You are both right in some regard. The housing/subprime crisis was born out of Democrats' doctrine that every American, no matter his income, job status, debt level should be allowed to own a home. They brow beat most banks (maybe Greenspan tacitly as well) to that agenda's end and the banks ran wild knowing the Democrats would forgo oversight as to whether loans were being made responsibly or not, so long as the mandate was fulfilled. Bush on the other hand net met a spending bill he didn't like or approve during a two-term administration.He spent like a drunken Democrat.
That's the right-headed analysis peter, directly from the last CC you are correct. One caveat, some of that expectation by management has to be predicated on the timely roll-out of some of that Helix order for the German manufacturer in March. Hopefully, the new CEO had some visibility re: the March delivery at the time of the CC. They cannot miss by a month, or even a few weeks, at least not to be able to bring home fiscal 3Q results.The market seems cautious to say the least. That may be opportunity knocking. I'll be watching call option volume the last week of April and first several days of May as a indicator of expectations for the 3Q results. I'll be watching put volume and pricing as well. After the last two quarters, the bias could be to buy protection just a few days ahead of earnings, if even one is "not worried about 3Q earnings". Unfortunately those options are not very liquid and I have little idea if they will look expensive or reasonable as regards premiums. It's just another thing to watch for clues.
Nice work, thx for the effort. Maybe we should focus more now on the new management's incentives. The new CFO is clearly underwater (out-of-the money) on his recently awarded options for 25,000 shares. The new CEO is in the money moderately for 100,000 shares. But after hypothetically paying the exercise price, and ordinary taxes on the difference between exercise price and market value marked to market as of today (and I think they only become exercisable over time so that's why I say hypothetically for valuation purposes only), it's not a huge pile of dough--not yet anyway. If new management does not deliver on 3Q and probably also 4Q eps, and the stock drifts lower still, they could both essentially be working for nothing more than salary for the 2014 year. Stock is where you accumulate measurable wealth, especially if you let the price appreciation grow and avoid taxes and exercise until near expiration of the option exercise period. And especially if you get options every year. New management has every incentive to hit good numbers out of the gate, their first full quarter on record. You never get a second chance to make a first impression, or establish credibility.
The COO is an issue. He sold half his stake in the company just ahead of the the March quarter close. It's that simple. Does that make you want to buy the stock ahead of earnings?
I'd be more optimistic than that. But this is clearly now in the company's hands to deliver or not. The backlog and order rates are there. It's all about execution. As you cite, they have a spotty record in that regard. Another earnings disappointment may put them in the deep freeze for a long time, so the March quarter is critical, an inflection point IMO. You can ignore SA in general, they are almost always "talking their positions" long or short. If they really liked it, they would be quiet and accumulating, not trying to buttress their case. They are usually setting up the "other side of the trade".
Creed, valuation will be okay if they start producing both earnings and cash flow from helix. You have to remember to back out the nearly $4 cash per share from both earnings and cash flow multiples as it produces next to no earnings or cash flow while it sits on the Balance Sheet, but could ultimately be deployed internally or externally to do so. As for Helix, they just have not produced any positive numbers yet to turn the net losses to net income. Hopefully that will come but it has been one hell of a wait, like about a decade, for betting on the come w/nothing to show bottom line as yet. Credibility is becoming an issue, particularly as former key executives have left just "before the turn". We'll see. The cost structure is hurting them w/the low revenue volume.
This stock has been hit w/everything except the kitchen sink: Insiders departing, insiders selling stock, two difficult quarterly reports in a row, a complete negative blitz on 3D by the financial periodicals and t.v. financial networks, a nearly one-third decline in the share price from early January. What else could they possibly throw at this to try and knock it down?
You would have thought that Barrons article focused on PRCP and not DDD. Getting a bit silly now and close to an overreaction?
Maybe both. There has been a lot of insider selling for sure. But Barron's, CNBC, Bloomberg have been applying tremendous negative pressure to 3D. Whether it is that or the COO and a director selling, there are forces converging like a Rhonda Rousey armbar to get investors to cry uncle. Eventually the negative pressure applied is just too much to take. The marginal trade here is a sell, and that sets the price, even on low volume. Even the true believers are seemingly afraid to step into the negative swirl and increase their positions. Buy and hold doesn't set the price, the marginal seller or buyer does. The timing of the insider selling is curious, coming just before the end of the quarter. Those willing to "look over the valley" seem willing to stand pat, not double down.That doesn't really help the stock much.
too bad, because PRCP has absolutely nothing to do w/3D printing, but the shorts have Barron's in their pocket and you can't fight that. It provides an excuse to sell that's all. Call it a "negative halo effect".
thanks, I assumed that was the case. I was concerned the high dividend income would be considered passive foreign income. I guess since the income is derived from operating drilling rigs and not from some paper financial instrument or investment that is why it escapes the PFIC designation.
It is foreign, but it is generating active income rather than passive income as far as I can tell. However its assets are generating dividends equal to 100% of free cash flow. Not sure if it escapes the PFIC designation which brings w/it onerous tax rates and filing requirements and adjusted cost basis calculations. Can't find anything regarding it being a PFIC or not being a PFIC in the press releases or documents on the company's website.
Not sure about the company, but you have been 100% right on the stock price, and in the end that is what matters. Kudos to you. Credit where credit is due.
I think Armstrong is a smart guy. Ultimately he will have the right guy in place. He has 100,000 reasons to do so.