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gausmus

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  • New Shell CEO Takes Out The Trash [View article]
    Shell has always had a "p*ss away the $" reputation in the upstream business. I'm worked for a firm that had non-operated interest in a Shell operated well. Costs were 3x other similar wells in the area. A microcosm, to be sure, but it points to a culture lacking thrift and husbandry of the shareholders assets. I wish the new CEO well, but suggest he focus less on divestment and more on creating a culture of cost control. Nice work as always Ray, but I much prefer the smaller, hungrier names in the oil patch. Shell and Exxon are more of an oil indexed bond, IMHO
    Aug 15 09:51 AM | 2 Likes Like |Link to Comment
  • Reacting To Earnings Reports: Let's Get Real! [View article]
    A thoughtful, "Buffetesque" article. Sound methods. Well done.
    Aug 10 07:49 AM | 5 Likes Like |Link to Comment
  • Natural Gas Services Group: A Solid Compressor Rental Business And Positive Catalysts For 2H 2014 [View article]
    Michael, your story is intriguing, and I can't fault your logic. I think the previous post has it right. I created a chart that compared NGS against the S&P (VFINX) and the Nasdaq (QQQ). A bit of outperformance, but with attendant idiosyncratic risk. I really like these midstream plays, but the proof of the pudding is in the eating. If they aren't outperforming the S&P by much, why do it?
    Jun 4 11:32 AM | Likes Like |Link to Comment
  • Stay Short, My Friends [View article]
    FB's user base must start to flatten, heck, there's only so many people on the planet, and they have 1.28 Billion (!) Monthly Active Users in March, 2014. So I'll concede that point. BUT - to that I will add that Revenue = Monthly Active Users x Average Revenue per User. The Rev = MAU x ARPU is true for all of these internet social companies. FB's sales will largely be driven by ARPU in the future. There is a cross sectional analysis of MAU and ARPU for Facebook, Yahoo, Google, and Twitter somewhere on Seeking Alpha, and my recollection of that analysis is that FB has a ton of growth potential in ARPU, given the ARPU of the more mature names. If I find it, I'll post the link. Is FB pricey? Sure it is. Is there room for revenue growth? Absolutely. Regardless of views, I really enjoy that SA has this forum to test ideas and hear from folks that see things differently.
    May 13 09:22 AM | Likes Like |Link to Comment
  • Stay Short, My Friends [View article]
    Curious on how see sales growth as flattening. The YOY % change in sales has increased every quarter since mid-2012. EPS growth was the best ever last quarter - up 183% YOY.

    Can't be this way forever of course, but the numbers show no flattening right now.
    May 12 08:48 AM | 1 Like Like |Link to Comment
  • Star Gas Partners: MLP Yields 5.2% And Has 20% Upside Potential [View article]
    Nice job. A Buffet company- simple, well understood, price is right, a ham sandwich could run it. Not to say that's the status of management - they are on the ball. But it's so simple... Love it!
    Apr 27 06:40 PM | 2 Likes Like |Link to Comment
  • Sovaldi's Q1 Is A Home Run With Men On Base; Why Gilead May Triple From Here [View article]
    Decent pipeline, crazy cheap after the earnings beat today. I honestly don't understand why this name is up 20%. Well, whatever. Bought some more this morning.
    Apr 23 11:08 AM | 1 Like Like |Link to Comment
  • SandRidge Energy: Hidden Value & Growth Are Underestimated [View article]
    RG3015: Oil and Gas wells are wasting assets, ie, production trends downward from the day of initial production. Wells reach their economic limit when sales revenues = operating expenses. The water cuts (% water produced) are very high in this play, and they increase as the well produces. Each barrel of water is cost. These wells must have very high economic limits, just on the electricity needed to lift fluid from the wells. My concern (and I probably didn't express it well) is that as the wells water out and are abandoned, the revenue to the MLP (electricity sales, water disposal fees) ends as well. Now, as long as the play keeps getting more wells, then there's a revenue stream. If drilling stops or moves far away from the assets in the MLP, then there is a revenue problem.

    I'm sure that all of this yields to a detailed analysis, but I just haven't seen it. My point is - the revenue stream can't be assessed as an annuity - some allowance has to be made for the wasting nature of the asset stream.
    Apr 23 10:44 AM | 2 Likes Like |Link to Comment
  • SandRidge Energy: Hidden Value & Growth Are Underestimated [View article]
    Clayton: A well thought out and intriguing analysis. Allow a former oilman/present day utility executive add his 2 cents worth. The "midstream" assets are, IMHO, not that, and could be more properly thought of as "ancillary" assets to production. Splitting hairs, perhaps, but please consider the following:

    First, with respect to the electrical distribution system, some diligence is necessary regarding electrical service to SD as well as other producers. A electrical distribution system that buys power and resells it to customers sounds/smells like an electric utility. As such (and I am unfamiliar with OK utility law) it could be regulated and have a mandated rate of return imposed upon it. All it takes is a couple of cranky (and unaffiliated) oil producers that don't like the charging rate to haul the putative MLP in front of the public utility commission, demanding that they be regulated to a (lower) rate.

    Second, with watercuts like the ones experienced in this play, the economic limits of the wells must be pretty high. The revenue stream off this MLP would be a wasting one, just like the oil wells that it serves. This would seem to augur for a lower multiple.

    No numbers here, just some thoughts...

    Thanks again.
    Apr 22 02:11 PM | 2 Likes Like |Link to Comment
  • 'Real Deal' Stocks: Volume 3 (Southwest Airlines) [View article]
    Stan: Thanks for your article and the REALDEAL screen. I tried to replicate this in MarketSmith (the IBD) tool. Was successful in getting 5 of the criteria into the screen, which cut down the universe of equities to 36 names (as of 4/9/2014). Interestingly, LUV didn't make the list. I own LUV as it has made other screens I've built, and it is a well run company.
    Apr 9 09:22 AM | 1 Like Like |Link to Comment
  • Take Advantage Of Legislative Grandstanding By Buying Gilead At A Discount [View article]
    Good analysis. GILD is one of the names I will own indefinitely. With respect to the chart comparing PE's and other valuation metrics: I made note of the fact that PE's have expanded generally. 8.3 -> 12.8 in the instance of GILD. While GILD is a great company, great companies are only worth so much... The present PE is 35 - a ratio above the mean for other equities, I'm sure we all agree. So maybe that's the problem with this name/sector....they just need to consolidate unto some improved earnings show up. Just a thought. I'd appreciate your comments.
    Mar 28 11:19 AM | Likes Like |Link to Comment
  • Facebook's Share Valuation: What Is The Market Expecting? [View article]
    Thank you for an even handed, numbers based look at this name. Nice job.
    Mar 26 07:54 AM | Likes Like |Link to Comment
  • Angie's List Is Melting Down To $0 [View article]
    Thanks for this analysis. Not sure I'll initiate anything with ANGI, but you do a great service by looking at the "back side of the mountain" for a social media business. The need for these companies to grow their subscriber base really hits home when you read this analysis. It's all about MAU and ARPU. Either one flattens - bye bye company
    Feb 13 12:48 PM | Likes Like |Link to Comment
  • US Steel: Subject To Market Despite Carnegie Project Improvements [View article]
    Dear VI: Pretty analysis, ugly subject matter.

    No wish to denigrate the progress being made at X, but structural cost cutting stories are pretty old hat for the U.S. integrated steel biz. Chasing the cost curve at X, MT, AKS is pretty much what most of the employees do all of the time. Hardly an rationale for investment.

    Let's just all admit to it: This industry hasn't returned its full absorbed costs (OPEX + DD&A) for many years. Investment in this space is tossing $ in the street IMHO. Far better to adopt the ArcelorMittal strategy of deftly buying existing facilities (Thyssen Alabama being the latest), manage them for cash, and harvest the weaker assets in their fleet.
    Jan 28 05:12 PM | Likes Like |Link to Comment
  • US Steel - Should You Buy Now, Or Wait? [View article]
    IMHO, steel stocks, esp. Integrated steel stocks are just a proxy for the underlying commodity Hot Band (hot Rolodex steel sheet). Per the latest edition of AIST (Jan 2014 ed., p. 16), flat rolled capacity utilization is >90%. U.S. Hot rolled sheet is firm and increasing. All of the integrated sheet producers X, AKS, MT have very bullish charts. Regress stock prices against hot band prices and you'll see what I mean.

    Your thought on normalizing earnings and PE's over a 10 year cycle is a good thought as it dials out the hyper cyclical nature of this industry, as it starts to look at anomalous pricing vs. the underlying commodity. I used to do that, but it's too much work. These days, I just watch capacity utilization and the stock chart.

    Presently long X.
    Jan 6 10:34 AM | 3 Likes Like |Link to Comment
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