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SenBiden

SenBiden
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  • Why I'm Buying Chesapeake Energy [View article]
    I'm a retired executive/economist from the power industry where the demand for natural gas is growing dramatically as the war on coal takes its toll on coal-fired plants and subsidized renewable sources (e.g., wind turbines) have inherent reliability limitations and require backup from quick-ramping gas plants. A few years back, the emerging gas glut induced me to sell CHK (a suspect CEO and Board made the decision easier), Devon and other gas producers in favor of oil producers like EOG and OXY and various midstream MLPs with little to no commodity risk. Now is the time to get back into the gas producers like CHK. The growing demand from the power sector is still intact and will remain so for many years, perhaps decades, retail consumers are still converting from oil to gas at a rapid pace, and LNG exports will be (thick) icing on the cake. Thanks for an informative article.
    Mar 24, 2015. 09:06 AM | 2 Likes Like |Link to Comment
  • Report: Statoil eyeing EOG Resources for megadeal [View news story]
    Another lesson in how the big players make money in the market - spreading nonsensical rumors like this.
    Mar 16, 2015. 10:29 PM | 2 Likes Like |Link to Comment
  • Shorting Realty Income Is A Bad Idea [View article]
    I'm sure many want to hold O for the steady, increasing monthly income, so why not sell at the money or near the money calls here and grab some premium along the way? If interest rates stay low or continue to fall perhaps your shares get called away. (A risk worth taking at these valuations IMO.) Then when O drops again, which it will, buy lower or sell puts and get back in at an even lower price.
    Jan 29, 2015. 07:54 PM | 2 Likes Like |Link to Comment
  • EOG Resources Remains Overvalued Relative To Future Earnings Growth [View article]
    I sold Devon in 2009 to buy best in class EOG. Have bought on dips, still holding, sure not selling based on partial analysis even though I'm up 80%. EOG is a true growth stock and although it has a low yield, its dividend growth is impressive enough to get it into premier dividend growth ETFs like Vanguard's VIG. Like many of the former Enron folks I have met in the energy industry, their management folks truly are "the smartest guys in the room" - without the financial games. BTW, if EOG is not significantly hedged for 2015 (something I have heard but not been able to confirm) then I believe that means prices are probably headed north.
    Nov 17, 2014. 10:11 PM | 2 Likes Like |Link to Comment
  • Kinder Morgan: You Must Strike While The Iron Is Hot [View article]
    Thanks for the thoughtful and timely article. Recently sold Royal Dutch Shell in my wife's IRA and wanted to redeploy profits and principal into something with similar yield. KMI seems to fit the bill with less geopolitical risk and at least equal probability for increases in yield over time. I also take comfort in Kinder's large personal stake. Thanks again.
    Jun 16, 2014. 03:03 PM | Likes Like |Link to Comment
  • Why Schlumberger's Stock Is A Long-Term Investment Opportunity [View article]
    Thanks for the timely article. Sold covered calls on my long position and had most of my SLB shares called away at $100 for 50% gain. Not looking so good now. Still like the stock but was hoping for a better (better than $100) reentry point. Would you suggest I keep waiting or jump back in on any pullbacks. I was considering BHI or WFT as alternatives until I saw your comparison.
    Jun 16, 2014. 02:26 PM | Likes Like |Link to Comment
  • I Found A Nice Margin Of Safety In Omega Healthcare Investors [View article]
    I have been following your articles on REITs and adding to OHI (and O) on pullbacks. My average cost on OHI is $32 but I bought for the income which I'm more focused on since retiring last year. Also long BMR and 3 REIT preferreds: NLY-C, NRF-D and VNO-L (have had good luck using pfds as bond substitutes). Your research has been helpful in my ongoing plan to replace my paycheck with dividends. Working toward a portfolio that affords me an opportunity to increase my yield when the inevitable correction comes.
    Jun 11, 2014. 06:22 PM | Likes Like |Link to Comment
  • Growing Capacity And Further Price Decline Are The Main Threats For Potash Miners [View article]
    Another company DID try to buy POT not long ago - BHP Billiton. POT and the Canadian Government joined forces to thwart that effort which would have clearly benefitted shareowners. POT stock has way underperformed since. I sold my POT shares back then and glad I did. For my money, MOS and AGU look like much better investments in this space, short and long term. And in my opinion the entire industry would have been better off for investors had BHP successfully absorbed POT. How does the POT argument that the BHP offer was too low sound now? Pretty hollow and self-serving.
    May 22, 2014. 12:51 PM | Likes Like |Link to Comment
  • How Strong Are The Dividends At Tupperware Brands? [View article]
    Added TUP in mid 70s in late Jan, early Feb to my 35 or so DG stocks. Had to part with long-time favorite MCD to make room for it. TUP looked like it had much better revenue and div growth potential for the foreseeable future. This research and that of others appears to confirm. Thank you.
    Apr 9, 2014. 05:09 PM | Likes Like |Link to Comment
  • McDonald's Tasty Shareholder Yield [View article]
    I sold MCD in Jan this year, fearing it was losing market share to companies like Chipotle, Five Guys, Wendy's, etc. When I tried their new wings (worst I've had)that sealed it for me. Not at all competitive, unlike other recent new offerings like their iced coffee drinks. I used the proceeds from MCD later that month to enter another DG stock, Tupperware (TUP) for higher dividend and (lately at least) better dividend and sales growth, and solid, relatively safe exposure to emerging markets. Not easy to let go of MCD as it has been a reliable moneymaker for me over many years. I just think there are better DG options right now. However, if management shows signs of getting its act back together I will be back. No arguing with MCD's stellar record on dividend growth over the years. It will always sell at a high P/E relative to overall market, deservedly so. I did not realize it was low relative to all those other restaurants. On my watch list, just not in portfolio for now. Thanks for your research.
    Apr 5, 2014. 11:09 AM | Likes Like |Link to Comment
  • Is Tupperware Brands The Perfect Dividend Growth Stock For Retirement Portfolios? [View article]
    Solid information here. I sold MCD in late January (concerned it was losing market share and the possible implications for cash flow) and used the proceeds to buy TUP as a replacement DG stock with exposure to emerging markets for both my IRA and my mom's brokerage account. I felt the drop in TUP price was way overdone based on the last earnings report and outlook. Your research confirms it. Looks like they can keep raising dividends for foreseeable future. Thank you.
    Apr 4, 2014. 12:12 PM | 1 Like Like |Link to Comment
  • Ensco Is Well Positioned To Prosper In Offshore Drilling Industry [View article]
    I went long ESV about 7 months ago and have seen nothing but positive articles in SA and elsewhere, including on CNBC. Even Cramer couldn't boost it. I can't recall seeing a single negative comment on ESV. Yet the direction of the stock has been consistently down. Can anyone explain such a poor stock performance for a company with a relatively high and increasing dividend, modest payout ratio, great P/E and backlog of orders, etc.? There must be an explanation but I have not seen it and just plain don't know. Too much backlog in the dying North Sea? I'm reaching, still long but puzzled, and hoping buying on the way down pays off.
    Apr 3, 2014. 04:35 PM | 1 Like Like |Link to Comment
  • EOG Resources: Strong Results From The Eagle Ford Have Me Staying Bullish [View article]
    Thanks for the concise and poignant report. I am long EOG and have seen it grow from my 6th to now my largest position. I share a similar concern of ChuckXX that E&P firms employing hydraulic fracturing and horizontal drilling may become victims of their own success and produce a glut, causing oil prices to drop significantly. If that occurs, the refiners like Valero and Holly Frontier (HFC) will be the play.
    I was glad to see the recent 2 for 1 stock split. When predecessor Enron did this it was a buying opportunity until the great collapse at the end. EOG is a different animal than Enron, with honest top management, terrific hard assets to exploit and obviously still plenty of those "smartest guys in the room" or at least smartest in the oil patch. I have had the pleasure of knowing and working with many former Enron folks in the electric power industry and found them to be brilliant and not at all like Skilling, Fastow et al. Staying long. Thanks again.
    Apr 2, 2014. 09:29 AM | 1 Like Like |Link to Comment
  • An Economic Moat Analysis Of Exelon [View article]
    Joe, the point is being the low cost provider has been nullified by government policy that favors renewables. First, renewables are subsidized so they can bid lower prices into the wholesale market than their true marginal costs knowing they will get the market clearing price like every one else plus their government subsidies. So they can bid zero or even negative prices during some hours. Second, the state mandates guarantee them a market for their output. So politicians have turned the market upside down, at least partially nullifying the natural competitive economic advantage that large nuke (and many coal) plants had in the market. When these plants start up they must run for a long time or they incur intolerable maintenance expenses associated with start up and shut down. When mandated wind turbines are running during off-peak periods and prices are ridiculously low, they cannot shut down and thus lose money.
    EXC possibly having to retire nukes has nothing to do with its "cost ineffectiveness", rather the lunacy of government policy. As an economist I submit that a nation that force feeds uneconomic energy sources into its economy, and fails to exploit its natural comparative economic advantages is bound to experience substandard economic growth. EXC's experience is but one symptom.
    Mar 31, 2014. 10:41 PM | 1 Like Like |Link to Comment
  • An Economic Moat Analysis Of Exelon [View article]
    Not sure I completely disagree with your overall conclusion, rather the reasoning you employ to get there. Under LOW COST PROVIDER you say " It is possible for Exelon's nuclear fleet to be a low cost provider if operating conditions are right. Inexpensive natural gas and government subsidies for renewable energy have made it difficult for nuclear operators to compete on price."
    Nuclear generation IS the low cost producer in virtually every competitive wholesale market (except perhaps the Pacific Northwest where Hydro dominates), especially the ones where Exelon is a dominant supplier, e.g., PJM, ERCOT, etc. Renewables like wind and solar are not really competitive on price, rather they are forced into the markets by government mandates that increasing percentages be sold to customers by retail suppliers in most cases regardless of their price. This affects all competitive generators, not just Exelon. Still, one would think that Exelon, with more than 92% of its fleet being low-cost nuclear, would be harmed less by the mandates than higher cost generators, including gas-fired. Under cost competitiveness analysis using the metrics you employ I would give Exelon at least a 4/5 in this area.
    No, there must be another explanation for this firm's persistent underperformance relative to the market and the power industry. Perhaps the market is punishing EXC for not having a more diverse generation mix fearing that one mishap at one of their nukes could devastate the stock. Perhaps the market thinks the renewable mandates will exact a more punishing toll on large, capital intensive nuclear power plants that do not have the flexibility to cycle up and down in response to swings in demand and output from the highly variable wind and solar units. This constitutes a very real and insidious cost imposed on the market by the renewable mandates.
    Long EXC no longer, but watching for new signs of life. The renewable mandates will prove to be a terrible political and economic policy error for all competitive generators, including EXC, for consumers and for the US economy.
    Mar 31, 2014. 03:20 PM | 1 Like Like |Link to Comment
COMMENTS STATS
33 Comments
20 Likes