Your highest conviction idea for 2014 + why

[steph]

What is your best idea for 2014?  Just one stock. I always find it hard to just select one idea, but it is a good exercise. Who wants to get started?

[racemize]

I'm going to have trouble not saying BAC.  The expenses should be coming off pretty well this year + dividend/buyback increase in March.

[sethatk]

UPL, Ultra Petroleum

Lowest cost Nat Gas producer, diversification into the Unita Basin. Believe that gas prices will rise long-term.

[steph]

Ok great, BAC. What would be a target price on normalized earnings?

[snowball82]

Hht.p last trade 0.11

 

See investment idea, baggers over next year. Best new reit on stock market.

[Guest deepValue]

If you mean one that is undervalued and will probably go up in price in 2014, then John Wiley. It trades at a small discount to the value its wide-moat academic journals business and you get the book/textbook businesses for free.

[racemize]

Ok great, BAC. What would be a target price on normalized earnings?

 

I don't really know how fast it will be, but I expect 20-24 by 2016.  Normalized earnings in the 1.80-2.00 range.

[Hawks]

Trevali (tv.to) Zinc production coming onstream in both Peru and Canada when other miners are shutting down and zinc deficit global situation lies ahead.

[T-bone1]

CHK - The company is shedding non-core assets, cleaning up the balance sheet (both in terms of total debt level and complexity) and will finally not outspend operating cash flow (or come very close to not outspending) in 2014.  At some point in 2014, there will likely be visibility into FCF production in 2015.  I wouldn't be shocked to see further cost cutting and layoffs as well as higher productivity and lower costs as the company moves from building new pads and holding acreage by production to drilling lower cost wells from existing drill pads.

 

Big potential upside if they sell a predictable long-lived asset like the Barnett shale to someone with a low cost of capital (like an upstream MLP).  Rising gas prices from a cold winter make this more likely.

[yadayada]

acw

[rainman]

SBLK

[frommi]

BP should do well in 2014, when it goes above 50$ it breaks the 3 year trading range. But that is a purely technical view, i don`t know if that is worth something in this forum.  ;D

[Packer16]

In terms of upside it is Intralot.  Nice recurring revenue selling a fat discount to peers and not much difference in terms of where the revenue is coming from just that it is located in Greece.  When I hear a poster say that Greece is begging for investment and the distressed debt guys are wanting to get in and Fairfax/HWIC is investing, my value antenna go up.

 

Packer

[tengen]

Altus Minerals. Kami mine should receive environmental approvals in the next couple of mouths. I believe Altius will initiate a dividend. Stock price could double in the next 12 months. See the discussion in the ALS board.

[bz1516]

I like EH, TSX.  Lots of confidence in high growth earnings forecast after new concept loan stores have been extensively tested in the field.  They now have 43 of the new concept stores.

[Palantir]

Right now I'm torn between DOX and QCOM. That being said, I dont expect either of these to go up 100%, but do well over the long term.

 

Both trade at high FCF yields, DOX has heavy buybacks and QCOM has high rates of growth.

[nkp007]

CHK - The company is shedding non-core assets, cleaning up the balance sheet (both in terms of total debt level and complexity) and will finally not outspend operating cash flow (or come very close to not outspending) in 2014.  At some point in 2014, there will likely be visibility into FCF production in 2015.  I wouldn't be shocked to see further cost cutting and layoffs as well as higher productivity and lower costs as the company moves from building new pads and holding acreage by production to drilling lower cost wells from existing drill pads.

 

Big potential upside if they sell a predictable long-lived asset like the Barnett shale to someone with a low cost of capital (like an upstream MLP).  Rising gas prices from a cold winter make this more likely.

 

I'm with you. Very ignored and misunderstood situation despite this year's price gains.

[Hielko]

Conduril. Solid business but trading at extremely cheap valuation (3.7x P/E, 0.5x PB, 1.6x EV/EBITDA).

[infinitee00]

SBLK

 

I am curious about your pick. SBLK is definitely one of the better, less leveraged dry bulk shippers, but what's your thesis ? Is this based on fundamentals or momentum?

[bz1516]

I almost posted on two of the dry bulkers I own, SB and BALT but in thinking about them I realized there is a more speculative nature to them than EH which I chose as my highest conviction position.  Of course SBLK and these will move up and down together, based on the health of the Chinese economy.  So they all will rise or fall together based on the macro environment.

 

Those that are the most leveraged, the most financially insecure, will move up the most and of course move down the most in the event of a decline in the dry bulk market.  I like SBLK after reading the MS industry buy report recently but do not know it nearly as well as some of the others.  It may be time to start moving away from the least leveraged bulkers and add maybe a name or two with a little more leverage, without getting to the high leverage of an EGLE or a GNK.

 

Those that have the most exposure capes are the most exposed to the momentum in the iron ore market.  Imo that is a good bet as any drop in prices there will increase shipment volume.  This is kind of a natural hedge.

 

Its definitely the time to move away from some of the names with long term contracts like DSX a NMM to those that are more exposed directly to the BDI and short term time charters. 

 

Its hard to know what to do right now as all these names have moved quite a bit, but the outlook in China continues to be very strong and the new build situation can't come into play until 2016.  One analyst looks at new build prices and prices on older ships and believes that owners won't flood the market with new build orders until the price of older ships hits 80% of the value of new builds.  If that is correct then the earliest we are likely to see a supply response would be 2017 or 2018.  Thats more than enough time for these stocks to travel significant highly from here.

[plato1976]

As for QCOM, when do you think their patent will have a cliff ?

Looks like we cannot project their current earning power into infinity b/c 2/3 of their profits are from patent fees. However, the current share price doesn't count on this either.

 

Right now I'm torn between DOX and QCOM. That being said, I dont expect either of these to go up 100%, but do well over the long term.

 

Both trade at high FCF yields, DOX has heavy buybacks and QCOM has high rates of growth.

[BargainValueHunter]

Citigroup.

 

I can't see how big C could have a bad 2014.

[jch548]

Regarding Conduril I noticed they haven't posted their 2012 Annual Report on their web site yet. I sure like the stock and have a position but can't find any timely news on them. Have you found any news on them?

[CorpRaider]

Citigroup.

 

I can't see how big C could have a bad 2014.

 

Ditto.

[plato1976]

The past few months CHK has been very quiet at the divesting frontier

I hope CHK can clean up its balance sheet asap and move on

 

CHK - The company is shedding non-core assets, cleaning up the balance sheet (both in terms of total debt level and complexity) and will finally not outspend operating cash flow (or come very close to not outspending) in 2014.  At some point in 2014, there will likely be visibility into FCF production in 2015.  I wouldn't be shocked to see further cost cutting and layoffs as well as higher productivity and lower costs as the company moves from building new pads and holding acreage by production to drilling lower cost wells from existing drill pads.

 

Big potential upside if they sell a predictable long-lived asset like the Barnett shale to someone with a low cost of capital (like an upstream MLP).  Rising gas prices from a cold winter make this more likely.