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Yongye International, Inc. Message Board

ddbikessamsara 9 posts  |  Last Activity: Dec 18, 2014 2:39 PM Member since: Oct 5, 2004
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  • From the Q3 CC : "First, LINN's production mix in the third quarter was 48% natural gas, 36% oil, and 16% NGLs. Pro forma, for all announced transactions, accept the final divestiture of remaining Midland Basin properties, a very preliminary estimate of our production mix shows approximately 55% natural gas, 35% oil, and 10% NGLs."

    So they are MUCH less exposed to oil prices per se than this crazy market is assuming.

    Add to that the strong hedges : "Second, we are hedged approximately 90% to 100% on expected natural gas production in 2015 and 2016. On the oil side, we are hedged approximately 60% to 70% in 2015 and between 50% and 60% in 2016 on expected production."

    Basically the "bad" exposure is the 35% oil production that is unhedged. So in 2015 that would be the UNHEDGED 40% portion of 35% oil, or a net 14% of 2015 oil production unhedged. Hardly a catastrophic situation.

    The current "market" price of oil is also virtually ignoring what to me is a very real chance of a significant geopolitical disruption caused by the Saudis intractable stance. Commando raid on the Ghawar field and oil is back over $100 overnight. You think Putin and Iran aren't already thinking along those lines?

    It seems unlikely to me the Saudis can hold this line with no consequences for a really protracted period. Even if the price of oil does stay low for a few quarters, based on the numbers laid out above things are nowhere near as dire as the panic selling is suggesting.

    All my opinion but I bought LNCO today based on it.

    Sentiment: Strong Buy

  • Reply to

    Baird's New Price Target

    by nosweat82 Dec 17, 2014 1:55 PM
    ddbikessamsara ddbikessamsara Dec 17, 2014 2:39 PM Flag

    So that puts them at the low end of the spectrum vs. $25 at the high end of the spectrum. 15 analyst opinions ranging from $25 to $7 price targets. In other words none of them have a real clue but are throwing out a wide range of guesses. It is all mostly dependent on the price of oil, secondarily dependent on how well BBEP manages the business through this period. They are overall well-hedged and have managed through other cycles very effectively - that track record is what made me choose them as my "oil crash" investment. Also one of the cheapest at .5 book value. Nearest comparison is LINE and they trade at .9 book so BBEP seems to me to more undervalued with greater rebound potential.

    T. Boone Pickens predicts oil back to $90-$100 in 12-18 months. I respect his opinion a lot more than any 2-bit analyst throwing darts. I can throw darts as well as them and to me both the decline in oil prices AND the decline in oil company stocks is greatly overdone and the odds are in your favor that there is much more upside than downside in both.

    I'm holding through this cycle with the expectation that BBEP will manage through it ok and looking for oil to return to $90.

  • ddbikessamsara ddbikessamsara Dec 16, 2014 11:24 AM Flag

    Wow, Baird is clairvoyant indeed making calls for 2Q '16. That's a year and a half out and there is no way they can legitimately predict oil prices 6 months out let alone a year and a half. This whole mess is due to the Saudis trying to force everyone else's hand, and the ensuing panic selling - NOT true market forces. There is no way Baird can possibly predict the price of oil, BBEP's asset mix, debt mix etc. that far ahead. This is a breathtakingly stupid report, even from the analyst community who make stupid calls on a regular basis. Where was Baird before the disastrous last 90 days when some accurate analysis could have saved a lot of people a lot of money?

    Sentiment: Strong Buy

  • ddbikessamsara by ddbikessamsara Dec 15, 2014 6:20 PM Flag

    Somebody or some group of bodies is manipulating the oil market. Just like a few hedge funds managed to move oil up to $140 the same effect is ocurring in reverse. There is a small amount of oversupply : from the IEA report:

    "IEA expects that global liquid fuels supply will continue to outpace consumption, resulting in an average stock build of 0.4 million bbl/d in 2015. Stock builds are expected to be concentrated in the first half of the year, averaging 0.7 million bbl/d during this period. EIA forecasts global liquid fuels supply to average 92.8 million bbl/d in 2015, 0.2 million bbl/d lower than in last month's STEO. The 2015 global demand forecast was also revised downward by 0.2 million bbl/d to an average of 92.3 million bbl/d, based on weaker global economic growth prospects for next year"

    So the supply is 92.8 million bbl/d and demand is 92.3 million bbl/d. Thus demand is 99.46% of supply. That is almost a statistical non-event, virtually equilibrium. Yes, prices should have come down to some small degree but a 50% washout is an impossibility just on the underlying base economics. This is unbridled manipulation. There is simply no way this sort of horror show could unfold otherwise.

    As to BEPP itself, they have ridden out similar storms in the past. They have a ton of high-dollar hedges and a lot of discretion on capex spending so they will be able to manage cash flow pretty well. Listen to the December 9th Wells Fargo presentation on the website if you want a degree of reassurance.

    This stock price is beyond insane, no logic whatsoever. I'm hanging in - 5-year low due to a manipulated downdraft in oil prices is not a reason to sell but a compelling reason to buy.

    Sentiment: Strong Buy

  • Reply to

    Functional RESET Theory

    by fireballmoney Dec 11, 2014 1:49 PM
    ddbikessamsara ddbikessamsara Dec 11, 2014 2:32 PM Flag

    I agree, The oil cycle has repeated itself many times and there is no reason to expect anything different this time. I'll bet the Saudis cut production in the near future - there is only so much pain they will be willing to endure. We may not see $100 oil for a while but this move down has been so dramatic and swift it has been overdone IMO. Strong hedges will offset a large part of the price decline for LNCO and when the price of oil stabilizes and recovers it's back to normal. Oil will be king for at least another decade, probably much longer since there simply are not enough renewables to even make a small dent in global energy requirements.

    Sentiment: Strong Buy

  • Reply to

    PSEC may not stay low for too long

    by thewisejman Dec 9, 2014 2:25 PM
    ddbikessamsara ddbikessamsara Dec 9, 2014 3:36 PM Flag

    I sold my PSEC this morning at a loss since I no longer trust the management. I immediately reinvested those funds into FSC. Same monthly payout BUT with my loss on PSEC I will be able to offset $3000 per year capital loss carryforward against the FSC dividend. Tax savings on that offset levers up my FSC yield to around 13%. If PSEC stays in this price range I may buy it back after the 30-day wash rule but for now I am out and regard FSC as an equivalent investment for the most part but with a better yield with the tax loss from PSEC offsetting it.

    Sentiment: Sell

  • Reply to

    Better Than Expected Earning Coming!

    by hotracer2012 Oct 29, 2014 6:15 AM
    ddbikessamsara ddbikessamsara Oct 31, 2014 12:22 PM Flag

    Nice call. Hopefully it will do a repeat of last year where the same thing happened - a "hiccup" quarter where it nosedived for a while then it turned around and ran back over $15

    Sentiment: Buy

  • Reply to

    Ashley Fieglein Johnson now permanent CEO?

    by ddbikessamsara Oct 2, 2014 2:22 PM
    ddbikessamsara ddbikessamsara Oct 3, 2014 11:53 AM Flag

    I think she said she PLANNED to step back into the CFO role, not that she wanted to. Biddescombe seems an odd choice - I agree it has to be some sort of board connection. He seems to have good credentials in the tech industry so I'm not particularly concerned, and I think Ashley could do ok as the CEO. The business is pretty straightforward and the market seems to be theirs for the taking if they simply execute properly - I don't think it takes a superstar to make that happen. The things that keep me holding are 1) the market seems to be there and the customer list is most impressive with no one leaving 2) the substantial cash hoard 3) the 2 institutions taking such monstrous positions and 4) the very significant upside if they get things going the right way.

    They had a non-stop growth trajectory going for years until this year's hiccup and I don't think the market has changed, they just have to regain focus. This could be double digits again easily with just one decent quarter and guidance.

    Sentiment: Buy

  • With this new CFO appointment does anyone think she will become the permanent CEO? She seems quite competent and knowledgeable so I personally would be satisfied to see her take the job. It seems odd that there is no announcement about her since her old job as CFO is now going to Simon Biddiscombe.

    Any thoughts?

    Sentiment: Buy

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