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TETRA Technologies, Inc. Message Board

  • MacKnife13 MacKnife13 Aug 26, 1998 2:26 PM Flag

    Big trade

    1 trade - 250,000 shares? Anyone know anything about this? Was TTI the buyer? Who sold?

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    • the 'market' is only the sum total of what the
      universe of investors think at any one moment. Small
      company stocks, in particular, are so beaten down
      (sentiment-wise) at the moment (especially in oil service or
      anything cyclical) that most market participants are now
      for the most part just ignoring them. Therein lies
      the opportunity.

      I would agree that if you're
      a ST trader, this is not a stock you should be in.


      However, there's tons o'value here, and that's the sort of
      thing that comes out in the long run. The value of a
      business franchise.

      I would highlight to you
      another stock I follow, Marquette Medical (MARQ), which
      was recently acquired by GE. Stock did nothing for a
      couple of years, but its market position was quite
      strong, and GE (which has stated as a business strategy
      that it wants to be #1 or #2 in all of its businesses)
      saw the value and paid up bigtime.

      Take a
      look at that chart. What would the market have told
      you a week before the acquisition? Nothing. To use
      your words, it was lying, which you say 'it' never
      does. That's why it's not always a good strategy to use
      the "market" as your guide to the true value of a
      company.

      Of course TTI and MARQ are in totally different
      businesses, and I'm not suggesting TTI is about to be
      acquired by GE or anyone else. But if you look at TTI's
      market positions in most of the areas where it competes,
      the company is quite strong. Sure, they're in some
      cyclical businesses but everyone knows
      that.

      Problem with the street is that they can only see the
      poor environment we're in today and don't appreciate
      the longer term earning power of this company. And
      here's a tip: the smart institutions don't rely
      exclusively on what street analysts are forecasting. They do
      their own work, and sometimes ignore the so-called
      expert analysts, who are probably wrong as often as they
      are right.

    • I disagree, SSAM. I think that a stock trading at
      this big a discount to net asset value reflects very
      low expectations for the quarter, meaning no one
      expects the company to hit estimates anyway. It's
      difficult to say what is expected, but at $12 it isn't
      much. Now we're getting closer to the end of the
      quarter, investors realize things won't be as bad as was
      thought (although still not at Street estimates), and
      there's the upside from announcements surrounding the
      divestiture of non-core assets for meaningful consideration
      on the horizon. Anyway, just the way I see it
      playing out right now. I think there's only upside from
      this price.

    • hate to say this, but market does not lie.
      I
      wish there is some news out there to clear the
      situation.
      But what I see is that analysts don't even bother to
      adjust
      their forecasting. It is bad because it will cause
      institution
      dumping since they buy based on forecasting....
      If the
      result of quarter is short of forecasting (which is
      almost sure thing since the forecasting was done at a
      good time), the stock will face nothing but down side
      pressure on price.

    • Thanks for the info. Definitely a good sign when the President buys!

    • I notice insider McInnes buying in August at $13
      and change. He sold at $20 back in January, so he's
      been successful trading in the company's stock. I have
      to take this as bullish. Even if earnings didn't
      come through this quarter, you know the company is
      rationalizing assets and restructuring to maximize shareholder
      value. McInnes is the boss, he would be privy to such
      strategy.

    • about what you mean, exactly. Volume has been
      quite low for some time here. How is this any different
      from a lot of other small cap, illiquid
      companies?

      I would not want to be short this stock. Maybe at
      $18 but not at $11.75. The company is talking about
      having a first ever meeting for Wall Street analysts
      sometime over the next quarter. It is likely that many
      participants will come back surprised, in a positive way. Also
      company has talked about selling or spinning off parts of
      itself.

    • Short term Tech reading does not looking good.
      They better have good quarter data coming out soon, or ....

    • Probably would not make sense for Tetra to get
      into this business. More likely that one of their
      potential customers for lithium would buy the raw material
      from Tetra and then develop this fuel tank.


      But thanks for passing this along - very interesting.
      Probably worth doing a web search to see all the potential
      uses for lithium.

    • You mentioned lithium is a part of Tetra's BR
      reserves. Are you aware that the space shuttle program has
      converted the composition of the main external fuel tank
      (the big orange tank everything is attached to) to a
      composite made from aluminum and lithium as of the last
      launch? These tanks are destroyed with each launch
      (non-reusable) so that there needs to be an ongoing supply of
      lithium to create them. Has Tetra investigated whether
      they can supply NASA with the lithium as a raw
      material or finished product? It seems that this would be
      a great market for them to break into, if
      possible....

    • A few items to clear up here - for SSAM and
      others:
      1) Tetra is viewed as an asset play primarily
      because of its Bromine (Br) reserves. Br is used as a raw
      material for biocides, flame retardants, and
      pharmaceutical intermediates, plus its use in Tetra's own
      drilling fluids as Calcium Bromide and Zinc Bromide.
      Reserves of Br that are concentrated enough to be
      economical are not at all common. Other key players in the
      Br business are Albemarle and Great Lakes Chemical
      in the US, and Dead Sea in the middle east. You
      should also know that Tetra's Br reserves also happen to
      contain significant amounts of Lithium, another mineral
      which is useful in such things as those small batteries
      used in watches, cameras, laptop computers,
      etc.

      Tetra is clearly an asset play when you realize that
      the value of these assets, assuming they are
      developed over the next 25 years, is probably worth more
      than it would cost you to buy the entire company today
      - which means that you're getting Tetra's other
      businesses for free.

      2) It's simply not true that no
      one is drilling for oil/gas in the Gulf these days -
      barring the days when a hurricane is blowing through and
      all the crews have to be evacuated. Believe me, if
      you had invested a few hundred million $ in building
      a deep water rig, you're not going to let it sit
      idle and wait for oil prices to go back north of $18
      or whatever - you're going to drill as soon as you
      can.

      3) As for Tetra's operating cash flow - it's been
      negative partly because they have been building inventory
      to support their customers who are by the way
      drilling and completing wells in the Gulf.

      Other
      notes:
      As for other reasons to like this company - try to
      learn about their payzone drilling fluid technology -
      it's going to revolutionize the business. In addition,
      their micronutrient business is definitely worth
      investigating - it's extremely profitable and is likely to be
      even more so going forward. Finally, they are in the
      process of (probably) deciding to spin off or sell parts
      of their business that aren't "strategic". There's
      more value in these pieces than most people realize.

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TTI
6.87+0.61(+9.74%)Dec 19 4:04 PMEST

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