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  • Delta Air Lines: Hedging Gone Awry  [View article]
    Can anyone shed some light on the degree of transparency required by the SEC of airlines as to their hedging programs. Those hedging charts Delta provides in their 10-q's somehow leave a lot to be desired. I was actually thinking of putting a list of questions together for investor relations but I'm not sure what they will be willing to divulge. If I recall correctly, in the interview with Charlie Rose, Anderson touts his experienced trading desk in Houston and says they are active in making changes to the portfolio. How active are they, how much autonomy and/or power do they have, and what policies are in place to prevent a trader from going rogue? I'm not sure what the exact scenario was with John Ruggles was in 2012, but it sounded like a situation that got out of their in control. I could be wrong on that.

    I don't want to hijack this thread, but if anyone is interested in helping me approach IR with this issue, please comment or PM me.
    Dec 5, 2014. 03:34 PM | Likes Like |Link to Comment
  • Continental Resources' Harold Hamm - Not The First Billionaire Energy CEO To Boldly Remove His Hedges  [View article]
    Yes, everyone has known about U.S. production, but as per your comment it is not appreciated enough, hence not reflected in price properly. The US is battling Russia and Saudia Arabia for top producer in the world! . . . Investors and the public still can't wrap their minds around this, and it is 100% the reason why brent has been in decline, aided by china slowdown. Sometimes the obvious answer is the right answer.
    Nov 17, 2014. 11:19 AM | Likes Like |Link to Comment
  • Continental Resources' Harold Hamm - Not The First Billionaire Energy CEO To Boldly Remove His Hedges  [View article]
    Hamm: "Our view ultimately comes back to global supply and demand which, in my opinion, has not fundamentally changed in the past 3 months. Certainly, not enough to justify a sell-off in Brent and WTI that has occurred."

    The problem with this statement is that you could just as easily postulate that $95 for WTI was inflated, and that only now is the price of oil more realistic, even though the supply demand picture hasn't changed.

    Now a good proxy stock. I would expect even higher volatility than normal.
    Nov 14, 2014. 09:11 AM | 1 Like Like |Link to Comment
  • Copa Airlines: The Numbers Reveal A Great Opportunity  [View article]
    So, according to their prospectus, their tax rate has to do the fact that many of the countries they service do not impose income tax; and, Panama only charges against the percent of revenue that is flown over Panamanian territory. At least that's the way I understand it. That seems like a pretty good scenario when you factor the amount of territory they cover that is outside Panama. However, you have to wonder about the risk of new taxes imposed by the countries they service.

    Regardless, what I don't understand is their apparent monopoly at Tocumen airport. If being a tax-advantaged Panamanian airline is so profitable, why haven't other Panamanian airlines emerged to compete in the market there?
    Oct 25, 2014. 11:23 AM | 2 Likes Like |Link to Comment
  • Is Dick's Sporting Goods Worth Considering?  [View article]
    My problem with DKS, and with those profit growth forecasts you mention, is the competitive landscape. I think eventually stores like Academy Sports eat Dick's lunch. Where I live, in Nashville, I see Dick's as a glorified apparel retailer. It's ironic that they got their start as a bait and tackle shop, because their fishing sections in Nashville are horrible. They have many aisles for lures and tackle, but it's obvious they are more worried about inventory control than providing tackle that local fisherman would use. In other words, their selection is skimpy. In Nashville, if you are a fisherman you go to Academy or Bass pro shops. And there are A LOT of fisherman in middle tennessee. Again, ironic since Dick's started as a bait and tackle shop. They are much better than Academy at golf, but I think the headwinds in golf will be here for a long while. The way I see it: too much inventory over the past decade. I am an avid golfer, and see no reason to buy a new set of $1000 irons when I can get a set made two years ago for $250 on ebay. The golf explosion is over for the next decade, in my opinion. So, where does that leave Dick's? Like I said, glorified apparel retailer, not a sporting goods store. At least here in Nashville.

    Of course I realize that the above is anecdotal. The company has been profitable so they must be doing something right. I wonder if they have stores closer to their origins that are superior to the ones where I live. Regardless, I think their bread and butter is apparel. Nike, Under Armour, Adidas, Columbia etc. But where is their competitive advantage?
    Sep 12, 2014. 05:10 PM | Likes Like |Link to Comment
  • Scientific Games: This Equity Stub Has Significant Upside In The Making  [View article]
    What gets my attention most in this leveraged deal is that Bally has a proven long term track record: impressive return on capital and subsequent ability to buyback shares. Shufflemaster also had excellent return on capital over a long term period. I think this fact helps mitigate the bankruptcy worry, along with the recurring revenue that the author mentioned. Add in the consolidation and subsequent pricing power, and the worry is mitigated further in my opinion. I don't know much about this guy Isaacs, but he seems to be the brains behind this, formerly with Bally and Shufflemaster. . . . Has there been any announcements regarding executive compensation and/or alignment with shareholders? i.e. what sort of shareholder stakes will insiders have, mainly Isaacs and the guys coming over from Bally?
    Aug 15, 2014. 05:11 PM | Likes Like |Link to Comment
  • Coach - Undervalued Company With A Buyout In The Cards  [View article]
    I was merely pointing out that buying stock on takeout rumors can be costly. And that people who thought coach was cheap at $50 have been proven horribly wrong. . . . Deja vu with current takeout chatter.
    Aug 11, 2014. 05:11 PM | Likes Like |Link to Comment
  • Coach - Undervalued Company With A Buyout In The Cards  [View article]
    Bloomberg article discussing coach takeover back in March 2013. Shares at the time were trading at $50:
    Aug 11, 2014. 01:26 PM | Likes Like |Link to Comment
  • Coach: An Imminent Takeover Target?  [View article]
    Unless the buyout rumors are true, the pop on Friday is just another reason for the stock price to move even lower. I am not saying there is not an investment in Coach, but I am not as confident as some that the brand has the power to overcome past missteps. I think margins will tell the story.

    The bulls incessantly pound the table about how new management and new creative designers and new this and new that are going to save their dwindling investment. Maybe. I won't buy this stock until I see margins decline further and then stabilize.

    Worst case scenario for Coach is Humpty Dumpty (e.g. Liz Claiborne). I think the outlet store issue in regards to brand appeal and exclusivity is very important, and I'm not sure if the bulls on SA have fully grappled with the problem of ubiquity vs.exclusivity. Bulls talk about how cheap the stock is but I wonder if they fully appreciate what 22% net margins do for a company's bottom line, and what a deterioration in those margins means for the same.
    Aug 11, 2014. 12:08 AM | Likes Like |Link to Comment
  • American Airlines Can't Buy Stock Quick Enough  [View article]
    Considering a scenario where you have a sustained decline in oil prices fostering sustained expansion in profit margins, isn't there a worry about new carriers entering the U.S. market?
    Aug 8, 2014. 01:54 AM | Likes Like |Link to Comment
  • American Airlines Can't Buy Stock Quick Enough  [View article]
    markcc--I think it is stable oil prices we are looking for. I do not think precipitous drops help airlines, especially short term, as those drops could indicate squeamishness in the general economy and financial markets. I think $100 oil is perfect for the airlines. They have shown they can make money at those prices. I'm fine with sub $100 oil if it is mostly a supply issue, rather than demand.
    Aug 6, 2014. 11:02 AM | Likes Like |Link to Comment
  • American Airlines Can't Buy Stock Quick Enough  [View article]
    I do not think it prudent to rule out a close correlation between jet fuel and crude, especially Brent. International refining capacity is abundant. Domestic capacity is obviously more challenged, but refineries are adjusting and expanding to take on more light crude as the margins are there.

    The complexities and bottlenecks in the refining business are important and should be paid attention to. But the main theme here is that the U.S. imports dramatically less oil than it did just a few years ago, and that domestic production will continue to rise over the next decade. This puts pressure on international crude benchmarks which in turn puts pressure on the price of refined products. If brent jumped to $150 over the next few years, domestic jet fuel would jump with it as domestic refineries have the option to export their product in line with international refineries. My thesis is that because of domestic crude production, the likelihood of Brent rising to $150 in the next decade is low--keeping jet fuel prices in check. . . . I worry about deflation in oil commodities than inflation.
    Aug 1, 2014. 05:25 PM | 2 Likes Like |Link to Comment
  • American Airlines Can't Buy Stock Quick Enough  [View article]
    I was short airlines in 2010, 2011 and made money. But it was the stupidest speculation I ever made in the stock market, and I consider myself lucky to have gotten out unscathed. In 2012 I reversed my position, covered, and have been building long positions since that time. Part of my long thesis hinges on historical negative sentiment (e.g. Buffet, DeepValueLover, myself). The negative historical sentiment will always cause sharp selloffs from time to time which I see as a healthy necessity for long term price appreciation. It's the classic wall of worry. As far as oil price volatility goes, I think DVL has it dead wrong. Among the fundamental shifts in the industry that people have enumerated, the oil price factor is among the most important. The massive quantities of oil coming out of the Baaken, Eagle Ford, and Permian make the surge in oil prices that we saw a decade ago highly unlikely to repeat. For the most part, I think the so-called shale revolution is under-reported and under appreciated due to the fact that Americans take low gasoline prices for granted. Stable $100 oil factors into many of my investment thesis besides domestic airlines. In short, I think meaningful oil price volatility is over for the next decade. When trouble arises in the middle east or Russia, you will see short term spikes, but they are meaningless in my opinion. I also think Delta's access to domestic crude via their refinery is underestimated in terms of their competitiveness with other airlines including non U.S. carriers, although possible lifting of the export ban should be watched out for--even though people seem to differ on its possible effects.
    Aug 1, 2014. 12:46 PM | 1 Like Like |Link to Comment
  • Dick's Sporting Goods Expanding Rapidly  [View article]
    You mention share buybacks, and management has touted them for awhile now, but share count has risen or remained steady. So they are basically buying back shares then issuing those shares directly to themselves.
    Aug 1, 2014. 09:00 AM | Likes Like |Link to Comment
  • Apple Continues To Bleed Market Share  [View article]
    My only gripe with Apple is that they caved to activists when the stock was near $400. In early 2013 the negative media frenzy was at such a heightened pitch that the stock could have easily floundered to the low $300's. All Apple had to do was keep their mouths shut and let it happen. They missed an opportunity to buy tons of stock on the super-cheap, which would have bought them more time to address the most important issue which is new products. They could have even repatriated money for the buybacks if the prices were cheap enough. If you projected cash/share forward a half decade or so, a $300 purchase price would have been close to buying the company in exchange for cash with the bonus of a free business. That's how insane the negative media frenzy was. That sell-off was far more irrational than any irrationality surrounding apple's stock split and subsequent rise in stock price that the author takes issue with.
    May 4, 2014. 11:35 AM | 4 Likes Like |Link to Comment