| To: Elroy who wrote (56704) | 1/21/2016 11:46:17 AM | | From: Touching | | | | 80% of ammonia and nitrogen production is from natural gas, the rest mainly from coal. China and India use coal and oil, mainly coal. CF bet is on the unsustainable low cost of coal that will cause many producers to get out of the market, additionally they are betting that China cannot meet their export with the demand for ammonia and nitrogen.
If CF is right, the real short-term threat may be Iran, that sits on top of big reserves of natural gas and had its sanctions lifted recently. nevertheless their capacity to export it is still low and will be so for some time.
Until the world economy is drugged, commodities can stay low, but if US continue to raise rates an uptrend will start. Without free money the supply will slow down, IMO.
Oil is in the middle of a world price war and as soon as the victims start to fall we will have a huge volatility in the price unless we restore price control somehow. Volatility in oil will cause other commodities to be volatile. |
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| To: Paul Senior who wrote (56715) | 1/21/2016 4:38:30 PM | | From: Grommit | | | | AHT-X I decided that with no news, and volume of 50,000 to 100,000 shares per day, that some institution or fund was selling. I added more AHT-A today in many (friends and relatives) accounts, at around $19. Closed at $20.48 -- up $2 today. Up 22% from my lowest buy 2 days ago ($16.73). IMO, not too late -- stock should go back to $25 soon. Very strange opportunity.
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| To: Paul Senior who wrote (56719) | 1/21/2016 6:30:11 PM | | From: Spekulatius | | | | I joined you too and purchased some BAC today at $13.5. I also added GS ($155) and $51.1 JPM recently. I like JPM and GS best.
Other adds are EEQ and AXE (industrial distributor, 3rd Ave value fund owns it as well). |
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| To: Touching who wrote (56718) | 1/21/2016 8:12:11 PM | | From: Elroy | | | | I'm not familiar with CF.
80% of ammonia and nitrogen production is from natural gas, the rest mainly from coal.
My fertilizer position is UAN, which I believe gets their fertilizer COGS from CVRR, a refiery operation. Those two stocks are the MLPs under CVI which is something like the parent company of the two.
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UAN is a solution of urea and ammonium nitrate in water used as a fertilizer.
So it seems UAN gets their ammonia from from CVRR's natural gas refining business, and produces fertilizer. Presumably this ammonia COGS for UAN has been declining with the price of natural gas, so even though fertilizer prices are falling badly, it may be that UAN's COGS are also in decline, so maybe their results will be OK. Or maybe not, I really have no idea. We'll see.
The stock is acting like a disaster is on its way.
http://finance.yahoo.com/echarts?s=UAN+Interactive#{"allowChartStacking":true}
UAN was paying 35-40 cents per Q through Q3 2015, when they paid zero due to an unexpected plant shutdown. The shutdown is (presumably) over, so we'll see what they can do in Q4 with the declining prices. They should have 2 additional weeks of production in Q4 relative to the Q1 to Q3 in 2015 due to a planned 6 week shutdown which was amortized over the first 3 quarters of 2015. At $5.00, it seems hard to believe that UAN can spit out 35 cents again for Q4, but we'll see. They seemed to do fine when prices were declining earlier in the year, so time will tell. I'm hoping the big sell off is mainly due to the market's aversion to MLPs, aversion to high yield and aversion to commodity related companies, and NOT due to UAN-specific info. But that's just a prayer, it's not based on any special understanding of mine about the fertilizer biz :-) |
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| To: Paul Senior who wrote (56719) | 1/22/2016 10:02:19 AM | | From: Wallace Rivers | | | | Sometimes following WB in doesn't work out. I did. AXP now very definitely in falling knife category.
Looked at my trade log of several years back, sold out LM above $31. After a trip to near $60, it's now hovering near $30. Considerable outflows of AUM and a non-cash charge.
Of course LM is now back on my watch list. |
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| From: Paul Senior | 1/22/2016 10:40:45 AM | | | | | | | OT: Another strange day this morning for me. Opposite of an earlier day this week. Today almost all of the many, many, many stocks, I own are green. I don't remember a day like this. It can't hold of course. Just an indication of how much volatility the market's in. |
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| To: Wallace Rivers who wrote (56723) | 1/22/2016 11:21:40 AM | | From: Paul Senior | | | | Yes, if you bought AXP when Buffett added to his position in 2015, you'd be in the red on those shares. Otoh, if you followed Buffett in when he began acquiring AXP (you'd have to be old enough to have done that), you'd still be well ahead with that stock if you held and even if you kept adding after Buffett's subsequent published buys.
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I keep adding to my positions in asset/fund managers, but I could be completely wrong. All -- or at least all of these companies that I am following - show declines in AUM. If it's the market falling, that's one thing. If it's a combo with a significant number of new people deciding they'll just manage their own assets via ETNs/ETFs/ index funds or cheap Vanguard-type funds --that could affect the business model of these publicly-held fund/asset managers. Also, if/as more people shift from equity funds to fixed-income funds, the value of these fund/asset manager stocks should drop because bond funds are much less profitable for these companies then equity funds.
My understanding is that, historically, these asset manager stocks rise with rise in the stock market, and fall with a falling stock market. So, I am essentially betting that the market will be better for stocks in future, and AUMs for these companies will increase, and their stock prices too. Also, that consolidation will help the sector too. (I note LM cutting costs/making acquisitions; AMG (in which I hold shares) known for its making many acquisitions.) |
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| To: Brian Sullivan who wrote (56608) | 1/22/2016 1:04:06 PM | | From: Paul Senior | | | | GM: I'll take more shares here.
Positive blurb from Barron's:
"General Motors ( GM ) shares are down 12% year-to-date. Earnings per share are expected to climb 14%, and the consensus has been rising. Shares now go for just five times the 2016 earnings forecast. Last week, GM raised its 2016 earnings guidance and expanded its authorized share repurchase to $19 billion to be spent through 2017. That’s roughly 20% of its stock market value. It also boosted its dividend. The new payment gives shares a yield of over 5%."
Imo, too soon to be concerned about an oversupply of used cars in future with the many cars coming off leases. And I'm even less concerned about large amount of subprime auto loans. I'll take now what the market's giving me now: p/e 5 & yield 5% for GM works for me. (Although otoh...I've found it tough to make money in GM in past, so maybe I'm wrong here again.) |
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| To: Paul Senior who wrote (56725) | 1/22/2016 2:18:58 PM | | From: Wallace Rivers | | | | | V and MA certainly have the upper hand on AXP now, but this selling seems way overdone. I'll repeat the mantra I said shortly after AXP lost the Costco deal: this is a premier brand that will come back, which trades at a relatively cheap valuation (now even cheaper at 11X earnings). WB owns it, I believe they have a share repurchase in place, and I wouldn't at all be surprised if an activist investor steps in here. JMO, and maybe worthy of ignoring, given my history with the stock. |
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