It's Time! The B*a*r*r*o*n*s Game!

S

stonedinvestor

Finally an issue we can work with.
I know a lot of you thought after such success that we would forgo further Baron's Games and leave on a high. NOPE. It's just that the issues have sucked royally lately and the great Roundtable this year is very lame with only KALU coming out as a solid idea of the first two rounds { from Whitmer again!-she's good with it)

Having tossed the renewal slip in the trash, I can confirm this may be near the last of the Barron's Games for a while but for now we have some grist so without further ado ... Wait one thing. I read this issue in the bath and messed the order of the pages of the roundtable up and got them wet, in some cases I have had to consult directly with the interview subjects to put this back together..,

Aside from the roundtable this issues theme is big oil is back and I have been thinking along similar lines lately. It looks like gold and commodities are back too and Ag... ugh. What's next the shippers? Well we do have one of those today. And an oil play or two as well.

In Dividends FASTENAL is mentioned 27 cent bonus dividend This could be an Obama play because they distribute nuts, bolts clamps and clips to the industrial and construction community. Full year earnings UP 20% from 07" Rev UP 13.5%. Not bad in this climate. Sales have turned down, but this is a good co. I've owned it in the past for several years running. Probably a good idea, in dividends you often find the good ones...FAST
OK this next part hurts not only do they do a whole article about aftermarket car parts they list all the companies and then highlight O'Reilly! Damn that's the one we had from $22 to $26.... right here at ET.... and sold. There was initially an article in Barrons with some smarty pants analysts who highlighted the stock. Now this article AND in this same issue Mario Gabelli is going to recommend it at $31.40!!! Arrrg...ORLY.

Props are paid to an interesting stock Kyocera a Japanese stock that has caught my eye before. They are makers of solar panels, cellphones, office and telecommunication equipment- they have a cash hoard of $9 BILLION. and virtually no debt..... priced at $67 worth $90 the bulls say.... Cash alone folks is worth $45 a share! the rest of the $13 billion in revenue is being given to you for $20..... I love this idea. Big european sales in solar remain firm. Now worth 1/2 of the profits! KYO...

Oil picks exxon BP, Total & Petrobas. I don't love these picks Total would probably be my favorite.

Nice little mention of old stoney fave, take me to the grave why don't ya? down hill skier... FOCUS MEDIA....Chinese - they have sold off their biggest assets and what's left is dirt cheap but it's hard to get excited about this name again, I prefer younger competitor VISN. Focus is down some 90% and they have this complex thing going on with SINA, they combine the FMCN outdoor digital ad unit with Sina and existing FMCN shareholders get some new shares in the combo - 47 million shares .. Focus shareholder get less than half the company- that all stock deal is worth $1 billion more than Focus's market cap of $916 million but wait Focus kept some good stuff, an interenet advertising unit , a outdoor billbords unit & roughly a third of $381 million combined cash.... that's all for free... an interesting call from Oscar Gruss! There's an even more complex way to play this merger- shorting 0.37 Sina for every share of Focus, both boards have oked the deal, this is free money but for the advanced investor.

Lets get to the roundtable already!
So far we have- FAST/ORLY/KYO/TOT/FMCN

HEY GUYS I APPRECIATE YOU ALL COMING ONLINE WITH ME OR WHATEVER THEY CALL THIS TELECONFERENCING...

Mario Gabelli: you mean Picturetel? Sorry about that one Stoney from a few years back! (laughter)

SETTLE DOWN EVERYONE. OK SCOTT BLACK YEAR AFTER YEAR YOU ARE MY FAVORITE YOU HAIL FROM DELPHI MANAGEMENT WHERE YOU HOLD THE TITLE OF PRESIDENT & FOUNDER! I HAVE A BIT OF A MANCRUSH ON YOUR BRAIN.GO.

Scott Black- I love Oracle laugh if you will but I can humilate you with a five minute rant of why I like it if you like?

THINK YOU CAN?

Scott Black: 2nd half rev could rise 3%earnings 1st half were $3.3 billion Oppoprating margins 43% profits before taxes of $5.27 billion ROE is 32%.
earns 30% on equity with no debt for ten years. It's a money machine. In 2010 it could generate $7 billion free cash cash flow.

WOW. YOU ALSO LIKE GENERAL DYNAMICS & ENDO PHARM, LET'S TALK ABOUT THE ONE'S THAT CAUGHT MY EYE, XTO,AMERON & STEALTHGAS...

Scott Black: XTO did a smart thing they hedged 77% of their nat gas production in 2009. They have 62,500 barrels of oil a day to sell at $118.85! 1.6 billion cubic feet of gas is spoken for at $8.94. Bought Hunt Petroleum last year for $4.2 billion. They are going to cut their capital spending budget from $5.8 billion to $3.8, they are wed to the notion of knocking $1 to $2 billion of debt off the balance sheet. Stock sells for 8.3 times earnings and thanks to the hedging will be one of the few energy companies with rising earnings.

NICE ONE. I LIKE THAT CALL. WHAT ABOUT AMERON.

Scott Black: Infrastructure play. Lots of pipes for water projects .

LETS MOVE ON WHAT THE HECK IS STEALTHGAS?

Scott Black: Stealth specializes in short-haul, feeder boats, 4 customers make up 60% of revenue. Shell Statoil, Petredee, and Vitol. The fleet OF 39 BOATS is 10 years old. On a scrap value basis the fleet is worth $560 million, less net debt of $225 million that leaves $335 million or $15 a share.

WOW THE STOCK IS $4.73 WITH A 15.8% YIELD!!!!

Scott Black: They company may cut that dividend, to buy shares or cut debt.

Mario Gabelli: Can I go now? Geez. My interesting ones are Asent media & Oreilly auto. Oreilly is $31 and I'm recommending it now when the others guys in this paper did so at $24...

LETS SKIP STRAIGHT TO ASCENT THEN, THIS IS A PLAY ON THE MOVE TO DIGITAL IS IT NOT?

Mario Gabelli: Yes Ascent has only 13.4 million A shares and and a $320 mln market bvalue. It was spun out of Discovery and trades to a discount to cash. Ascent specializes in platforms that enhance digital tech & media- $50 mln in EBITDA, $25 a share in cash and trades for $22.62...

THANKS GUYS YOU CAME TO PLAY. LETS WRAP THIS UP WITH AN INTERESTING PICK FROM OSCAR SCHAFER.

Oscar Schafer: Lender Processing Systems LPS- provides banks with software that help them service or finance mortgages... no 1 player in a nich industry. the business is likely to befit from the current turmoil in housing, they are more leveraged to the rising default and forclosure side. A large shareholder was forced ouT driving the stock down to $29 and it's worth $50, 16 X 09' est....

GEEZ OSCAR I'M CALLING MY BROKER TOMORROW!

Lets wrap up folks from the roundtable we have-
ORACLE/ XTO/STEALTHGAS/O'REILLY AUTO/ ASCENT MEDIA AND LENDER PROCESSING.

ASCMA - ASCENT
ORCL - ORACLE
XTO- XTO ENERGY
GASS- STEALTHGAS
ORLY- O'REILLY
LPS- LENDER PROCESSING
ALONG WITH
FAST/KYO/TOT/FMCN..... 9 IDEAS!, now which one to use? ~ stoney
 
Faber said nothing that entire issue- mumbled something about not buying CDS insurance on the default of US treasuries, because if they default, no one is going to be there to insure them...

That was it for him...
 
I intentionally left Faber out of the teleconference because he talks crazy and scares people. He called the US Gov a ponzi scheme which in a way is true all of life is based off last person in I've been doing a lot of thinking along these lines but you don't say it now. faber says the US Gov will go bust. Faber comes off as an I told you so saying last year it was very " easy " to see that the economy worul;d worsen and that commodities would come under pressure.

Faber says that like Japan we could be in for a very long slog and then he used some of his typically loopy reasoning saying: " Japan is at the same level it was twenty years ago & Korea is at 1988 levels... If The US were to go back to the 1990 levels, the S&P would be at 300. "
Thanks Mark! Your point is all markets are going to return to twenty years ago levels because Japan and Korea are...
This is Fabers schtick (jewish word) talk gloom and doom and then recommend some ideas so esoteric and hard to buy no one can ever find them to say you are wrong...

In this issue he flip flops more than usual which means he interprets a rally ahead but can't bring himself to say so. Faber says : The market gave back in the 14 months since Nov 21 the entire amount lost in 1973-1974. people may review the coming reflation of financial stocks and the monitory policy as favorable and stocks MIGHT rise. You can have an horrible economic backdrop and stocks that move up. "

That's an interesting statement. When companies are cutting their forecasts and the economic numbers are horrid stocks rarely go up but I have noted in prior threads that high unemployment in and of itself does not mean that stocks have to go down... There were periods in the 80's of rapid stock advances despite rising unemployment.

faber then launched into Singapore banks ideas
(guess Singapore is not back to 1980 levels) one bank OCBC is run by an American. Then Faber buys Hong Kong (guess they haven't gone back to those levels Mark) He likes Swire Pacific and Sun Hung Kai properties... Next up buys in Thailand, Bancock bank and Glow energy. In India- Infosys, finally a stock we can buy easily & Icici Bank...

In our markets mark is sensing a run in Cyclical resource plays like CVRD and RIO , Fereeport MacMoran & Alcoa. he sees an artificial bull market coming in these shares. Mark says there is 50% upside in a Brazil Index and a Greater China Fund... and actually now that I read it carefully (some of the pages have dried... mark suggests an idea that I have been floating lately... If we ever could get a good rally, money would come pouring out of the safety of the bond market and then you might use as mark suggests the TBT- ProShares UltraShort Lehman 20 year exchange traded fund. It goes up when bonds of over 20 years go down in a 200% way...

Also faber likes Gold.

Thanks for playing guys remember we need ONE good idea for next week. Sometimes it's a frontrun on an idea--- in this case it would be big oil -- or the cyclical names, in some cases it's more of a long term bet that happens to work out quickly - KYO.... ~ stoney
 
re: FAST
from seekingalpha-

It’s a supplier of nuts, bolts, parts and tools to manufacturers and commercial contractors.

I’ll concede that such a business is unglamorous and mind-numbingly boring. But the fact is, the company’s nearly 700,000 products are vital. They are used to operate and keep up large buildings, campuses and industrial plants, as well as bolt together furniture, appliances and trucks.

Recession or not, demand remains stable for Fastenal’s products. Otherwise, simply put, stuff stops working.

I originally alerted Oxford Club members to this stock in November. It reported earnings Tuesday. And guess what? It beat expectations. The company posted a 10% increase in profits and enviable same-store sales growth of 8%.

Moving forward, it will continue to grow thanks to four key competitive advantages – unparalleled convenience, market penetration, cost leadership and customization. Strong insider ownership, double-digit growth opportunities and the most attractive valuation in over a decade (approximately 40% below its historic price-to-earnings ratio) only make the stock more compelling
 
re: ORCL

Oracle Corp. (ORCL): Director George H Conrades Bought 10,000 Shares Director of Oracle Corp., George H Conrades, bought 10,000 shares on 01/14/2009 at an average price of $16.91. Oracle Corporation is one of the world's leading suppliers of software for information management. The company develops, manufactures, markets, and distributes computer software that helps corporations manage and grow their businesses. The company's software products can be categorized into two broad areas: Systems software and Internet business applications software. Oracle Corp. has a market cap of $89.48 billion; its shares were traded at around $16.91 with a P/E ratio of 12.58 and P/S ratio of 3.99. Oracle Corp. had an annual average earning growth of 18.2% over the past 10 years. GuruFocus rated Oracle Corp. the business predictability rank of 4-star. As of June 2, 2008, Oracle Corp. had annual total revenue of $22,430 million, compared to the 2007 annual revenue of $17,996 million. Oracle Corp. is owned by 11 Gurus, as of 9/30/08. David Tepper bought 1,617,500 shares, which is 5.74% of the $572 million portfolio of Appaloosa Management LP. Joel Greenblatt bought 15,565 shares, which is 0.5% of the $63 million portfolio of Gotham Capital. HOTCHKIS & WILEY owns 6,065,800 shares, which is 0.82% of the $15.02 billion portfolio of HOTCHKIS & WILEY Capital Management LLC. Kenneth Fisher owns 23,928,882 shares, which accounts for 1.54% of the $31.63 billion portfolio of Fisher Asset Management, LLC. PRIMECAP Management owns 62,719,840 shares, which makes up 2.28% of the $55.92 billion portfolio of PRIMECAP Management. Richard Snow owns 42,680 shares, which accounts for 0.02% of the $3.61 billion portfolio of Snow Capital Management, L.P.. Ruane Cunniff owns 10,200 shares, which is less than 0.01% of the $9.47 billion portfolio of Ruane & Cunniff & Goldfarb Inc. John Hussman owns 2,750,000 shares, which accounts for 1.93% of the $3.49 billion portfolio of Hussman Economotrics Advisors, Inc.. Ronald Muhlenkamp owns 2,016,090 shares that are 5.09% of the $805 million portfolio of Muhlenkamp Fund. Mark Hillman owns 59,019 shares. This makes up 0.21% of the $569 million portfolio of Hillman Capital Management. Richard Pzena owns 54,577 shares, a decrease of 86.04% of from the previous quarter. This position accounts for 0.01% of the $13.21 billion portfolio of Pzena Investment Management LLC. In the same quarter, Chris Davis, John Keeley, and John Hussman sold out their holdings. Director George H Conrades bought 10,000 shares of ORCL stock last week; the price of the stock has increased by 3.49% since. President, Director Safra Catz sold 1,000,000 shares total September through January; the price per share has decreased more than 6% since the last sell. Executive Vice President-Ops Juergen Rottler sold 100,000 shares of ORCL stock two weeks ago. Executive Vice President Sergio Giacoletto sold 312,500 shares of ORCL stock total September through October; the price of the stock has decreased by 17.07% since. Executive Vice President-Ops Juergen Rottler sold 60,776 shares of ORCL stock in September; the price of the stock has decreased by 15.7% since.
 
re: Stealthgas

StealthGas (Nasdaq: GASS) is an international shipping transportation company specializing in the transportation of various petroleum and petrochemical gas products in liquefied form. It vessels carry various petroleum and petrochemical gas products including propane, butane, butadiene, isopropane, propylene and vinyl chloride monomer, which are all byproducts of the production of oil and natural gas. These products are transported in liquefied form in order to reduce their volume and to facilitate their handling.

StealthGas owns 39 vessels, which includes 38 currently under operation and 1 that is expected to be delivered in February 2008. StealthGas has also agreed to sell three of its existing vessels for delivery in January 2008. With the expected delivery of the remaining vessel by February 2008 and the sale of the three vessels in January 2008, the average age of the fleet will be 11.0 years compared to an industry average of 18 years and the total carrying capacity will be 160,268 cbm. StealthGas ranks number 1 in owned vessels in the 3,000 to 8,000 cbm segment which is its niche.

GASS investor highlights include reporting 3Q revenues of $23.2M and net income of $4.0M an increase of $4.6M or 24.4% and an increase of $1.9M or 91.0% respectively from net revenues of $18.7M and net income of $2.1M for the 3Q ended September 30, 2006. An average of 35.1 vessels were owned by the Company in the third quarter of 2007, earning an average time-charter-equivalent rate of approximately $6,747 per day. GASS has announced eight consecutive quarterly dividend since the company went public in October 2005.
 
re: FMCN
from seekingalpha

Shareholders of Focus Media Holding Limited (ADR) (FMCN) and SINA Corporation (USA) (SINA) were met with a surprise on Monday. The boards of both companies have agreed to a transaction whereby Focus Media will sell the majority of its LCD display network, its poster frame network, and its in-store network to SINA. In return for these businesses, Focus Media shareholders will receive 47 million shares of SINA Corporation.

Now if you’re like me, your immediate thought is “what is left of Focus Media?” The trite answer would actually be “not much.” According to the press release, the businesses in question account for 52% of Focus Media’s revenue and about 73% of gross profits. (This is calculated using the last nine months of reported data.) Focus Media will be left with its Internet advertising network, its movie theater advertising, and certain traditional billboards. These businesses are still profitable, but are simply not what FMCN shareholders owned the stock for.

Despite feeling a bit frustrated at losing what I considered to be a good growth opportunity (I’m not all that excited about owning SINA shares yet), some of the specific terms of the transaction are quite interesting. According to the release, the SINA shares received will not be held on the balance sheet of Focus Media. Instead, shortly after the transaction closes, these shares will be distributed to FMCN shareholders.

Since my background includes a bit of work for a risk-arbitrage hedge fund, I was immediately compelled to “do the math” on the transaction, and was a bit surprised at what I came up with. There are currently 128.6 million shares of FMCN outstanding and SINA is paying for the transaction by issuing 47 million shares. That equates to roughly 0.365 shares of SINA for each share of FMCN. Using the SINA closing price of $23, and assuming that each share of FMCN will receive 0.365 shares, the actual value of the SINA payment comes to $8.40 per FMCN share. So this implies that the rest of FMCN’s business is only worth $1.20 per share. That seems a bit low for the remaining business which still produces 27% of gross profits.

So the arbitrage play would be to buy 100 shares of FMCN assuming that you are going to get 37 shares of SINA distributed to you. You could short 37 shares of SINA now which is essentially selling those shares that will be given to you. The difference in purchase price for the FMCN and the proceeds from the SINA sell should be roughly $1.20. So once the transaction is complete, your SINA shares are distributed and paired off against your short position, you will be long 100 shares of the remaining FMCN stock with a cost basis off $1.20. It's not a risk-less play, but it certainly seems that this sets up a very good value for owning what is left of Focus Media.
 
This is a penny stock that you are pumping which goes against the posting rules.

Quote from stonedinvestor:

re: Stealthgas

StealthGas (Nasdaq: GASS) is an international shipping transportation company specializing in the transportation of various petroleum and petrochemical gas products in liquefied form. It vessels carry various petroleum and petrochemical gas products including propane, butane, butadiene, isopropane, propylene and vinyl chloride monomer, which are all byproducts of the production of oil and natural gas. These products are transported in liquefied form in order to reduce their volume and to facilitate their handling.

StealthGas owns 39 vessels, which includes 38 currently under operation and 1 that is expected to be delivered in February 2008. StealthGas has also agreed to sell three of its existing vessels for delivery in January 2008. With the expected delivery of the remaining vessel by February 2008 and the sale of the three vessels in January 2008, the average age of the fleet will be 11.0 years compared to an industry average of 18 years and the total carrying capacity will be 160,268 cbm. StealthGas ranks number 1 in owned vessels in the 3,000 to 8,000 cbm segment which is its niche.

GASS investor highlights include reporting 3Q revenues of $23.2M and net income of $4.0M an increase of $4.6M or 24.4% and an increase of $1.9M or 91.0% respectively from net revenues of $18.7M and net income of $2.1M for the 3Q ended September 30, 2006. An average of 35.1 vessels were owned by the Company in the third quarter of 2007, earning an average time-charter-equivalent rate of approximately $6,747 per day. GASS has announced eight consecutive quarterly dividend since the company went public in October 2005.
More...
 
jan 14 press release
re: XTO

08:33 EDT
XTO Energy said that over the past thirty days it has entered into early settlement and reset arrangements with respect to 37% of its 2009 commodity hedge volumes. As a result of these early settlements, the company realized about $900 million of after-tax proceeds which it used to reduce its outstanding debt. The company expects to end the first quarter of 2009 with net debt of approximately $11 billion. The net effect of the early settlements is to accelerate cash receipts, while maintaining the company's full hedge position against further declines in oil and natural gas prices during the year. For accounting purposes, the commodity hedge gains and losses will be recognized in the underlying production quarter.
 
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