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The Coca-Cola Company Message Board

my911jim993 10 posts  |  Last Activity: Jul 28, 2015 10:43 AM Member since: Oct 20, 2010
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  • Reply to

    Earnings

    by my911jim993 Feb 23, 2015 7:54 PM
    my911jim993 my911jim993 May 13, 2015 9:40 AM Flag

    Williams Partners going the way of a KMI transaction. Might only be a matter of time before OKS does.

  • Reply to

    Where are we headed?

    by optiondoggy May 12, 2015 10:32 PM
    my911jim993 my911jim993 May 30, 2015 9:11 PM Flag

    http://news.investors.com/051315-752358-williams-cos-to-buy-its-pipeline-mlp-in-stock-deal.htm?ven=yahoocp&src=aurlled&ven=yahoo

    This is what caused the move. Williams Company and Partners merger announcement. Folks think the same would be a good option for OKS, however the though process is OKS taking over OKE would be a better transaction for tax purposes. I wouldn't be surprised to see that.

    Sentiment: Hold

  • Reply to

    Credit Downgrade Today!

    by leonard4mvp Jun 4, 2015 8:58 AM
    my911jim993 my911jim993 Jun 5, 2015 8:55 AM Flag

    I'm not sure where you're getting your information from, but here's a recent take from S&P.

    "We have a favorable view of SO's $16.5 billion
    three-year capital spending plan, which includes
    spending on environmental controls,
    transmission and distribution investments, two
    new nuclear units (Vogtle 3 & 4) and an integrated
    coal gasification combined cycle power
    plant (Kemper)."

    Comments not indicative of a pending credit downgrade. All of the major rating agencies see earnings growth for the foreseeable future. Also not indicative of a pending credit downgrade. SO is caught up in some negative headlines around Kemper and Vogtle. It's also caught up in the negative trade related to the prediction of an interest rate hike later in the year. Both currently serve as drivers which open up a very good entry point in SO's shares. If you go back through history and look at SO's yield during periods of higher rates, you'll notice at the low point in the stock (high point in the yield) we're right in line with what historically turned out to be great entry points. I get it, you're short the stock over the short term, (no pun intended) and it's your right to try and make as much money as you can on that position. Ultimately, I believe you will as the pendulum usually swings too far in either direction. Perhaps the price goes a bit lower though there's no guarantee. For those who have a time horizon greater than 12 months, SO presents a pretty good value right now.

    Best of luck to all.
    -Jim

    Sentiment: Buy

  • Reply to

    Any chance this company gets acquired?

    by etrain_03 Jun 16, 2015 12:44 PM
    my911jim993 my911jim993 Jun 16, 2015 2:22 PM Flag

    I think the most likely scenario is they merge with the OKE. A merger of the two would likely bring down the cost of capital and generate cost savings. Same rational in the KMI mergers as well as williams companies. The lower OKS share price falls, the higher the yield, the more a merger makes sense. I'm holding my position at this point. If it goes much lower, I'll bite my lip and and to my position.

    Sentiment: Hold

  • Reply to

    Any chance this company gets acquired?

    by etrain_03 Jun 16, 2015 12:44 PM
    my911jim993 my911jim993 Jun 17, 2015 8:54 AM Flag

    I'd be lying if i said i wasn't afraid of a cut in distribution. They can't run below a 1.0 coverage ratio forever. That said, incorporating the cash flows from the new assets and new projects set to come on board, there is a good possibility they get back to 1.0 before the year is out. I'm in a holding pattern right now waiting to see how the results come in over the next couple quarters...which will hopefully bring an improving distribution coverage ratio. If we see solid improvement i'm likely to add to my position. If the stock continues to tank, as I said early, it eventually gets to a point where the underlying assets are not being valued appropriately due to the distribution cut fears. At that point, i'll have to hold my nose and buy more as well. They have some of the best assets in the industry, eventually the market will value them correctly. If it doesn't someone else will come in and attempt a buyout.

    Sentiment: Hold

  • Reply to

    Any chance this company gets acquired?

    by etrain_03 Jun 16, 2015 12:44 PM
    my911jim993 my911jim993 Jun 18, 2015 11:06 AM Flag

    Exactly.

  • Reply to

    What I fear most :

    by joebo246 Jun 17, 2015 7:21 PM
    my911jim993 my911jim993 Jun 18, 2015 11:12 AM Flag

    I agree. The likely scenario is OKE being merged into OKS. This will maintain the tax benefits of the LLP structure as well as maintain the distribution while simultaneously shoring up the coverage ratio and reducing the overall cost of capital. I'm sure there are some additional complexities, however in my opinion this seems to make the most sense for both entities and their shareholders alike.

    Sentiment: Hold

  • Reply to

    What I fear most :

    by joebo246 Jun 17, 2015 7:21 PM
    my911jim993 my911jim993 Jun 22, 2015 12:11 PM Flag

    Honestly its hard to predict pricing on such a transaction. I think both entities will see a boost in price as the street would likely view the transaction in a positive light. As to the bottom, my gut tells me we're pretty close give or take a few points. I was kicking myself for not loading up back at the early stages of the great recession. I won't make the same mistake this time around. Management has done a helluva job through rough patches and I expect this won't be much different. It is pretty interesting to see ETE's offer for WMB though. Things are getting interesting...

  • my911jim993 my911jim993 Jun 30, 2015 6:36 PM Flag

    I am surprised to see just how low this thing has fallen. The market is without a doubt pricing in a distribution cut and essentially projecting that based on the terrible distribution coverage ratio of .60 in the last quarter. Basically, it's the market's opinion vs management's projections and right now the market is winning. According to the transcript, management states there will be significant volumes coming on in Q3 and Q4 which will essentially bring the distribution ratio back to 1+ by year end. If in fact that is gospel, we are then witnessing a great buying opp. If it is not gospel, go with worst case scenario and you're looking at a 40% distribution cut to 1.90 or a 5.5% yield at the current price, which tells me it's already baked in. If a cut were to happen, i don't think the shares would fall much further. I don't believe a cut is coming, much less one as deep as what i would consider worst case. They've got the right assets and the right footprint. Even morning star believes the shares are trading at a 21% discount to fair value. With fee based revenues increasing and the fact that commodities prices will eventually head back up (the cure for low prices is low prices), I think the risk reward ratio is in our favor if your investment horizon is more than a year or two. I'm getting close to adding to my position as we've now fallen below my cost basis.

    Good Luck to All.

    Jim-

    Sentiment: Buy

  • my911jim993 my911jim993 Jul 28, 2015 10:43 AM Flag

    This was a spec for me. After 3 years of being dead money, I officially threw in the towel this morning. Capital losses continue to wipe out the dividend. Best of luck to everyone else.

    -Jim

KO
41.08+0.52(+1.28%)Jul 31 4:00 PMEDT