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Inergy, L.P. Message Board

richardleeds 105 posts  |  Last Activity: May 24, 2015 6:35 PM Member since: Apr 1, 1999
  • richardleeds richardleeds May 24, 2015 6:35 PM Flag

    You say not more room for growth in Latin America for DTV. Over the last 20 years they have picked up 20 million customers and most of the government ministers that I have read commenting on the industry down there is that the numbers of cable and satellite are going to double over the next decade. Google pay tv prospects and market growth forecasts for cable and satellite and you will see that you are flat out wrong about the market potential. Without doing proper research you will never understand how DTV has been growing its business by over a million a year down there. All of those customers are going to get pitched other business lines from ATT.

  • richardleeds richardleeds May 24, 2015 6:31 PM Flag

    Smalls,

    There is no competition in Mexico and the fees for cable, satellite and phones are high.
    A similar situation exists in South America. ATT-DTV is going to take market share all over that area and it is 500 million people. The government of Mexico does not like the current situation where one or two families control cell phones, tv, etc.

    The debt that ATT has and the debt that DTV has never bothered their bankers. The companies they have purchased in Mexico are going to give them the current 9 million customers plus the future growth as most consumers resent having only one strong company as the go to for service and product and will turn to ATT-DTV and related subsidiaries.

    You have been preaching about how these companies are dead and yet ATT and DTV have been going up in price every year. Latin America is in its infancy in technology and the populations use of the technology. ATT & DTV will be the big elephant in the room as they offer packages to the masses. Look at the market penetration of cable or satellite tv south of the border, and you might understand where ATT share price will go. It is not down.

    DTV is still the best service provider of sports in North America and it will be the same in South America.

  • richardleeds richardleeds May 23, 2015 2:33 PM Flag

    Wall...
    The plastics industry is significant but not as significant to future prices of energy as ISIS. Does anyone really think that ISIS Islamic State is going to stop with Iraq and Syria or Libya? They are not going to stop with 2 or 3 states, they want to conquer the entire area. What Western oil and gas multinationals are going to send workers and spend money on Middle East infrastructure (which requires foreign workers) into this ever expanding war zone. That part of the world is destabilizing more and more each month.
    The U.S. has been unable to stop it after 10-15 years there.
    In fact when President Bush started the destabilization with the removal and execution of the dictator S. Hussein and Obama continued it with the removal of the dictator Kadafi in Libya and the attempt to remove Assad in Syria, it has only become more chaotic and destabilized.
    As the Middle East becomes more dangerous this will have more to do with energy prices.
    Remember, ISIS and the other Muslim terror groups want to hurt the U.S.

  • richardleeds richardleeds May 23, 2015 2:24 PM Flag

    Is this the same Goldman Sachs that a few years back said oil was going to $150-200 a barrel?

  • richardleeds richardleeds May 21, 2015 3:33 PM 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.