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Chemed Corp. Message Board

tincupinhand 8 posts  |  Last Activity: May 20, 2015 4:02 PM Member since: Feb 1, 2002
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  • Reply to

    Buyout Rumor

    by curt_cpa May 20, 2015 12:35 PM
    tincupinhand tincupinhand May 20, 2015 4:02 PM Flag

    I only hold a spec position and so have no inside info on a buyout offer...but the signs are there.
    Shorts have no urgency to cover mid quarter, which would have otherwise explained the run-up as a pre-earnings cover.
    The tell tale sign I see is the cash burn rate getting worse into 2016, so a capital funding is needed in the near future. Given the lower guidance, any equity related deal would be highly dilutive. Facing this cash need, exploring "strategic alternatives" make sense. So I only hope that their portfolio of patents have some attraction to an industry buyer...all the other pieces are worthless. I'll continue to hold until some of the smoke clears.

  • Reply to

    Thoughts

    by moneytrainparts May 15, 2015 8:11 AM
    tincupinhand tincupinhand May 19, 2015 4:17 PM Flag

    A roll-up play like FENX needs dry powder and with $93 million (over 90%) of IPO proceeds going to selling owners they have left the balance sheet in bad shape. Profits will only be proforma since the old owners expense excesses (to avoid double taxation) can't be relied on for historical earnings needed for bank debt...thus they'll have more expensive BDC debt to fund future deals.

    The track record of the founding companies does not evidence any organic growth, thus financial engineering will be central to FENX success...that is trying to play the old private vs public company PE arbitrage. New acquisitions will need to rely on "deal synergies", aka firing the family members, which is going to make acquisition prices rise and shrink the PE delta.
    If the stock doesn't rise sufficiently to soon get a secondary offering done, they will be stuck in neutral. I don't know that institutional buyers will be that motivated to pay up for this type of story. I fear FENX thus becomes an easy target for shorts who prey on this type of situation. I just can't get comfortable with management executing on this since they gave away too much to get the founders to get the IPO deal done. Wanted to find a reason to buy but must move on.

  • Reply to

    Q1 results here for IPHS

    by shrewd_curmudgeon Apr 28, 2015 3:24 PM
    tincupinhand tincupinhand May 18, 2015 3:07 PM Flag

    The company is properly leveraged given its cash flow cover of debt. The balance sheet actually has a hidden asset that management has not publicly discussed...as of yet. Perhaps in the Q2 conf call we will hear about this catalyst that may dramatically impact their strategic supply chain issues with OCP?

  • Reply to

    Reason Shorts Are Posting Obsessively

    by brad_welshs_buddy Apr 14, 2015 11:06 AM
    tincupinhand tincupinhand Apr 14, 2015 1:37 PM Flag

    Having been a vocal short squeeze proponent as part of the hold thesis in OMEX, I can only hope that the squeamish longs have already been exhausted and that the day traders feeding short covering are also nearing the end of that game.

    I personally had a full position prior to the MINOSA deal announcement but had to do some homework to reassess the risk / reward situation of a difficult deal to understand. Since then, I've determined that the Oceanica downside was nearly eliminated by the involvement of the Altos Hornos group (including Cargill)...that is, enough cash flow to float the boat and place the MIA is in better hands, more likely to not be derailed by any foul play the shorts will be inventing in the weeks ahead.

    Likewise, the longer-term value of Don Diego as the feed stock into the Mexican fertilizer market, likely a complement to the re-start of the Pajaritos ammonia plant which Altos Hornos sold to Pemex a year ago, now adds significantly greater value to the phosphate resource as part of the integrated DAP production needed to replace the imports from Morocco. I am sorry that this can't be spelled out in a proxy filing to quickly educate the retail longs (and quickly put the shorts out of their misery), but it does create the opportunity for some of us longs to re-assess the risk/reward and continue adding to our positions...not as part of the ever speculative shipwreck thesis, but rather the fertilizer thesis which is now less risky and truly puts into play the billion dollar plus valuation of Oceanica. Even post dilution, there are enough scraps left on the table to justify a re-set of the risk /reward calculation in favor of adding to my OMEX holdings at these levels.

  • Reply to

    Bad Start to the new Quarter

    by w_prtt Apr 1, 2015 9:41 AM
    tincupinhand tincupinhand Apr 1, 2015 11:40 AM Flag

    If any company should have tailwinds from the strengthening US dollar, it should be PIR.
    If they can't figure out the online business as MS suggests, well there are others who have already solved that issue who could take PIR mgt out of our misery.
    BTW...good find wprtt on the reason for todays action.

  • Reply to

    AHMSA just out of BK?

    by ga.rscrappa Mar 26, 2015 12:17 AM
    tincupinhand tincupinhand Mar 26, 2015 2:40 PM Flag

    Look at the chart of any major steel producer over the last five years and it will show that AMHSA has a lot of company in the traditional cyclical downturn of steel companies globally. What the real news is relates to who are the major holders of the AHMSA debt. You'll find DE Shaw as a major holder, but more importantly we have the private equity group of the Cargill family (major agricultural business empire in North & Latin America) not only holding AHMSA debt, but also a major private position in Mosaic. Guess who lead the Cargill spin-off of a significant piece (but not all) of their Mosaic interest? JP Morgan, who also advises OMEX on their Oceanica business. Another coincidence... AHMSA sold a moth-balled urea/ammonia fertilizer to plant to Pemex last year. I find these pieces of the Oceanica puzzle fit nicely together for anyone holding a major phosphate resource in Mexico. Bottom line... the AHMSA - OMEX combined businesses appears to be transformation for both parties, and this will attract a whole new class of big money to the party.

  • Reply to

    Double Hurricanes Pam and Penelope !

    by rolandrickperry Mar 14, 2015 11:21 AM
    tincupinhand tincupinhand Mar 14, 2015 6:57 PM Flag

    With the people from Altos Hornos calling the shots, the de-risking of Don Diego reduces the pain of the price they extracted...smart guys! The $100+ mm is cash that guarantees the next several years operations, de-risking cash burn rate we have loathed. Oh...and no shares hit the market, so we've got a de-facto 18 million shares buy-back to see play out ...which only longs benefit from. Stay long

  • Reply to

    Dilution

    by rolandrickperry Feb 27, 2015 10:38 AM
    tincupinhand tincupinhand Feb 27, 2015 12:46 PM Flag

    If a company such as OMEX raises the $5 million, it buys some 90 days of operating time. What could possibly happen during the next quarter? Oceanica looms with several hundred million of value in the global fertilizer marketplace and huge strategic value to Mexico's food security. Vic & SSCA loom with the potential to fund all operating cost for years to come...funding the search for other high potential targets, many of which are being politically readied throughout Latin America (a silver lining from Spain's Black Swan behavior). Will OMEX shareholders feel the brunt of dilution? Or will a funding...say a PIPE or project deal keep new shares out of the market for the next couple quarters? If so, the dilution will be absorbed by the shorts in OMEX during the ensuing "mother of all short squeezes"... your premise on this event looming even more today than when you originally wrote that phrase. Yes...dang good!

CHE
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