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Advantage Oil & Gas Ltd. Message Board

minireef05 27 posts  |  Last Activity: 18 hours ago Member since: Aug 16, 2006
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  • Reply to

    How does BRKB Outperform....

    by fredrickson01 Dec 18, 2014 9:34 PM
    minireef05 minireef05 18 hours ago Flag

    J, much better to sell the bricks, siding, roofing, paint and other components to the the people building the house and then exit the picture-- at least you know you are getting paid for your products. Same for sales from remodeling where the contractor or homeowner pays for the products and then is responsible for doing the work (or paying off the credit card or home loan used to purchase the products for the job). Much more risk involved in blanket mortgages. They already do mortgages through various subsidiaries, but can have tighter control on credit risk. Freddie and Fannie are too much bulk mortgage risk to take on.

  • Reply to

    How does BRKB Outperform....

    by fredrickson01 Dec 18, 2014 9:34 PM
    minireef05 minireef05 18 hours ago Flag

    Jad, I can understand the dismay with a stock that does not pay a dividend-- some people want to see that as a part of their investment because it provides some cash flow for the year and can be construed as a sign of normal operations. Berkshire is not that kind of vehicle, as you well understand. There is an entire spectrum of dividend plays with MLP's and REIT's at one end and the BRK's at the other. The choice is yours as to which investment path to follow, and quite frankly, it is not for anyone else to knock or question-- you park your money where you see fit.

    On the point of "unscrupulous stock pumpers", I can somewhat agree with that sentiment as well, where people expect BRK to continue north and so buy continually buy more the whole way up. However, at 17-18 times earnings, this is hardly anywhere near a momentum play. GE trades at a higher multiple with a lackluster balance sheet, heavy bureaucracy, and misaligned management. Now, if BRK was trading at 25 times earnings and making 3-4% moves every day, then you would quite correct. However, that is quite far from reality.

    The truth is that BRK is quickly adjusting itself away from from a stock investment vehicle to an autonomously managed but centrally organized (via a common balance sheet and income statement) conglomerate. While a significant amount of book value is still derived from their $100 billion+ equities portfolio, their earnings stream is overwhelmingly dominated by core businesses. Some people might look to the overwhelming size of their insurance float, closing on $100 billion, as an unstable or unsustainable component of business value. I think Berkshire is well aware of that sentiment as well, deploying larger sums of capital into hard-backed assets.

    For some of us, the inner-workings and business/investment philosophies of Berkshires are a thing of beauty. In its purest sense, take cash made from a float, invest into equities. Receive dividends and buy a company.

  • Reply to

    It won't be long before companies

    by xit_wounds Dec 17, 2014 4:48 PM
    minireef05 minireef05 Dec 18, 2014 10:25 AM Flag

    True, but there's no real way to use it without hundreds of billions of investments to improve the infrastructure of the country. The infrastructure build out is the first major investment theme. Then again, essentially nothing has thawed in the economic relationship, so it is a mute point.

    If things thaw, look to CAT, DE, engineering firms, telecoms, food processors, and the like.

  • minireef05 minireef05 Dec 17, 2014 3:59 PM Flag

    I'm sorry but I think you guys are missing the point. The price of crude does not impact UOP as much as refinery and petrochemical plant utilization and throughput rates. They make their money from catalysts and technology licensing. As long as these plants continue to run at near full capacity to meet VOLUME demand of refined products and petrochemicals, they are making their targets. The price of crude is down because of a glut of crude oil in storage and overhead production. The utilization rates at refineries are not cratering. Demand for oil has not dropped, with the exception of projected future demand increases--- the base demand is still there. There is still a significant petrochemical demand yet to be met, especially for propylene and likely soon enough for methanol (Methanex and others are building out capacity in the US south to meet growing demand for this base feedstock and fuel additive/replacement).

    You need to watch run rates of production to see whether UOP will be okay. High run rates equate to high licensing/royalty payments as well as faster use and replacement of catalysts.

  • Reply to

    Time for Berkshire Hath to Shed KO

    by fredrickson01 Dec 13, 2014 1:08 AM
    minireef05 minireef05 Dec 16, 2014 10:59 AM Flag

    Whoops! I read the EPS instead of the Dividend-- sorry about that. 40.67% yield on cost then.

  • Reply to

    Time for Berkshire Hath to Shed KO

    by fredrickson01 Dec 13, 2014 1:08 AM
    minireef05 minireef05 Dec 15, 2014 4:39 PM Flag

    And they make a lot more than $300,000,000. 400,000,000 shares paying $1.80 in dividends--$720,000,000 pre-tax.

  • Reply to

    Time for Berkshire Hath to Shed KO

    by fredrickson01 Dec 13, 2014 1:08 AM
    minireef05 minireef05 Dec 15, 2014 4:37 PM Flag

    A nice bond? It's a lot more than that! $3 cost basis paying a dividend of $1.80 for a 60% yield on cost! Attempt to go find a bond like that anywhere in the world currently. No, KO is not like a bond. It is like a gold mine or an oil well that just keeps pumping.

  • Reply to

    Double the SPR and buoy US Oil

    by minireef05 Dec 10, 2014 12:44 PM
    minireef05 minireef05 Dec 11, 2014 10:24 AM Flag

    Which it why I said "double" it-- another 750 million barrels.

  • We should double the capacity of the Strategic Petroleum Reserve and buy directly from US drillers to fill it at these prices. We emptied how many barrels over the years to disperse high prices in the face of supply shortages. Why are we not refilling and expanding our holdings at these low prices?

  • Reply to

    Fewer wells but more sand

    by jefferybennett78 Dec 10, 2014 9:20 AM
    minireef05 minireef05 Dec 10, 2014 12:41 PM Flag

    Fear of oversupply is what is driving down prices. You think introducing US oil exports somehow reverses that trend?

  • Reply to

    Hopefully Warren Buffet

    by jforuus Dec 8, 2014 7:26 PM
    minireef05 minireef05 Dec 9, 2014 12:24 PM Flag

    Buffett is no longer crucial to the success of the company. This is not the 1990's where equity selections are leading the growth of the company. The equities portfolio adds to the book value, for sure, but heck he does not run those companies and as long as they hold onto the stocks that have already been chosen, there is no problem. The operating units of the corporation provide far greater revenues and profits than the equity portfolio he crafted (largely done TWENTY years ago!). He is not calling the shots at Marmon, or GEICO, or McLane, or BNSF, or BH Energy, or Lubrizol, and yet these companies provide the backbone of the entire corporation.

    What Buffett has done is to bring together through accretion, long-lived and highly-successful entities under one corporate banner, to share balance and income sheets, and ultimately coffers. He brings them together, they flourish, and he redeploys capital effectively in new acquisitions.. And yet, separately these entities have been doing the same exact thing for dozens and even over 100 years in many instances. What is he doing that is any different than what the leadership of the components have been doing, except at one level higher in the hierarchy and with much much deeper pockets.

    You can Berkshire for Buffett or you can buy it for the entity itself, which would continue to grow if left only to the dividends of the equity portfolio and the successful business practices of the nearly autonomous leadership.

  • Reply to

    Still sticking to story

    by robbrush Dec 3, 2014 1:34 PM
    minireef05 minireef05 Dec 3, 2014 5:01 PM Flag

    They announced the 2014 buyback in September 2013. $6-8 billion. How much is left on that authorization?

  • Reply to

    I can see 100 from my house.

    by gamalataki Nov 26, 2014 1:55 AM
    minireef05 minireef05 Dec 3, 2014 2:31 PM Flag

    Dave Cote just made an urgent press release announcing a 2 for 1 split to help the stock advance another 17 cents to break the $100 mark.
    Quote:

    "I have urged the board to make this immediate split of the stock in order to overcome the hurdles our company stock currently faces. It has been brought to my attention that successive years of record earnings and market performance is not enough to help our stock break the bounds of normal market valuations, trading at an elevated but not excessive P/E multiple. It is our hopes to forgo conventional investment wisdom and usher forth a new phase for Honeywell stock, relinquishing sound fundamentals and pushing forward excessive price-to-earnings multiples. We will now consider any annual returns under 30-35% a complete failure on the part of management."

    At least you can't blame him for not listening!

  • minireef05 minireef05 Dec 3, 2014 1:26 PM Flag

    I love it. They cite lower oil prices eroding demand for their services. They haul almost exclusively petrochemicals and refined products!!!! Does BB&T think lower oil prices translates to eroded demand for gasoline, diesel, jet fuel, methanol, propylene, anhydrous ammonia, etc., etc.????

    I will not sell. They have been steadily increased revenues and profits on a per barge basis for 10+ years and I do not see that slowing any time soon. I refuse to follow the: at least .05% connection to oil equals sell and downgrade train.

  • Yet another solid string of acquisitions made to further progress away from "dependence" on the equity portfolio for post-Buffett corporate strength. I think this point was underscored by the recent move to liquidate a stock position in return for a business unit, i.e. Duracell. Things are in the works for establishing significantly greater earnings power from business units to keep this ship sailing well beyond Buffett and Munger management.

    Mortality of the managers is still a wild card out there, but they are making greater moves into business line expansions to provide earnings power with BNSF, utilities, and chemicals. Still likely to have a corrective sell-off in the event of deaths, but I think analysts having been warming to the underlying strength of the enterprise versus the previous heavy-hitting growth of equity positions like Gillette, Washington Post, and Coca-Cola.

    Any thoughts?

  • Reply to

    Due to come down........

    by jdellie Nov 13, 2014 10:46 PM
    minireef05 minireef05 Nov 28, 2014 12:37 PM Flag

    Fears over lower oil production reducing unit train and frac sand shipments driving this down today? On the flip side, though, is the benefit of potentially less congestion on the tracks improving train speeds and efficiency across the network which will reduce fuel burn. Also the growing tail wind of the fuel surcharge lag adding heavy cash to their coffers at the moment.

  • Reply to

    On November 11th...

    by the_original_artemusrex Nov 17, 2014 3:02 PM
    minireef05 minireef05 Nov 25, 2014 12:55 PM Flag

    A split will do nothing to lower the P/E ratio. Post split surge will cause the stock to become overvalued comparable to other industrial companies, causing it to stall out once again. Patient is all that is needed. Every hour and day that goes by, HON is raking in sales and cash. If you had an accurate meter on the value of the company down the dollars and cents that you could watch 24/7 I guarantee you would spend less time worrying about stock splits and more time appreciating the importance of enterprise value and P/E multiples.

  • Reply to

    On November 11th...

    by the_original_artemusrex Nov 17, 2014 3:02 PM
    minireef05 minireef05 Nov 24, 2014 6:21 PM Flag

    Them: Stock splits make the share price move higher!
    Me: Berkshire Hathaway Class A. Enough said.

  • Reply to

    Up $3 to almost $147 - News??

    by rgchjr1945 Nov 21, 2014 9:35 AM
    minireef05 minireef05 Nov 21, 2014 1:17 PM Flag

    China and Europe easing which could help their economies bottom out and potentially stabilize. CMI on the last quarter said they saw weakness continuing in China. If China flattens out or turns positive, they have a huge tailwind here.

    Nothing to do with nat gas engines from my perspective. Compared the volumes of diesel engines being manufactured, thinking that people are betting on Cummins right here and now for their nat gas engine potential is a bit weak. If oil was $115 and heading higher and they announced that interest from large fleets had picked up, then maybe you could look to Westport tie in being the boost. But not at these levels.

    Besides, Cummins has lagged the other industrial names because of their exposure to China, Latin America, and Europe (much like Caterpillar). If there is some hint of things improving in those markets, CMI is back in business (literally).

  • minireef05 minireef05 Nov 6, 2014 4:19 PM Flag

    Conference Call at 5. Earnings out at 4:15.

AAV
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