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American Capital Agency Corp. Message Board

turbofever 95 posts  |  Last Activity: Feb 13, 2015 12:17 PM Member since: Jun 7, 2012
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  • Reply to

    RRGB

    by jkprice Feb 12, 2015 12:02 PM
    turbofever turbofever Feb 13, 2015 12:17 PM Flag

    The moment you called it a gift, you shoulda know the results wouldn't be good today ;)

  • turbofever turbofever Feb 11, 2015 12:21 PM Flag

    Thanks for posting about the Fearnley website, it's been frustrating trying to gauge NAO's fleet status. I wish we could find out the dayrate amounts for the NAO fleet too. I disagree with the claims in their press releases that NAO is "very transparent."

    It looks like they have 2 PSV's in need of contract (NAO Thunder, Blue Storm), two that have recently started short term contracts (Blue Viking, Blue Protector), and then no status on the remaining 4 (Blue Fighter, Blue Prosper, Blue Power, Blue Guardian)?

    I'm concerned that Net Charter Revenue dropped 30% last quarter ($14.3m down to $9.89m), and also that the revenue reduction is as much or more than the 2 newbuilds would add even if fully chartered (for the current quarter they aren't). Even if the 2 newbuilds returned Net Revenue's back to the $14 million's in the current or future quarters, the dividend hasn't been sustainable at that level, I'd have to go check the numbers but I believe it was roughly falling $3mil - $3.5mil short per quarter.

    In order to sustainably cover the dividend, right now it's feeling to me like it will take all remaining newbuilds (the last arriving September 2015) operating nearly full time and with no additional material drops in dayrates.

    Thoughts?

  • Reply to

    NAO YIELDING 17.15% @ 10.5/ SHARE......

    by bondy92037 Feb 5, 2015 11:32 AM
    turbofever turbofever Feb 11, 2015 11:27 AM Flag

    SDRL and LNCO shareholders both asked that same sort of question ("Where are you going to get such a high yield?") several months ago. They also made the same sort of statements about the dividend looking solid.

    Just be careful, and IMO don't over-allocate until there's more clarity on the situation, especially since the dividend isn't currently sustainable.

  • Reply to

    "OMG! What a freakin' nightmare"

    by dividendhunter Feb 3, 2015 5:20 PM
    turbofever turbofever Feb 5, 2015 1:36 PM Flag

    Up until a few months ago, I'd at least have interest in hearing what Gartman had to say when it came to oil and the overall market. He seemed like a seasoned veteran who could keep his cool and objectivity, and would draw upon his decades of experience. And the quips between him and the Fast Money crew were mildly entertaining.

    But along the lines of what you are saying, he started becoming more and more over-the-top in his statements, and I started finding his behaviors mirrored the over-emotional, quick-to-overreact, long-term-wisdom-lacking "investor" that we all try so hard to avoid being (but from time to time fail at of course). First I think he said he was totally freaked out by how the market was acting, the sky was falling, and he went totally to cash, a rookie mistake. A week or two later of course the market had bounced very nicely and he looked foolish. Then after his comments roughly a month or two ago about oil being like whale oil and that it was going to go to $10 and never come back and that $30 wasn't the bottom, etc... Well, now I don't even bother listening to him, I just keep fast-forwarding as I do through the commercials. He's truly become worthless.

    Though I'm pretty sure he is making $$ starring as that older gentleman on a sofa calling Liberty regarding the one of many different catheters available! (Man what a horrible, over-played CNBC commercial!). Between those commercials and all the cialis/viagra stuff...

  • Reply to

    AI

    by respectful321 Feb 4, 2015 8:36 AM
    turbofever turbofever Feb 4, 2015 11:52 AM Flag

    You might want to check out Lunco's posts on the Yahoo AI forum, written in maybe the past 30 to 90 mins or so.

    It sounds like much of the book value drop may relate to accounting on part of the big tax-loss carryover they've had on their books for years.

    Core earnings (which goes towards covering the div) held up great, they have nearly 160% coverage, and management noted in the CC that the increasing spread is positive for earnings. Especially when it comes to mREITs (or mREIT-like stocks, in AI's case), one has to ask how much one cares about book value declines vs. the company's ability to generate profits and cover their div. They tend to move inversely: when the spread widens, profits increase but BV tends to drop. Though in such a case, BV should not move nearly as extreme as what AI's just did, as mentioned that may be a result of 2014 expiration on some of those tax credits per Lunco.

  • Reply to

    Did I miss something about SFL?

    by golob.chad Jan 28, 2015 2:32 PM
    turbofever turbofever Jan 29, 2015 1:31 PM Flag

    And let's not forget LNCO, with its great 13-14% yield in the $20-22's. Now with its div cut, it still yields 13-14%. Except of course the stock trades at $10, a 50%+ loss of capital. I'm sure we can all do the math regarding how many years of $1.25/yr it takes to make up an $11+ loss of capital...

  • Reply to

    Sold YHOO...$50.50.....

    by rbgambler99 Jan 28, 2015 12:59 PM
    turbofever turbofever Jan 29, 2015 1:07 PM Flag

    Great timing!! Congrats.

  • Reply to

    OT: yhoo bounce

    by marklibera Jan 20, 2015 6:12 PM
    turbofever turbofever Jan 21, 2015 12:01 PM Flag

    IMO, Yahoo is just following BABA for now. Compare the two on the 5-day. Unless rumors of Marissa's plans for Yahoo are somehow pulling BABA up and down ;)

    However Yahoo acts after the 1/27 ER, be prepared for additional volatility (in either direction) a couple days later on 1/29 (the first day of trade here following BABA's pre-market ER).

  • Reply to

    YHOO and BAC are killing me....

    by rbgambler99 Jan 15, 2015 11:59 AM
    turbofever turbofever Jan 15, 2015 1:34 PM Flag

    I hear ya.. After being treating me well earlier on, BABA has been repeatedly punishing me hard. Take a look at a 5-day chart comparing YHOO and BABA by the way - they're essentially identical. BABA is wagging the YHOO dog, if BABA keeps going down, YHOO will follow.

    I have really got to make a stronger effort each time I enter a new position to define a protective sell-point and stick to it. I'm happy I recently sold off half of my BABA position but most of the big damage was already done.

  • Reply to

    NAO declares

    by bobdbeck Jan 7, 2015 7:55 AM
    turbofever turbofever Jan 11, 2015 1:04 AM Flag

    William, perhaps your mistake is seeing that $10.7m operational cashflow number at the top of page 5 and thinking it was for Q3. If you re-check the heading you'll find it's actually a trailing **9 month** number. NAO specifically states in the Q3 ER:

    Page 1, 2nd bullet: "Operating cash flow was $6.0 million. Adjusted for
    a non-recurring one-time cost, operating cash flow was $7.5million." (Non-GAAP).

    Page 2, 3rd paragraph: "The Company's operating cash flow was $6.0 million in 3Q2014, compared with $7.7 million for 2Q2014. Adjusted for the non-recurring costs, operating cash flow was $7.5m in 3Q2014."

    Our numbers agree that the dividends paid for the *3* months of Q3 are indeed $10.54mil. So NAO is paying out $10.54mil per quarter in div's, and their operating cashflow of around $7.5 million (which already excludes the 1-time $1.5mil IPO expenses) leaves them with a $3+ million shortfall every quarter. That is not a sustainable dividend.

  • Reply to

    NAO declares

    by bobdbeck Jan 7, 2015 7:55 AM
    turbofever turbofever Jan 9, 2015 9:49 PM Flag

    Thanks keebon, always good to know someone else came up with the same numbers & conclusions. Re: Statoil, my memory is fuzzy but didn't they cancel out of some North Sea drilling contracts a few months back?

    Anyways, I agree with your hunch that the div will be maintained but not increased. My worry is more that they would maintain the div as long as possible even if things were getting dicey, and that stock holders could die a much slower death so to speak (ala PSEC, LNCO) as capital gets eroded away by a falling share price.. But frankly the bar isn't so high for NAO to be able to maintain.. Just get 2 of the 4 newbuilds signed up for a decent rate and if they can continue their existing contracts then they can probably tread water with the div until the space gets better. Like you, I could more than live with that div, just as long as I wouldn't find myself losing a lot of capital that would take years for the div to restore...

    Someone post here immediately the moment they catch wind of potential new contracts for NAO ;)

  • Reply to

    NAO declares

    by bobdbeck Jan 7, 2015 7:55 AM
    turbofever turbofever Jan 9, 2015 4:03 PM Flag

    I generally agree but would not cite NAT having paid a dividend for 70 straight quarters as anything that should inspire confidence in management. They spent most of those years steadily reducing their dividend, from what used to be over $1/qtr to an average of just $.15c/qtr for 2014.

    And the stock price has gone from the upper left to the lower right over the past few years too. $30 in 2010, down to around $8 - $10 for 2014.

    For many of the worst years, the CEO would appear on Cramer spouting a jolly, optimistic attitude. Likeable guy, but a total disconnect with the stock's performance.

    One might mistakenly think I'm negative on NAO from some of my comments but honestly I'm just trying to stay as objective as possible. I'm not saying anyone should sell, I just think there's reasons in the current climate that one might want to wait to buy, with the risk of missing a little pop if good news is announced. I only keep room for a few oil stocks in my total portfolio and this could be one of them but only after they've shown me they've navigated the current risks. I'm 4x bitten, 8x shy ;)

  • Reply to

    OT: Major housecleaning

    by marklibera Jan 9, 2015 12:21 PM
    turbofever turbofever Jan 9, 2015 2:22 PM Flag

    One of the lessons I "learned" in 2014 and was also able to then successfully practice particularly with oil, is simply not to try to time bottoms. Specifically, it's better to give up a few percentage by buying on the far side of the U or V curve.

    Oil production does not stop on a dime of course, prior capex spent last year will continue to turn out a lot of oil for a bit, even as new capex budgets are drastically cut. If you didn't catch Cramer yesterday (I think it was yesterday and not Weds), it is worth watching the segment regarding why oil should go lower. Off the top of my head, he cited two companies which recently reported that their new capex budgets are now cut by over 50%, yet they are still projecting 20-30% greater 2015 production than 2014 (!!).

    It's simply going to take more time for this to play out or at least until we can start to feel any confidence about getting back in. It doesn't mean oil prices "have" to get much lower, but it probably means they aren't going to get higher for a while either, so no one is likely to lose much money by getting out and waiting on the sidelines.

    I suppose that was a long way of saying: Though oil sure has gotten low, I suspect your sales will serve you well and that you will have an opportunity to re-buy the stocks lower at some point. Dunno if we hit $30's or not but personally I'd guess low-$40's is in the cards.

  • Reply to

    SDRL.....UGH

    by bobdbeck Jan 9, 2015 1:04 PM
    turbofever turbofever Jan 9, 2015 1:55 PM Flag

    Side note: Now at $1.30's, sadly NADL's stock price is practically an "Option". And to think it wasn't quite a year ago that NADL IPO'ed at $9, and as recently as September was trading at $10.

  • Reply to

    NAO declares

    by bobdbeck Jan 7, 2015 7:55 AM
    turbofever turbofever Jan 9, 2015 12:58 PM Flag

    November Post #1
    It appears the div was set in anticipation of the money coming in from 2015 newbuilds and is not sustainable based on the current fleet. $.45 div/qtr and 23.4 mil shares outstanding = $10.5 mil in divs to pay. Quarterly cashflow (not incl the 1 time IPO expense) is $7.5 mil, a $2.5 mil shortfall.

    At $25k/day, each incoming newbuild should gross $2.25 mil/qtr.

    So after the 2 Jan newbuilds begin contracts, chances are the current div will be shored up. Then, when the next 2 arriving in mid-2015 begin contracts, there's the potential for div expansion (or, should day rates all get nailed across the board on NAO's whole PSV fleet, at the least allow NAO to continue to maintain over 1.0 div coverage)

    #2
    Clean, debt-free balance sheet. 6 contracted ships running, 4 new-builds due in 1st half of 2015. G&A likely to stay in-check even as the fleet size rises. The current div is not sustainable as-is (it is not covered by the revenues from the 6 ships). Instead it was set to take into account the future income that the new-builds will provide. I think if they contracted just 2 of the 4 new-builds, they could cover the div. Contracts for the remaining 2 would add notably extra coverage, possibly even allow a raise. Prior dayrates were ~26k, so keep that in mind when contracts are announced.

    I think the stock is a good bet assuming we don't see North Sea active drilling-rig count dropping. Though these ships don't have to operate in that region, it would work out best if they did. If & when NAO starts announcing contracts for the 2 newbuilds in Jan and then the 2 newbuilds around June, the stock should hopefully climb as the great-yielding div first becomes sustainable, and then looks to be "over-covered". They could alternatively use the extra income to further expand the fleet, obviously that could increase risk though if there are concerns that the number of active rigs in the deep sea drilling market declines and supply ships become too plentiful.

  • Reply to

    NAO declares

    by bobdbeck Jan 7, 2015 7:55 AM
    turbofever turbofever Jan 9, 2015 12:43 PM Flag

    I'll have to disagree. The dividend is not fully covered at this point.

    After this message, I will copy and re-post a message or two I wrote here back in November, since the same questions on NAO seem to continue to come up. The posts seem as true today as they were then. Given we're in January now and so far there hasn't been any announcement of contracts for the 2 incoming newbuilds, each investor needs to decide for themselves if they want to be in before first hearing news re: if this month's newbuilds have landed contracts.

    Personally, I'm playing things very conservatively in the oil space, and for NAO I'm willing to miss out on what I'd guess would be an immediate $1-$2 pop on such news. I'd rather buy a little higher but with confidence that their new supply ships are getting good contracts in this environment, given the lack of demand for utilizing additional deep sea rigs right now and North Sea rigs in particular (the preferred space for their PSV's, though they can operate elsewhere).

    I'd like to get back into NAO, I'm just cautious right now as I don't feel oil & the deep sea market is going to suddenly rebound and stay up. Way too much production still occurring even as capex is starting to fall.

  • turbofever by turbofever Dec 16, 2014 2:06 PM Flag

    Neither here nor there... Just wanted to point out where Google's stock (GOOGL) has sunk to. Down almost 10% year to date, and down 17% from its highs earlier this year. Has dropped 8% just in the past month and is knocking on the door to $400's. Momentum sure seems to have fled from the stock.

    I had been casually/inactively waiting for a good pullback in Googl to start a long-term position. For now I'm not so sure, probably based on the same reasons the stock has been pulling back... I question what they're spending their $$ on (ala Amazon) and wonder how they'll be growing business in the future. Seems like there's better tech picks out there in the meantime on any major market pullbacks.

  • Reply to

    OT: Carter Worth saying to short the SPY

    by marklibera Dec 15, 2014 12:03 PM
    turbofever turbofever Dec 16, 2014 12:25 PM Flag

    I am rarely one to try to time a major bottom any more when something has been getting repeatedly pounded, but if oil actually gets to low-to-mid $40's I would have to force myself to buy. Doesn't seem sustainable long-term especially as production must fall off in the coming year if prices stayed anywhere near that low.

    Enough people in the market probably realize this, which would make me guess that we don't get to see $45 & under. Who knows though.

  • Reply to

    LINE/LNCO popping in A/H

    by bobdbeck Dec 15, 2014 6:34 PM
    turbofever turbofever Dec 16, 2014 10:05 AM Flag

    Agreed, the price action has been horrid. In the case of this morning, interestingly enough both stocks have quickly reversed since market open and swung $.75c+, both in the green now. I'll keep my fingers crossed for those still in 'em.

  • Reply to

    LINE/LNCO popping in A/H

    by bobdbeck Dec 15, 2014 6:34 PM
    turbofever turbofever Dec 16, 2014 9:46 AM Flag

    Yesterday in AH it looked like the Linn stocks might finally catch a break and maybe get some shorts to cover today given these deals going through and Linn being able to pay down a lot of debt... But sadly, no dice so far today.. Perhaps the morning's Baird downgrades (with $10 price targets) are responsible.

AGNC
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