The fundamental outlook in oil is changing dramatically and IMO, far too quickly. Peak US production in 2014 was ~8.5M BOEpd and global oversupply is estimated between 1-2M BOEpd. As of this past Friday, US producers have shut in ~20% of the total operating rigs with the past week alone accounting for a, record setting, 7% reduction in operating rigs. The price of crude has dropped far too fast and irrationally in response to a 1-2M BOEpd oversupply. US producer activities to date (20% rig reduction) will lead to a ~1.7M BOEpd reduction on global supply and they are still shutting down operations aggressively. Additionally, it would be shortsighted to not anticipate that the likes of Russia, Europe, Venezuela, Brazil West Africa, etc. haven't shutdown a significant number of low margin operations to preserve their financials in this depressed price environment. Everyone is listening to the talking heads and not applying common sense to the countless micro activities and their combined effect on the macro environment of this relatively inelastic commodity. IMO, the resulting under-supply will far exceed the current over-supply in magnitude, setting up an opportunity for financial windfall that will be as great, or greater, than that experienced with US banking and auto manufactures between Feb 2009 and Mar 2010. GLTY!
I like it today under $4. Gold getting taken to the wood shed, but volume is very light?? I see near-term support at $1240+
You have interpreted correctly. Another way to look at it; If the bottom falls out on gold (as forecasted by many), then AUY has put a fairly decent floor in place at $4.40ish. IMO (yep everybody has one), anything you can get below $4 and maybe a little higher is a safe bet. GLTY.
Check the details. The -$2.61 eps last quarter was do to a non-reoccurring write down of $2.8B. There operations last quarter still yielded over $900M in gross profit. Analyst eps estimates for 2015 are at $2.30 which has been adjusted down to less than 1/2 of the 2014 eps. I anticipate the divy for 2015 to be cut to the .30 to .50 range. GLTY.
I'm with you. They will likely announce final payout of .75 and a significant divy cut for 2015 which will send the stock higher. GLTY
CAT will likely be down 10-15% today and DE will follow. I will be looking for long positions on both in the $68-72 range later this year. GLTY
You asked "What will be Virtra's cost per lounge": IMO, Virtra won't have any costs unless they negotiated very poorly with Modern Round. The way I've scene this type of arrangement work in the past, is Virtra will get their typical profit margin for the equipment they install in lounges, maybe even a littler higher margins. The 5% ownership Virtra is getting in Modern Round is essentially the royalty fee (a dynamic revenue/profit stream if Modern Round is successful) for use of Virtra's specialized technology and equipment. GLTA!
Sentiment: Strong Buy
Some random thoughts: Most villages and small townships won't be able to afford a 300 degree system, but could easily budget and justify a single screen or 180 degree, but I think it is safe to assume each county in the US could afford and greatly benefit from a 300LE. IMO, commuting beyond the county distance for training becomes costly and inefficient for most small LE offices. The US has 3100 counties and lets say Virtra could capture 50% of that business. I would say that is a conservative saturation estimate for US law enforcement. What is even more interesting is that those conservative numbers (1550 units) would generate nearly $390M in initial sales (assumed a conservative $250K per unit) and add to that a very high margin recurring revenue stream of $31M/year. So IMO, Virtra has a very long way to go before they approach saturation with existing products. Hopefully while they work at achieving saturation in the US and around the globe, they can develop some new products and business initiatives. GLTA!
Sentiment: Strong Buy
TASR market cap and PE is very frothy. They need to buy something to add revs and eps. Virtra would compliment TASR nicely at about .50 pps :-) Happy holidays to all!
From Yamana's 2014 guidance following June's acquisition of Malartic it's around 131,083 GOE/month.. Before Malartic it was around 87,750 GOE/month.
You can estimate about 26 gals of diesel per ounce of gold mined. From there you can do the math. Diesel prices have not come down near as much as the crude and gasoline prices have, but I think you are still looking at Q4 diesel being 25 cents a gallon cheaper than Q3 average and will likely come down more before reversing. GLTU!
I'm with you. This trade feels good below $10. If nothing else, the divvy will be better than I can do sitting on cash. GLTU!
Completely agree with your post:
- Don't expect a block-buster quarter
- Virtra has no requirement to report by the 15th, it's just their pattern
- Always better to report bad news on a Friday and save the good news for Monday.
- If no report tomorrow morning, that could be positive signal for a Monday report.