Forward margins keep sliding and sour grades are ripping. Coker margins are not helping like they have in the years past. Peak gasoline demand is behind us and smart money will sell into the gc gasoline strength being fueled by fall maintenance.
Eps estimates keep sliding and the Ebitda/ev ratio is at historic highs. No compelling value here until mock is back into the mid/low 70's
Merck announced that they were re-evaluating their entire development partnership pipeline. Ecyt hitting a major bump was the decider I think. Why pony up another 600-700 million without seeing a clear outcome. In my opinion, I think Merck would rather let ecyt deal with sorting out the issues at hand and buy the company for 3-4b in a few year than to pump more money into ecyt at this juncture.
I might add that I believe in selective small molecule delivery. Some think immunotherapy is the future, but I think that is just part of the treatment portfolio oncologist will have at their disposal in the coming years(incy is my immuno play)
I Said this month ago. ECYT is an early stage small molecule drug company that is in the process of developing a new, and more effective, targeting/delivery method for cancer drugs. they also are working on similar drugs for r.a. which has large potential.
i truly believe that if you look back at ecyt in 5 years you will be kicking yourself for either not holding on, or not buying at current prices. pcyc was a similar experience for me. the market under appreciated their drug molecules and when they too hit a bump the stock imploded. 10 years later and 100k investment is worth millions. unlike ecyt, pcyc had a much shakier balance sheet.
bottom line. last week was nice, but really just noise. ecyt could rally $10-20 and it would not reflect the true value of the company. i anticipate positive news in early oct and more positive news in 2015. bottom line, i am fine to own ecyt if it drops $2 or rallies $4. either way i am not selling any shares, but would be a buyer $6.25 and lower.
buying scale down 6.40 to 6.05 and kicking out 7.05 to 7.25. continue to trade the range while waiting for some positive news if/when.
reading about immunotherapy being the future vs. small molecule drugs. pretty funny given the cost difference. either way, it is long from over for ecyt.
CVI looks like teh better short/trade to me. higher distribution(1.50 &.75) which puts the stock back at the top of the trading range without factoring in the impact of the fire. balance sheet is "lighter", margins 20% lower year on year and hedges not in place. i'd rather trade wti/brent cleanly on the merc then bet the stock will perform if that spread widens.
i think cvi can drop $4-5 from here.
you are looking at q3 run rates 40kbpd++ lower than last quarter due to the coffyville fire. add in lower capture rates and there will be a big fat ugly quarter coming up. i find it amusing that the stock rallies in the afternoon in 200 share trades.
sell morning rallies, cover and revese at noon and sell the close. repeat daily.
Reuters) - U.S. crude oil futures plunged by nearly $2 and Brent crude oil futures fell by more than $1 per barrel on news that the 115,000-barrel-per-day Coffeyville, Kansas, refinery could be down for four weeks following a July 29 fire.
CVR Refining said on Thursday that its Coffeyville refinery could be down four weeks after the fire in the facilities isomerization unit. The Coffeyville refinery receives supplies from the Cushing, Oklahoma, delivery hub.
I posted when i bought a what price. i have said many times before. ECYT is very much like PCYC of ten years ago. some early failures in early clinical trials, but eventually they refined their science and rose from the ashes. ECYT. you either believe in the thesis or folate receptors and their payload delivery science or you don't. I believe!
i think you will see positive data leaking out over teh next 12-18 months and come 5 years from now everyone, including myself, will be kicking themselves for not buying more.
buying back in today. last trade I captured $1.00 on the upside and this time I am looking for $2.5-3.00.
earnings call coming up and I anticipate more clarity as the management puts to rest many of the b.s. rumors. ask yourself a question, why hasn't the SEC jumped in here if there was fraud? I know the answer!
6.05 long. I have a bid at 5.85 for more.
Tumbling Dice.....Now what? you have your $2.00 and you are looking at new lows on the 211 crk spread and no hedges for next year. good luck. you have been lucky up until now i give you that.
fridays we rally on air and today we are seeing much of the same. nothing more than shennanigan's ahead of the "special $2.00 dividend" if you ask me. cvi will airdrop $2.00 plus soon as it goes ex divi which is no shocker. i am more interested to know how they maintain the payouts with wti/brent roofing. 50+million of crude storage unfilled on the gc and margins 20%+ lower year on year(cal 2015 effectively unhedged).
anyone chasing yield may end up losing far more than their yield by blindly holding the common shares.
Can you please clarify what you mean "exports are so limited as to have no effect on profits" thanks
also, given that refining margins for 2015 and 2016 are more than 25% lower than 2014... how do you expected cvrr and cvi to maintain payouts given that they have virtually nothing hedged for next year and further out. peak earnings were q2'2013 and i struggle to understand why people don't see the problems presented regarding the payout.
i'd start by saying that q2'15 ulsd hedge of 1 million bbls is 11,000 bpd. that is tiny and not going to protect cash flow. why won't it protect cash flow... well. per page 14 of their may investor presentation, their 2014 nymex heat crk hedge was $28.03 bbl. currently the bal'2014 margin in $19.87bbl as of 1:00 est and cal2015 heat crk is 22.50 or almost 20% lower than their 2014 hedges. as a result, there is little chance that CVRR can maintain their curret distribution rate in 2015 without a significant recovery in refining margins(looks unlikely)
oh... E14 rins are trading .5400 cpg, not where you mentioned.
net net, i would not buy unless you discount for 20-30% lower distributions in 2015/2016. yes, i am short CVI.
i am not sure how one can think refiners(mid cont in particular) are a "buy" given that wti/brent is -7.00bbl and cushing is actually fairly tight. refined products mkts are saturated and there are no signs that reuns will ease up until we get to the fall maint. as a result, i view refiners as neautral at best. i might add that peak earnings were in q2'2013 and continue to errode. as a result, the p/e's continue to expande as does ev/ebidta.
now we should look at 2015 hedges, or lack thereof. how do you suppose the cash distributions will be maintained given lowere forward margins and virtually no hedges in place for 2015? even if they hadge, it will be significantly lower than 2013 and 2014. what am i missing?
wti/brent continues to contract while mid cont refining margins compress. peak earnings have long passed us and if you guys think the company can sustain the current dividend payout structure you are eternal optimists imho. year on year will have a bit of an uptick given that their cracker was down this time last year, but that is only going to add to the net surplus on group3 gasoline.(cal 2015 group gasoline traded .2100 cpg under the nymex on friday and was offered over. definately a heavy mkt)
the saving grace are the merc hedges that they have in place, but those winding down... but kep in mind they did not hedge their basis risk bewteen the group and the merc. duh!
mid cont ulsd margins continue to come off hard. gasoline margins now doing the same. given that the gov't just opened the door to exports of condensate i doubt it will be long before equity producers push the envelop e and we see heavier crudes being exported as well. mid cont runs are way too high relative to demand and CVI has all their hedges on the merc. sure, they make some moeny off teh hedges, but they are exposed to basis risk between the merc and group(getting smashed the last 6-7 weeks) and those hedges will continue to evaporate.
re ichan.... more likely that he cuts and runs while he can since he has gutted the company of the easy cash.