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Inergy, L.P. Message Board

richardleeds 104 posts  |  Last Activity: 13 hours ago Member since: Apr 1, 1999
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  • richardleeds richardleeds 13 hours ago Flag

    Smalls, you keep reporting false information on your posts. You say "how much debt is AT&T going to assume on the DTV? Answer $20B." If you could read a balance sheet you would see that DTV has $5 billion in cash sitting around and debt of $20 billion, so that is net debt of $15 billion. You say it will take "a long time just to pay for for DTV's existing debt." How about learning how to read financial reports. DTV has $5 per share in earnings. Earnings are funds left after all expenses are paid including interest on debt.

    You also keep implying that DTV will be cash flow negative with a modest dip in satellite TV revenue, but you fail to comprehend the DTV quarterly reports that show actual revenue of $65/share and earnings of $6/share.

    Also, what is not in the residential customer numbers in either North America or South America are the businesses that are hooked up to DTV. Take L.A. Fitness with 600 locations. My location has over 50 televisions hooked up to DTV on each treadmill, stairmaster and every wall and pillar. This chain is growing and all other businesses that take 50-1000 TV hook ups from DTV at each location are never going to switch to cable or other options. I am speaking of the hotel management companies around the world such as Hilton, Sheraton, Hyatt, etc.

    Not only are your numbers and misrepresentations false, you just do not understand the future products such as monitoring security at home and office, data and broadcast into cars/trucks on monitors. These are all future business growth opportunities.

    Week after week , month after month you post false statements about these companies and you fail to understand why they have grown in market capitalization year after year after year.. My initial investment in DTV at $16 per share is now $90+.

  • I have been investing in high yield equities throughout the last
    decade. It is important when to get in and when to get out.
    The high yielders always cut the dividend it does not matter if
    they are BCD's, REIT's, MLP's or shippers.

    The problem with shipping is that there are too many ships
    being built in the shipyards.

    The yield and the pay out ratio are warning signs on NMM and
    the lack of profitability in NM is also a warning.

  • Reply to

    Wow "The Street" is trashing CHK

    by adamloser2233 May 15, 2015 11:53 AM
    richardleeds richardleeds May 16, 2015 2:06 PM Flag

    Listening to the Street is like listening to any financial writer, they do not know how to make money 90% of the time. Carl Icahn bought another 7 million shares this year in CHK and now has 73 million shares. That is all any investor in CHK needs to pay attention to. If he failed to up his investment then buyers of CHK should take notice but he bought more.

  • richardleeds richardleeds May 15, 2015 4:22 PM Flag

    I too wonder why the CEO has failed to purchase a billion dollars of shares at the current low price. It sends a bad message.

  • richardleeds richardleeds May 15, 2015 3:27 PM Flag

    You are right in part. Natural gas is not surging though, it is growing slowly
    in its use..
    Coal is killing the planet.

    I saw a utility CEO on CNBC this week and he said that they are converting
    four coal power plants to natural gas at this time and he said there is going
    to be more and more of that by all utility companies each year.
    Also, exports to Mexico on a new pipeline to Mexico are going to be expanding
    exports.
    Finally, next year we start exports of natural gas.
    While it is a slow process there are more fleets using natural gas rather than
    gas or diesel each year.
    All of this switching may be slow but the prediction is that exports of natural
    gas will take about 10% of the current production over the next ten years, increasing
    by 1% of production each year.
    Take that 10% and switching by power plants over the next ten years and that
    is probably another 10% going to domestic power plants at 1% each year.

    Carl Icahn owns 66 million shares. The shorts really will not be able to drive
    the price much lower. Who is smarter, the pack of shorts or Carl?

    What happens if CHK sells some of its land and production for $4-5 billion.
    I think the shorts take it in the shorts because another sale similar to the one
    a year ago will allow CHK to pay off a ton of debt.

  • richardleeds richardleeds May 14, 2015 7:34 PM Flag

    Beast,

    Forget NFL ticket which is given as a one year free bonus. DTV is going to eventually do the same thing will soccer in Brazil, Argentina and Mexico. They will convince soccer to make them the exclusive provider of every game on the continent as they do with American football. Once they do that and offer a free year of every soccer match, Latin America subscriptions will explode. I expect another 10-20 million subscribers for ATT-DTV in South America over the next decade.

  • richardleeds richardleeds May 14, 2015 7:27 PM Flag

    No, I do not know the number of pesos but you can multiply the revenue and earnings per share by 20% and then the number of pesos per dollar. I have no idea what that does for you. DTV's current revenue is 20% from South America. It does not report Mexico in those figures as they own only 40% of the Mexico company. Since, DTV has around $6 in earnings per share, I assume $1.25 per share is from south of the border. The company expects this number is going to grow to $2.50 per share as the market is growing rapidly in South America and with pay tv, the weak subscribers leave and those that tend to upgrade offerings and equipment stay with the provider.and usually pay more each following year as subscription fees grow higher and higher. Once hooked it is difficult to give up.

  • richardleeds richardleeds May 14, 2015 2:43 PM Flag

    Smalls,
    DTV has $6 per share in earnings, that is after paying its debt service. Take a look at earnings per share. Earnings per share means after expenses are paid. Once you understand that definition you should then comprehend that ATT will use that $6 per share in earnings that DTV makes to pay the 5% dividend, still have excess cash from DTV on those earnings. Then take the lower prices achieved by the combined company for content purchases, the bundling benefits of DTV with T's internet and cell operations, reduced employee count, new business for T in Mexico and South America and you get to savings from synergy of $2.5 billion a year. This savings will go to paying off all the debt taken on for the DTV purchase over 7-8 years. That debt will disappear with the content savings and new business in South America. You need to stop thinking that the new customers in Mexico and South America will not reach the bottom line of ATT. You just ignore those 500 million people down there and how ATT will reach them for the first time during the next decade. DTV alone in South America and Mexico is going to pick up another 10 million customers over the next decade.

  • richardleeds richardleeds May 11, 2015 2:20 PM Flag

    The distribution after tax will give you a decent return. Investors just have to expect no growth in the equity.
    Nothing wrong with a 7% return after tax as long as the equity does not start to decline in value. I perceived that they needed a nice sale each year to demonstrate that they can grow the equity value. Remember, the insiders not only get the distribution, they get salaries and options and other benefits.

    I think the pipelines and tanker fleets that move oil around the world offer more cash distributions and equity appreciation potential each year. So, I am going to pass at this time. Now, if the stock market corrects in the next year and equities drop 10-15%, I will take another look.
    regards,
    R.

  • richardleeds richardleeds May 9, 2015 6:59 PM Flag

    The companies I zeroed in on actually have a 2-3 year history without improvement so I assumed 2015 was not going to be a turnaround for all of them. So, yes they are speculation not misleading as most companies do not reverse 2-3-4 years of side-ways or decline. I am in the process of being taken out of 3,000 shares of Direct TV (DTV) which is being acquired by AT&T. I held on to that company for a decade as I watched yearly results improve year after year after year. My investments where a company has flat or no growth results for 2-3-4 years do not tend to reverse that. My CHK holding of 10k shares has gone nowhere year after year after year. When management improves the operations every year and revenues and earnings improve every year, that is a recipe for a winner. Look, you say I am misleading readers, that may or may not be true but we only need to wait another 2-3 quarters and my judgment will either be right or wrong, that is what makes for good investment results.

  • richardleeds richardleeds May 9, 2015 3:39 PM Flag

    ATT's future is the amount of data that their cell phone users will use as they migrate away from computers and use phones more. Then there is South America and Central America which has 500 million people compared to the 300 million in the U.S.

  • richardleeds richardleeds May 9, 2015 3:36 PM Flag

    bobhb,
    DTV is not cable. It has no in-ground infrastructure. Cable is run through the streets and each city gives the operator a franchise to operate for 20 years or 30 years. DTV operates up in the sky and can serve every city in my county which has 28 cities and 4 million people. The cable companies that operate in the county are three. ATT is the company that can provide internet and cell phone coverage, that is one of the reasons for the merger of ATT & DTV. Another reason for the merger is that DTV owns 40% of the biggest provider of pay tv in Mexico and they are the largest provider of pay tv in South America. Central America and South America have 500 million people and the pay tv penetration is 50% up from 10% just a decade ago. Most of the governments in South America are saying that cable and satellite penetration in their countries will match North America in another 10 years so that the growth is going to be incredible. That is one of the reasons that ATT has acquired the 3rd and 4th largest carriers in Mexico and why they are buying DTV.

  • richardleeds richardleeds May 9, 2015 3:17 PM Flag

    Ca7/11,

    Yes you can write off Goodwill over 15 years. It does provide some shelter on the distributions to the investors. But that big number on the balance sheet as it is deducted on taxes each year is not bringing in any revenue. It does bring in some tax savings to the extent their are some taxes being paid. Perhaps the effective tax rate is 15%-20% to the extent they report taxable income, then they save that percentage. The other 80% of the deduction is in essence wasted.

    Now, individual investment performance where I said there is little to show over the last 3 years:
    Triedien had $6.4 million of EBITDA in 2012, first quarter is only $.9M, so $3.6 million annualized. Significant decline which results in significant decline in the value purchased.
    Look at Camelback, they paid $250 million for this company, a monster holding for them. EBITDA was $40 million back in 2012, first quarter 2015 is $7.5 million which is $30 million annualized, a 25% decline in earnings, so what does that do to the $250 million purchase price when earnings are hit 25%. In a good company the earnings grow each year from 2012-2013-2014-2015, note here.
    Ergobaby had $64 million of EBITDA in 2012, first quarter of 2015 is $16 million so no growth here in 4 years. Get the picture I am painting?
    Clean Earth, EBITDA was $26 million in 2012, first quarter of 2015 is $5 million, so that is $20 million on an annual basis which is a 25% decline which reflects a decline in the value of what they purchased.
    Sterno's revenue in 2013 was $134 million, in the first quarter of 2015 it is $28 million which works out $112 million in annual revenue, a decline in revenue of $22 million.
    These five companies are showing about a 20% decline in value the way I see it, yet the value is carried at the purchase price on the balance sheet. If you assume very little or no value in the Goodwill and intangibles and a decline in the value of these 5 companies, then there is really no equity for investors

  • richardleeds richardleeds May 9, 2015 2:44 PM Flag

    They distributed the proceeds from successful companies that are no longer in the portfolio. Investors are now holding mediocre investments except for one company. Look at the balance sheets and the performances of the remaining companies. The equity that really existed in the balance sheet has been distributed. Think about how they are going to pay the loan off when they are distributing 100% of the cash flow. The loan is going to take forever to be paid down.

  • richardleeds richardleeds May 9, 2015 2:56 AM Flag

    AS a retired CPA I can tell you that goodwill and intangibles generate no cash flow and no one will buy it. We call it blue sky and it is not worth anything to anyone. You can not see it or sell it. It is a number on the books. Now if someone wants to buy your entire company you might get something for it, but only if someone is desperate to buy the company.

    Look at the presentation and see that 1/3 of the companies they have invested in have not improved their top line or bottom line performance during the last four years.

    The company unloaded the good companies in previous years and only have one more superstar company left in the portfolio and its market value is $240 million.

    This company has too much debt and too much goodwill and intangibles.
    The equity is zero if you consider that the company is unable to sell the goodwill or intangibles because there is nothing to show any buyer. It is just a number on the balance sheet. You are not able to photograph it, show it to someone --- get the idea!!!

    I think this is just going to decline more and more.

  • richardleeds richardleeds May 9, 2015 2:49 AM Flag

    I worked in the tax area rather than audit and financial reporting. Goodwill and intangibles are usually not saleable and have no real world value unless you can sell the company for more than you paid for it.
    Looking at 1/3 of the companies owned by CODI investors can see that they are making less money now than four years ago. While the economy has been very good over the last four years, it is apparent that 1/3 of the portfolio is not doing very well as revenues are not really growing on them and there is an actual decline in the bottom line performance.

    An investor could argue that 1/3 of the portfolio would find no buyers as the performance has not only not increased it has declined in revenue and bottom line performance.
    When you add the Goodwill number to the 1/3 of the portfolio that is not appreciating but might be declining, then factor in the debt that is carrying a part of the portfolio, I see a company that is covering up a major part of the portfolio that is actually quite problematic.

    They are trading on the successes of the early years where they have unloaded the super stars in the portfolio, have one left, and a bunch of companies that are not generating any distributable revenue to investors.

    Yes the intangibles are not saleable either and generate no cash flow. The Goodwill and intangibles is a big number, so is the debt when you add it to the total. There is no equity left, just the distributable cash flow.

  • I am a retired CPA and was doing some due diligence on CODI.
    Looking at the last presentation and over 1/3 of the companies
    actually have a deterioration of EBITDA over the last five years.
    Second, take a look at the balance sheet and they are carrying
    a value of $800 million in goodwill. Write off goodwill and the
    $800 million on the balance sheet in equity vanishes.
    These two criteria would indicate that the price of CODI is
    supported by the distribution but there are issues with the
    company and the only asset that looks outstanding is the
    equity of $240 million in FOXF.
    The company is trading on its previous successes but 1/3
    of the holdings are actually declining in performance from 4
    years ago, so those holdings have probably declined in value
    even though the balance sheet reflects the investments in those
    companies at cost when they were acquired for $800 million
    in value above the assets acquired which is reflected in the
    Goodwill. Any investors or financial guys have any concern
    about the Goodwill number and how it can wipe out a large
    portion of the equity?

  • richardleeds richardleeds May 8, 2015 1:56 AM Flag

    Smalls, the big money in this country is sports: college games, specialty subscriptions that carry those conferences for a fee, professional sports on networks which are accessible for free and then subscriptions for the major league baseball channel, the NFL channel, the NBA channel, the NHL channel and of course the big gorilla in the cage: ESPN and ESPN2. Even look at the 300 million dollars paid in to watch a fight.
    Sports is the financial windfall on TV and it costs money to get the best packages and that is delivered by cable and satellite. The goal in the future is to bundle internet, cable/satellite and cell phone. ATT-DTV is going to be in the driver seat in the combined North America and South America market. There are 800 million in that market. Can ATT-DTV capture 10% of that market. Sure they have a chance to do that.

  • richardleeds richardleeds May 7, 2015 8:01 PM Flag

    beast, it happens that smalls is correct about the difference in profitability of the U.S. entertainment market and the fact that DTV-Latin America only brings in 20% of DTV's revenue. However, the market in Latin America is in its infancy at only 50% penetration. He fails to grasp the fact that ATT-DTV can sign up another 20 million customers over the next decade and as the middle class acquires higher income levels they will pay for more programming and better equipment, such as a DVR that tapes 5 programs at once which is what DTV provides. Also, when you double your market in Mexico, Central America and South America over the next decade, the billions in cash flow that DTV generates now which is $65 per share just keeps growing as ATT-DTV South America adds millions of subscribers each year to its customer base down there. Smalls does not seem to understand that if DTV could acquire 20 million customers in its first ten years south of the border, it can acquire the next ten million much faster due to the lack of competition. I expect ATT to have 20-25 million customers in North America after the merger and 20 million in South America which will grow to 40 million in South America over the next 10 years. That will be a total of 65 million TV sets bringing in revenue. The subscription rate in the U.S. might average $100 a month in the U.S. and only $60 per month in Latin America, but the customer base in Latin America should be double the customers in the U.S.

  • richardleeds richardleeds May 7, 2015 7:45 PM Flag

    Smalls getting personal and saying people are clueless does not address the facts. Personally, I do not want to have my 3,000 shares of DTV taken out by the merger, but since they are, I am required to evaluate the potential for ATT-DTV or sell.
    You keep saying that the profits of DTV or ATT-DTV are going to come under attach but in reality DTV has not been hurt by the churn or loss in customers in the last 5 years.
    The customer base in South America is in its infancy as DTV has built out that infrastructure and continues to do so at 1 million new customers each quarter. These new customers are not profitable as the installation and capex is quite expensive. In Latin America the cash flow that reaches the bottom line actually takes a couple of years to reach a positive number as DTV has to write-off this cost over the term of the contracts which are usually 12-24 months depending on the customer contract.
    You should not assume we are lousy investors making lousy decisions because we have made big money in either ATT or DTV over the years.
    My ten year hold of DTV may not be continued as I am doing my due diligence on the delivery of entertainment and data and the prospect for ATT continuing to deliver a 5% dividend and 5% or greater share price appreciation each year.
    ATT actually has the financial ability and product to take DTV's 20 million customers in the U.S. and another 20 million in South America, for a total of 40 million new customers and actually negotiate entertainment or content at much lower prices due to a larger subscriber base. You are talking about 800 million people in South and North America. DTV has dozens of satellites covering both continents. This is a serious moat for competition to deal with.
    AT&T will get to sell into this market and in the U.S. AT&T is buying up data spectrum delivery and that is also the future. But buying entertainment content is all about how big is your subscriber base.