Trading Alert : Peabody Energy ( BTU)

A positive Supreme Court ruling mere days ago has done nothing to halt the precipitous decline of Peabody Energy Corporation (NYSE:BTU)’s shares, which are imploding  in trading this morning, down by nearly 26% already.

The sad spectacle has inflated the loss of the company’s shares year-to-date to an ugly 79%. The latest major blow comes after Peabody Energy Corporation (NYSE:BTU) was forced to downgrade its loss estimate for its current fiscal quarter, the results of which it will post on July 28. Among other things, lower coal prices and bad weather have been cited as reasons for the revision, while demand is also weakening in China. The latest blow is bad news for Dmitry Balyasny‘s Balyasny Asset Management, which opened a 27.31 million-share stake in the first quarter, worth $134.34 million at the end of March, doubtlessly feeling he was getting a discount at the time, with shares already down heavily in the first quarter. They’ve done even worse in the second.

TheStreet Ratings team rates PEABODY ENERGY CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

“We rate PEABODY ENERGY CORP (BTU) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company’s weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow.”

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 264.1% when compared to the same quarter one year ago, falling from -$48.50 million to -$176.60 million.
  • The debt-to-equity ratio is very high at 2.55 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, BTU has a quick ratio of 0.61, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PEABODY ENERGY CORP’s return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for PEABODY ENERGY CORP is currently extremely low, coming in at 14.06%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -11.48% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $3.40 million or 93.71% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm’s growth is significantly lower.

Save taxes offshore

PHM Gains on Report On Business Story

Out top spec pick ( picked at $1.11  ) gained Monday closing at $1.46 on a feature in the Globe and Mail Report On Business :

Being a top performer on the TSX Venture Exchange doesn’t exactly set the investing community abuzz these days.

One of the elite listings on the lowly Venture of late is Patient Home Monitoring Corp., which has unleashed a wave of acquisitions to bring about a quintupling in share price over the last year.

Now big enough to have overcome most of the startup risks associated with Venture names, but not so big that investor hype has priced in a growth premium on the stock, Patient Home Monitoring still has plenty of room to grow.

“Normally one hears of stocks that the ‘easy’ money has been made,” Beacon Securities analyst Doug Cooper said in a recent note. “However, we believe with PHM, the opposite is the reality.”

Underlying the company’s business model are some powerful trends in U.S. health care. An aging population, combined with capacity strains on health-care facilities, have ensured a high growth rate in the home-based health-care services market.

“In a period of uncertainty in the economy, we believe the U.S. health-care service industry, especially one catering to the aging baby boom generation, offers a relatively safe haven,” Mr. Cooper said.

Patient Home Monitoring focuses on three major categories of illness – diabetes, pulmonary and cardiac – to offer multiple services to the chronically ill.

While listed in Canada, the company targets the highly fragmented U.S. home monitoring market, acquiring smaller regional businesses that need capital to expand.

Investors tend to look upon roll-up strategies with some skepticism, in part because they end up relying exclusively on acquisitions for growth. Patient Home Monitoring, on the other hand, is able to combine acquisition-based growth with considerable organic growth.

It does so through its expanding patient database. While takeover targets ideally have strong revenues and earnings, and are available at favourable prices, an extensive client list is a top priority in hunting for new deals.

“Through mining the aggregate patient database, PHM will cross-sell its various services thus driving revenue-per-patient growth,” Mr. Cooper said. “For example, those with pulmonary issues have a high probability of a cardiac condition … [and] a high probability of being overweight/obese that could require a power mobility solution.”

In the fiscal first quarter, the company generated organic annualized revenue growth of 34 per cent year over year, Mr. Cooper calculated.

And the company’s growing acquisition pipeline should mean much more growth of both kinds. Having already closed two deals this year, Patient Home Monitoring has three pending acquisitions which will just about double the size of the company, generating annual sales of about $125-million by the summer. By the end of this year, the company is targeting $175-million in annual revenue. Sales in 2014 amounted to $21.2-million.

And previous company guidance has consistently proven conservative, said Bruce Campbell, president and portfolio manager at StoneCastle Investment Management Inc., which owns shares of the company. “They’ve been fairly cognizant of not trying to over promise.”

Michael Dalsin, the company’s CEO, has said he thinks $1-billion in revenue is a realistic mark for Patient Home Monitoring, eventually. That 10-figure top line mark might come into view much sooner than many expected, considering the company’s pace of acquisitions.

In the first two months of this year alone, Patient Home Monitoring issued letters of intent or term sheets to 12 companies with combined annual revenues of more than $141-million. Non-disclosure agreements – which are the first step in identifying targets – were signed with another 40.

That kind of growth makes the company’s valuation a moving target. “The real difficulty is trying to figure out what multiple you should put on these things,” Mr. Campbell said. He estimates the stock is trading at an enterprise value to EBITDA (earnings before interest, taxes, depreciation and amortization) ratio of a little less than 10 times, based on future earnings the company has publicly declared.

Mr. Cooper said the company’s growth already realized and yet to come should warrant a multiple in the upper end of the range of 10- to 12-times forward EBITDA, which results in a target price of $1.75. Mr. Cooper is currently the only sell-side analyst covering the stock, according to Bloomberg.

While the stock has risen by more than 60 per cent this year so far, Patient Home Monitoring is now a safer play than it was a year ago, when investors had little proof that the company could execute its roll-out strategy and cross-sell its services, Mr. Cooper said. Plus, the company’s clean balance sheet increases flexibility and lowers risk.

“All of those fears should be dispelled now,” Mr. Cooper said.

Patient Home Monitoring (PHM)

Friday close: $1.39, up 4¢

Our Spec Pick March 2015 : Make Money with Old Sick People

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Patient Home Monitoring Corp. (PHM.V)

KEY: Highly focused management, expanding merger and acquisition strategy

Growth story unfolding – still little known

Please check out the website and latest news releases


1.22 Up 0.01(0.83%) 9:53AM EDT
Prev Close: 1.21
Open: 1.21
Bid: 1.22
Ask: 1.23
1y Target Est: N/A
Beta: N/A
Next Earnings Date: N/A
Day’s Range: 1.211.22
52wk Range: 0.22 – 1.27
Volume: 221,662
Avg Vol (3m): 3,312,280
Market Cap: 239.21M
P/E (ttm): N/A
EPS (ttm): -0.03
Div & Yield: N/A (N/A)
Profile Get Profile for:
Patient Home Monitoring Corp.
14724 Ventura Boulevard
Suite 1250
Sherman Oaks, CA 91403
United States – Map

Index Membership: N/A
Sector: Healthcare
Industry: Medical Appliances & Equipment
Full Time Employees: N/A
Business Summary

Patient Home Monitoring Corp. provides and rents in-home monitoring equipment, supplies, and services for patients in the United States. It offers diabetic testing supplies and other medications, power mobility equipment, home durable medical equipment, and respiratory services. The company is headquartered in Sherman Oaks, California.


Asanko Gold Inc. Spec BUY

AKG : TSX : C$2.50
Target: C$3.25

The combination of AKG and PMI created a significant gold
development company with 2P reserves of 4.8 Moz with a
permitted, financed (US$231M in cash, Q2/14) mine plan on half
the reserve (Obotan project) with the permit in hand with a permit
pending on the other half (Esaase project). All the assets are
within the Ghana, one of the premier jurisdictions in the entire
African continent.
All amounts in C$ unless otherwise noted.

Metals and Mining — Exploration and Development
Investment recommendation
The company announced an agreement to buyback a 2% NSR reducing
the overall NSR from 7% to 5% for Phase 1 (Obotan) of the Asanko Gold
Mine in Ghana, West Africa. We view the acquisition of the NSR as a
strong positive and highly accretive given that the Phase 1 project is
breaking ground and close to production (H1/16E). We raised our target
(+C$0.10) accordingly to C$3.25, a 30% premium to current price levels,
and maintained our SPECULATIVE BUY recommendation. We anticipate
more construction updates leading to a resource update for Phase 1
followed by an updated mine plan (Q4/14E

Investment highlights
 Our revised target price is based on an increase in our NPV8% (+4%
to US$733 M) of the combined Obotan (Phase 1) and Esaase (Phase
2) gold projects, now known as the Asanko Gold Mine, related to the
reduction of the NSR at Phase 1 (Obotan) from 7% to 5%. On an
NPV8% basis, we valued the 2% NSR on Phase 1 at C$25-30 M (LT
US$1422) The drop in our NSR assumption from 7% to 5% for Phase 1 is
related to the recently announced purchase of the 2% Goknet
(privately held company) NSR for 1 M shares of AKG and cash (we
estimate US$1 M as the details were not disclosed). In addition, AKG
will transfer the rights to two exploration projects, Kubi and Diaso,
which the company deems as non-material.
 In November 2012, Asante Gold Corp. (ASE : TSX-V
offered to purchase half (1%) of the 2% NSR on the Obotan project
from Goknet for C$22.5 M via shares (45 Msh, C$0.50), which
would now be worth about C$4 M (for 1% NSR). The sale was never

Donnycreek Energy Inc. SPECULATIVE BUY

Target: C$4.00

Donnycreek is a junior pure play Montney exploration and
development company with assets in Alberta’s Deep
Basin. Donnycreek trades under the symbol “DCK” on the
TSX venture exchange.
All amounts in C$ unless otherwise noted.

Investment recommendation
Donnycreek released a brief operational update this morning on its
operations at Kakwa. The wells on the company’s three well Montney
pad (the company’s first 1.5 mile horizontals) have been successfully
completed and tested, however no test rates were provided with the
release. The company also announced a plant turn-around at Kakwa,
which will shut in production from the block for ~16 days in September,
and plans to expand the plant on the block from 15mmcf/d to 30
mmcf/d in the spring of 2015.
In our view, a fairly neutral release from the company; however, given
the delays in bringing on production at Kakwa, we have lowered our
production estimates for 2014 . Trading at just 3.1x 2015E
EV/DACF and 0.5x Base NAV (lowest NAV multiple in our coverage
universe), we continue to believe DCK is extremely undervalued relative
to its peers.
We continue to rate the stock a Speculative Buy, and look to November
for IP30 rates on the 3 recently completed 1.5 mile Hz’s (in addition to
the large production bump)as significant potential catalysts for the stock.
Highlights from the release
 Kakwa 3 well pad. DCK announced that all three 50% working
interest wells from the company’s first three well pads have been
completed and flow tested . These wells were drilled with
horizontal lengths of 1,900m, which is longer than wells previously
drilled on this acreage. The wells are expected to come on
production in October.
 Facility expansion. Donnycreek and its partners are currently
designing an expansion for its 16-7 facility to double the throughput
capacity to 30 mmcf/d of natural gas and associated liquids. DCK
and its partners plan to start-up the expansion by spring 2015.

Trading Alert – NEWL Charges Back


As of 27 May 2014 at 10:38 AM EDT.


Open 2.80 P/E Ratio (TTM)
Last Bid/Size 3.18 / 96 EPS (TTM) -56,034.36
Last Ask/Size 3.20 / 150 Next Earnings
Previous Close 2.83 Beta 2.30
Volume 3,996,183 Last Dividend
Average Volume 21,085,591 Dividend Yield 0.00%
Day High 3.38 Ex-Dividend Date
Day Low 2.66 Shares Outstanding 10.1M
52 Week High 8,235.00 # of Floating Shares 10.02893M
52 Week Low 0.3788 Short Interest as % of Float 0.53%

Questerre Energy – OIL Potential

Questerre Energy Corporation
Questerre Energy Corporation (Photo credit: Wikipedia)


TSX : $0.88

Great potential – but they used to say the same  thing about me.
Shares of Questerre jumped after the company announced the results of the resource assessment of its Montney acreage in the Kakwa-Resthaven area.

The best estimate by the company’s independent reserve engineers of Prospective Resources (PR) is 100 million barrels of oil equivalent and of Economic Contingent Resources (ECR) is 32 million barrels of oil equivalent.

Commenting on the results, QEC’s President and CEO, Michael Binnion, stated, “We are very  pleased that the report puts a significant value on the dense resource we have captured in the Kakwa-Resthaven area over the last year. ECR were assigned to just over 15% of our total acreage based on proximity to tested or producing Montney wells.”
He added, “We expect that as additional wells are drilled and tested on and adjacent to our lands, the majority of the prospective
resources will be reclassified as economically contingent resources and ultimately reserves.”