finetrader

Wow, this guy just won't stop shuffling his cards.

'If they pay off the debenture, how do you get debt at $150M? Here is my math/thinking' I think we are on the same page when looking beginning 2011/2010 year end where (debt minus cash) should be about 100M$

if economic conditions stay the same, FBK should have a little bit more than 100M$ cash at end of year. I would consider this a serious offense to shareholder if they dilute the share count to pay debenture with shares at 1$! Probable scenario. FBK pay off the debenture with cash and still have about 50M$ cash on hand to navigate in difficult time. that would give a capital structure: 50M$cash 130M share outstanding 150M$ debt ________ consider a share price at 1.5$ at year end, this gives an EV of 295M$. It is difficult to estimate future cash flow but let say they make half EBIDTA in the future than they did in 2010. That would put EBITDA at about 40M$ for a EV/EBITDA of 7. Seems reasonable to me. Especially for a company that do not have many capex, adequate and diminushing leverage, and that should not pay a lot of taxes due to tax shield provided by all the depreciation.

3rd quarter is almost over and pulp price is still high. We can expect another 15M$ FCF (excluding working capital changes) for this quarter alone! This for a market cap of 130M$ My guess is that management wants to improve the balance sheet before reinstaing a dividend. They probably also want to make sure it is sustainable. Short term, a dividend announcement would probably be very good for share price. Medium term, no one expect pulp price to stay that high. Those plants restart will indeed put pressure on pulp price. http://www.cmegroup.com/trading/agricultural/lumber-and-pulp/wood-pulp.html Other things being equal, is anyone have an idea what the cash flow would look like if pulp price follow this pattern? I mean, what would be the cash flow if pulp pirce at 800$/ton?

In a bankruptcy event, the creditors have to vote to adopt the plan of reorganization. I don't remember seeing a judge determining himself the plan to adopt. Don't think they have that power. The equity holders usually have almost no say on the reorganization even if they get ripped off. What I have seen is a big equity holder make an arrangement with a group of creditors (this group was getting more in the equity plan than the creditor's plan) so that they vote in favor of the equity plan. In the reorganization of Stelco, this had the effect of forcing the creditors to negociate with the equity holders.

'I would prefer a site that show the current price and yield all on one page. Any suggestions?' I usually find those info concerning preferred security on this site. http://www.theglobeandmail.com/globe-investor/markets/stocks/summary/?q=WFC.PR.L-N

For Canadian investor, it could be a good idea to buy US preferred in this economic environment. Every time fear is ramping in markets, investors rush to US bond and the CAD dollar depreciate compared to USD. Then if you buy a preferred when exchange rate is at parity you get a steady dividend plus you get protection againt market risk with the exchange rate. Of course you lose if CAD keeps appreciating, but it seems like a low probability to me. The trick is to find a preferred that won't go down when everything else is, but you also want a good yield.

I don't know what options are available to management in term of finding ways to lower cost, but I was thinking that maybe this is no such options on the table and the fresh 40M$ from the warrants are just going to stay in the company's coffer only to serve as a security in case a serious bad market(like in 2009) comes in again. an another option I guess.

some good news. http://www.theglobeandmail.com/globe-investor/news-sources/?data-ipsquote-timestamp=20100621&archive=cnw&slug=C7016

Tuesday was the latest date to buy or hold share of FBK to get the rights.(3 days settlement) And that is also why I think the share price is around 1.18$. Suppose someone buy tuesday 3h59pm at 1.25$, then for this price you effectively get 1 share + 1 right of FBK. You need 2.28 rights to get one share at 1.01$. So the no arbitrage price for FBK on wednesday 9h30am should have been around 1.18$ so that a drop one share of FBK from 1.25 to 1.18 is compensated for the gain of 1/2.28 rights at strike price of 1.01. So 1.18-1.25= -0.07$ and (1.18-1.01)/2.28=0.07$ approximately.

Maybe it's too soon, maybe it's too risky... but European banks like Banco Santander, Societe Generale, BNP Paribas, and the Euro have lost a lot of market value lately. ex. STD(ADR) have lost 45% ytd I am no expert in analyzing the banking business, but I know that those banks have a lot of loans to countries like Greece, Spain... I also know that you can make good money when you do banking and you can borrow at historical low rates. Anyway, I would be interested to hear commentaries about it..

I did get a reply be email from IR saying the discount apply to all investors. And the way I read the prospectus, it is confirming it. The 20% discount is a discount from the average price of the last trading days(whether it's 5 or 40 days). The subscription price = the weighted average price of the last trading days - 20%. The subscription price is the same for all investors. I myself too find that prospectus can be confusing..

'The 20% discount applies only to FFH, only to whatever they take up under the standby, & they cannot resell anything they take up under the standby (p-4). ' I'm not so sure about that. To me the subscription price is the same for everyone. The term subscription price is defined as : The Subscription Price per Common Share will be equal to $. also we have: Basic Subscription Privilege: Every Rights entitle the holder thereof to subscribe for one (1) Common Share UPON PAYMENT OF THE SUBSCRIPTION PRICE. No fractional Common Shares will be issued. See "Details of the Offering - Basic Subscription Privilege". In the Standby commitment, we have : The Corporation and the Standby Purchaser have agreed that the SUBSCRIPTION PRICE per Common Share WILL BE EQUAL TO the lesser of (A) the volume-weighted average price ("VWAP") of the Common Shares (or Units, as the case may be prior to May 27, 2010) on the TSX for each of the trading days on which there was a closing price during the five (5) trading days immediately preceding the date of filing of the short form final prospectus (the "Final Prospectus"), less a discount of 20% and (B) the VWAP of the Common Shares (or Units, as the case may be prior to May 27, 2010) on the TSX for each of the trading days on which there was a closing price during the forty (40) trading days immediately preceding the date of filing of the Final Prospectus, less a discount of 20%.

You have to have cash to buy the stock if put goes in the money. I think you could get 1$ premium. For someone with cash on the sideline and happy to own MFC at 11,50$US(strike minus premium). If it does'nt go that much lower you get to keep the premium. (then make 1$/11,50$*12/7= 14% annualized return on cash) Sounds like a win win situation. Agree that opportunity cost is an important factor to consider too.

about selling puts I'm looking at: 10 dec 12.5 put for MFC anybody else find the premium attractive and a way to get in MFC at a cheap price?

I just got a reply by email from Mme Ducharme at SFK and she told me that the 20% discount apply for the normal subscription as well as for the additionnal subscription(if you exercice alll your rights) and is for any shareholder. finetrader

Talking about driller, I like Essential energy (ESN-t). I bought this winter and I've hesitate between this one and HYD and though that Essential had a lot of upside potential and was more profitable, so less risky, than HYD.

He looks like Ozzy ;D

What is the situation concerning the black liquor subsidy? I know SFK management said last summer that they expected that the subsidy to be renewed in december. Was it the case? Thanks

try this one http://www.omaha.com/article/20100210/MONEY/702109950

I sucked my thumb while watching WFC-L going from 400 to 938.

China market might be overvalued, but it is still the promised land for future growth. Anyone care to share their best ideas to invest in this country? I'm following many chinese stocks that are listed in North America, but the ones I find the most interesting are those three: HF.to: fertilizer company, growing, p/e around 15, good management UTA: small cap online travel agency, cheap valuation compare to peers like LONG and CTRP, p/e is around 10, growing fast NPD: retail drug stores , too expensive though, P/E around 25-30 I own HF and UTA, and would love to own NPD at the right price.

It can be a good trade, but i don't think it is risk free. Even if you short BNI, if the deal goes as exected, your short BNI convert to short BRK (adjusted for ratio of 40% BRK stock and 60%cash) . If BRK do go up a lot before you close your positions (at expiration of your options) then you could lose money on that trade. in other words: your potential loss on your short could be more than the spread premium received on your options position.

I agree it is a bit complicated, and confusing (ex: Mass Financial changing his name for KHD and spin off a company called Mass Financial right after.) But if you bought 4-5 years ago when the name was Mass financial you probably bought at around 10$(split ajusted). The stock is now 15$ and you received about 0.6 share of MFCAF worth about 10$ today for every share you bought. So it is about a double. Compare to S&P500...

http://finance.yahoo.com/news/KHD-Humboldt-Wedag-prnews-1079435258.html?x=0&.v=1 I guess this marks the end of a deep bargain stock. This stock had an awesome risk/return ratio as the cash on hand and the royalty from the wabush mine was giving a support floor for IV, while the engineering business was an excellent kicker for the stock providing exposure to infrastructure construction in emerging countries.