New FBK

[SharperDingaan]

 

Sell part of the postion into strength & buy it back on weakness. Share remains the same but there is a realized gain/(loss) less two commissions.

 

SD

[alertmeipp]

I think that's called Trading not Hedging.  ;)

[doc75]

I think that's called Trading not Hedging.  ;)

 

Agreed.  Whatever you call it, in retrospect it would've been the right way to play FBK after the great runup!

 

On that point... here's a question:

 

There are a great number of cases where there have been huge sudden run-ups in my "value" holdings, and I'm extremely tempted to sell and then re-enter.  I have generally resisted the temptation, telling myself to wait until they approach my estimate of intrinsic value.  But if I guesstimate based on personal experience, I'd say I would've experienced much greater returns had I consistently sold positions after very fast run-ups of 50% or more, particularly if they take place with huge volume spikes.  Far more often than not it seems the stock falls back after the big buying is done.  (Fibrek's not actually a great example of this, since the run-up took a while.  I'm mostly talking about huge returns over one to three trading days.)

 

I'm curious what others on the board do?

[Myth465]

I generally like to trade value.

 

Honestly you are screwed either way. Those that sold ATSG from $1 to $2.50 have to be a bit annoyed. For me it depends on whats out there to compete with the idea.

[biaggio]

"There are a great number of cases where there have been huge sudden run-ups in my "value" holdings, and I'm extremely tempted to sell and then re-enter.   I have generally resisted the temptation, telling myself to wait until they approach my estimate of intrinsic value."

 

Doc75,I have had the same experience.

 

I am thinking that if it is a great business that you bought at a good price, one should just hold (I am thinking for possibly forever, unless you find another great business at an even bigger discount, but I think this is rare.). Especially if there are taxes to be paid.

 

I am thinking for jockey stocks like FFH, LUK, BRK, etc I would hold until they are way overvalued.

 

For good business at a great price, I am thinking I should trade into a better value if it becomes available especially if there are no taxes  (inside RRSP or IRA).

 

For "cigar butt" types of companies-I have been avoiding these, but would definetly sell if got big run up. If it is a cyclical company I would sell.

 

My issue(just thinking out loud) is how confident am i with regards my estimation of the quality of the business + its valuation. I guess we should do it when it is really obvious ie a fat pitch.

 

Agree that you re probably screwed either way,unless it is obvious.

 

What are others thoughts?

 

[Myth465]

biaggio I do much the same.

 

For Jockeys or other Good Companies at fair prices - L, LRE, SSW, FUR, and soon to be FFH, LUK. I try to hold unless significantly overvalued. For everything else i sell near IV or sell if I find something else.

[SharperDingaan]

 

Think in terms of recovering a fixed $ investment over time. 

Over time either you get paid a quarterly cash yield, or you hold the same share count for a lower total investment. Lower your cost by trading your position - sell 50% of a position to repurchase later & you’ve hedged. 

 

Hedging a margined security at 50% margin is particularly effective - guess correctly & on the way up you have 2x the gain, on the way down 1x the loss. 

 

Trade successfully & you will recover your entire fixed $ investment, earn a healthy cash yield on the $ investment deployed, & still hold the shares. Reinvesting the recovered $ investment in a Treasury/Canada/Guilt removes the casino effect (reinvesting the gains to double the share count), & creates a low risk synthetic convertible. Reinvest recovered investment $ in mortgage prepayments & you’ve maximized after-tax cash return.

 

Time & volatility become your friends.

 

SD

 

[alertmeipp]

Hope we will have a chance to "trade" or "hedge" soon.

 

The problem with me is I see the IV so much higher for this one that I don't see a "trading" point any more after the right offering. 

[Uccmal]

The concerns with fbk and other Graham style return to value scenarios are easily addressed by the dirty word diversification.  One has to make fbk a big enough part of their portfolio such that if/when it moves, it moves the needle.  Simultaneously, one, or should I say, I need to make it small enough that I dont obsess over it constantly. 

 

I too sat and watched fbk/sfk rise to $2.00.  I sold some on the way up but didn't want to sell out before I hit my target, which is somewhere nearer to $3.50 back then.  I would do exactly what Sharper suggests as the stock rises selling a few hundred to a thousand shares at various points below my target.

[Uccmal]

fbk - Up 6% - sell out now!

 

whoaa. calm down, calm down....    :P

[doc75]

fbk - Up 6% - sell out now!

 

whoaa. calm down, calm down....    :P

 

So all I have to do to get an 8% pop is do a little bitching on this board? 

 

Hmm...

 

You know, I'm also not impressed with the stagnant FFH share price as of late.  Worrisome.  Management doesn't have any direction.  Industry pricing is soft.  Hate their website and its conspicuous lack of flash animation. 

 

Now excuse me while I check my portfolio. ;)

[Myth465]

fbk - Up 6% - sell out now!

 

whoaa. calm down, calm down....    :P

 

So all I have to do to get an 8% pop is do a little bitching on this board?   

 

Hmm...

 

You know, I'm also not impressed with the stagnant FFH share price as of late.  Worrisome.  Management doesn't have any direction.  Industry pricing is soft.  Hate their website and its conspicuous lack of flash animation. 

 

Now excuse me while I check my portfolio. ;)

 

I own about 14 stocks I may need your help with lol.

Someone wants in.

[alertmeipp]

I think Cfx-un.to will be out today. Doesn't have the time to check it yet.

[lessthaniv]

Canfor Pulp earns $27.90-million in Q3

 

2010-10-25 20:33 ET - News Release

 

Mr. Terry Hodgins reports

 

CANFOR PULP INCOME FUND ANNOUNCES STRONG THIRD QUARTER 2010 RESULTS

 

Canfor Pulp Income Fund is releasing its third quarter 2010 results, as well as the results of Canfor Pulp LP, in which the fund has a 49.8-per-cent ownership.

 

The partnership reported record sales of $247.9-million and net income of $54.5-million, or 76 cents per unit, for the quarter ended Sept. 30, 2010. The partnership generated EBITDA (earnings before interest, taxes, depreciation and amortization) of $63.6-million in the quarter, similar to the record level in the second quarter of 2010. The fund reported net income of $27.9-million, representing the fund's share of the partnership's net income and a future income tax recovery of $800,000.

 

In the quarter, the partnership generated adjusted distributable cash of $55.3-million, or 78 cents per unit, and the partnership and the fund declared distributions of 69 cents per unit.

 

Partnership results were similar to the second quarter of 2010, as higher prices for the partnership's pulp and paper products offset lower shipments and higher unit manufacturing costs.

 

The scheduled maintenance outage at the Northwood pulp mill, originally estimated to result in 10,000 tonnes of reduced production was extended for additional inspections and repairs to the recovery boilers. The additional work extended the outage into the fourth quarter of 2010, for a total of 24,000 tonnes of reduced production, with approximately 18,000 tonnes in the third quarter and 6,000 tonnes in the fourth quarter.

 

Softwood pulp markets remained balanced through the quarter. Bleached softwood inventories have increased as a result of reduced demand from China and the typical seasonal slowdown through the summer months. Rising inventories resulted in a $30 (U.S.) price decrease in North American markets from the $1,020 (U.S.) peak in July, 2010, to $990 (U.S.) per tonne for September, 2010.

 

Some North American bleached softwood capacity was restarted in late September, which will result in a modest increase in supply. Conversely, seasonal maintenance downtime through October should mitigate this increase in supply in the near term. The North American NBSK pulp list price for October, 2010, is announced at $970 (U.S.) per tonne, a $20 (U.S.) per tonne reduction from September, 2010.

 

As reported in Stockwatch on Oct. 20, 2010, the fund declared a monthly distribution of 25 cents per fund unit for the month of October, to be paid on Nov. 15, 2010, to unitholders of record at the close of business on Oct. 29, 2010.

[Uccmal]

Looking at the Canfor results I get the impression that this is as good as it gets for Canfor.  Barring higher pulp prices for a long duration the cash flow has no where to go but sideways.  If they put their money into an acquisition it is unlikely to be accretive in any way since they are a low cost producer.  Geographic distances make it unlikely that any head office synergies could be realized.  When they convert to a corp. the dividend will be reduced by 30% or so, which I am guessing is priced into the stock price. 

 

I am a holder right now of a slowly dwindling position in CFX.  I actually hold the parent - cfp - as well since lumber prices really have no where to go but up and they have the cash flow from cfx.un to tide them over.

[Myth465]

What the hell is going on. Did someone fat finger something. I kind of want to cash out now, is there a buyout or something.

 

Someone must have had a market order or something.

[Guest Dazel]

 

Very quiet?

[alertmeipp]

Wake me up at 3.

[FFHWatcher]

Is it just me or has the velocity of the pulp price declines been less dramatic than forecast?  A 2.5% decline in 2 months is negligible if you were to compare it to any other commodity or compared to NBSK on the way up.  Generally, price declines seem to have a lot more velocity vs. increases but that has not been the case with NBSK, so far.  Lots of other moving parts too, such as the US/CDN/EUR, cost of wood chips, deferred capex, lower output, future I/T expense re:website ???, etc.  But still...it is what everyone is looking at right now and a lot seems to hinge on China's demand.

 

Date NBSK in the U.S. (USD) NBSK in Europe (USD)

 

26-Oct-10 974.78 963.01

19-Oct-10 974.78 963.81

12-Oct-10 974.78 967.70

5-Oct-10         984.78 969.83

28-Sept-10 990.00 972.91

21-Sept-10 990.00 973.12

14-Sept-10 990.00 970.55

7-Sept-10 990.49 971.33

31-Aug-10 999.78 974.19

24-Aug-10 999.78 975.37

17-Aug-10 999.78 975.63

 

[SharperDingaan]

 

Keep in mind that valuation reflects overly low revenue estimates, discounts the effect of operating & interest savings (approx 1M+/qtr), & is not recognizing co-generation expense capitalization. Most folks will have discounted the estimated NBSK market price received with a 15-20% discount off the list price, & will not recognize the operating/interest savings until they actually see them. Obviously if you think differently, there is some earning upside.

 

To move up we really need the P/E multiple to rise.

ie: 1) rising confidence in earnings predictability, 2) disclosure on the new material ownership positions (where did the new rights shares actually go?), 3) management maturity, & 4) credible guidance around 2011 business objectives (debs repaid with cash/shares?, acquisition/divestment?, etc.). When the result is material outcomes, a mature management should be disclosing the broadbrush intent & not hiding behind the corporate veil. It is because management has not spoken up - that FBK trades as a bankrupt ...  as why on earth should I pony up when mgmt cannot evidence that it even has a plan ?

 

SD

 

 

 

[Josh4580]

Mercer International Inc. Reports Record 2010 Third Quarter Operating EBITDA of 65.5 Million Euro ($84.7 Million) and Net Income of 46.1 Million Euro ($59.6 Million)

 

http://finance.yahoo.com/news/Mercer-International-Inc-pz-3033811305.html?x=0&.v=1

 

Mr. Lee concluded: "With our mills running near record levels and no scheduled downtime in the last quarter of 2010, we are well positioned to continue to take advantage of historically strong NBSK pulp prices. Additionally, we anticipate that the sales of surplus energy with the completion of the Celgar Energy Project should provide us with a new, stable revenue source unrelated to pulp pricing. Although there may be some short-term softness in NBSK pulp resulting from the start up of a previously closed NBSK mill and increased hardwood pulp capacity, we believe that steady demand in Europe and North America along with improving Chinese demand and relatively low NBSK pulp inventory levels should result in a reasonably favorable outlook for prices in the medium-term."

 

Bodes well for Fibrek

[FFHWatcher]

Mercer International Inc. Reports Record 2010 Third Quarter Operating EBITDA of 65.5 Million Euro ($84.7 Million) and Net Income of 46.1 Million Euro ($59.6 Million)

 

http://finance.yahoo.com/news/Mercer-International-Inc-pz-3033811305.html?x=0&.v=1

 

Mr. Lee concluded: "With our mills running near record levels and no scheduled downtime in the last quarter of 2010, we are well positioned to continue to take advantage of historically strong NBSK pulp prices. Additionally, we anticipate that the sales of surplus energy with the completion of the Celgar Energy Project should provide us with a new, stable revenue source unrelated to pulp pricing. Although there may be some short-term softness in NBSK pulp resulting from the start up of a previously closed NBSK mill and increased hardwood pulp capacity, we believe that steady demand in Europe and North America along with improving Chinese demand and relatively low NBSK pulp inventory levels should result in a reasonably favorable outlook for prices in the medium-term."

 

Bodes well for Fibrek

 

Nice 15% pop in Mercer's share price.  Wow, major leverage with over $1B in debt and approx. that much in annual revenue. 

 

Interesting.  Mercer is generating approx. $10M/quarter from energy sales.  I wonder how much from Celgar Mill in B.C.?  St Felicien is about 70% the size of the Celgar Mill.  Perhaps their energy revenue is a similar percentage as Celgar's? 

 

From Mercer website remember Mercer's Celgar Mill (500,000 mt capacity) vs. approx. 360,000 MT at St.Felicien

 

Energy Producer (Mercer)

In addition to our core business of market pulp production, we produce significant quantities of renewable electricity, generating over 1.4 million MWh of electricity in 2009. In 2010 we will focus further on energy production and sales through an energy project at our Celgar mill in British Columbia, Canada. The Green Energy Project is an approximately C$55 million investment in the mill's power production capacity. Upon completion, the project is expected to permit Celgar to meet all of its energy requirements through self-generation and allow excess electricity to be sold to power utilities, resulting in zero net energy costs for Celgar and significant electricity sales revenue. In the fall of 2010, Celgar's new 48 MW turbine is expected to result initially in exports of up to 30 MW of surplus electricity in the summer and up to 25 MW in the winter. The mill already produces up to 7 MW of electricity for sale on any given day. This surplus energy is a by-product of pulp production, and there is opportunity with this new installation to achiever further incremental increases in electricity exports.

 

 

Has anybody tried to calculate an estimated revenue number from Fibrek's deal with the gov't to produce green power?  I remember trying but it but energy and electricity is over my head. 

 

News Flash : Fibrek has a new website up...although it looks to be somewhat temporary as well.  An improvement, none the less.

 

[Uccmal]

News Flash : Fibrek has a new website up...although it looks to be somewhat temporary as well.  An improvement, none the less.

 

Just ahead of the conference call.  You've got them on the run FFHWatcher...

[Guest Dazel]

 

Hopefully they make you happy SD...

 

Mercer has issued $300 million in notes and are tendering their 2013 notes...this is most interesting for Fibrek as

it shows that the debt market in pulp has opened...if they were to have decent earnings which they should...

a bond issue extending maturities at decent rates would be more beneficial to the stock price...in my opinion. SD

is correct that the stock is trading at bankruptcy prices...A good result and a bond issue would make me feel

the manangement is not asleep at the wheel. The recycled paper side of the business is the wild card. They had a major

competitor go bankrupt which should help.

Finally give us some indication on the value of the green energy deal!!! let the shareholders know you have a heart beat management! We do

not mind holding as the fundamentals in the industry are getting much better but give us a plan!

 

disclosure

we have not sold any Fibrek in over a year...sale last year was at .99

Dazel.

[FFHWatcher]

 

Hopefully they make you happy SD...

 

Mercer has issued $300 million in notes and are tendering their 2013 notes...this is most interesting for Fibrek as

it shows that the debt market in pulp has opened...if they were to have decent earnings which they should...

a bond issue extending maturities at decent rates would be more beneficial to the stock price...in my opinion. SD

is correct that the stock is trading at bankruptcy prices...A good result and a bond issue would make me feel

the manangement is not asleep at the wheel. The recycled paper side of the business is the wild card. They had a major

competitor go bankrupt which should help.

Finally give us some indication on the value of the green energy deal!!! let the shareholders know you have a heart beat management! We do

not mind holding as the fundamentals in the industry are getting much better but give us a plan!

 

disclosure

we have not sold any Fibrek in over a year...sale last year was at .99

Dazel.

 

Are you suggesting that FBK try to float a $50M bond to repay converts and not use cash, that may or may not be on hand and not to issue more shares?  It likely makes sense and may make even more sense after a couple more quarters of profit but the clock will start ticking on the convert as soon as 2011 rolls around.  I would love to see a couple of sharp management moves in the near future.  Anything to show us they show up to work each day.  You know, kinda pull a rabbit out of the hat trick, a la Mr. Watsa.