I agree - it makes little sense right now when the market is gyrating. Let the mReits start posting good earnings and all of them will uptick. Then they can think about another SPO.
The acquisition of CreXus should be accretive to earnings and cash flow and will hopefully drive up distributions.
Well, the last quarter they were selling their NG at about 60% of the market price and have never explained why there was such a discrepancy between their selling price and every other company selling NG. If this happens again the lawsuits are going to start flying. They still need to properly explain why they were getting sixty cents on the dollar.
Today an article came out in WSJ. It stated "Major buyout firms have been unloading a record amount of shares in companies they have taken public. Bain Capital, KKR (KKR) Apollo Global (APO) and other private-equity firms sold $20.5B of stock through 50 follow-on offerings during the first three months of 2013. That’s twice as many deals as in the year-earlier period and the highest quarterly pace on record, according to Dealogic" It's going to be a blowout quarter.
Sentiment: Strong Buy
CF needs to split the shares at 10:1 to keep this from happening. They do have a fiduciary responsibility. One thing I can say for sure is that they will do record planting in the country this year as the ground moisture has improved tremendously and will support much more activity.
The Fed just signaled the start of end QE this summer. Long rates are rising and will continue to do so. Looks like the mReits can start collecting on their hedges instead of losing money and start rolling over their portfolios into more profitable bonds. Spreads are about to start their gradual increase.
I've never seen a stock that gets recommended more and performs as poorly as Line. Is this stock just being gamed or is there a fundamental reason for this discrepancy?
Again, I think there is a case that they are not meeting their fiduciary responsibility by selling gas below market value I still believe somehow CHK is in the middle of this collecting money on the spread. They need to disclose exactly where the money is going and CHK needs to disclose exactly what they knew before they sold this to the public - either through their own knowledge or knowledge gleaned from others with wells in the area.
The only thing I take issue with is the fact that CHKR seems to be selling LNG at 40% below market claiming transport costs reduces their price - which I think is BS. It may lower cost but not by over $1.50.
The powers that be have been hitting it for three days now to try and push it below 90. We made have seen the end of this recent retrace - hence the bounce back at eod. Cross your fingers.
If you look at their Q4 finacials they took a $50 million charge for early extinguishment of debt in the quarter. This lowered their earnings by over $.54 per share. Add it back in and earnings were $1.62. So, this will also reduce expenses going forward adding to quarterly earnings.
I read the transcript from the conference call. They booked all kinds of "provisions" in Q4 against a loan portfolio they acquired - I think around $3 million. So, I assume they bought it at a discount then booked these "losses". They have very few non-performing loans and they have around $90 million in unrestricted cash which could be earning 5% or more. That's an additional $1.25 million per quarter in earnings. So, it appears between not deploying their cash and tossing everything and the kitchen sink into the loss column we got this outcome.
The SPO diluted existing shareholders while the money generated wasn't put to work, costing us a couple of cents of distributable cash. If this had been managed better we would likely have seen a $.24 in distributable cash.
They have also dramatically lowered their operating expenses when you look at it as a percentage of AUM. So, as AUM increases profits should grow geometrically. My guess is that at roughly $600 billion AUM they can throw off more dollars that they did before at $800 billion AUM.
Sentiment: Strong Buy