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Ship Finance International Limited Message Board

  • staggman99 staggman99 Oct 11, 2013 2:10 PM Flag


    Board members...the refineries are really on the fast track today...i.e. CVRR (yield about 23%,???) is up over 8% at this time today...this could be a false start (???) but I may do some dollar cost averaging in my current holdings in them and then start a position in CVI (yield about 7.8%)....fact is, we are seeing that the refineries 'can turn the corner very fast' when the markets are in their favor...! Keep the faith as it is getting better...! $tagg...!

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    • Stagg - the Brent / WTI spread Friday went up to $9.87, which is widening due to the November Brent price rising (futures) so refiners are on a roll again. CVI is very well hedged to have a good quarter and onward through next year. HFC Holly has really improved their balance sheet so that earnings are going to earnings instead of paying a chunk for interest on debt so will do well and MPC is earning a lot from their convenience stores such as Speedway. I like ALJ Alon and TSO Tessoro as well.

      • 2 Replies to rogers2308
      • Rogers, I thought I would look at CVI's earnings conference calls to see what I could learn. A couple of things jumped out. One, CVRR did an spo and used the proceeds to buy back some of CVI's shares. CVI has more cash but less shares in CVRR so when CVRR pays a smaller distribution, CVI will get even less. You mentioned that CVI hedges, but in the hedge table, it looks like they only hedge some 5 million barrels when they use much more in the quarter. Again, hedging helps, but unless you lock in your totat output, the decline in spreads will hurt CVRR. All that being said, it appears that CVI has enough cash to continue paying its 75 cent divy even if the divy at CVRR is cut. As I have said, I like gp's because of their leverage to the MLP.

      • rogers...I really like the looks of CVI (yield about 7.7%) and will start a position in it on the first pull-back (if it comes)...investing is a 'game of mistakes' and the investors that make the least are the ones who will win the most...I am wrong about 20% of the time, but I fail to see how CVI can go much lower in share price...

        HFC, MPC, ALJ and TSO all look interesting to me but after checking them out , I still favor CVI because it is very over-sold and should benefit from current turnarounds and maintenance at a lot of other refineries (CVI also has about 10.6 million dollars of rev. per employee, which is not to bad, lol)...this is probably a good time to invest in companies that will benefit from lower oil prices
        in the future...! $tagg...!

    • A couple of notes. First, since the variable rate MLP refinery stocks don't pay a fixed distribution, it is misleading to state their yield without mentioning that it is a past historic yield. This is what gets many retail investors in trouble thinking that the company has to pay that yield as if it is fixed, only to see it cut. Same can be said of the mREITs. Second, the market rebounded on Friday because there was noise that there would be some deal on the govt shutdown and debt ceiling. We may see something, but chances are it will resemble some can-kicking just like the summer of 2011, which led to the sequester, which as everyone remembers was supposed to be a last gap option because surely the two sides would agree and not face that draconian result. The market may still respond positively even to a can kicking deal, but it could easily reverse the gains that were based on the hope of a deal. Third, the refineries were oversold and their charts look horrible, with some falling below their trend channels, so they could bounce. Many high dividend paying stocks, whether MLPs or mREITs or royalty trusts start to run up prior to their distribution announcements and then decline once the distributions are paid. This could happen especially if crack spreads have not stabilized. I found info on the currrent crack spread on the Energy Information Agency website, and the current crack spread is $8. I don't know if this is the bottom and whether Wall Street is projecting it to turn up, and more importantly, whether retail investors won't panic or hedge funds won't short based on distribution cuts. In my experience, the market usually doesn't react well to stories about dividend cuts or lower earnings, and now we know that there are several HFT algos that trade based on thes.e type of headlines. Be careful.

      • 3 Replies to marklibera
      • Nothing is fixed in concrete, Dividends can go up or down or eliminated, we all rely on the past and our view of current trends to estimate future payouts. Concerning the spread - the energy dept. has safely estimated a $10.00 spread - the spread peaked around $22.00 and bottomed around $2.00 and a recent plateau of $6.00 has now moved to the $8.00 - $10.00 range so definitely things are much better for refiners and with exporting prospects also helping the current share prices are way too negative.

        Sentiment: Strong Buy

      • mark...I try and to keep my board messages 'clean and easy to read'...however, I am about the 'only investor on this message board' that always try to give other investors 'a window to the yield and the Total Returns' and most of the time I am pretty close to the wire...we all know that performance is always based on previous data (and can be different the future)...

        While I do agree with most of your posted message, it 'is not fair' to say that I mislead other investors on this message board...fact is, that you are wrong on the crack spread because it is not the same for all refineries (unless the $8.00 is an average among them)...I also know that I think outside the box and a lot of people disagree with me (that is normal)...

        What about over a Trillion dollar in off-shore bank accounts (???), and what could those funds do to stimulate the economy and what about over 300 Billion dollars in unpaid taxes on that money (???)...some farmers buy crop insurance and 'it is not cheap' and if we collect we have to pay taxes on it...70% of the farm program is for food stamps and the school lunch program, do people pay taxes on their food stamps (???)...who is misleading people on this data (???)...

        mark, I am not trying to sound like a know-it-all but I have sources to a lot of data and information that a lot other investors do not have...i.e. I have a close friend that run a refinery 15 miles away from my home base...also, my two sons own 'Evolve Engineering' in Evansville, In. and they do a lot of contract work for several major Global Corporations (it is made up of a lot of the top R&D engineers from Whirlpool Corp.)...the only reason that I am here is to seek and share 'honest wisdom' and will continue to do so in the future...! Good luck investing and I will be careful...! $tagg...!

      • i own NTI and can give you the guessed distribution projections for the next 6 one.30,then.39,.28,.84,1.03,and .71.the reason for the fast track:fed easing,has to do with tax credits and ethanol of which i know whoot when i owned culmet,i,ll probably just hold through all the variablies.its too hard on my head.kinda remember the same as in the old VLOdays.ed

    • Board members...'this is wonderful', all of my holdings have been on the fast track for two days and I have a lot of nice dividends on the way...I am in the money (by Total Returns) on all of my holdings except for ALDW (still a lot of pain there)...I strongly feel this market 'still has long legs' at this time...

      That said, AI (yield about 14.9%) had a great day as it is up over 3% and even STAG (yield about 6%) is 'in the money' and still running strong...I will start buying CVI (yield about 7.8%) on the first price pull-back and start to dollar cost average more into it from that point forward...

      MLPL (yield about 10.1%) and BDCL (yield about 14.3%) are real sweethearts and will continue to shine if the markets keep moving forward...WMC (yield about 23%) is another sweet surprise as it is still increasing in share price...! $tagg...!

    • Yea because the Tea Party through the Republicans forced the EPA to rationalize the corn ethanol mandates to a level the blend wall physics could accommodate. ;-)

      The most efficient 'Pipe' refiners like VLO will benefit. Localized refiners having the advantage of blending in the political corruption of corn ethanol and capturing the artificial political corruption of ethanol RIN credits likely be hurt.

      But the Corn Monster is the mayor here. Much like the Detroit mayor in the news.

      It is your hard earned savings you are investing. Please be logical and careful fellow Americans.

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