Rate shrinkage is my biggest concern. PACD may be forced into concessionary prices to get the Meltem an assignment. That will set the stage for lower prices on renewals. PACD will do okay until the market turns, but it could be a while. Someone wanted in today quite seriously. Maybe it was an inside buy on news of the next lease. Peter
It would seem to me that PBF could be advantaged by the significant drop in Bakken prices even accounting for transportation costs. This should translate into a final price advantage while providing some margin protection. Am I being blindsided by something? Peter
Admittedly, I am shocked that PACD shares could be priced this low. It is like the market is assuming that deep water drilling will go extinct because of a short-term drop in oil prices. Supply will start rising as soon as the junk bond spicket to over-indebted frackers dries up and the extreme decline rates kill off frackers one-by-one. This is a best in class company with a bright future for those daring enough to back up the truck. Sure, they could end up with a drill ship underperforming for a while or not even performing, but PACD can easily last until the frackers go belly up. Peter
I agree, but a fair price will not be achieved until the two new ships are put to lease at a decent rate. Unfortunately, they cannot cut the lease rate too aggressively to get the ships into revenue mode or some of their existing short-duration leases will burn them on renewals. Not a good position to be in, but they are pros and I would rather have this team doing the leasing than any other player. Peter
I read Zacks for laughs. They were very bullish on HK only months ago. I have come to believe, Zacks has a coterie of Orangutans madly typing away randomly in a zoo from which occasionally a report emerges. I can't figure out how Zacks makes money given the high price of bananas.
I hope that this "interest" in Liberty Media was just a trial balloon and not a serious expression of interest. Paying a 60% premium for a bunch of old movies is nuts. I have no problem with VOD expanding into non-telephony telecommunications, but leave the content arena to others. Look how well NBC worked out for GE!
Did IAG secretly get into shale oil drilling while I was out of town? It seems to be following all of the shale drillers off the cliff. On reflection, however, Letwin might do better looking for oil rather than gold given his record. Peter
I may not have sufficient understanding of the relationship between raw material price and finished project price, but it would seem to me that although PBF's gross margin may deteriorate slightly, won't increased demand allow it to retain rough profitability (although there may not be any flexibility to improve output if it is operating at 100% capacity)?
You have to love it when a new shortie or two sees a headline about an overleveraged Fridlington blowup (SDRL) and starts trolling about for similar short [potentials to ride and spouts gibberish without even taking the time to check out the company.. An announcement of a Mistral lease would kill their short in a nanosecond.
Although no Y#$%$hoo posters seem to be interested in TPRE, Z#$%$cks just posted #$%$ h#$%$tchet job report on TPRE's recent e#$%$rnings. Although the d#$%$t#$%$ w#$%$s f#$%$ctu#$%$l, the observ#$%$tion th#$%$t TRPE is #$%$ novice in the reinsur#$%$nce industry shows #$%$ tot#$%$l l#$%$ck of underst#$%$nding of the m#$%$n#$%$gement te#$%$m, which includes some top industry veter#$%$ns. I find myself on the opposite side of so m#$%$ny Z#$%$cks' recommend#$%$tions, I question their rese#$%$rch skills #$%$nd honesty. Are they rese#$%$rchers or shills? Peter
The price of oil does not directly affect PACD's revenue since they operate under fixed price contracts (standard in the industry, but not sacrosanct). However, the price of oil DIRECTLY affects the lease rates that oil companies pay to drillers. Drillers are not happy to have to negotiate medium-long term leases in periods of weak oil prices because they can get locked into 2-3 year leases at lower rates. Very short term leases are impractical due to mobilization costs and the extremely high debt service costs of new drillships. While I am confident of PACD's long term value as a deep water driller, they could suffer as the new drill ships go into service and prior leases come up for renewal. By holding PACD and adding in price drops, I am betting that prices will quickly firm as shalers cut back on drilling. Long term, deep water drilling is here to stay. Peter
There are a lot better shorts in the oil patch and among drillers than this. Once new leases are announced, even at a low price, shorts will get it crammed to them. Smart shorts only short slam dunks. I don't see that here. Peter
Cutting 3% off your debt would normally be a positive event, but someone(s) decided it was a good time to dump. Sometimes I think some investors do not know what they own or what benefits the company. This is a huge endorsement of KW's business plan and their recent performance. Peter