A Look At Third Avenue Funds' Quarterly Report [View article]
Loving ECA at these levels. Collecting the 80 cent annual dividend for the 4% yield until gas prices firm up a bit more and they show they are exceeding expectations on their NGL drilling program and perhaps bring in a few more billion using joint ventures like the one with Mitsubishi. ECA has enormous low cost acreage (over 10 million acres in the US and Canada) for gas drilling and can produce at current rates for the next 50 years and most likely the price of (dry) gas will firm a dollar or two in the next few years providing ECA with a big cash flow and EPS boost in the process.
The risk of AIG's sale of its ILFC unit to a Chinese group is no longer non-negligible, says Sandler O'Neill, but the insurer should still be in good shape even were that to happen. Markets and credit have improved since the deal was first announced, suggesting AIG could find another buyer (or IPO?). The main risk here is delay. The analysts maintain their Buy with price target raised to $52 from $50, reflecting higher valuation for the broader insurance sector. [View news story]
The Chinese are acting as true amateurs. Not making a very good impression here but it will not matter long-term to AIG as they will dispose of ILFC to another group if not hese jokers.
Citigroup - A Must Buy Blue-Chip Stock [View article]
C-WTA up from around 30 cents in the last 18-24 months to 85 cents currently.....excellent way to leverage further gains in the common shares. After all back when the common was at $22 the shares had to rise by a multiple of 5 for these warrants to be 'in the money' with the strike price of $106. Now with the common in the mnid $50s the common has to merely double for the C-WTA to be in the money.
Very heavy buying in the last quarter by major hedge fund managers of C-WTA. And we have over 5 1/2 years of time left on these warrants and C has not even started buybacks yet of any significance.
Is AIG's sale of ILFC falling apart? The insurer says (8-K) the consortium making the purchase missed a deadline for a deposit payment. Shares -1% premarket. [View news story]
Who really truly cares where ILFC ends up really. It will be disvested one way or another at near or slightly better proceeds than what the untrustworthy Chinese agreed to. As a warrant holder I actually would be fine with the common trading down just so if they actually do a buyback they can buy many more shares and it will drive the value of my waarants even higher over time.
Why In The World Is Bruce Berkowitz Buying Chesapeake Energy? [View article]
I will put CHK in the SHLD category although Bruce has invested more money in the latter over time. The similarity is I could never quite figure out the sense behind SHLD. OK I know Bruce says it is a real estate play as SHLD controls more square footage in malls etc. combined than a Simon Property Group. This all may be true but at the same time location, location, location would seem to matter as well and I doubt too many SHLD stores are the equivalent locations of a Pentagon City Mall (Simon property) and other high-end Simon spaces. I admire Bruce for his gutsy moves on AIG and BAC and I am into AIGWT as well but SHLD and CHK I don't see the point and I prefer ECA over CHK. ECA has extremely low production costs....controls millions of low-cost acres...was late to the NGL game but has been aggressively increasing NGL production. OK it still only makes up about 10% of their output but the growth rate is phenomenal at 75,000 barrels by year-end 2013. ECA can produce at current production rates for the next 50 some years with current reserves and at some point during that time the price of NG will be substantially higher than it is now. Some fear ECA's cash flow may be insufficient but remember they have an UNTAPPED $5 billion line of credit available thru 2015. They pay a 4% dividend still which if necessary they could cut (not likely to happen) and save about half a billion dollars for as long as necessary. ECA stock is basically at current levels a cheap call option on the long-term bullish outlook for NG prices as energy users (chemical plants, power plants, large commercial fleets) switch to natural gas as the fuel of choice. ECA has done some JV's with a few of their assets in the last year or two brining in billions of dollars in the process and has not had the need to sell assets at fire sale prices like CHK.
Granted liquids are THE place to be and yet liquids are still a very small percentage of daily ECA production but estimates for end of 2013 liquids production run around 60,000 barrels per day and it seems the actual number will be closer to 75,000 barrels per day and growing fast. True, if the % would be closer to 40% liquids versus 10% we would be better off now but then the stock would be trading in the mid $20s if not higher.
Also, ECA has the benefit of an untapped $5 BILLION dollar line of credit thru 2015 so a liquidity crunch is not likely anytime soon. I don't even really care if they were to eliminate the dividend for a while to conserve cash. I am going to hold this baby for the next 10 years and it will eventually turn into a multi-bagger. Great things will happen with the nearly 15 million net acres they control one way or another. Patience is key here. Look at how many plants are switching to natural gas and how many companies are choosing to buildt production capacity in North America to take advantage of the cheap gas supply. As demand slowly rises over the years the price of gas will bump up to $6.00 which will do wonders for ECA and its shareholders.
Why These 3 Oil Stocks Are Too Cheap To Ignore [View article]
STO evolved from a local Norwegian oil play established by the government to a global player active in dozens of countries acquiring valuable assets along the way in the Bakken, Africa, the Gulf of Mexico AND they are not ignoring their home market by exploring in the Arctic and adding to their North Sea activities.
Norway as a nation has hundreds of billions of dollars in their rainy day investment fund. No reason to make STO's life complicated. A little tax here or there will not do much damage with STO's activities increasingly growing in scope overseas.
Been adding to STO also. Their production numbers were expected to be down and they ended up meeting those expectations. However, they have added assets in the Bakken and also the Gulf of Mexico which will start to contribute to their production numbers in the next few years. The dividend is well supported and likely will grow. Plus you can rest assured these guys operate in the safest possible manner without taking shortcuts....the Nordic way. The latter is one more reason why I picked STO over BP.
Added to PM holdings and holding it long-term. It is one of the most diversified opportunities out there from a currency perspective since they operate in pretty much every country. Kind of like a United Nations of cigarettes. Buying back stock at an aggressive pace. Some say they have taken on too much debt to fund the repurchases but they are paying such low rates on the debt (lower than the dividends they 'save' i.e. are not paying out because the stock is retired).
Lastly, NVO will continue to do well and continue to raise their dividend as they have done in years past.
More on the insurance upgrades (I, II) by Barclays: Not convinced AIG can boost P&C results much more, or that either it or Hartford Financial (HIG) can do much to improve returns at their life insurance units, Jay Gelb says both should aim to boost value by buying back shares trading at steep discounts to book value. He sees $5B in buybacks for AIG for both 2014 and 2015, and $750M for Hartford. [View news story]
AIG will be at $55 by September. That should put the warrants around $25.00.
AIG plans one more "liability management" exercise in 2013, says management on the earnings call (slides), and that's the call of at least part of $7.4B in hybrids. Together with other actions taken, it should reduce the company's annual interest tab by $290M (company earned about $2B in Q1). Shares +2.3% premarket. [View news story]
All part of the effort to be seen by the FED and public to a degree as well as bulletproof once again. This exercise is in conjunction with the ILFC sale becoming final. Combined, both events provide the foundation for the dividend reinstatement at 20 cents per quarter sometime before the end of 2013 and possibly as early as late summer. Also, a simultaneous buyback authorization will likely be announced for around $5 billion and running thru the end of 2014. Both will be a powerful statement underlining the strength of the business and the fact that AIG is undeniably BACK.
Go AIG Warrants......few wanted to buy them down at the $6.00 level ($6.25 as recently as January 2012) and here we are above $19.00. So for $19.00 I have the right to buy the stock (for $45.00) basically the level where the stock is now all the way thru January 2021.....!!!! Holding the warrants long-term.
On a totally unrelated note....buy STO for solild oil sector exposure. Their Bakken acreage and Gulf of Mexico leases will start to add meaningfully to the bottom-line. Also, very high standards at this company ie no short cuts. And a nice dividend. (about to be paid)
Is It Worth Adding PNC Financial To Your Portfolio? [View article]
PNC Financial Services Group, Inc. Is Set To Improve Its Performance [View article]
A Look At Third Avenue Funds' Quarterly Report [View article]
The risk of AIG's sale of its ILFC unit to a Chinese group is no longer non-negligible, says Sandler O'Neill, but the insurer should still be in good shape even were that to happen. Markets and credit have improved since the deal was first announced, suggesting AIG could find another buyer (or IPO?). The main risk here is delay. The analysts maintain their Buy with price target raised to $52 from $50, reflecting higher valuation for the broader insurance sector. [View news story]
Citigroup - A Must Buy Blue-Chip Stock [View article]
Very heavy buying in the last quarter by major hedge fund managers of C-WTA. And we have over 5 1/2 years of time left on these warrants and C has not even started buybacks yet of any significance.
Is AIG's sale of ILFC falling apart? The insurer says (8-K) the consortium making the purchase missed a deadline for a deposit payment. Shares -1% premarket. [View news story]
Why In The World Is Bruce Berkowitz Buying Chesapeake Energy? [View article]
Encana: The Future At A Glance [View article]
Also, ECA has the benefit of an untapped $5 BILLION dollar line of credit thru 2015 so a liquidity crunch is not likely anytime soon. I don't even really care if they were to eliminate the dividend for a while to conserve cash. I am going to hold this baby for the next 10 years and it will eventually turn into a multi-bagger. Great things will happen with the nearly 15 million net acres they control one way or another. Patience is key here. Look at how many plants are switching to natural gas and how many companies are choosing to buildt production capacity in North America to take advantage of the cheap gas supply. As demand slowly rises over the years the price of gas will bump up to $6.00 which will do wonders for ECA and its shareholders.
Statoil Expands Its Worldwide Footprint [View article]
Why These 3 Oil Stocks Are Too Cheap To Ignore [View article]
Norway as a nation has hundreds of billions of dollars in their rainy day investment fund. No reason to make STO's life complicated. A little tax here or there will not do much damage with STO's activities increasingly growing in scope overseas.
Why These 3 Oil Stocks Are Too Cheap To Ignore [View article]
Will look into the other two as well. Thanks for the article.
Your Portfolio Can Be All American [View article]
Added to PM holdings and holding it long-term. It is one of the most diversified opportunities out there from a currency perspective since they operate in pretty much every country. Kind of like a United Nations of cigarettes. Buying back stock at an aggressive pace. Some say they have taken on too much debt to fund the repurchases but they are paying such low rates on the debt (lower than the dividends they 'save' i.e. are not paying out because the stock is retired).
Lastly, NVO will continue to do well and continue to raise their dividend as they have done in years past.
More on the insurance upgrades (I, II) by Barclays: Not convinced AIG can boost P&C results much more, or that either it or Hartford Financial (HIG) can do much to improve returns at their life insurance units, Jay Gelb says both should aim to boost value by buying back shares trading at steep discounts to book value. He sees $5B in buybacks for AIG for both 2014 and 2015, and $750M for Hartford. [View news story]
AIG plans one more "liability management" exercise in 2013, says management on the earnings call (slides), and that's the call of at least part of $7.4B in hybrids. Together with other actions taken, it should reduce the company's annual interest tab by $290M (company earned about $2B in Q1). Shares +2.3% premarket. [View news story]
AIG - The New Darling [View article]
On a totally unrelated note....buy STO for solild oil sector exposure. Their Bakken acreage and Gulf of Mexico leases will start to add meaningfully to the bottom-line. Also, very high standards at this company ie no short cuts. And a nice dividend. (about to be paid)