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Silver Wheaton Corp. Message Board

dlhild 29 posts  |  Last Activity: Jul 16, 2014 1:09 PM Member since: Dec 3, 2009
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  • dlhild@ymail.com by dlhild May 23, 2014 11:22 AM Flag

    This may take 18 months or so. ANR has $780M in debt coming due within the next 15 months. They have not extended their maturities like BTU and ACI have done. If ANR burns and crashes, then market supply/demand will result in very profitable pricing for those companies that survive. Nattie gas priced at $4.40/Mcf put downward pressure on coal prices too. Coal has a serious pricing problem for at least 1-2 years, so ANR bankruptcy is not that far fetched.

  • dlhild@ymail.com by dlhild Jun 18, 2014 9:02 PM Flag

    Coal prices are still crap. Low volumes + crappy prices = low prices for quite a while longer. Buy next June for $7.50/share.

  • dlhild@ymail.com by dlhild Jun 3, 2014 11:02 AM Flag

    Coal prices are the big reason BTU's stock price is down.
    CAPP $60.70 per ton down $1.88 per ton WoW
    NAPP $65.50 per ton down $2.67 per ton WoW
    ILL Basin $46.00 per ton down $0.02 per ton WoW
    PRB $13.00 per ton down $0.02 per ton WoW
    Unita $36.75 per ton up $0.02 per ton WoW

  • Presently there is way to much capacity, so prices are in the tank. Global growth is slow, and perhaps slowing, so volumes are not going to increase any time soon. Nattie gas price at Henry Hub is at the very low price of $4.22/Mcf. This makes it hard for coal to effectively compete in the US. Coal exporting capacity on the west coast is still limited. BTU did extend their debt payment schedule, so they have some breathing room for the moment. However, for another 6-18 months coal is not likely to do well. While I'm long a few shares, I would not be a serious BTU buyer above $12/share. It may even hit single digits before sufficient coal capacity is taken off line. Also, if the Fed is tapering $35B per month and sounding like they are going to taper to zero, interest rates may bump up and growth slow even further. If on the other hand they quit tapering, then they are admitting the economy is not growing very much and that is bad for coal volumes. No reason to buy BTU to buy anytime soon at the current price. If you ant to read an interesting reflective blog on energy and the economy google "our finite world". Just my simple opinion.

  • There are roughly $380,000,000 in these debentures outstanding. At $2.50 per $1,000, the penalty payment would be roughly $950,000 (if every bond holders accepts), so it would seem anyway. Within the scope of all the debt BTU is juggling, $950,000 is simply NOT A BIG DEAL. Accordingly, this is nothing more than a tiny tiny momentary distraction issue. BTU's far bigger long term problem is pricing. Powder River coal is somewhat land locked (because of the lack of west coast exporting facilities) and is currently priced too low as well. Met coal is at terribly low prices globally. ACI, ANR, and others are going to be able to stay in the coal game for a long time. Natural gas at $4.55/Mcf is seriously hurting coal prices too. Perhaps if one steps out 2-3 years, domestic natural gas prices will move up to the $8+/Mcf range. This may happen, because all the natural gas export talk is not about helping the good old USA, but instead all about international price arbitrage so that producers can get the higher international price ($12/Mcf Europe and $16/Mcf Japan). Because about 25% of natural gas is lost in production/transit, the USA price would likely be about 70%/75% of the European price (ball park $8-$9/Mcf). Also, it is clearly possible, perhaps even likely, that there will be another recession somewhere (globally, Europe, USA, Japan, etc.). If there is another recession in the cards over the next 3 years, prices may even move down from here.

    BTU has done a nice job of pushing out their debt structure. Debt structure through Sept. 2020 is shown below:
    Nov. 2016 - $650,000,000
    Nov. 2018 - $1,518,000,000
    Sept. 2020 - $650,000,000

    IF, and that is a BIG "IF", coal prices were to move up materially from here (say by 20% or more), BTU would have a lot of leverage to the upside. I think there is plenty of time yet before it is worth buying BTU, but BTU's price will probably start moving up before better price becomes apparent to little investors like me.

  • Drum roll, "ANR GOES BANKRUPT". This may take another 18 months though. ANR has $780M in debt coming due within the next 15 months. They have not extended their maturities like BTU and ACI have done. If ANR burns and crashes, then market supply/demand will result in very profitable pricing for BTU and more likely than not for ACI as well. As for now though, there does not seem to be any rush to buy BTU. IMO, buy below $15 later this year.

  • dlhild@ymail.com by dlhild Jun 20, 2014 12:59 PM Flag

    04/15/2015 - 2.375% note is due - $267,000,000

    08/15/2015 - 3.25% note is due - $513,000,000

    Do you hear the BIG sucking sound of bankruptcy...?

  • Reply to

    Any view on the CEO announcement?

    by darv222 Jul 10, 2014 2:02 PM
    dlhild@ymail.com dlhild Jul 11, 2014 12:03 PM Flag

    I agree with poorhouse that this was a positive change. I'm guessing Jon Salveson played a role in this happening. I suspect one thing could become a problem though. SA is a 100% control freak, like a total control freak. The company is his baby and his life. Can he REALLY step back and let Pat Mackin (PM) take control? I don't know, but this will be an interesting dynamic to watch as we go forward in time. If SA and PM can in fact work well together, they would be a powerful force. Also, it had always appeared to me that DAL was perhaps being groomed for the CEO role, so I wonder how that will play out. Since DAL is more a finance person, the selection of PM was a good one in my opinion. Another plus is that prior to this it was my view that CRY's relationship with MDT was probably very poor, because of SA's personality..just my opinion obviously. Now though, CRY's relationship with MDT is likely a good one. The odds of a buy-out just went up. Probably not right away, but a year or two out CRY may well have some attractive buy-out characteristics. I think too that this just made the buckeye 3-5 game plan even better.

    Conclusion: Definitely a positive development. If SA and PM can work well together, then this will likely prove to be super positive. Also, it was time for new blood to evaluate CRY's product line and start making needed changes. Simply put, it was just time for some fresh blood at CRY.

  • dlhild@ymail.com by dlhild May 13, 2014 5:08 PM Flag

    Are there any other good nuclear fuel producers out there?

    Is CCJ going to ever get their act together?

  • dlhild@ymail.com by dlhild May 27, 2014 7:23 PM Flag

    Anybody know squat about PWR?

  • Based upon my analysis, I like the company. However, I'm new to PWR so would like to hear the opinions of someone who has been following them for a while. Quality of management? Honesty of management? Where you think PWR be be in 3 years? 5 years?

  • Hence, no sustained move to the upside is going to happen until pricing improvement becomes visible.

    Below $12/share I would buy it though.

  • Buckeye's Posting:
    I'm looking at the free cash flow long term growth of the business. Besides the US, the company is expanding in Europe, Latin America and Asia.
    I'm not counting on it but a buyout at a substantial premium to today prices is possible , too especially when you look at SA's age. There have been 3 that I know of in the last 5.5 years related to hemostasis type products . The first was Ormrix Biopharmaceuticals in Dec of 2008 for $408,000,000 by JNJ. Their main products were 3 liquid based hemostasis type products that had very small sales but just got FDA approval. I think you should be aware of the other two. From my standpoint the most likely buyer would be Covidien. In 1998 way before Covidien was spun off from Tyco, Tyco bought US Surigical for 3 billion. On of the main things US Surgical does is provide all kinds of surgical staples and stapling machines. CRY's products would be a perfect fit with COV.
    Unlike dlhild, I think CRY's other products have some value but he is right that bioglue and perclot are by far the most valuable products. They contribute to the free cash flow of the business and require little capital investment. The Hero Graft and tissue businesses are also one of a kind businesses which attract some of the leading cardiovascular surgeons in the world to CRY's hemostasis products.

    My Re-Thought Response: The parts would be greater than the whole. A strategic buyer would probably be interested if it could spin off the unwanted parts to another interested party. Also, with low interest rates, a strategic buyer may actually be able to make a buy-out work for CRY shareholders, because money doesn't cost them much. So I'm not as negative right now as I was previously. At the moment, I see CRY's risk more as general market risk, and I'm not very good at predicting that.

  • dlhild@ymail.com by dlhild May 19, 2014 12:24 AM Flag

    Until we see some indication of coal pricing starting to improve, this puppy and other coal puppies are going to struggle.

    In the USA coal usage is on the decline, and perhaps a good thing too although opinions can differ here. Either way, coal usage in the USA is headed south over time.

    Sales and better pricing need to come from international markets. So far, no improvement in coal pricing visibility, so no improvement in coal stock prices.

    Also, the more efficient coal companies like BTU need to drive some of the other coal companies into bankruptcy.

    Lousy coal prices are a fact and lousy coal prices are the problem.

  • Reply to

    Will Cameco take out their 52 week low?

    by encana101 May 15, 2014 11:17 AM
    dlhild@ymail.com dlhild May 15, 2014 8:11 PM Flag

    What are your thoughts long term. It appears prices are too low right now, which would seem to impact supply longer term. More importantly though, Japan hasboth a fiscal account deficit and a capital account deficit. They are in really bad shape, so will have to start some/many/most of their nuclear plants. Also, China and many other countries are building more nuclear plants as well. All of these plants need a secure long term supply. This it would seem has the potential to push prices really high if one looks out say 3 years or more. Al that point, what would CCJ be worth. Finally, are there any other good plays in this area? Thank you.

  • dlhild@ymail.com by dlhild May 14, 2014 11:05 AM Flag

    What's the deal with the SEC asking PWR to preserve their FCPA compliance documents? Anybody know what this is about?

  • dlhild@ymail.com by dlhild May 28, 2014 12:21 AM Flag

    Another week and still low coal prices. There is no reason to rush this investment, plenty of time left to wait for lower prices.

  • dlhild@ymail.com by dlhild May 3, 2014 9:03 PM Flag

    When did they go public and at what price. Thank you.

  • Reply to

    Question for dlhild

    by darv222 Apr 30, 2014 6:00 PM
    dlhild@ymail.com dlhild Apr 30, 2014 10:06 PM Flag

    I'm not all that knowledgeable on CRY. Yes, I do have some views and opinions on CRY. Buckeye may see CRY as a buy out candidate. He may be right. I have some difficultly with that though. Tissue, roughly 46% of revenues has terrible gross margins, so who in their right mind would want to buy it? Then they have several other nickel dime small market products such as Revascular Technology, HeRO Graft (this may become profitable with time, but still a small market IMO), and some other stuff, so not worth too much now. I personally don't see PerClot Topical as that big of deal because they have to sell it to people who haven't ever heard of it plus the price will be much much lower. So for now that's a nice SA story IMO, but not much profitability lurking there. So as a buyout, I don't see it right now.

    CRY really has one proven off patent valuable product, BioGlue. BioGlue is well established and has physicians that must like it. It now may have new competition coming from MDCO's ArterX. My guess though is that CRY will quite effectively protect their BioGlue market. I don't know, so this is just a guess. Still though, it is off patent. In 24 months the financials will answer this question.

    SA's SUPER MEGA LONG TERM GAMBLE is PerClot. If BCR prevails, then SA made a mistake. Who knows how all of this goes down. BCR could mess up, who knows. CRY may ultimately prevail at some material level (e.g. license from BCR etc.), I simply don't know. But, the market for this type of product has high margins and is huge. To play CRY for the PerClot outcome you have to be looking out 2-4 years, not next quarter. In 2-4 years, we will know the outcome to this story. In the short term not too much happening IMO. In the long term maybe. Buckeye is a strategic long term thinker; and, I suspect PerClot's long term story is the real game he is playing.

    Above was just my guesses. Do your own due diligence.

  • Google Gail Tverberg and read her blog. She projects global energy usage usage will peak in 2015 at around 12.5 Mtoe's and then decay exponentially to around 2.5 Mtoe's by 2035. In other words she is saying energy usage will fall by an estimated 80% over the next 21 years. Should this happen, the global economy would be destroyed as we know it. Don't blow off these estimates lightly, because she makes a strong case that energy will fall this much because as energy, particularly crude oil, prices get too high people can't afford the high price. Without the high price the producers can't afford to keep going after the cheap oil. This results in recession/depression and the system continues to implode. This is an excellent blog. The title of the blog is "Our Finite World". She argues that if crude oil prices collapse because of financial reasons, other energy prices like coal will collapse too.

    Civilization it not natural. It has to be continuously fed with energy, resources (physical and human), and needs a moral structure and probably a legal structure as well.

    I think she makes quite compelling arguments for her positions.

    A great video on how math, energy, economics, and the environment work together is one by Chris Martenson. Google "Martenson the next 20 years". A zerohedge link will show up and the video is contained in that link.

    Enjoy, or perhaps panic.

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