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Linn Energy, LLC Message Board

richardleeds 29 posts  |  Last Activity: Feb 12, 2016 2:43 AM Member since: Apr 1, 1999
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  • richardleeds richardleeds Feb 12, 2016 2:43 AM Flag

    The goodwill would be lower in the 10-K by any write off of goodwill during the last quarter. I still wonder why they did not want to disclose in the conference call the amount of the asset reduction for goodwill. I do not understand any company paying out 25% for a dividend when it is debt that can hurt you. The debt cost for the next five years is going to be be higher than the last five years especially if interest rates rise by 1/2% per year. Or even 1% per year in the later years. Having a quarter of a billion subject to rising interest rates for a small company is not wise in my opinion. I do not think they will attract new investors to drive up unit price with that 25% dividend sitting out there. Investors will be waiting for the 50% cut in the dividend and the accompanying price decline in the units with that cut. I think this is the one mistake management is makings.

  • Investors should look at the Yahoo balance sheet or the company balance sheet.
    The total Goodwill and intangible assets are quite a big number in comparison
    to the fixed assets. I really do not like to see such a high number as these two
    assets do not generate revenue, they are non-productive assets as they merely
    reflect excess acquisition prices paid to acquire other assets, etc..

    Between the debt of $700 million and the non-productive assets of $300 million,
    I would like to see them cut the dividend and strengthen the balance sheet by reducing debt.

  • richardleeds richardleeds Feb 11, 2016 1:18 PM Flag

    I liked the CEO saying he was buying shares when permitted and would consider additional purchases when allowed to. The only negative for me was the borrowing base which is close to the amount allowed by its bank covenants. Also, a caller asked what was the amount of the impairment charge to Goodwill and rather than answer the question they told the caller to look at the 10-Q fled with the SEC. I guess they did not want to disclose the magnitude of the loss in the value of Goodwill and have others jump on that issue. Personally, as a retired former accountant, I hate to see Goodwill on a balance sheet because Goodwill is so nebulous, being the excess amount paid for assets above their actual carrying value or appraised value.

    Shares are down again big time today and the market looks like it is in free fall. These corrections are nasty especially if we fall into recession after 5-6 good years with low interest rates. If the market indexes are going to fall another 10% the MLP sector could fall more than that as it is out of favor.

  • richardleeds richardleeds Feb 11, 2016 3:53 AM Flag

    Good call. Management is buying when they can. Problem as I see it with the public is they are afraid of the MLP class or sector. One issue I heard is that the borrowing base is not supposed to be 5 or greater in 2016 and it is currently at 4.8 so there is not margin for a business decline where they might be in breach of lending covenants and have to negotiate with lenders. I wish they had decided to reduce the dividend and pay down some of the debt which would be reported and potential investors would be attracted to a company that said it was going to pay down debt.

  • richardleeds richardleeds Feb 10, 2016 8:15 PM Flag

    I did not say that health care REITS depending on government revenue do not face issues. Obviously private pay health care reits are different from those depending on government funds and government audits and oversight.

  • richardleeds richardleeds Feb 9, 2016 5:47 PM Flag

    I do not think Brad Thomas is the issue regarding OHI and GEN. Nine out of ten stocks around the world have been going down. In the U.S. the market actually went up for five years and markets do not run forever. U.S. markets can easily continue to be in a bear market for 2016 and we could see another 10% or more decline. IMO

  • richardleeds richardleeds Feb 9, 2016 5:42 PM Flag

    if is a "big" word - very warm here in California compared to most winters

  • richardleeds richardleeds Feb 2, 2016 2:37 PM Flag

    next quarter this is going much lower as results will be much worse than this last one. Yeah, CEO keeps talking about being profitable at $60 oil when oil is around $30. This is going to be ugly. Why own the shares as they go down each quarter more than the 2.5% dividend. Should cancel the dividend and buy back shares and pay down debt.

    I would not be surprised if the shares do not decline another 10% by the time he goes on tv again after the first quarter. Then when the next quarter news comes out this falls another 10% that week.

  • BP had terrible results and listening to the CEO last night for about 10-15 minutes it sure sounds
    that it will be much worse this March 31. He kept talking about how they could be profitable around $60 a barrel. The problem is that he kept saying that and the interviewer kept saying oil was at $30+.

    This is going to get very ugly over the next one or two quarters. It is bad now. If earnings dropped 90% they are not going to have earnings next quarter, only a loss in my opinion. CEO said he would not cut dividend. As this gets worse he would be crazy to pay out money at 10% rate when he should take money and buy up shares or pay down debt.

    Crazy.

    Wonder how low this is going?

  • L.A. Times had an article yesterday on the prison population. It has dropped 30,000 as California decriminalized many drug offenses from felonies (prison) to misdemeanors (no prison time). It also said that California would no longer send convicted felons out of state to other prison facilities to be incarcerated. This trend is going to hurt the private prisons.

  • Reply to

    dilution

    by analyst112 Jan 5, 2016 3:27 PM
    richardleeds richardleeds Jan 14, 2016 8:10 PM Flag

    Very unfriendly management for Dream office investors. $5 million in cash and $3 billion in debt. This is a disaster. As the energy sector continues to collapse over the next year what will happen to this REIT and its tenants? The value has dropped 50% this last 12 months and I expect more decline during the next 12. Some of their tenants might go bankrupt and I wonder how they fill that space in a terrible economy.

    You are right, management looks like idiots issuing shares on the DRIP. More importantly why are paying double digit dividends when they have so much debt outstanding.

  • The story here is that shareholders and employees are not well served by this turnover.
    I think the units are still overpriced and are going lower.
    Until management clarifies what has been going on and why the shake up there is a credibility issue.

  • If that happens NMM equity will crater.
    Neither company has any cash of any significance, that is when things go wrong.

  • Reply to

    From the GS Presentation

    by jaime9_2000 Jan 6, 2016 4:15 PM
    richardleeds richardleeds Jan 11, 2016 5:35 PM Flag

    the distribution is not going to help investors that see a 10% decline in energy investments during January and February. Management should have addressed the actual reasoning behind a management change and what they expect to be accomplished rather than letting investors flounder with a lack of direction.

  • Reply to

    dumped it.

    by nadsmis Dec 28, 2015 1:38 PM
    richardleeds richardleeds Jan 11, 2016 5:31 PM Flag

    Management changes usually are made due to management mistakes. Investors need to look at that change and ask why? And what was new management hired to do?

  • Reply to

    Looking at some history

    by richmike775 Jan 11, 2016 11:37 AM
    richardleeds richardleeds Jan 11, 2016 5:29 PM Flag

    Company was on a buying spree taking on quite a a lot of debt during previous years. Those ventures did not increase distributions. So what was all the debt accomplishing?

  • Reply to

    From the GS Presentation

    by jaime9_2000 Jan 6, 2016 4:15 PM
    richardleeds richardleeds Jan 7, 2016 2:34 PM Flag

    No one has an idea what the new management is going to do. The CEO might have to get rid of the under-performing segments of the business and that might mean taking a charge for any loss on the sale of the assets and the writing off of any goodwill.

    Also China is in trouble with its stock market in free fall. This will have an impact on all markets. I think the shares of CLMT can easily drop to $15. Only time will tell. I want to see what the new management is going to do. Obviously you bring in new management when something needs to be straightened out.

  • richardleeds richardleeds Jan 5, 2016 2:34 PM Flag

    China was in the market big time in the last half of 2015 even though industrial production (exports) was down and its stock market is telling us that this is going to be a bad year in 2016 for them. This probably equates to less energy demand in 2016 and they did hoard oil in 2015 buying the commodity cheap.

    If production in China is down and growth is down in China then demand for energy will be down. That is having an impact as China is the biggest importer of commodities in the world.

    I expect companies shipping oil will have a tough year again in 2016. My prediction is that they fall another 10%. Many are predicting that the overall market could have a tough year, correcting down.

  • With the drop in fleet utilization to 80% and 2016 two weeks away and 120 million shares outstanding and commitments to buy 6 more ships during 2016 and 2017 where is the money going to come from for the dividends and ships? Buying ships when the shares are at 5 year lows? I smell a dividend cut by end of second quarter 2016 unless fleet utilization jumps quickly. In fact the dividend should be cut to help pay for ships. Does anyone know of any business that pays out over 10% and does not cut its dividend in recent years.

  • Reply to

    Why heading opposite direction of other refiners

    by bayousaint58 Dec 16, 2015 12:37 PM
    richardleeds richardleeds Dec 17, 2015 1:51 PM Flag

    WTI and Brent are going to be in equilibrium when Congress allows oil to be exported. This will result in lower refinery margins as buying oil in different locations has no wider spreads. In addition the company has been taking on more debt, more equity issues over the last three years for rapid expansion. The expansion was to increase profits and by implication distributions but the cash flow and increase in profits have not been realized yet. Finally, any distribution in excess of 10% usually results in a cut in the distribution. Investors should look at every business that has ever had a 10% distribution and ask themselves what has happened to that distribution. 90%+ of the companies that I have followed over the last decade with a distribution in excess of 10% have eventually cratered in price as distribution cuts are implemented.

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