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Spirit AeroSystems Holdings, Inc. Message Board

jch548 11 posts  |  Last Activity: Dec 10, 2014 2:01 PM Member since: Aug 2, 2001
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  • The Saudi's have been building up their refining and petro-chemical industries. Their capacity will continue to grow over the coming years. Has anyone kept up with this? Are the capacity additions enough to harm petro-chemical industries elsewhere?

    I'm also surprised by the drop in LYB and WLK. I think there must be some global economic worries out there yet not much has really changed. U.S. gdp is favorable while Europe remains mired in border line deflation. Maybe china but we have been through that a number of times.

  • Reply to

    Westlakes stock price

    by mecca923 Oct 27, 2014 1:16 PM
    jch548 jch548 Dec 4, 2014 10:19 AM Flag

    Yes. I just read a piece by citi on the chemicals. European crackers are more competitive with $70. I guess I follow the logic but the euro has been crashing against the dollar so energy prices have dropped farther in $ terms vs the euro.

    Citi stated that there is oversupply in ethelyne going out to 2020. I suppose this is nothing new.

    They seemed to like LYB.

    I was warming up to WLK but need to better understand the industry. I believe WLK will continue
    to grow through acquisitions. They have tripled ebitda the last nine years.

  • jch548 jch548 Dec 3, 2014 8:18 PM Flag

    This stock looks extended by me. I have no idea what is driving the stock up on heavy volume. If insiders were
    buying that would mean things were going very well but I haven't seen any insider buys.

    Maybe convertible holders shorted the stock and are now covering. Last qtr cash flow was very good but this was off the back of A/R collections. Operating FCF is still minimal. My swag on this coming qtr is FCF from
    operations of $7.5mm or $30mm annualized. This for a market cap of $700mm and debt also.

  • jch548 jch548 Dec 3, 2014 7:50 PM Flag

    I'm trying to understand why many of these petrol-chemical companies fall on lower oil. My initial view is product selling prices decline while the industry is stuck with higher cost inventories. If that is the case this would just be temporary as eventually that high cost inventory get worked off. Is that how you see it?

    I was looking at WLK as they look oversold. Not as diversified as LYN but they have a pretty impressive record.

  • Reply to

    Westlakes stock price

    by mecca923 Oct 27, 2014 1:16 PM
    jch548 jch548 Dec 3, 2014 1:47 PM Flag

    Can you elaborate why WLK is less competitive at $70 oil? I guess competitors' cost come down but the same
    would apply to WLK. A strong dollar? maybe this hurts the export market but would be a plus on costs.

    I was looking at this stock yesterday. Seems oversold if the global economy doesn't tank. Very impressive operators was my take. Tripled ebitda over the past nine or ten years. Strong balance sheet.

    Thier forward eps estimates have come down recently.

    Might make a decent long-term investment. I wonder how volatile their product selling prices are? I mean if say Europe went into a recession this could be a big negative as global selling prices would be effected.

  • jch548 jch548 Nov 14, 2014 2:02 PM Flag

    I was expecting more of an uplift from axing the Japanese fab. On the transcript they I believe are saying there will only be $6mm in costs from the Nishiwaki fab in Q4 so the vast majority of the benefit from reduced fixed costs is now behind us.

    When I first looked at Tower I assumed the cash flows would improve $30MM/QTR from the elimination of the fixed costs. Without including movements in working capital etc the company was still cash flow negative in
    Q3. The big paydown in A/R helped them be cash flow positive.

    Things are going very well for Tower and it sure seems like profitability will improve. I was expecting more sooner with the Nishiwaki closure.

    On the transcript they stated they expected the Panasonic JV to reach capacity in 2017. They are looking at $180mm in incremental revenue at 60% margins to take them to capacity. That and maximizing capacity at their other fabs will drive future profitability.

  • jch548 jch548 Nov 12, 2014 10:54 AM Flag

    While we wait on earnings you could read on Seeking Alpha Jaret's new article on TSEM out today.

  • Reply to

    AMKR

    by jch548 Nov 5, 2014 9:08 AM
    jch548 jch548 Nov 5, 2014 8:10 PM Flag

    They have some top tier clients. Apple, Samsung and trying to get a foothold in china with their smart phones. Auto related chips and other industries. They own 30% of a closely held OSAT company in Japan that is growing at a fast clip also.

    I'm suspicious because they don't say too much about capacity. If you were doing good in this area utilization wise you would want to show it or at least explain how far behind you were.

    I'll watch. Maybe the shares will get cheaper. They could do quite well down the road though.

  • Reply to

    AMKR

    by jch548 Nov 5, 2014 9:08 AM
    jch548 jch548 Nov 5, 2014 9:53 AM Flag

    The debt is bothersome. FCF could really ramp up under the right circumstances though. A combination of better margins and lower capex would do the trick. I'm just kicking the tires at this point. If there is any evidence of a capex slowdown I might wade in. For now I hope it goes lower.

  • jch548 by jch548 Nov 5, 2014 9:08 AM Flag

    Amkor's stock has been slammed as of late. They are I believe a high end OSAT company. Big capex spenders. They will spend $675MM this year in capex and probably a similar number in 2015. I read through their last CC and they don't provide capacity utilization numbers yet they blamed not hitting their margins on less than optimal capacity use.

    Amkor will do $3B plus in revenue. A movement of 1 percentage point translates into $30mm in added profits.
    The CEOs plan is to grow into their capacity. Growth should be a bit above the overall growth in wafer production.

    I might like the stock if I saw their capex was dropping but I don't see any evidence of that. They are building a state of the art facility in Korea that I believe won't be ready until 2016. Maybe capex drops off in 2016.

    Anyone follow this one?

  • I was looking at bonds and noticed this issue. My initial glance says this is a St. Pauls related issue which is owned by Travelers. Decent looking yield of 6%.

    Anyone know anything about MMI Cap Trust? Credit worthy etc?

SPR
44.15+0.45(+1.03%)Jan 23 4:02 PMEST

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