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richard48

richard48
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  • 3 Gold Exploration Companies With Huge Near-Term Upside [View article]
    The author states the Seabridge mine will cost $5+ billion to build.
    There is no mine that gets built without cost overruns today because
    the build out of mines takes around 4-5 years when they are the
    projected size of this one.

    In addition no company has signed on to build this mine which tells
    us that the big miners have enough on their plate in terms of
    projects that cost more than $5 billion.

    This mine has lots of ounces but the grade of the gold is very low
    that is why you have not seen a major gold company pick off this
    mine. As the years go by the cost of equipment and fuel to run
    the equipment goes up that would be required to build this mine.

    The projected costs for the mine are now old history. Also gold
    prices have been fluctuating. Until the price of gold hits $1350-1400
    and stays at that level as a floor on the price, miners will be foolish
    to start this project with a cost of closer to $6 billion. Miners can
    get all the metal they need from existing production and there are
    better choices for the next mine than this low grade ore.

    That does not mean a mine never gets built but any buy out would
    probably require gold at higher prices and that might be 5 years
    from now. Of course predicting the price of gold is a dangerous
    business. People have been predicting the price of gold would be
    $2500-5000 per ounce for the last decade and it has not happened.
    In fact after making a run at $2,000 gold the price has been in a
    downward fall and has been sitting in the $1200-1300 range and this
    could be the range not just for 2013-2014 but 2014-2015 or beyond.

    Personally I would not be surprised to see gold fall to $1000 when the
    FED begins to let interest rates go up in another year. The economy
    is getting stronger every day and when cheap money gets more
    expensive the lack of return on cash will no longer be equal to the lack
    of return on gold and should result in a hit to the price of gold and with
    it I would expect these shares to decline.
    Aug 21 02:00 PM | Likes Like |Link to Comment
  • Berkshire Ups Their Bet On Chicago Bridge & Iron [View article]
    The author is an astute guy. But he did not mention that Berkshire Hathaway is sitting on its biggest cash position ever. That number is $55 billion and is growing larger each month by over $2 billion. They are going to have to make a run and buy another company soon. They do not have to buy 100% they can do it as a joint venture with a major hedge fund or another major investor.

    My bet is that Berkshire Hathaway goes after Chicago Bridge or Chesapeake Energy. Both companies have a few issues to clean up but they have dominant positions. Chicago Bridge is going to build major projects over the next decade for Kinder Morgan and energy projects of all types that cost $5 billion and up. Chesapeake Energy has one of the largest positions of any energy producer in the Eagle Ford and Wolfcamp. If Buffet does not make a move then others could take out either company as they are cheap with bright futures.

    What do you do with $55 billion dollars in cash that is not earning anything?
    That number will be $65 billion or more by the end of the year is an acquisition does not take place pretty soon.

    There are very few bargains in the market right now. I see CBI, DTV and CHK which all could rise 15% by the end of the year. They are just too cheap based upon the prospects for 2015. All three companies could of course be taken out. DTV by ATT, CHK by Chevron, Exxon, BP or Shell and CBI by BRK. A take out and the price of all of them is up 15%-20% or more.
    Aug 18 02:47 PM | 2 Likes Like |Link to Comment
  • Here's Why AT&T Isn't Destined For Success With DirecTV [View article]
    DTV has a low margin in South America because they have been building out and installing a major business across the South American continent. That infrastructure is a huge investment. The expense of the last decade will be cut substantially during the next decade.

    You say DISH has been acquiring satellite licenses in Latin America. Take a look at the DISH financial reports and see if they report any revenue. DISH has not started to spend the billions of dollars that it takes to launch a satellite network across the South American continent. Do you have any idea how long it takes to build each satellite and how much a network of satellites cost including buying reserve satellites in case of failure.

    I have read nothing in DISH's quarterly or annual reports that they are prepared to spend that money to start competing against DTV ten years after DTV started in Latin America. Come on, DTV has 40% of the market in Mexico with their partner down there. DISH has 0 percent of the market in Mexico and 0 percent in South America. If you want 6-8 satellites above South America and Mexico and 1-2 reserve satellites you better start building them now and hope you are ready to launch your service in 2017. The problem by then is DTV will have 20-25 million subscribers in Mexico and South America and DISH will be starting with 0. I think there is a major competitive advantage when you approach a sports team or tv channel and you say we will pay you for 20-25 million subscribers in the Spanish speaking community.
    Aug 13 12:40 PM | 1 Like Like |Link to Comment
  • Here's Why AT&T Isn't Destined For Success With DirecTV [View article]
    Author fails to recognize that Latin America only has 25% penetration of cable and satellite TV. The governments have all predicted that the numbers will reach the North America numbers during the next 10 years.

    Also, the author fails to recognize that North America has 330 million people and Mexico and South America have 550 million people.

    Also, DTV is going to roll out a business and home security monitoring system that is tied into its current services. Security is going to become more prevalent an issue as law enforcement budgets shrink each year.
    Aug 13 12:28 PM | Likes Like |Link to Comment
  • Continue To Avoid Linn Energy [View article]
    The author fails to address one major factor involving Linn Energy and there is probably a reason he does not discuss the matter or want to discuss the matter.

    Insiders own 15% of this company!!!

    The author would have us believe that he has a better understanding
    concerning the potential for this equity than do the insiders.

    Is that arrogance or lack of analytical skills?

    My money is with the insiders.

    As to the author's lack of understanding as to why the management
    team would want the authority to buy shares/units and also have the authority
    to sell shares/equity and his inability to understand the concept, that should also tell us much about the author.

    Let me explain the simplicity of the move by management: if there is a market correction and they see the price drop they want the legal authority to load up the truck. If the share/unit price escalates they want the ability to tap the public market for additional capital.

    Most analysts, stock brokers and investors would have trouble finding companies where management has such a major investment in the equity of the company. Eventually this fact will have an impact as will the sale of the rest of Permian basin land and the impact of the BP and Exxon transactions along with the recent merger transaction using LNCO shares as an example of similar transactions that can take place every year. Do not be surprised if LNCO uses shares to acquire a Denbury Resources or Sandridge Energy if the shares of either company continues to decline.
    Aug 10 02:33 AM | 9 Likes Like |Link to Comment
  • Pacific Coast Oil Trust Opportunity [View article]
    As a lawyer and investor I would point out to current investors
    in ROYT, the following:

    If the initiative passes all parties harmed by the initiative will retain
    legal counsel to represent their interests. Any suit for compensation
    or attacking the constitutionality of the proposition will take years
    going through the courts at any trial level and then through any
    appeals. These suits and the claims take years to resolve and are
    very costly. I am talking millions of dollars in legal fees.
    In all likelihood should this initiative pass, ROYT will have to consider
    suspending or substantially reducing the distributions in order to
    to pursue its claims through the courts. Cash flows will decline and
    production will decline each month without new drilling.
    Is it worth it to any investor to hold ROYT when an announced cut
    or suspension in the distribution might be announced? I believe current
    investors should not become gamblers on the outcome of the ballot
    initiative. What would happen to the price of the equity if distributions
    are substantially reduced or suspended? I would assume a further
    major decline in the price of the equity.
    Jul 25 02:40 PM | 1 Like Like |Link to Comment
  • Weakness In Offshore Drilling May Mean No Gusher For Ensco Earnings [View article]
    The largest users of energy are planes, cars, trucks and ships.
    The vehicles have been acquired over the last 20 years
    and have a total cost of trillions of dollars. You are talking about
    a new source of energy that would require new purchases of
    transportation vehicles which would not be ready for years.

    Boeing and Airbus take five years to work new technology into
    a plane and then they produce so many a year (3%)
    of the total existing planes that they have manufactured over
    the last 25 years.

    Cars, trucks and buses is a different story. There are 260
    million vehicles registered to the 317 million Americans:
    individuals, corporate fleets, government fleets and military
    fleets. With 15 million cars, buses and trucks sold each
    year it is going to take many decades to replace those and
    remember, manufacturers take several years to retool and
    manufacture new equipment, test it and place it into
    production. I see no real sales for at least 5-10 years.
    Electric cars have been sold for 5 years and they do not
    even make up 1% of total cars in the U.S.
    What you are thinking about is not going to have any
    impact for years if not decades.
    Jul 24 02:46 PM | 5 Likes Like |Link to Comment
  • Rice Energy Acquires Chesapeake's Marcellus Package: Analysis [View article]
    Analysts are all upgrading RICE and one has a target of $50 which is a market capitalization of $6 billion from the current level of $3B.

    I have a question for the author and other posters. How can this small company with a market cap of $3B with only 6 years of drilling locations be worth $6 billion (according to the new analyst target) when Chesapeake Energy is only worth $17B+.

    Chesapeake has thousands of drilling locations in every major energy basin in the country.
    Jul 23 03:25 PM | Likes Like |Link to Comment
  • Linc Energy - Nearly A 'Sure Thing'? [View article]
    Author said the company has $125 million in cash.
    Yes, but the current liabilities are over $100 million.
    The company is very low on cash and every potential
    project they have requires years of capex and infrastructure
    build out.
    I would say this is a bunch of hype and promotion.
    Why else does the company see a share price decline
    of 50% during a year when most stock markets have
    gone through the roof.
    Jul 21 04:41 PM | Likes Like |Link to Comment
  • Linc Energy: Strong Growth Likely From Rich Assets [View article]
    This company is trying to develop all kinds of expensive energy projects. These various endeavors require all kinds of lead time, infrastructure development and major capex and lots of time.
    They are usually impacted by cost overruns and years of build out.
    The company has little cash.
    Most energy shares are up big time while this has done the opposite.
    That should tell all shareholders and potential shareholders all they
    need to know-that the majority of investors that look at this promotion
    come the same conclusion a I did. They do not see how a company
    with little reserves on hand and projects that will take years to develop
    is going to be profitable in the next five years
    Jul 18 02:32 PM | Likes Like |Link to Comment
  • $3,000 Annual AT&T Dividends Are Like An Aesop Fable Sprung To Life [View article]
    Good points made the author.
    The problem is T is like a bond and the example worked because the market has been on a tear for the last five years after going through two terrible years.
    Reinvesting the dividends was the key.

    The problem is that the market has gone straight up for five years and is due for a correction. Also T is more expensive now and it is getting difficult to raise prices not only for cable-satellite (NASDAQ:DTV) but for cell phones. The market is pretty saturated in both areas in the U.S..

    If ATT gets DTV it will have a growth market in South America and Mexico where DTV has great business operations and the population of of South America and Mexico is around 500 million people compared to the market of 300 million (U.S.) where ATT currently operates, so picking up this added population will be beneficial to ATT.

    DTV is developing a home-security business that dove-tails with its satellite business and this could be a great future business (monitoring homes and businesses for security purposes). The home owner and small business are going to have to do something as police services and other public services are being pinched by the retirement costs for these public service workers. I believe they expect to roll it out the security home monitoring in 2015 as it is being tested in a few markets to get the bugs out.

    The cash flow in satellite-cable TV has half the market penetration in South America compared to North America and South America is supposed to catch up with North America over the next ten years, so DTV should continue to grow in South America which will improve cash flow over the next ten years. DTV had to build out the system in South America over the last 10 years and that has not maximized cash flow as they only get 20% of all cash flow from south of the border. That is going to change over the next decade as Mexico and South America spend more money on entertainment.

    I would wait on buying T until their is a market correction and T swallows DTV. The costs of acquisitions always seem to impact a company during the year they swallow a major acquisition. Remember, that is going to be a large amount of new shares and supposedly DTV gets to operate independently with current management controlling the business.
    Jul 14 02:50 PM | 5 Likes Like |Link to Comment
  • Will Linn Energy Benefit From The Deal With Devon? [View article]
    It is not going to take a year to sell this property. My estimate is that it takes six months to sell the property. So $60 million plus $10 million in transaction fees/costs = $70 million in costs during year one on $350 million of EBIDTA. 20% one time cost.

    There is a tax deduction on the interest and transaction costs but you have to have taxable income to benefit from that.
    Jul 13 05:54 PM | 1 Like Like |Link to Comment
  • Will Linn Energy Benefit From The Deal With Devon? [View article]
    I believe Linn is using its credit facilities to buy this property which costs 5-6% for money borrowed short terms. On a purchase of this magnitude that would require around $10 million of interest every 30 days. If this takes about 3 months that this around $30 million. If it takes 6 months to close the transaction that is going to be $60 million. So I assume the added expenses are going to be $30-60 million over the next two quarters.
    Plus the legal and accounting costs and banker costs that are involved in billion dollar purchases and sales. That might be another $5-10 million in fees.
    Jul 13 03:04 PM | 1 Like Like |Link to Comment
  • Deere: A Cheap Dividend Stock With Potential [View article]
    Farmers are really being squeezed because of energy, fertilizer and water-drought.
    The farmers in California are allowing crops and trees to die because of the water issues. Also, the stock market has been on a five year run.

    I think DE over the next 2-3 years is going to see declining cash flow, declining profits. Does this mean a 10-20% correction down? Probably if the market corrects 10%. If this market corrects 20%, then.....

    I realize this is an international company but things are tough in the bread baskets: (Ukraine for Russia, California for the U.S., Brazil and Argentina for South America).

    Yes, it is a good company, but everything has cycles. This company and the market have run for many years, nothing goes only in one direction.
    Jul 11 05:41 PM | Likes Like |Link to Comment
  • Linn Energy's Acquisition Of Devon Energy's Natural Gas Assets Is A Good Move [View article]
    Clean Energy said they are fueling 35,000 vehicles according to your information. That is a drop in the bucket compared to the six
    countries mentioned that have 2-4 million natural gas vehicles
    in each country.
    Jul 11 02:46 AM | 1 Like Like |Link to Comment
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