodge that responsibility? What will you or they say if that should occur? What will be the media response in such an event? How will the nation view it?

    Take the blinders off and look at the situation objectively. What if you had young children in possible harm's way. Would you wait until a major catastrophe to try and do something about it, when it is believed to be man made and there may be something that can actually be done about it?

    As for accurate information, that generally occurs AFTER a disaster, not before. I'm not talking about panicking, but taking proactive steps to stop the quakes, to include stopping disposal of quake triggering amounts of water on or near fault lines that have been reactivated. Dispose of it some other way.

    In 2014, Oklahoma had three times the number of quakes as California. Three times as many.
    Jun 29, 2015. 10:12 PM | 1 Like Like |Link to Comment
  • Oklahoma Earthquakes: Is There A Liability And What Companies Are Impacted? [View article]
    @Craig Cooper,

    And if there is a magnitude 5 or greater in the next year, I will be revisiting your statements.

    When it comes to oil/gas companies doing the right thing and the government doing the right thing, you do understand why I am skeptical, I assume.
    Jun 29, 2015. 07:51 PM | Likes Like |Link to Comment
  • Linn Energy: The Earnings Reporter Edition [View article]
    Well, Kirby, are you buying more on the dip? The yield is now in excess of 13%.
    Jun 29, 2015. 07:02 PM | Likes Like |Link to Comment
  • Oklahoma Earthquakes: Is There A Liability And What Companies Are Impacted? [View article]
    D. Rockefeller,

    Is your post serious or sarcastic?

    Money overcomes a ton of objections? Even at the risk of lives lost? In Mother Russia, yes, here in the states, no.

    Tornados are not man made. The evidence points to the probability that the quakes are man made, meaning we may be able to control them. The fuss is about controlling what we can to prevent loss of life and property.

    I served 4 years in R.O.T.C. (with honors) and two years in the military. I knew the day I signed a contract (1971) that my life could be on the line. Everyone that serves today is a volunteer. They understand the same. Don't lecture me about the military. Did you serve?

    A "few" earthquakes? LOL
    Jun 29, 2015. 06:55 PM | Likes Like |Link to Comment
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