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Cliffs Natural Resources Inc. Message Board

xgrk88a 110 posts  |  Last Activity: 9 hours ago Member since: Jul 15, 2004
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  • Reply to

    Q1 Forecast 2015

    by pismire_03 Apr 19, 2015 8:21 PM

    There's always a point to estimates. If you're not thinking about how earnings are determined, where they've been, and where they're going, then how can you understand where the stock is going?

    Knowing that earnings could be in the 40 cent range (which is down 50% from the last quarter) means that the stock could tank into (and or maybe up to a month after) earnings. So I will be a buyer on weakness post earnings. Seems logical? Shorts will see earnings falling q/o/q and use it as a reason to short it back to $1?

  • Reply to

    Q1 Forecast 2015

    by pismire_03 Apr 19, 2015 8:21 PM
    xgrk88a xgrk88a Apr 19, 2015 11:19 PM Flag

    SG and A could be slightly higher because of prospector acquisition (potential lease termination fees or accounting fees or who knows what). Costs from this will fade, but my guess is $16m for SG&A. I figured there wouldn't be as much taxes because of all those write offs last year (although I realize they guided to a 30% effective tax rate). Interest could be a few million higher. And I thought the revenue would be slightly higher than this although I haven't done a detailed analysis.

    I don't mean to be nit picky. You have been spot on, and I think this is probably fairly close to what will happen (as well as fairly close to what they guided to). I don't quite understand why the analysts are so far off?

  • Reply to

    Q1 Forecast 2015

    by pismire_03 Apr 18, 2015 2:58 PM
    xgrk88a xgrk88a Apr 18, 2015 9:22 PM Flag

    Hi Pismire, are you still in PGN? Would love your opinion on that.

  • Is there any news here? Or was it just short covering because oil may have bottomed? Either way I expect this to be way higher in a year.

  • xgrk88a xgrk88a Apr 7, 2015 12:31 PM Flag

    Any other buys? I'm looking for another beat up oil stock not in the offshore space. I am a little scared of E&P's. Maybe a pipeline or midstream company? Any ideas?

  • Reply to

    PGN vs HERO

    by xgrk88a Apr 1, 2015 11:01 AM
    xgrk88a xgrk88a Apr 3, 2015 1:14 PM Flag

    Bull hedger, thanks for the info. That's helpful. So a few more questions (since you seem to understand this well).
    1. Are there high spec mat style rigs? Or is there no such thing?
    2. Are there any ILC's working in the gulf or are they all mat?
    3. Why have the utilization rates been lower for ILC's?
    4. What makes you sure that the GOM area is competitive with the rest of the world on oil prices? It seems that an investment in HERO is a bet on GOM oil demand increasing?

    I am a big holder in PGN and own some NE and RDC as well. I'm just trying to figure things out, and may consider an investment in HERO if it makes sense.

  • Reply to

    PGN vs HERO

    by xgrk88a Apr 1, 2015 11:01 AM
    xgrk88a xgrk88a Apr 2, 2015 11:23 PM Flag

    My understanding is that ILC's are easier to lease. Also, #$%$'s with 300' depth or more have much higher utilization. If you look at HERO, the % ILC is far lower than PGN's % ILC. Or alternatively the % of #$%$'s that can handle 300' water depth or higher is 2/3 of PGN's #$%$'s and only 15% of HERO's. PGN has twice as much debt and twice as much revenue, but also twice as many shares and is about half the price. What's that mean?

  • Reply to

    PGN vs HERO

    by xgrk88a Apr 1, 2015 11:01 AM
    xgrk88a xgrk88a Apr 1, 2015 4:19 PM Flag

    Bull hedger, Good reply and interesting thoughts. But that still doesn't explain why these two stocks mirror each other in price week to week.

  • Reply to

    PGN vs HERO

    by xgrk88a Apr 1, 2015 11:01 AM
    xgrk88a xgrk88a Apr 1, 2015 12:49 PM Flag

    Thanks for your honest feedback.

    What I really need is an answer to why these two mirror each other in stock prices despite the fact they are very different equipment, regions, customers, backlog, valuation metrics. Even the % short is very different. There is no reason these two stocks should mirror each other so closely? If anybody understands why, please let me know.

  • Reply to

    PGN vs HERO

    by xgrk88a Apr 1, 2015 11:01 AM
    xgrk88a xgrk88a Apr 1, 2015 11:57 AM Flag

    How are PGN's fundamentals worse? They trade at about the same EVA / revenue and PGN trades at a much lower trailing EV / EBITDA. PGN has higher quality rigs (although both companies have old rigs as does ESV). But they are really very different companies with different customers, different backlog, different rig quality (HERO has rigs that generally have lower utilization rates in the industry) and different earnings history as well as earnings potential. It seems strange they mirror each other week to week.

  • xgrk88a by xgrk88a Apr 1, 2015 11:01 AM Flag

    PGN and HERO have dropped at almost identical rates over the past 9 months, yet they have different equipment in different places with different customers. Anybody know why it works that way? Just an overall shorting of the sector rather than specific company fundamentals?

  • Reply to

    Moody's states PGN and HERO will suffer most

    by goskiing99 Mar 31, 2015 6:54 PM
    xgrk88a xgrk88a Apr 1, 2015 10:55 AM Flag

    PGN and HERO have mirrored each other through this descent. But one is definitely better than the other. I guess that's just how markets work?

  • Reply to

    Buy out coming

    by xgrk88a Mar 26, 2015 6:06 PM
    xgrk88a xgrk88a Mar 27, 2015 11:24 PM Flag

    I'm not pumping a buyout. I'm just saying this would likely come up through the natural course of debt refinancing discussions. Especially because the debt is distressingly cheap and the equity is an unmeaningful amount relative to the entire purchase. Actually, I typically hold 10 stocks at a time and one per year gets bought out on average (which isn't something I like because it is usually at a lower price than I believe the stock is worth). My last 3 were QCOR (which turned out well because I got MNK stock), BYI and LSI. Others I've had bought out from under me include RUE, PCS and TEA. Longer ago, I owned Applebee's, BUD, and some insurance company (I think Safeco). I also owned EBIX which eventually fell through and became worth more than the buyout price.

    Anyway, I'm just saying it is a certain possibility. If it happens it would likely be a leveraged management buyout.

  • Reply to

    Buy out coming

    by xgrk88a Mar 26, 2015 6:06 PM
    xgrk88a xgrk88a Mar 26, 2015 8:34 PM Flag

    There is a price you'd accept?

  • xgrk88a by xgrk88a Mar 26, 2015 6:06 PM Flag

    Not saying this to pump, but I really believe a management buyout is coming. As the management discusses floating some debt for Prospector, the idea of also raising enough money to buy the whole company would likely come up. With some haircut on debt and premium on equity, they could buy this for $2 billion. Buy 3 more prospector rigs for $600 million and sell / scrap some rigs and they could easily make at least five hundred million of EBITDA on $2.5 billion of total EV. Based on the current cost of money that would be a profitable transaction, and really a no brainier.

  • xgrk88a xgrk88a Mar 18, 2015 12:19 AM Flag

    He talks about the dividend over and over because as a short seller, the high dividend increases the holding cost. PGN dropped their dividend and the stock fell through the floor (because the shorts could push hard)

  • Reply to

    use dead cat bounce to go short

    by abehaus Mar 13, 2015 2:20 PM
    xgrk88a xgrk88a Mar 15, 2015 10:05 AM Flag

    Shares price falling isn't a reason to sell much like share price rising isn't a reason to buy. Each person needs to do their own analysis of where the company is going. It is pricing to revenue down 70-80%. If you think it will be worse than that, then short. If you think it will be better then go long. Pretty much that simple.

  • Reply to

    Paragon releases 10 K...

    by insider_expert Mar 13, 2015 8:22 AM
    xgrk88a xgrk88a Mar 13, 2015 12:15 PM Flag

    The selloff is way overdone. This stock is pricing in a 70-80% drop in revenue by 2017.

  • xgrk88a by xgrk88a Mar 12, 2015 7:58 PM Flag

    So my theory is the falling share price is because of falling analyst earnings estimates for 2015. They all seem to be way off and fall week after week which doesn't make a lot of sense since there is no new news. I still fear that management is guiding earnings down to analysts so the stock will be cheaper and they can do a leveraged buyout. Hope I'm crazy. Regardless the forward estimates are way too low and this will pop on earnings.

  • Reply to

    PGN=Slaughter House

    by abehaus Mar 12, 2015 3:33 PM
    xgrk88a xgrk88a Mar 12, 2015 3:45 PM Flag

    Going all in on this. Dont see this falling to 0.

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