Ross812 Posted August 6, 2015 Posted August 6, 2015 I sold HOG to buy more DISCK and FOX. This sell off in media names is getting ridiculous. I feel like this is similar to the old tech sell for MSFT, CSCO, INTC, etc. Those companies are still growing revenue, earnings, and buying back shares. But the market kept compressing their multiple. So hopefully there will be some sanity restore. Those ala carte options aren't cheap. Paying $10-20 each for NFLX, HBO, HULU, etc. ends up being the same or more expensive than the bundle option available nowadays. I agree completely. I've seen this game played many times over the years; In just the passed 5 we've had: the PC is dead, mobile and facebook will kill google, SSDs are replacing HDDs, ACA will kill Insurance, brick and mortar is dead, sell everything with operations in Europe, distributors are being replaced by amzn, and long haul trucking is all going to train. In every case it has been a buying opportunity. As long as people have a desire to watch the news, sports, movies, and programing beyond House of Cards and Orange is the New Black, these content providers are going to thrive. I own Fox and Discovery. I'm watching TWX and Disney for the time being.
valueyoda Posted August 6, 2015 Posted August 6, 2015 FOXA, VIAB and CBS and even a small position in Disney. And an Einhorn basket: CNX, SUNE and TWX and short Netflix.
Valuebo Posted August 6, 2015 Posted August 6, 2015 Disney - DIS Star Wars is coming! Good luck! I've been looking at DIS all morning (and it's been on a small watchlist prior to this morning). I also barely passed on INT at $36 the other day. There's definitely some interesting stocks getting close to attractive levels. I bought more DIS today. This is a no-brainer investment. Powerful movie franchises, a moat on theme parks, ABC, ESPN, etc. How about the valuation? I sold HOG to buy more DISCK and FOX. This sell off in media names is getting ridiculous. DIS stock and others more than tripled since 2011 and now it's a screaming buy after not even a 15% drop? Maybe Mr Market is just realizing now they might not be that valuable? Clairvoyance sometimes comes with a shock, something little can set it off. DIS is at the level where it was 5 months ago. How many bought then? How about a year ago? Two years ago? Just playing advocate of the devil but I'd be wary of price anchoring. And how likely are you to outperform with a $185B company anyway? I've also noted this trend where quality seems to be everything. Valuation comes second for some reason. Or that's at least how I perceive it. Definitely see a surge in the popularity of this damn quote: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.".
Ross812 Posted August 6, 2015 Posted August 6, 2015 Disney - DIS Star Wars is coming! Good luck! I've been looking at DIS all morning (and it's been on a small watchlist prior to this morning). I also barely passed on INT at $36 the other day. There's definitely some interesting stocks getting close to attractive levels. I bought more DIS today. This is a no-brainer investment. Powerful movie franchises, a moat on theme parks, ABC, ESPN, etc. How about the valuation? I sold HOG to buy more DISCK and FOX. This sell off in media names is getting ridiculous. DIS stock and others more than tripled since 2011 and now it's a screaming buy after not even a 15% drop? Maybe Mr Market is just realizing now they might not be that valuable? Clairvoyance sometimes comes with a shock, something little can set it off. DIS is at the level where it was 5 months ago. How many bought then? How about a year ago? Two years ago? Just playing advocate of the devil but I'd be wary of price anchoring. And how likely are you to outperform with a $185B company anyway? I've also noted this trend where quality seems to be everything. Valuation comes second for some reason. Or that's at least how I perceive it. Definitely see a surge in the popularity of this damn quote: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.". DISCK is at a 3 year low. In that time (2012), FCF has risen 25%, share count has fallen by 12%, revenue up 45%... Fox is now cheaper than it was at the time of the spin off. Shareholder base is ValueAct, Buffet, and 13% of Yackman Funds owning 6% of the shares with Murdoc owning 15%.
Jurgis Posted August 6, 2015 Posted August 6, 2015 I've also noted this trend where quality seems to be everything. Valuation comes second for some reason. Or that's at least how I perceive it. Definitely see a surge in the popularity of this damn quote: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.". Agreed. I wonder if we are seeing "It's far better to buy a wonderful company at any price than whatever man".
Jurgis Posted August 6, 2015 Posted August 6, 2015 DISCK is at a 3 year low. In that time (2012), FCF has risen 25%, share count has fallen by 12%, revenue up 45%... Fox is now cheaper than it was at the time of the spin off. Shareholder base is ValueAct, Buffet, and 13% of Yackman Funds owning 6% of the shares with Murdoc owning 15%. DISCA/K and FOXA are quite cheaper than DIS. DIS has bigger moat, stronger brand. Does that justify the price spread? I guess for some people it does. I own/buying some DISCA/K, FOXA. No position in DIS.
Valuebo Posted August 6, 2015 Posted August 6, 2015 I've also noted this trend where quality seems to be everything. Valuation comes second for some reason. Or that's at least how I perceive it. Definitely see a surge in the popularity of this damn quote: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.". Agreed. I wonder if we are seeing "It's far better to buy a wonderful company at any price than whatever man". Certainly feels like it! Disney - DIS Star Wars is coming! Good luck! I've been looking at DIS all morning (and it's been on a small watchlist prior to this morning). I also barely passed on INT at $36 the other day. There's definitely some interesting stocks getting close to attractive levels. I bought more DIS today. This is a no-brainer investment. Powerful movie franchises, a moat on theme parks, ABC, ESPN, etc. How about the valuation? I sold HOG to buy more DISCK and FOX. This sell off in media names is getting ridiculous. DIS stock and others more than tripled since 2011 and now it's a screaming buy after not even a 15% drop? Maybe Mr Market is just realizing now they might not be that valuable? Clairvoyance sometimes comes with a shock, something little can set it off. DIS is at the level where it was 5 months ago. How many bought then? How about a year ago? Two years ago? Just playing advocate of the devil but I'd be wary of price anchoring. And how likely are you to outperform with a $185B company anyway? I've also noted this trend where quality seems to be everything. Valuation comes second for some reason. Or that's at least how I perceive it. Definitely see a surge in the popularity of this damn quote: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.". DISCK is at a 3 year low. In that time (2012), FCF has risen 25%, share count has fallen by 12%, revenue up 45%... Fox is now cheaper than it was at the time of the spin off. Shareholder base is ValueAct, Buffet, and 13% of Yackman Funds owning 6% of the shares with Murdoc owning 15%. Sorry Ross, read DISCK as DIS. My bad! :) Have been looking at DISCK myself given the price action and Malone influence. DISCK is at a 3 year low. In that time (2012), FCF has risen 25%, share count has fallen by 12%, revenue up 45%... Fox is now cheaper than it was at the time of the spin off. Shareholder base is ValueAct, Buffet, and 13% of Yackman Funds owning 6% of the shares with Murdoc owning 15%. DISCA/K and FOXA are quite cheaper than DIS. DIS has bigger moat, stronger brand. Does that justify the price spread? I guess for some people it does. I own/buying some DISCA/K, FOXA. No position in DIS. Yeah agreed. Read DISCK as DIS(ney). Time to get some glasses I guess...
Jurgis Posted August 6, 2015 Posted August 6, 2015 Disney - DIS Star Wars is coming! Good luck! I've been looking at DIS all morning (and it's been on a small watchlist prior to this morning). I also barely passed on INT at $36 the other day. There's definitely some interesting stocks getting close to attractive levels. I bought more DIS today. This is a no-brainer investment. Powerful movie franchises, a moat on theme parks, ABC, ESPN, etc. How about the valuation? DIS stock and others more than tripled since 2011 and now it's a screaming buy after not even a 15% drop? Maybe Mr Market is just realizing now they might not be that valuable? Clairvoyance sometimes comes with a shock, something little can set it off. DIS is at the level where it was 5 months ago. How many bought then? How about a year ago? Two years ago? Just playing advocate of the devil but I'd be wary of price anchoring. And how likely are you to outperform with a $185B company anyway? I've also noted this trend where quality seems to be everything. Valuation comes second for some reason. Or that's at least how I perceive it. Definitely see a surge in the popularity of this damn quote: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.". Sorry Ross, read DISCK as DIS. My bad! :) Have been looking at DISCK myself given the price action and Malone influence. .......... Yeah agreed. Read DISCK as DIS(ney). Time to get some glasses I guess... To be fair, some people upthread were talking about DIS, so your comment was on target. I tried to cut relevant parts out above.
Guest MarkS Posted August 6, 2015 Posted August 6, 2015 I'm adding to my position in GHI a closed end global dollar denominated bond fund. They are trying to close a 13% discount by bumping up the yearly payout to about 11% - paid monthly. About half of the payout is a return of capital. So I'm reinvesting the distributions each month. If they want to give me a dollar for 87 cents, I'm good with it.
HJ Posted August 6, 2015 Posted August 6, 2015 SBGI. Know it's a bit of a cigar butt, but seems like there's a few more puffs left. Earnings wasn't bad, but got sold down with all the media companies as they pronounced today to be "the day linear TV bundling died". $6 billion enterprise value, CFO on the call said they believe they can get up to $2 billion in the upcoming spectrum auction with minimum effect to their business. The few puffs left: 1) 2016 is set up to be an all time record political advertising year. And local news seem to have that piece of the political ads locked down pretty well 2) New broadcast TV standard may free up more spectrum that may allow them to offer new wireless communications services. This one could be worth billions to the industry. 3) There's a bit more retransmission upside to go.
Guest JoelS Posted August 6, 2015 Posted August 6, 2015 I bought Sunedison (SUNE). I see SunEdison got smashed today. http://www.bloomberg.com/news/articles/2015-08-06/sunedison-posts-11th-straight-loss-amid-global-expansion-effort Is this a classic case of short termism by fickle investors?
jawn619 Posted August 6, 2015 Posted August 6, 2015 I bought Sunedison (SUNE). I see SunEdison got smashed today. http://www.bloomberg.com/news/articles/2015-08-06/sunedison-posts-11th-straight-loss-amid-global-expansion-effort Is this a classic case of short termism by fickle investors? Aaaand...it's gone
TwoCitiesCapital Posted August 6, 2015 Posted August 6, 2015 I've also noted this trend where quality seems to be everything. Valuation comes second for some reason. Or that's at least how I perceive it. Definitely see a surge in the popularity of this damn quote: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.". Agreed. I wonder if we are seeing "It's far better to buy a wonderful company at any price than whatever man". Hasn't gotten into my thick skull yet. The larger positions in my portfolio are "quality" positions - those are the only ones I'm comfortable building up to 10% with, but I would say 60% of my portfolio is invested in "cheap" as opposed to quality.
valueyoda Posted August 6, 2015 Posted August 6, 2015 I bought Sunedison (SUNE). I see SunEdison got smashed today. http://www.bloomberg.com/news/articles/2015-08-06/sunedison-posts-11th-straight-loss-amid-global-expansion-effort Is this a classic case of short termism by fickle investors? I bought Sunedison as well, but given how fast declines are taking place, it could easily drop a few more dollar before it bottoms. I think the last two months are a great lesson for investors. No matter whether we are talking about oil stocks, Micron, Sunedison or media companies today, the declines are getting really violent on misses. So no matter how secure I am about my purchase, I have sharpened my risk management limits, because a temporary evaporation of liquidity surrounding a potential rate hike could make cheap and vulnerable stocks even more vulnerable. So many stocks are already in a deep bear market, and could be great bargains this year. It is weird to see such a divide between momentum growth stocks, such as Facebook and Netflix, and cyclical cheap stocks, such as Micron and Hertz.
shhughes1116 Posted August 7, 2015 Posted August 7, 2015 Buying EPD and ETP. Both have sold off quite a bit...I am happy to nibble on some EPD @ a 5.8% yield and ETP @ a 8.8% yield. People seem to think that the weakness in oil and gas producers mean that the midstream companies are f*cked also. What most forget is that commodities operate in a cycle...low commodity prices tend to drive higher demand. In the case of ETP and EPD, both have substantial access to demand drivers such as our country's premier petrochemical complex and Mexico's increasing appetite for low-cost natural gas. Also picking up some REIT's that have been slaughtered recently (GPT and MPW). Everybody in the market seems to think that rising rates spell doom for REITs. However, I have a tough time seeing how the Fed raises rates by more than 25 or 50 basis points over the next two years, so the cost of REIT funding will not increase that much. Moreover, rising rates generally indicate an improving economy which yields higher rents for existing properties under management...beneficial for REITs. I've also been looking at some of the short-term debt of mid- and small-sized independent oil and gas companies. While there are some real stinkers out there, the general fear in the market of O&G bankruptcies has caused some decent pricing on O&G short-term debt. Reasonable coupons and pretty decent yield-to-maturity. I haven't pulled the trigger yet, but am getting closer on some of the senior stuff... heads I win, tails I end up with a stake in a restructured company with decent O&G assets.
Palantir Posted August 7, 2015 Posted August 7, 2015 Buying EPD and ETP. Both have sold off quite a bit...I am happy to nibble on some EPD @ a 5.8% yield and ETP @ a 8.8% yield. People seem to think that the weakness in oil and gas producers mean that the midstream companies are f*cked also. What most forget is that commodities operate in a cycle...low commodity prices tend to drive higher demand. In the case of ETP and EPD, both have substantial access to demand drivers such as our country's premier petrochemical complex and Mexico's increasing appetite for low-cost natural gas. How do you know EPD and ETP aren't hurt by weakness in O&G? Oil is being hit by supply, but it's also being hit by demand, what does that tell you about volumes?
shhughes1116 Posted August 7, 2015 Posted August 7, 2015 Buying EPD and ETP. Both have sold off quite a bit...I am happy to nibble on some EPD @ a 5.8% yield and ETP @ a 8.8% yield. People seem to think that the weakness in oil and gas producers mean that the midstream companies are f*cked also. What most forget is that commodities operate in a cycle...low commodity prices tend to drive higher demand. In the case of ETP and EPD, both have substantial access to demand drivers such as our country's premier petrochemical complex and Mexico's increasing appetite for low-cost natural gas. How do you know EPD and ETP aren't hurt by weakness in O&G? Oil is being hit by supply, but it's also being hit by demand, what does that tell you about volumes? Pick up the ETP or EPD 10Q and read it, that will tell you all you need to know about crude volumes. But since you may not do that, I will spell it out, in the context of ETP: 1. 10% of EBITDA from ETP is derived from liquids. Of this , off the top of my head, half is crude and the other half are NGL's. So 5% of EBITDA might be impacted by lower crude prices. 2. 10% of EBITDA is derived from their retail segment (i.e. retail gasoline and retail diesel). Margins tend to go up for retail gasoline and diesel sales when crude prices drop. 3. Most, but not all, ETP crude pipeline service is based on take-or-pay contracts. You dont ship? No problem, you still pay. 4. When O&G companies go bankrupt, trustees attempt to maximize cash flow by continuing to produce oil and gas. Hard to void your take-or-pay contract if you still want to get gas/oil to the market. 5. When crude volumes decrease, the first shut-ins tend to occur with crude shipped by rail (substantially more expensive than pipeline transport). The remaining crude volumes continue to be shipped by pipeline. EPD generates more EBITDA from crude oil pipelines, but they are also predominantly moving crude oil from basins with very low costs of production and very close proximity to the gulf refinery complex (i.e. well established basins in Texas). As such, they are not impacted much by reduced crude volumes. While I generally think that crude oil consumption throughout the world will decrease over time, you should also recognize that it is becoming cheaper for Europeans to import refined gasoline and diesel from the United States than it is to refine crude in Europe. Therefore reductions in crude oil consumption will impact refiners less in the United States than it will in other countries, and thus it will have less of an impact on pipeline operators.
Palantir Posted August 7, 2015 Posted August 7, 2015 I have sharpened my risk management limits, because a temporary evaporation of liquidity surrounding a potential rate hike could make cheap and vulnerable stocks even more vulnerable. Agreed, I think investors vastly underestimate how pervasive the combination of low oil and an interest rate hike is going to be...SUNE is exposed badly to this unfortunately as well. :(
Palantir Posted August 7, 2015 Posted August 7, 2015 If volumes don't materialize then that means that growth projections will be lowered, which raises the cost of capital. If that happens, the partnership ends up in a vicious cycle, where it becomes very expensive to raise additional equity for projects. You realize ETP has a 9% current yield? Also, EPD does not compete with crude by rail.
shhughes1116 Posted August 7, 2015 Posted August 7, 2015 If volumes don't materialize then that means that growth projections will be lowered, which raises the cost of capital. If that happens, the partnership ends up in a vicious cycle, where it becomes very expensive to raise additional equity for projects. You realize ETP has a 9% current yield? Also, EPD does not compete with crude by rail. In the midstream world, proposed projects are not constructed without firm commitments. Those firm commitments, in almost every case, take the form of take-or-pay contracts that last 15-20 years. So the comments that volumes may not materialize is quite irrelevant. And yes, I realize that ETP's yield is almot 9%...I specifically stated that in my earlier post.
shhughes1116 Posted August 7, 2015 Posted August 7, 2015 If volumes don't materialize then that means that growth projections will be lowered, which raises the cost of capital. If that happens, the partnership ends up in a vicious cycle, where it becomes very expensive to raise additional equity for projects. You realize ETP has a 9% current yield? Also, EPD does not compete with crude by rail. Sorry, I neglected to address your other point. As a matter of fact, EDP does "compete" with crude transported via rail. As an example, BNSF transports crude via rail from the Mississipian Lime Shale, the Eagle Ford area, and the Barrnet Shale. These are all areas served by EPD's crude pipelines. I use the word "compete" loosely because crude by pipeline is substantially cheaper than crude by rail. As a result, when marginal production is shut-in due to the crude price, crude by rail is what suffers.
Palantir Posted August 7, 2015 Posted August 7, 2015 If volumes don't materialize then that means that growth projections will be lowered, which raises the cost of capital. If that happens, the partnership ends up in a vicious cycle, where it becomes very expensive to raise additional equity for projects. You realize ETP has a 9% current yield? Also, EPD does not compete with crude by rail. In the midstream world, proposed projects are not constructed without firm commitments. Those firm commitments, in almost every case, take the form of take-or-pay contracts that last 15-20 years. So the comments that volumes may not materialize is quite irrelevant. And yes, I realize that ETP's yield is almot 9%...I specifically stated that in my earlier post. And if those firm commitments do not materialize?
rb Posted August 7, 2015 Posted August 7, 2015 If volumes don't materialize then that means that growth projections will be lowered, which raises the cost of capital. If that happens, the partnership ends up in a vicious cycle, where it becomes very expensive to raise additional equity for projects. You realize ETP has a 9% current yield? Also, EPD does not compete with crude by rail. In the midstream world, proposed projects are not constructed without firm commitments. Those firm commitments, in almost every case, take the form of take-or-pay contracts that last 15-20 years. So the comments that volumes may not materialize is quite irrelevant. And yes, I realize that ETP's yield is almot 9%...I specifically stated that in my earlier post. And if those firm commitments do not materialize? They replace them. Since pipe is the cheapest way of transporting oil. The only way that the pipe does not make money is if the end market stops consuming oil or if the producing area stops producing.
Palantir Posted August 7, 2015 Posted August 7, 2015 How do replace commitments that don't arise? I think you are both focusing on how existing pipes make money and forgetting the demand for future pipes.
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