Detour Gold Corporation

DGC : TSX : C$14.90

Target: C$15.00

Detour Gold Corp. is a gold development company presently focused on advancing the Detour Lake project in the Abitibi Greenstone Belt of northeastern Ontario.
All amounts in C$ unless otherwise noted.
Investment recommendation
We maintain our HOLD rating on Detour Gold but are raising our target
price to C$15.00 from C$11.00. The company has made considerable
progress in de-risking the balance sheet and ramping up the Detour Lake
operation. Year-to-date, the stock is up 234% relative to the S&P/TSX Gold
Index, highlighting the market’s favourable response to management efforts
in addition to potential M&A speculation. While progress-to-date has been
encouraging and the plant is expected to hit nameplate capacity by year-end,
we still see a long way to go before the ramp-up is complete. As per the
latest mine plan, the head grade is expected to gradually increase to reserve
grade in 2017 while mining rates are expected to continue to ramp-up to
peak at 389 ktpd in 2020.
Detour Gold currently trades at 0.81x P/NAV and 8.1x P/CF 2015 vs the
large cap producer average of 0.89x and 10.2x respectively. At this stage of
the ramp-up we believe the discount is justified – continued execution on the
mine plan and successful completion of the ramp-up could lead to a
meaningfully higher multiple over the next few years. Considering the stock’s
higher leverage to the gold price, we also see the potential for the share price to move higher if the gold price continued to increase.


We have updated our valuation and forecasts to reflect our revised commodity and currency price deck. The stronger assumed C$ has had a negative impact on our valuation and forecasts, but offset by lower assumed sustaining capital forecasts and longer-term operating costs closer to the recent mine plan (We had previously modeled 20% higher LOM sustaining capital and 20% higher longer term site costs beyond 2020).
The combination of the encouraging progress to date, expected meaningful operational improvements in H2/14, greater comfort level following the recent positive site visit and productive meetings with management have resulted in us increasing our target P/NAV multiple to 0.85x from 0.70x which is the primary reason for the increase in our target price.
Our 12- month target price has increased to C$15.00 from C$11.00 based on 0.85x (previously 0.70x) our operating NAVPS estimate plus working capital and other adjustments.

Lumber Liquidators Holdings

LL : NYSE : US$70.42

Target: US$100.00

Lumber Liquidators is the largest specialty retailer of hardwood
flooring in the U.S. The company offers premium hardwood
flooring products in a wide variety of domestic and exotic wood,
as well as engineered products, laminates, bamboo, cork, and
accessories. Lumber Liquidators assortment is largely comprised
of proprietary brands including the flagship Bellawood brand.

Consumer & Retail — Specialty Retail
Investment recommendation
We are lowering our Q2 EPS estimate from $0.94 to $0.61,
compared with guidance of $0.59-$0.61 and prior consensus of
$0.90. LL reported a Q2 SSS decline of 7.1% on top of +14.9%
versus expectations of +7%. Total customers invoiced declined
5% yr./yr., the steepest decline in three years. LL did not regain
momentum after difficult Q1 weather as we had anticipated, and
management is blaming macroeconomic factors. The 131 stores
impacted by weather experienced a SSS decline of 13%, with
non-impacted stores -2%. We are lowering our FY14 EPS
estimate from $3.35 to $2.70 on SSS -2.5% on top of +15.8% (we
had previously forecast +6.3%). We still project double-digit sales
and EPS growth over the long term, keeping us BUY rated. Given
consecutive quarterly EPS misses and limited near-term visibility,
we think investors will view LL as a show-me stock over the next
few months.
Investment highlights
 An inventory shortfall accounted for $18MM of Q2’s $47MM
revenue downfall versus our estimate. LL expects quality
assurance-related supply-chain issues to resolve in Q3.
 We are reducing our price target from $122 to $100 based on our discounted free cash flow model. This is a long-term target, and reflects our belief that LL’s model of better selection, service, and value should enable it to take market share

Stocks Slide With Portugal Bonds as Treasuries, Gold Gain

European stocks fell and Portuguese bonds dropped as concern deepened over missed debt payments by a company linked to the nation’s second-largest bank. Standard & Poor’s 500 Index futures signaled a selloff earlier this week will resume, while the yen, Treasuries and gold gained.

The Stoxx Europe 600 Index lost 1.3 percent at 8:35 a.m. in New York, led by a gauge of banks dropping to this year’s low. Financial bond risk increased in Europe for a fifth day. Standard & Poor’s 500 Index futures fell 0.9 percent. Portugal’s 10-year bond yield rose 11 basis points to 3.88 percent while Treasuries gained and the yen advanced against all but one of its 16 major peers. Indonesian stocks climbed to a one-year high as polls showed Jakarta’s Governor Joko Widodo won the presidency. West Texas Intermediate oil slid 0.3 percent to $101.62 a barrel while gold climbed 1.1 percent.

Bonds of Europe’s most-indebted nations declined as speculation resurfaced that the euro region remains vulnerable to shocks as it emerges from the sovereign debt crisis. The sell-off comes after minutes of the Federal Reserve latest meeting showed yesterday some policy makers were concerned investors may be growing too complacent. The value of global equities climbed to a record $66 trillion last week, data compiled by Bloomberg show.

Photographer: Dimas Ardian/Bloomberg
One-month rupiah forwards added 0.2 percent as unofficial counts showed Jakarta… Read More
“The concern of an event like this is always determining whether it’s occurring in isolation or whether it’s the first domino,” said Lawrence Creatura, a fund manager at Federated investors Inc. in Rochester, New York. His firm manages about $363.8 billion. “People will shoot first and ask questions later when news like this hits. It’s a classic flight to safety across the equity, commodities and bond markets. Portugal has been perceived as a weaker link so it’s not a particular surprise they’re encountering this kind of trouble now.”

Fewer Americans than forecast filed applications for unemployment benefits last week, a sign the labor market is strengthening, a government report showed today.

Peripheral Bonds

Portuguese bonds fell for a fourth day. The yield on 10-year Italian notes rose six basis points to 2.94 percent and Spain’s rate jumped six basis points to 2.82 percent. The Markit iTraxx Europe Senior Financial Index of credit-default swaps on 25 European banks and insurers rose two basis points to 71 basis points, the highest since June 4.

While Portugal’s central bank said Banco Espirito Santo SA, the nation’s second-largest lender, is protected after its parent missed debt payments, Moody’s Investors Service downgraded a company in the group citing a lack of transparency and links to other companies.

Banco Espirito Santo tumbled 17 percent before the Portuguese securities regulator said it stopped trading in the shares pending an announcement. Espirito Santo Financial Group SA, which owns 25 percent of the lender, fell 8.9 percent before the company suspended trading earlier in stocks and bonds, saying it’s “currently assessing the financial impact of its exposure” to Espirito Santo International, which has missed payments on short-term paper.

Fugro Tumbles

More than nine shares declined for every one that advanced in the Stoxx 600, with trading volumes 72 percent higher than the 30-day average, according to data compiled by Bloomberg. The gauge of banks tumbled 2.7 percent to the lowest since Dec. 18.

Banco Popular Espanol SA (POP) dropped 4.8 percent. The Spanish lender said it postponed a planned issue of the riskiest bank debt because of “heightened volatility” in credit markets.

Fugro NV (FUR) sank 20 percent, the most since November 2012, after the Dutch deepwater-oilfield surveyor forecast a drop in profit margin and writing off of as much as 350 million euros ($477 million). Skanska AB lost 2.5 percent after the Nordic region’s biggest construction company by global revenue said it will scale down operations in Latin America after booking 500 million kronor ($73.7 million) in project writedowns and restructuring costs.

Jobless Claims

The S&P 500 index (SPX) rebounded 0.5 percent yesterday following two days of losses.

Jobless claims declined by 11,000 to 304,000 in the week ended July 5, the fewest in more than a month, a Labor Department report showed today in Washington. The median forecast of 45 economists surveyed by Bloomberg called for 315,000.

Federal Reserve Bank of St. Louis President James Bullard said yesterday that a surprisingly fast decline in unemployment will fuel inflation and back the case for higher interest rates.

The Jakarta Composite Index added 1.4 percent to 5,095.20, heading for its highest close since May 2013. The rupiah gained 0.7 percent to 11,555 per dollar, according to prices from local banks, after touching the strongest level since May 22.

Both Widodo, known as Jokowi, and his opponent Prabowo Subianto claimed victory in yesterday’s presidential vote. Jokowi had about a five percentage point lead in the poll, according to unofficial counts from two survey companies that declared him the winner. Official results aren’t due for about two weeks. Bank Indonesia will probably hold its reference rate at 7.5 percent today, according to the median of 21 estimates from economists surveyed by Bloomberg.

The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong advanced 0.3 percent, after losing 1.6 percent yesterday, its biggest decline in two weeks. The Shanghai Composite Index slipped less than 0.1 percent, extending yesterday’s 1.2 percent retreat.

China Exports

China’s overseas shipments fell short of the 10.4 percent expansion that was the median of 47 economists’ estimates compiled by Bloomberg. Imports grew by 5.5 percent in June, less than the 6 percent increase projected. The trade surplus fell to $31.6 billion for June, from $35.92 in May. Data yesterday showed producer prices fell last month at the slowest pace in more than two years.

“Extreme cautiousness towards China’s economy has receded overall, with the government showing signs it will step in to support growth when needed,” said Mari Oshidari, a Hong Kong-based strategist at Okasan Securities Group Inc.

West Texas Intermediate oil dropped to $102.01 a barrel. Gasoline inventories increased by 579,000 barrels last week as a measure of consumption slid, the Energy Information Administration said yesterday. Brent declined 0.2 percent to $108.10 a barrel, the ninth consecutive decline in the longest streak since May 2010. The crude closed at a two-month low yesterday amid signs that Libya, the holder of Africa’s largest crude reserves, will boost exports, while Iraqi production remains unaffected by an insurgency.

Treasury Sale

Gold for immediate delivery jumped to $1,342.23 an ounce, the highest since March 19. Palladium rose 0.3 percent to $876.25 an ounce, the 14th consecutive advance and the longest streak since June 2000. Cotton fell 0.4 percent to the lowest price since July 2012 on ample supplies.

The yield on 10-year Treasuries dropped five basis points to 2.50 percent. The rate on 30-year notes declined five basis points to 3.33 percent as the U.S. prepares to sell $13 billion of the debt.

Greece’s five-year note yield increased 11 basis points 4.33 percent. The government sold 1.5 billion euros of three-year notes via banks, priced to yield 3.5 percent. That’s higher than forecasts earlier this week for a rate of about 3 percent from HSBC Holdings Plc and Royal Bank of Scotland Group Plc.

The yen strengthened 0.3 percent to 101.36 per dollar and gained 0.3 percent to 138.31 per euro.

Australia’s dollar retreated from the highest in a week, falling against all of its 16 major counterparts after the nation’s jobless rate climbed. The Aussie weakened 0.4 percent at 93.74 U.S. cents.

BlackBerry Debuts Passport

An image posted on the Inside BlackBerry blog compares spreadsheets displayed on the BlackBerry Passport to those on phones with rectangular screens.

With a 4.5-in square display, the new BlackBerry (BBRY) Passport doesn’t look much like other smartphones. The company unveiled the new device this week, hyping up its suitability for reading spreadsheets, e-books and other documents. It is expected to debut in Sept. In other news, Apple (AAPL) patented a method for building seamless all-glass devices using glass-fusing technology. BlackBerry shares rose 4.2% to 11.40. Apple rose 0.04% to 95.39

BlackBerry officially unveiled a new phone this week with a very unusual screen shape — it’s perfectly square.

The BlackBerry Passport features a “unique 4.5-inch square screen with full HD capabilities,” said a post on the company’s official Inside BlackBerry blog earlier this week, which included photos of the device.
It has a separate keyboard below the screen, like traditional BlackBerry smartphones, but it contains only letters, not numbers or punctuation.

The square screen gives it similar viewing space to a phone with a rectangular screen that measures five inches across the diagonal, and allows it to show 60 characters on each line, instead of the 40 on most rectangular smartphone screens, wrote Matt Young, author of the blog post.

“Academic research has shown that the optimal number of characters on a line in a book is 66 characters,” he said.

He added that users will also no longer have to worry about whether the phone is in portrait or landscape orientation for optimal viewing of documents, spreadsheets or images, making it ideal for professional users such as architects or doctors.

The Passport was first announced by CEO John Chen during an earnings report in June, when he said there would be an official launch in London in September, the technology blog MobileSyrup reported at the time. Since then, various photos of the device have been floating around the internet.

At least some tech watchers seemed open to the idea.

“The Passport could help BlackBerry reconnect with its traditional business and government customer,” wrote Ben Fox Rubin of the technology news site CNET, “though some may still be wondering whether a square phone will fit in their pockets.”

Those commenting on the official blog post had mixed responses.

“In my mind this could quite possibly the best phone design ever,” gushed a user named Roy Whitney.

Another user called OWC wrote, “No thanks. I miss the alt and shift key!

Investors Reaction – with the DOW off 100 points :


Above Average
As of 10 Jul 2014 at 10:47 AM EDT.



Open 11.09 P/E Ratio (TTM)
Last Bid/Size 11.58 / 69 EPS (TTM) -11.39
Last Ask/Size 11.59 / 24 Next Earnings 26 Sep 2014
Previous Close 11.40 Beta 1.17
Volume 10,478,168 Last Dividend
Average Volume 22,350,378 Dividend Yield 0.00%
Day High 11.60 Ex-Dividend Date
Day Low 11.02 Shares Outstanding 526.9M
52 Week High 12.18 # of Floating Shares 500.0557M
52 Week Low 5.44 Short Interest as % of Float 19.19%

CEO Endorses Blackberry

Talking Numbers Bullish Techs

This beaten stock could be worth another look
By Lawrence Lewitinn
3 hours ago
Talking Numbers
Think BlackBerrys are obsolete? Well, many of the biggest names in media and technology think otherwise.

At the annual Allen & Co. Sun Valley Conference, which brings together media titans from all over the world, AOL CEO Tim Armstrong said in an interview with CNBC’s Kyle Tausche:

“The Blackberry for me is a utility. And if you look around Sun Valley, you look around probably your studios, you see people who have to do a tremendous amount of work utilities on BlackBerrys.… The future hopefully will be driven by utility. I don’t know what their plans are, but I’d be happy if they did well.”

However, BlackBerry is in the process of reinventing itself, focusing more on enterprise and platform software rather than the smartphones it once dominated. The market has even expressed some confidence in BlackBerry CEO John Chen’s efforts to turn the company around. Since Chen took the helm in November, the stock is up 47 percent.

Nonetheless, BlackBerry still has a long way to go from when it was the biggest name in smartphones. In mid-2008, its market value was $78.4 billion. Today, it’s worth just $6 billion.

But, BlackBerry’s stock may be worth a second look, according to Richard Ross, global technical strategist at Auerbach Grayson. “I took BlackBerry off my screen,” he admitted. “It’s not really a stock I’ve been watching and for good reason. But, when I looked at the chart this morning, I thought to myself, ‘this is a stock you have to keep an eye on.’”
Looking at a short-term chart of BlackBerry’s stock, Ross sees a bullish head-and-shoulders bottom pattern that has formed over the past year, with a neckline at around $11 per share. The stock broke above that price on Wednesday. Should it stay above there convincingly, that could be good news for shareholders, according to Ross.
“Break above that key neckline resistance and there could be some real upside here for this stock,” said Ross, a “Talking Numbers” contributor.
This comes simultaneously to BlackBerry’s stock hitting another key resistance level: its 150-week moving average. It has “been below this 150-week moving average now for over five years,” Ross said. “If you can get back above that 150-week moving average, which comes in around $11.70, there could be some upside to that previous resistance at the 2013 highs up at around $18 – $19.”
For Steve Cortes, founder of Veracruz TJM, the catalyst for BlackBerry to break higher will be growth in its enterprise and QNX divisions. QNX is the operating system installed in an estimated 11.6 million vehicles as of last year.

“The things they are doing in the automotive field in terms of infotainment in cars, they are really the leader in that market right now,” Cortes said. “The things they are doing in healthcare are incredibly exciting.”

Plus, Cortes believes BlackBerry has limited downside, making him a fan of the stock. “It owns a ton of patents that are worth practically the market capital of the company,” he said. “I think that puts a bit of a floor underneath the stock price here.”

To see the full discussion on BlackBerry, with Ross on the technicals and Cortes on the fundamentals, see the above video.

Arch Coal Expansion Halted At Supreme Court

Global Warming Texas
In a landmark decision on Friday that could have far-reaching implications for federal coal leasing, a U.S. District Court judge ruled against the expansion of Arch Coal’s West Elk mine in Colorado for failure of federal regulators to consider the social cost of carbon in their environmental review.
The decision issued by Judge Jackson of the U.S. District Court in Colorado found that the Bureau of Land Management and the Forest Service overlooked the costs of carbon emissions from the mining and combustion operations associated with the mine’s expansion even though the agencies acknowledged that expanding West Elk’s operations would likely result in greater greenhouse gas emissions.
Friday’s ruling is the result of a challenge brought by environmental groups contesting three agency decisions on the Colorado Roadless Rule and expansion of the West Elk mine in the Sunset Roadless Area. This region is a part of the treasured North Fork Valley backcountry in western Colorado which abuts the iconic West Elk Wilderness and is a destination for hikers and hunters and habitat for the threatened lynx.
The agencies’ decisions would have permitted Arch Coal to expand the West Elk Mine into 1,700 acres of the Sunset Roadless Area, the bulldozing of six miles of road, and the construction almost 50 well pads for the venting of methane from the mine expansion. Methane is a potent greenhouse gas and the second-most prevalent GHG emitted in the United States after carbon dioxide.
According to the decision, the BLM and Forest Service initially found that the social cost of carbon associated with the expansion could be as high as $984 million, but the agencies arbitrarily scrapped this analysis from the final environmental impact statement. However the associated benefits of the project were still included in the agencies’ analysis. The court called this error “more than a mere flyspeck.”
The ruling goes on to acknowledge that agencies are required to analyze the effects of their actions on climate change. The court noted that the BLM and Forest Service “acknowledged that there might be impacts from GHGs in the form of methane emitted from mining operations and from carbon dioxide resulting from combustion of coal produced,” and “this reasonably foreseeable effect must be analyzed.”
The decision was issued just in time before Arch Coal’s exploration activities were set to begin on July 1, and stops the expansion of the West Elk coal mine and any associated surface or below-ground activity, including bulldozing or construction, for now until the parties can agree on how to move forward.
Expanded coal leasing in the American West, particularly the coal-rich Powder River Basin in Wyoming and Montana, has been a hotly contested issue in recent years, with parties raising significant concerns over the climate effects of burning the coal mined in the region.
This court’s decision reminds agencies to consider climate impacts when making decisions affecting federal lands.

Trading Alert BBRY Blackberry Moving Past Resistance

Please refer to our article of July 8th
Blackberry – BBRY Fever $30 Target ?

published July 8,2014

BlackBerry: Never Mind The Bears, I Won’t Sell Below $30…fer to our earlier article


Jack A. Bass Managed Accounts re-entered at $10.02

As of 09 Jul 2014 at 11:56 AM EDT.


Open 11.02 P/E Ratio (TTM) –
Last Bid/Size 11.31 / 89 EPS (TTM) -11.39
Last Ask/Size 11.32 / 115

Next Earnings 26 Sep 2014
Previous Close 10.94 Beta 1.17
Volume 11,691,432 Last Dividend –
Average Volume 20,370,276 Dividend Yield 0.00%
Day High 11.32 Ex-Dividend Date –
Day Low 11.00 Shares Outstanding 526.9M
52 Week High 12.18 # of Floating Shares 500.0557M
52 Week Low 5.44 Short Interest as % of Float 19.19%
1 Day|5 Da

HudBay Minerals

HBM : TSX : C$10.87

Target: C$13.50
HudBay Minerals is an integrated Canadian zinc and
copper producer with operating assets in Manitoba,
and development or exploration properties elsewhere
in Canada, in the U.S., and in Peru.

All amounts in C$ unless otherwise noted.

Metals and Mining — Base Metals and Minerals
GROWTH TO 2019; 
We have incorporated the Augusta Resources/Rosemont copper project
into our HBM full valuation model, and incorporated our new
commodity price forecasts throughout the model.
Action and valuation
We are maintaining our BUY recommendation and raising our 12-
month target price to C$13.50 (from C$11.00). Our C$13.50 target price
is based on the average of: i) 7x 2015E EV/EBITDA, which would imply
a share price of C$12.81, and ii) our NPV10 estimate of C$14.12.
We see the potential for upside to our target price as Constancia and
Rosemont progress. 6x 2016E EBITDA (with Constancia in production)
equates to a share price of C$14.89, and 5x 2019E EBITDA (with
Rosemont in production) equates to a share price of C$30.51.
Our NPV10 estimate of C$14.12 includes C$7.50 for Constancia and
C$4.89 for Rosemont (treating AZC acquisition costs as sunk costs).
We are forecasting low-point cash balances of C$213 million mid-2015
during Constancia start-up, and then C$166 million mid-2018 during
Rosemont start-up.
Next potential catalysts and investment risks
We believe Constancia commissioning and Rosemont permitting are key
catalysts and key valuation risks for HBM over the next 12 months

Shipping Sector – Still Struggling to The Light At The End Of The Dock

Navios Maritime Acquisition Corp.

NNA : NYSE : US$3.58
Target: US$3.75
Energy — Maritime
Investment recommendation
Initiating coverage with a HOLD rating and $3.75 price target

Investment highlights

 Strong brand and long-term relationships creates market
opportunity: As part of the Navios group of companies, management
maintains significant relationships throughout the industry,
particularly with banks, that allow it to see distressed deals earlier
than many of its competitors. Furthermore, the company has
proven access to multiple forms of capital and has demonstrated an
ability to think creatively and move quickly to seize opportunities.
 Focus on growing attractive VLCC segment: Recently, NNA has
focused its capital on growing in the VLCC segment, particularly
secondhand vessels. We believe this is an attractive strategy, as we
think that 5-10 year old secondhand VLCCs are currently one of the
most undervalued segments of the tanker market.

 Capital structure and employment strategy supports dividend: NNA
maintains a relatively long-term capital structure through a mixture
of term loans and senior notes, which, combined with high period
charter coverage, help support a healthy dividend of 5.6% per year.
Upside exposure to the market is primarily through profit sharing
arrangements. We believe this is a more conservative approach to
the segment.

Our forward, normalized NAV (2016E) is $3.43 per share, not including $0.60 of dividends expected over that time frame. As such, we believe the stock is fairly valued at current levels and initiate coverage with a HOLD rating and $3.75 price target.
We use a 1.1 multiple to value the stock due to an above average, sustainable dividend, and relatively low cost structure

09 July 2014

Shipping Index Remains Under Pressure
Baltic Dry Index (BDI)    -18   863 



(Cape index)


(Panamax index)


(Supramax index)




















8139 9449


Jack Bass on Exit Coach Radio July 10 10:40 a.m. Pacific Time

I just wanted to let you know that I will be a Guest on The Exit Coach Radio Show on July 10 at 10:40 a.m.. I will discuss several tips and ideas for you to use in your business planning, so I hope you will listen in. There is a “LIVE SHOW LINK” at that you can use to tune in. Thanks


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