Lance Posted December 16, 2014 Posted December 16, 2014 BP, LUKOY, OGZPY and SBRCY Thanks, Lance LOL, Everyday that goes by where I see my LUKOY position get slaughted I think to myself "I wonder if Lance is going to post that he is buying more today" :) lol. It's been painful. Thanks.
PatientCheetah Posted December 17, 2014 Posted December 17, 2014 QIWI incredible FCF/ROI and a growth stock that pays dividend?!?!
kab60 Posted December 17, 2014 Posted December 17, 2014 QIWI incredible FCF/ROI and a growth stock that pays dividend?!?! What do you think about the devaluation of the ruble and the risk of default? I really like QIWI's numbers, just haven't digged into how exposed they are (do they lend out?) to the current situation. Obviously earnings will be affected, but apart from that? EDIT: I bought Medallion Financial and Horsehead Holding myself
PatientCheetah Posted December 17, 2014 Posted December 17, 2014 QIWI incredible FCF/ROI and a growth stock that pays dividend?!?! What do you think about the devaluation of the ruble and the risk of default? I really like QIWI's numbers, just haven't digged into how exposed they are (do they lend out?) to the current situation. Obviously earnings will be affected, but apart from that? EDIT: I bought Medallion Financial and Horsehead Holding myself All of those are valid concerns. Hence it's only a 2% position for me. Since its a debit card servicer, its users put money into QIWI, I would think its liabilities would go down if Russia does default or further devalue.
kfh227 Posted December 18, 2014 Posted December 18, 2014 I'm DCAing into SD and PWE tomorrow. If BBRY drops to $9.75 or so I'll be buying some calls that expire on Friday. Earnings are Friday before the open. Hoping for good news that causes a short squeeze. Of course, I think it is doubtful this early but it will happen in one of the next 4 quarters. Too many things are going right at BBRY. John Chen is doing an amazing job in the CEO spot. It's just a matter of time till they turn a profit and start producing Free Cash Flows.
berkshire101 Posted December 18, 2014 Posted December 18, 2014 Started small positions in YNDX, QIWI, and CTCM.
shhughes1116 Posted December 18, 2014 Posted December 18, 2014 Started small positions in YNDX, QIWI, and CTCM. When you say small...are you saying ~1% positions? Just curious...I have been looking at CTCM for quite some time and held off because of the price. It is starting to get interesting for me.
berkshire101 Posted December 18, 2014 Posted December 18, 2014 Started small positions in YNDX, QIWI, and CTCM. When you say small...are you saying ~1% positions? Just curious...I have been looking at CTCM for quite some time and held off because of the price. It is starting to get interesting for me. Yeah, they're about 1% each. I left some room to maybe add more if it goes down from here.
benchmark Posted December 22, 2014 Posted December 22, 2014 It is just under 6% of my portfolio. I generally carry about 20-30 positions, so it is currently weighted a bit on the higher end than normal. I guess here is the 10-cent version of my thesis: 1. 85% of revenue is fee-based and generated from compression equipment installed in natural gas midstream applications. This is pretty sticky, and the company states this in their most recent filings. Think of it this way, you can't move natural gas through a gathering system or through a large natural gas trunk line (i.e. WMB's Transco pipeline) without compression. These systems are long lasting, and they need compression for the life of the pipeline. 2. 15% of revenue is fee-based and generated from gas-lift applications for crude wells. After a well is drilled and completed, the crude output declines over time. Producers employ secondary techniques (i.e. gas-lift) and tertiary techniques (water flooding) to improve the output of a well. Assuming oil prices remain low for an extended period of time, the drilling of new wells will likely slow. However, producers will desire to maintain/enhance output from existing wells by using secondary and tertiary recovery techniques. Thus I suspect the use of compression units for gas-lift applications in crude wells will not collapse. 3. Their recent quarter was the first where they achieved a 1.0x distribution coverage. During the previous quarters, the distribution coverage has been under 1.0x, but the controlling shareholders agreed to participate in the DRIP program rather than take distributions. 4. Their cash flow during the recent quarter was a substantial improvement from the previous quarter. However it underestimates their true earning power because a substantial amount of new compression equipment had not been deployed for the entire quarter. 5. They are ordering ~200k in new compression equipment for 2015, all for midstream applications. The drop in crude should not impact new natural gas pipelines current under construction, thus the market will likely be able to absorb the new compression units. 6. Large, addressable market. Compression can be provided by the producer or midstream operator. However, many choose to outsource this work, so there is a large market with more opportunity to expand if desired. 7. Although USAC could operate profitably by itself, I suspect it would make a good acquisition target for one of the major oil service companies. Do you have a price target?
PatientCheetah Posted December 22, 2014 Posted December 22, 2014 last bit of ASPS, I don't understand the market reaction :(
shhughes1116 Posted December 22, 2014 Posted December 22, 2014 It is just under 6% of my portfolio. I generally carry about 20-30 positions, so it is currently weighted a bit on the higher end than normal. I guess here is the 10-cent version of my thesis: 1. 85% of revenue is fee-based and generated from compression equipment installed in natural gas midstream applications. This is pretty sticky, and the company states this in their most recent filings. Think of it this way, you can't move natural gas through a gathering system or through a large natural gas trunk line (i.e. WMB's Transco pipeline) without compression. These systems are long lasting, and they need compression for the life of the pipeline. 2. 15% of revenue is fee-based and generated from gas-lift applications for crude wells. After a well is drilled and completed, the crude output declines over time. Producers employ secondary techniques (i.e. gas-lift) and tertiary techniques (water flooding) to improve the output of a well. Assuming oil prices remain low for an extended period of time, the drilling of new wells will likely slow. However, producers will desire to maintain/enhance output from existing wells by using secondary and tertiary recovery techniques. Thus I suspect the use of compression units for gas-lift applications in crude wells will not collapse. 3. Their recent quarter was the first where they achieved a 1.0x distribution coverage. During the previous quarters, the distribution coverage has been under 1.0x, but the controlling shareholders agreed to participate in the DRIP program rather than take distributions. 4. Their cash flow during the recent quarter was a substantial improvement from the previous quarter. However it underestimates their true earning power because a substantial amount of new compression equipment had not been deployed for the entire quarter. 5. They are ordering ~200k in new compression equipment for 2015, all for midstream applications. The drop in crude should not impact new natural gas pipelines current under construction, thus the market will likely be able to absorb the new compression units. 6. Large, addressable market. Compression can be provided by the producer or midstream operator. However, many choose to outsource this work, so there is a large market with more opportunity to expand if desired. 7. Although USAC could operate profitably by itself, I suspect it would make a good acquisition target for one of the major oil service companies. Do you have a price target? Yeah. I suppose there are two ways to value this company. On an EV/EBITDA basis and on a yield basis. USAC has equity of $700 million and debt of $500 million, so enterprise value of $1.2 billion. Their run-rate EBITDA, coming out of the third quarter, was $27 million per quarter. As I stated in my earlier post, I think this underestimates their earning power because not all of their new compression equipment was installed for the duration of the third quarter. So let's assume that their quarterly run rate will be ~$30 million exiting the fourth quarter. Move over, they are adding another 200k HP in compression equipment next year, so about another 20% increase in HP. So let's assume a quarterly run rate of ~$35 million by q42015. That yields an EV/EBITDA of 8.5. I think an oil services firm would be willing to pay 10x given some of the cost synergies they could realize, so maybe $20/share based on annualized earnings from q42015. You could also value USAC based on yield. I see a 10% yield being reasonable given the nature of their business, which also yields a target share price of ~$20 given their current distribution.
rpadebet Posted December 23, 2014 Posted December 23, 2014 I'm buying cash. LOL How is this value investing. Cash seems expensive @ 1000 PE. 2000 PE if you consider taxes.
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