Zacks Shipping Review – DRYS Takes A Hit

 

 

DryShips (DRYS) Misses on Q4 Earnings, Beats on Revenues – Analyst Blog

Zacks

DryShips Inc. (DRYS) declared lackluster fourth-quarter 2014 financial results. Quarterly GAAP net loss came in at $24 million or 4 cents per share compared with a loss of $24.4 million or 6 cents per share in the year-ago quarter. Moreover, adjusted net income per share of 2 cents missed the Zacks Consensus Estimate of 5 cents. Quarterly total revenue stood at $598.4 million, up 38.7% year over year. Moreover, the figure surpassed the Zacks Consensus Estimate of $550 million.

Note : Our Jack A. Bass Managed Accounts are long out of shipping ( as per our November newsletter.

Quarterly total operating expenses stood at $459.9 million, up 32% year over year. The rise in expenses can be mainly attributed to higher drilling rig operating costs. Operating income in the reported quarter stood at $138.5 million, up 66.9% year over year. Adjusted EBITDA was $298.7 million as against $179.8 million in the year-ago quarter.

At the end of the fourth quarter of 2014, DryShips had $658.9 million of cash & cash equivalents and $5,517.6 million of outstanding debt on its balance sheet compared with $739.3 million and $5,568 million at the end of 2013. The debt-to-capitalization ratio stood at 0.56 compared with 0.59 at the end of 2013.

Drybulk Carrier Segment

The Drybulk Carrier segment generated $54 million in revenues, up 1.9% year over year. Time charter equivalent revenues totaled $46.1 million, flat with the year-ago quarter figure. Time charter equivalent (TCE) rate stood at $12,974, down 2.5% year over year. Total voyage days for fleet stood at 3,555, up 4.2% from the year-earlier quarter.

Oil Tanker Segment 

The Tanker segment generated $45 million in revenues, up 36.8% year over year. Time charter equivalent revenues came in at $23.9 million, up by a whopping 120% from the prior-year quarter. TCE rate was $26,003, up a significant 100% year over year. Total voyage days for fleet grossed 920, flat year over year.

Offshore Drilling Segment 

Quarterly revenues from Drilling contracts totaled approximately $499.4 million, up 44.5% year over year. At the end of the reported quarter, this segment had an order backlog of $5.2 billion.

Zacks Rank & Other Stocks to Consider

DryShips currently has a Zacks Rank #1 (Strong Buy). Other favorably-ranked stocks in the shipping and other related industries are Danaos Corporation (DAC), Nordic American Tankers Limited (NAT) and Spirit Airlines, Inc. (SAVE). All three stocks currently sport a Zacks Rank #1.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Warren Buffett BERKSHIRE HATHAWAY INC. SHAREHOLDER LETTERS

BERKSHIRE HATHAWAY INC.

SHAREHOLDER LETTERS

Many of the letters below are presented in PDF format. If you do not have Adobe Acrobat® Reader® software on your computer, use the link to go to Adobe’s web site for a free download.     Adobe
1977
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For shareholders and others who are interested, a book that compiles the full unedited versions of each of Warren Buffett’s letters to shareholders between 1965 and 2012 is available for sale at this link.

 

ALL SHAREHOLDER LETTERS INCLUDE COPYRIGHTED MATERIAL REPRODUCED WITH PERMISSION

 

 

Apple to Hold Special Event March 9th the Apple watch

 

(Bloomberg) — The countdown has begun to Apple Inc.’s next big thing: the Watch.
The company on Thursday sent out invitations to an event on March 9 in San Francisco, where it will unveil details for the release of the Apple Watch, a person with knowledge of the matter said.
Optimism about Apple has been growing since Chief Executive Officer Tim Cook first took the wraps off the smartwatch, along with larger-screened iPhones, in September. The new phones helped fuel record profit in the last three months of 2014. Apple shares are trading near all-time highs, giving the company a market capitalization of about $758 billion. The event gives Cook the chance to show off the gadget’s capabilities and convince consumers they need one.
“The development community has had at least three months to start writing apps so I think they’ll profile some of the best apps,” said Tim Bajarin, president of Creative Strategies Inc. “It will start giving us reasons for why we may want the watch.”
Cook said last month that the smartwatch will ship in April. The connected, fitness-tracking wristwatch is the first entirely new gadget line to debut since he took the helm at Cupertino, California-based Apple. The company hasn’t given much information about the gadget’s battery life or how much models will cost, other than $349 for the basic version.
Time Shift
“Spring forward,” reads the invitation to the event, to be held at the Yerba Buena Center for the Arts Theater at 10 a.m. The headline refers to the annual switch to daylight savings time, when Americans move their clocks and watches forward by one hour. This year, the time shift begins on March 8, a day before Apple’s event. The event’s focus will be Apple Watch, said the person with knowledge of the matter, who asked not be identified because the topic wasn’t made public.
Apple Watch, with a rectangular touch-screen face, includes sensors to detect pulse rates and other health-related features and must be paired with an iPhone to work properly. It will come in two sizes and three styles — classic, sports and gold editions. The company may give more details about styles and prices at the event.
“The creativity and the software innovation going on around Apple Watch is incredibly exciting,” Cook said when he announced the watch would begin shipping in April.
Sales Projections
Morgan Stanley has projected Apple Watch will generate $8.1 billion in revenue in fiscal 2015, including $1.35 billion in the March quarter, while RBC Capital Markets said Apple could “conservatively” generate $6.5 billion from 20 million watch shipments.
At a Goldman Sachs Group Inc. conference earlier this month, Cook talked about uses for the watch, saying he uses it to track his activity levels.
“If I sit for too long it will actually tap me on the wrist to remind me to get up and move because a lot of doctors believe that sitting is the new cancer,” he said. “It’s something that you’re going to think, ‘I can’t live without this anymore.’”

Oil Continues to Fall, and OPEC Isn’t Helping

February 23, 2015

It was another down day in the oil market: Crude prices fell more than 2 percent, with WTI finishing Feb. 23 below $50 a barrel for the first time in almost two weeks.For a moment, things looked like they might go the other way. OPEC President Diezani Alison-Madueke said in a Financial Times report that she would call an emergency meeting of OPEC if prices continue to fall. Oil prices were buoyed by the news—briefly—until they fell again.

In addition to being president of OPEC, Alison-Madueke serves as Nigeria’s oil minister, and cheap oil has helped sow crisis in her country. The Nigerian currency, the naira, is at all-time lows against the dollar, terrorist attacks by the Islamist group Boko Haram have worsened, and national elections were recently postponed more than a month. It makes a lot of sense that Nigeria would want to put a floor under oil prices by hinting at an OPEC resolution—even if such a resolution is unlikely.

Some reasons for doubt:

  1. Another OPEC delegate told Bloomberg News today that OPEC has no plans to hold an emergency meeting. OPEC is scheduled to meet in June, and all 12 members must agree to hold a special meeting in the interim.
  2. It’s unlikely that Saudi Arabia, OPEC’s biggest producer, would agree to such a meeting, not to mention actually cutting production. Saudi Oil Minister Ali Al-Naimi has said OPEC won’t change course even if prices go to $20 a barrel.
  3. Even if a meeting were called, it’s not clear whether OPEC is capable of mustering support to cut sufficient production to boost prices. It would require imposing a shrinking market share for oil-dependent economies that are already stretched.
  4. Even if OPEC members were to cut production enough to increase oil prices, how would the legions of U.S. oil producers respond? Probably by putting all those idled rigs back into action, adding more supply to the market and undermining OPEC’s efforts.

In oil markets, perception is everything. It’s very possible that today’s talk of an emergency meeting was simply meant to reassure unstable markets. Sometimes the threat of taking action removes the need for taking action.

If that’s what happened, it comes at a risk for OPEC. The fact that markets brushed off the threat so quickly may imply that OPEC’s threat is losing credibility.

 

Banks still use accounting tricks to hide their true condition

 

Pacioli’s invention was the double-en

 

Pacioli’s invention was the double entry accounting

 system; in fact he’s known by bean counters today as the father of accounting.

This was a major and much needed innovation at the time.

In the 15th century, Italy was dominating global trade and commerce.

Yet unlike in the centuries before where merchants were primarily transporters and traders of exotic goods, 15th century merchants had essentially become proto-bankers whose primary business was extending and trading credit.

This was a major change in the way that business was done, and it absolutely demanded a new way to keep track of it all.

That’s exactly what Pacioli invented. And his system of accounting is still being used today, over 500 years later.

This was a seminal moment in business history—the near simultaneous birth and convergence of credit-based money, banking, and accounting that would eventually become the global financial system.

It revolutionized everything.

Back then, just as today, few people really understood it. And those who did were often clever enough to find loopholes in the system to hide their fraud. Especially banks.

There are some really stunning (and sometimes hilarious) examples of early banks who learned how to cook their books and misstate their capital using Pacioli’s system.

Curiously very little has changed. Banks still use accounting tricks to hide their true condition.

Bloomberg showcased one such technique last year, exposing the way that many US banks are rebooking their assets from “available for sale (AFS)” to HTM – Hold To Maturity

 

-  they’re called “available for sale,” because the bank has to sell these assets to pay their depositors back.

But here’s the problem—many of these investments have either lost money, or they soon will be. And banks don’t want to disclose those losses.

So instead, they simply redesignate assets as HTM.

It’s like saying “I don’t care that these bonds aren’t worth as much money as when I bought them because I intend to hold them forever.”

Thing is, this simply isn’t true. Banks don’t have the luxury of holding some government bond for the next 30-years.

This is money they might have to repay their customers tomorrow, which makes the entire charade intellectually dishonest.

That doesn’t stop them.

JP Morgan alone boosted its HTM mortgage bonds from less than $10 million to nearly $17 billion (1700x higher) in just one year. This is a huge shift.

Nearly every big bank is doing this, and is doing it deliberately. This is no accident. And there’s only one reason to do it—to use accounting minutia to conceal losses.

But the accounting tricks don’t stop there. And in many cases they’re fueled by the government.

One recent example is how federal regulators created a new ‘rule’ which allows banks to consciously reduce the risk-weighting it assigns its assets.

The Federal Financial Institution Examination Council recently told banks that, “if a particular asset . . . has features that could place it in more than one risk category, it is assigned to the category that has the lowest risk weight.”

This gives banks extraordinary latitude to underreport the risk levels of their investments.

Bankers can now arbitrarily decide that a risky asset ‘has features’ of a lower risk asset, and thus they can completely misrepresent their investments.

Bottom line, it’s becoming extremely difficult to have confidence in western banks’ financial health.

They employ every trick in the book to overstate their capital ratios and understate their risk levels.

This, backed by a central bank that is borderline insolvent and a federal government that is entirely insolvent.

It certainly begs the question—is it really worth keeping 100% of your savings in this system?

I would respectfully suggest finding a new home for at least a portion of your savings.

After all, it’s 2015. You no longer need to bank in the same place as you live and work.

It’s possible to establish an account offshore—at a safe, stable, well-capitalized bank overseas in a country with no debt.

You might even find that the bank will pay you a reasonable interest rate that actually exceeds inflation (shocking!).

And in many cases you may be able to do all of this without leaving your living room.

It’s hard to imagine anyone would be worse off.

The Bottom Line

 

Jack A. Bass, B.A., LL.B.an independent professional firm and with its affiliates provides a full range of offshore corporate services – registration and administration of IBCs and Special License Companies, Registered Agent and Registered Address services, directors` and company management, shareholding and custody of documents and bank account introduction.

When structured properly, history shows that a well-informed offshore strategy can have an immediate and  generational impact on your wealth.

Who Is Designing Your Offshore Strategy ? ( do you have a strategy?)

The most important thing that you MUST do is seek advice from a qualified advisor – Jack A. Bass, B.A. LL.B. (someone who understands international tax jurisdictions and tax law) . Your advisor must understand the benefits of particular offshore jurisdictions. It is your responsibility to take action.

In most jurisdictions you can set up your offshore company in as little as a few weeks. We most often start the process with registering a company name and sending in the right documentation and supporting documents for the incorporation and a bank account(s) or merchant account for you and your business.All of this can be conducted by internet on in rare cases we will attend in person – for you.

Contact Information:

To learn more about asset protection, trusts ,offshore company formation and structure for your business interests (at no cost or obligation)

Email info@jackbassteam.com  OR

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Do You Have A Plan – or are you just planning to think about a plan ?

 

 

Trading Alert PHM.V

Patient Home Monitoring

Volume and Price Moving

Rapidly growing by mergers and acquisition team

PATIENT HOME MONITORING CORP(PHM:TSXV, CA)

$1.11CADIncrease0.03(2.78%)Volume: 
Above Average
As of 23 F

COMPANY DESCRIPTION

Patient Home Monitoring Corp. (PHM), formerly International Health Partners, Inc., is a Canada-based company which provides in-home disease management services for patients in the United States cardiology market. The initial focus is on providing in-home monitoring equipment, supplies and services to patients in the United States who take prescription blood thinners, such as Coumadin (Warfarin). In June 2014, it acquired Care Medical Partners, LLC…

Greek Banking / Euro Crisis Will not End Well – get out while you can UPDATE FEB 22

Originally posted on Tax Haven Guru:

The IMF’s director Christine Lagarde, greets the Greek finance minister, Yanis Varoufakis

Greece Won’t Ever Be Able to Pay Off Its Debts With Austerity

FEB 22

The drachma will be a currency which it can print to its heart’s content. Greece would thus no longer be subjected to the confines of the Euro gold standard. This ability would be the source of most other consequences.

What would be the consequences, then? A few predictable ones follow:

  • Since the drachma could be printed at will, as soon as it became official currency it would devalue by at least 40% or so;
  • Inflation would shoot up by a similar amount, internally, at least for a short while. The inflation would first be concentrated on foreign goods, but not limited to them;
  • Greeks — Employed unemployed, pensioners — would thus instantly lose around 40% of their purchasing power;
History shows the country is facing a wall few nations surmount

When will Greece run out of…

View original 963 more words

Canadian Oil Sands Output Growth Defies Prices : Increases Output -and more to come

Athabasca Oil Sands
Athabasca Oil Sands
A machine works at the Suncor Energy Inc. mine in this aerial photograph taken above the Athabasca Oil Sands near Fort McMurray, Alberta, Canada, on June 19, 2014. While production from forests of Northern Alberta started in the 1930s, output didn’t ramp up until the late 1960s and 1970s after companies including Suncor Energy Inc. and Syncrude Canada Ltd started operation.
U.S. Oil Production Increases The Most Since 1993

(Bloomberg) — The deluge of Canadian oil that’s adding to a global glut and driving prices lower is showing few signs of slowing.
Even with crude down 52 percent since June, output will grow 3.5 percent this year from the world’s fifth-biggest producer. The Canadian dollar is near a six-year low and materials cost less, helping oil sands producers cut costs and keep pumping. Oil would have to stay between $30 and $35 a barrel for at least six months, down from about $50 now, before wells and mines are shut, according to the Canadian Energy Research Institute.
Surging North American production has contributed to a global glut, pushing U.S. supply to the highest in three decades. OPEC opted in November to maintain output to hold on to market share. Oil sands supply is growing even as the number of rigs drilling for oil in the U.S. has fallen to the lowest in almost four years. RBC Dominion Securities estimates that oil companies have cut $86 billion from spending plans.
“We are above the price where existing projects” get shut down, Robert Johnston, chief executive officer of risk consultants Eurasia Group, said in Calgary Feb. 4. “Even projects that are under construction will continue.”
Western Canadian Select, the heavy crude that serves as the benchmark for oil sands, traded at $37.10 a barrel, according to data compiled by Bloomberg. It was $13.50 below West Texas Intermediate, the U.S. benchmark.
Lower Oil
Canada exported 2.93 million barrels a day in the third quarter, 97 percent to the U.S., National Energy Board data show. Canadian production will rise to 3.89 million barrels a day this year, according to the board. Conventional crude and condensate will drop 3 percent, while output of oil sands and upgraded synthetic crude will grow 8.3 percent.
Oil sands companies extract bitumen, a thick hydrocarbon, either by shoveling it from mines or injecting steam into the ground to melt it and then pumping it out. While production from forests of Northern Alberta started in the 1930s, output didn’t ramp up until the late 1960s and 1970s after companies including Suncor Energy Inc. and Syncrude Canada Ltd started operation.
Break-even costs have fallen 18 percent from a year ago and range between $25 a barrel for producers who use steam and $40 for the mining operations, according to Bank of Montreal estimates. This compares with $10 to $25 estimated by the Paris-based International Energy Agency for conventional Middle East and North African producers.
Smaller Producers
WTI fell 82 cents to $50.34 a barrel on the New York Mercantile Exchange. The U.S. benchmark will drop to $39, Jeff Currie, Goldman Sachs Group Inc.’s New York-based head of commodities research, said Thursday in an interview on Bloomberg Television.
Some Canadian output from smaller producers who have to borrow money may be at risk, Juan Osuna, IHS Energy Inc.’s senior director for North American oil, said by e-mail Feb. 10. Oil sands explorer Laricina Energy Ltd. said last month it was in default.
The Alberta oil sands growth parallels the Gulf of Mexico, another region where producers have invested for the long term. Offshore rigs will rise 30 percent this year compared with 2014, according to data from Wood Mackenzie, an industry consultant.
Canadian Oil Sands Ltd., the main owner of the Syncrude Canada mining project, expects to spend C$40.19 ($32.16) a barrel this year producing synthetic crude from oil sands, down from a previous forecast of C$45.69. Production is forecast to rise 8.9 percent this year.
Global Players
Suncor, which cut oil sands operating costs 6.5 percent in the fourth quarter from a year earlier, is proceeding with its Fort Hills project, scheduled to begin production in 2017 and ramp up toward 180,000 barrels a day. This comes after Suncor said it will cut 1,000 jobs and lower its 2015 capital budget by about 13 percent.
Imperial Oil Ltd. said Feb. 2 it will examine costs and capital investments even as it plans to double output from its C$20 billion Kearl oil-sands project in Alberta and boost production from the Nabiye facility this year.
While starting an oil sands project now wouldn’t be economical, companies will push ahead with those under construction and projects already operating will continue, Jackie Forrest, vice president of Calgary-based ARC Financial Corp., said in a Jan. 29 e-mail.
New Capacity
While it can take years for a new oil sands operation to ramp up to full production, a total of 423,000 barrels a day of new capacity is under construction and scheduled to be in operation this year, up from 116,000 barrels added last year, according to data published in Alberta’s winter 2015 Oil Sands Industry Quarterly update.
Most of the oil sands companies are “global players” and “they can afford to operate at a loss within the oil sands area,” Dinara Millington, a vice president at CERI, said by phone yesterday.
Oil sands miners would have to spend billions of dollars on reclamation of tailing ponds if they shut, she said. “It’s not as simple as turning off a truck or shutting in a well.”

Supertankers At Work For Higher Rates

Tanker Glut Signals 25% Slump In Freight Rates This Year

as Oil Prices Fall

February 19, 2015

Tanker Glut Signals 25% Slump In Freight Rates This Year
Oil tankers are anchored near the Port of Long Beach, California.
Photographer: Tim Rue/Bloomberg

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Breaking Down the Greece Deal
(Bloomberg) — The world’s supertankers are sailing at the fastest speeds in 2 1/2 years as a collapse in crude oil prices spurs demand for cargoes and drives up daily returns owners can make from deliveries.
Very large crude carriers, each about 1,000-feet long and able to transport 2 million barrels of oil, sailed at an average of 12.57 knots this month, according to data from RS Platou Economic Research, an Oslo-based firm. The fleet, whose steel weight is about 27 million metric tons, last moved that fast in August 2012.
Tanker rates have surged amid signals that China accelerated purchases of crude to fill its stockpiles after Brent crude, the global benchmark, collapsed last year. Prices plunged in part because the Organization of Petroleum Exporting Countries pledged to keep pumping oil amid a global oversupply. The ships earned an average of more than $71,000 a day since the start of January, the best start to a year in Baltic Exchange data that begin in mid-2008.
“Freight rates are high because there’s a lot of oil trade at the moment,” Frode Moerkedal, an Oslo-based analyst at Platou Markets, an investment adviser linked to the research company, said by phone on Thursday. “OPEC has refused to cut production so there’s more oil being shipped.”
VLCC speeds from 14-to-16 Feb. were 6.7 percent higher than 14-to-16 Nov., according to Platou. The speed for the ships when voyaging without cargoes rose 10 percent over the same period to 13.31 knots.
Fuel Costs
The daily average rate to hire a VLCC on the benchmark Middle East-to-East Asia route was $71,772 so far in the first quarter, compared with an average of $47,614 in the fourth quarter, according to Baltic Exchange data.
VesselsValue Ltd., a London-based firm that provides shipping data, also estimates VLCCs are sailing at the fastest since 2012. The acceleration is in part because falling oil prices have cut fuel costs and made it more profitable for owners to transport cargoes, said Kaizad Doctor, analytics director. Ship fuel is known as bunker.
“This can be attributed to the simultaneous decrease in the oil prices and the consequent reduction in bunker prices but also due to the increase in rates caused by the Chinese re-stocking cut-price crude,” Doctor said.

Protect Your Portfolio Profits Offshore  see http://www.youroffshoremoney.com

Oil: Value trap or buying opportunity?

 

Oil Well cartoons, Oil Well cartoon, funny, Oil Well picture, Oil Well pictures, Oil Well image, Oil Well images, Oil Well illustration, Oil Well illustrations

 

Oil: Value trap or buying opportunity?

Depends if you are investing or a speculating/trading. The previous week’s oil inventory numbers show U.S. crude oil inventories are at the highest level for this time of year in at least the past 80 years. (Source: U.S. Energy Information Administration 11Feb15 for week ending 6Feb15) Investors reacted Tuesday to Citigroup indicating that $20 oil/barrel may soon be on the way. They must have an awful lot of short positions they need going back the right way: “Oil Could Plunge to $20 & this Might be the end of OPEC”: Citigroup goes on to say, “The recent surge in oil prices is just a “headfake,” and oil as cheap as $20 a barrel may soon be on the way, as it lowered its forecast for crude. Despite global declines in spending that have driven up oil prices in recent weeks, oil production in the U.S. is still rising, wrote Edward Morse, Citigroup’s global head of commodity research. Brazil and Russia are pumping oil at record levels, and Saudi Arabia, Iraq and Iran have been fighting to maintain their market share by cutting prices to Asia. The market is oversupplied, and storage tanks are topping out. A pullback in production isn’t likely until the third quarter, Morse said. In the meantime, West Texas Intermediate Crude, which currently trades at around $52 a barrel, could fall to the $20 range “for a while,” according to the report. The U.S. shale-oil revolution has broken OPEC’s ability to manipulate prices and maximize profits for oil-producing countries.

“It looks exceedingly unlikely for OPEC to return to its old way of doing business,” Morse wrote. “While many analysts have said in past market crises ‘the end of OPEC,’ this time around might well be different,” Morse said. Citi reduced its annual forecast for Brent crude for the second time in 2015. Prices in the $45- $55 range are unsustainable and will trigger “disinvestment from oil” and a fourth-quarter rebound to $75 a barrel, according to the report. Prices this year will likely average $54 a barrel.” (Bloomberg 9Feb2015)

Thursday, Swanzy Quarshie of Sentry Investments was on BNN and gave some of our historical favorites some exposure. Her macro-view of the sector/market is a positive outlook for energy and energy related equities for 2015, however, Sentry remains cautious in the short term. Although much of the issues inherent in the oil markets have been priced into the commodity, they see the possibility of a retest of the oil price lows of January driven by growing crude inventory levels globally (levels are at an 80 year high!). For now, they are firmly in the camp that the current demand/supply imbalance is driven by excess supply and expect the market to move closer to equilibrium towards the end of the year with a slowdown in North American drilling activity. At this time, they do not expect demand to have a negative impact on the imbalance. In this environment, they favour companies with strong balance sheets and good cost structures who can take advantage of this downturn to further strengthen their businesses. They prefer oil weighted producers in the short to midterm given the structural challenges in the North American gas market. In the longer term, they are optimistic that growing export channels and increasing industrial demand for natural gas will help to strengthen the North American gas market. Her Top picks: Bankers Petroleum (BNK-tsx), Raging River Exploration (RRX-t) and Whitecap Resources (WCP-t). Legendary value investor Seth Klarman has built a position in Bellatrix (BXE-tsx): According to reports, legendary value investor Seth Klarman has built a position in Bellatrix. Klarman has purchased 21,839,400 common shares of BXE, representing 11.4% of the company’s shares outstanding. Separately, Orange Capital, LLC at last report held 28,146,263 common shares of BXE, representing 14.7% of the company. This week, Canaccord Genuity Energy Analyst Anthony Petrucci initiated coverage on BXE and highlights the company is currently trading at 7.1x 2015E EV/DACF, which is a discount to its peer group at 10.3x. Likewise, its P/NAV of 0.6x is also discounted to the group average of -1.2

In Petrucci’s view, the discount for Bellatrix is too severe, particularly given the company’s asset base and growth profile. While a 2015E D/CF (trailing) of 4.8x is concerning, Petrucci notes BXE’s ability to spend JV dollars to bridge the gap during the current pricing environment. Forbes refers to Klarman as an “investing demigod.” Here is one of Klarman’s most notable quotes, “In capital markets, price is set by the most panicked seller at the end of a trading day. Value, which is determined by cash flows and assets, is not. In this environment, the chaos is so extreme, the panic selling so urgent, that there is almost no possibility that sellers are acting on superior information. Indeed, in situation after situation, it seems clear that fundamentals do not factor into their decision making at all.” (CG 11Feb2015) due to the length of the report, please call/email us if you would like it in its entirety.

 

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