Inventory Decline Gathers Steam UBS Coal Train In this report, we seek to update investors on fundamental developments and trends within the US coal space by analyzing production, consumption, exports, imports, railcar loadings, and barge traffic. We also discuss emerging trends and inferences for coal supply/demand balances and forecasted price levels. Coal Regains Market Share; Stockpiles Continue to Fall Coal once again appears to have continued to regain market share in February as it outpaced electric generation while natural gas underperformed electric generation for the third straight month. This marks a very strong open to the year after coal lost roughly 94mm tons of demand vs. 2011. Stockpiles continued to decrease roughly 3.1mm tons in February; we forecast flat stockpiles into March (normally an ~8mm ton build) but strong generation could translate into a draw. Inventory days saw a slight improvement, at roughly 77.4 days of burn. When adjusting for the abnormally warm weather and high level of fuel switching in 2012, the days of burn falls to roughly 62 days. Net exports increased 4.0% in February y/y. Exports increased 2.0% in February while imports fell 27.9%. Production cuts continued in February, down roughly 5.3% mostly driven by App (down 7.4%). Lower production, falling stockpiles, increasing exports, and fuel switching reversals are all finally pointing in a positive direction for coal, especially thermal coal. Overall the trend of lower production and a partial fuel switching reversal supports our improving inventory thesis especially in the PRB – ACI, CLD, and BTU all have PRB exposure.
FLY up 6% this morning on really good results. Reduced debt, sold some planes for a profit. Stock even cheaper now.
Thanks CP for the report. FLY indicating good demand contrary to BACML report. Will hold it for now as they do have valuation support and management has done a lot of good things for several years now. Last cycle air lease companies got pretty high valuations - probably won't happen this time, but maybe the yield chasers start going after more risk and start bidding stocks like FLY higher.
Yeah, I've noticed analysts know plenty of three letter acronyms and are good at making up believable stories using convincing language but you know I have to wonder if they're just FOS or worse, trying to mislead.
ie: What's supposed to go up doesn't, at best, quite often.
BB - Have you heard anything new about Treasury debt issuance's being scaled back? Supposedly Bernanke said something about not having as much for FED to buy and now traders are thinking FED might have to increase buying MBS to make up the difference?
Bought some ING today. Saw they did the IPO of their US business and reminded me of their stock again.
ING owned some sub prime paper and had to raise a bunch of capital back in the financial crisis. Issued a bunch of shares and got a loan from the Dutch government. That loan is now almost fully repaid. Very, very profitable in banking and insurance. In excellent shape but cannot pay a dividend until they finish paying off the loan, which will probably happen by the end of 2013 and expect they will resume paying dividends in 2014, maybe 2015 (and they are committed to paying them). Trading for a very low multiple (fwd p/e under 5). Less than half of BV.
The other thing that I've been reading about these European financials is that they are only making top quality loans now due to their capital restriction which limit the amount they can loan and because they are very conservative now. Most bad loans are over 5 years old now, so as these continue to roll off, their loan portfolio quality improves and writedowns will shrik.
Mark - I read over the comments they made in the report early this morning and my first thought was "this is going to be ugly". It opened higher to my surprise but the down move now makes more sense.
Will be interesting to see how the jobs report turns out tomorrow but I still think the bigger picture of improving housing and therefore improving credit markets is the story and it will be the story for a long time. I also think the economy excluding government is doing quite well. And the best part is: (1) not that many big money managers believe in this market and consumer sentiment (i.e., Univ of Michigan Sentiment Surveys) is still far below prior highs in previous bull markets (2) Valuations are still reasonable
With housing truly on the mend, I think now is the time to seriously consider those beaten down sectors/stocks that were tried in 2011 and 2012 but ultimately failed. That's the trade for 2013. I think CECO is a huge buy right now. Still researching it.
Yeah I'm still reading through the SEC reports...probably will get to them again this afternoon/evening.
In regards to the market, one thing I have noticed is a gradually weakening RSI_EMA reading on each new high since 1/25/13. That is always something to keep an eye on. The same thing was happening with nat gas since mid March.
boy i tell you what. i think ANR is a buy here. i mentioned to jesse a week or two ago that the ultimate conundrum would be a drop in nat gas, people sell the coal stocks, and then the coal stocks rise hard.
Want to get real angry or real depressed? F_ _ _ing unbelievable. http://www.bloomberg.com/news/2013-05-01/china-cyberspies-outwit-u-s-stealing-military-secrets.html
Sounds pretty stupid, it's amazing these guys are actually capable of developing anything worth protecting. Thank MSFT though, for operating systems chocked full of back doors designed for the purpose, the one aspect where they outshine.
You would think with national security involved, that they would go back to meeting face to face and exchanging physical information and isolate the computers until they actually resolved the security issue. IMO a firing squad is too good for these assholes.
If you are any defense contractor and you have a security breach, you should be prosecuted to the fullest extent possible. There is no excuse.
Well, even we were using that dual-layer system to access our servers remotely and we weren't working on national security secret squirrel propeller head stuff, our work was much more boring than that although we did experience pyrophoric fires or chemical spills caused by carelessness. Thankfully on rare occasion.
I nearly was fired once for suggesting a pregnant woman probably shouldn't be working with aromatic VOC's, it was an eye opener.
AUMN always moves in the opposite direction, this really baffles me. I honestly suspect that once AUMN begins trading above SVM, if ever, then a very powerful move is possible.
Actually screw it fellas. I think the better trade if you're looking to choose between the two is the CECO trade. I think that could potentially go up several times its current price and I think people in general have basically given up on the public education / university stocks, much more so than the coal stocks. Sold it at breakeven and moved to CECO. Earnings on Monday.
TXT - Does this one count as some kind of exotic sounding inverse knockout or bowtie play, the bear flag triggered and seems to be rebuilding for perhaps another leg down, or maybe this is close to the area where bears take gains and move on?
I'm running out of bad ideas, could use a few suggestions.... CECO qualifies as one, I wanna see earnings first though, since taking a brow-beating on my BIDU blunder.
FLY - According to Finviz, insider ownership is ~15%. If correct, that sounds pretty good huh? This is another stock that analysts are low-balling, guess they were trying to cover up success.
Could be. Like I said management has been very astute and you are right about the insider ownership being high.
I guess the risk is if the economy collapses, the value of planes will fall, but I don't see that happening. Airplane travel is a long term growth trend.
Paul McCartney is playing Seattle at Safeco field. The most expensive seats (2) $2182.
I'll buy the bootleg. I bet I'll over pay for it under $10. If it were the Beatles, I'd put it on the card. The nosebleed seats can be had for a hair over $50 each.
Grab a bottle of Pinot, break out the white album and throw it on the turntable, see how that works for ya. You can always step it up a notch from there if need be.....
CNH/AGCO - Both of these beat, does insider ownership impress? Are these potentially capable of going on to return a double from here?
CNH makes a nice tractor(New Holland), I think probably the best available, not made in Japan for DE, or China
"CNH share reaction is stock specific, in our view On Tuesday, CNH shares fell over 9% on a day when agriculture equipment peers AGCO and Deere shares rose +3.9% and +0.5%, respectively. We believe CNH’s share price reaction is stock specific and not reflective of ag equipment trends currently facing the industry. CNH just posted a 45% EPS beat for Q113 driven by a 9% and 26% YoY increase in Ag Equipment sales and EBIT, despite concerns over the global economic environment. The beat was even more impressive when we consider that CNH received no help from construction equipment, which delivered its third consecutive quarterly loss."
The opening bid on miners will be sold, IMO.
ReplyDeleteBullion should have a bid all day, Dragi easing, miners who knows, but easier money should be helpful.
DeleteInventory Decline Gathers Steam
ReplyDelete UBS Coal Train In this report, we seek to update investors on fundamental developments and trends within the US coal space by analyzing
production, consumption, exports, imports, railcar loadings, and barge traffic. We also discuss emerging trends and inferences for coal supply/demand
balances and forecasted price levels.
Coal Regains Market Share; Stockpiles Continue to Fall Coal once again appears to have continued to regain market share in February as it
outpaced electric generation while natural gas underperformed electric generation for the third straight month. This marks a very strong open to the
year after coal lost roughly 94mm tons of demand vs. 2011. Stockpiles continued to decrease roughly 3.1mm tons in February; we forecast flat
stockpiles into March (normally an ~8mm ton build) but strong generation could translate into a draw. Inventory days saw a slight improvement, at
roughly 77.4 days of burn. When adjusting for the abnormally warm weather and high level of fuel switching in 2012, the days of burn falls to roughly
62 days. Net exports increased 4.0% in February y/y. Exports increased 2.0% in February while imports fell 27.9%. Production cuts continued in
February, down roughly 5.3% mostly driven by App (down 7.4%). Lower production, falling stockpiles, increasing exports, and fuel switching reversals
are all finally pointing in a positive direction for coal, especially thermal coal. Overall the trend of lower production and a partial fuel switching reversal
supports our improving inventory thesis especially in the PRB – ACI, CLD, and BTU all have PRB exposure.
went long NOG
ReplyDeleteWas that really a rebalancing effect yesterday?
DeleteDo not think so, earnings Monday after
DeleteWatch for the OGRe today...
ReplyDeleteOGRe underway in miners already.
DeleteAlready had it on ANR.
Delete2nd in the lead on miners, pre-market after market always a viper pit.
DeleteOGE?
DeleteOpening Gap Reversal
DeleteYeah, I blinked and it was done, don't think I could've traded it...
DeleteNot that big a gap up. Good enough to lighten existing positions into strength.
DeleteVMW - What the heck is wrong with those shorts, they're nuts, stupid or what?
ReplyDeleteREITs - I'm not sure but it seems like they're reacting negatively to whatever Bernanke said yesterday.
ReplyDeleteSomething about Treasury tapering off debt issuance? We're gonna run out of debt to purchase?
Must just be NLY earnings don't justify great enthusiasm
DeletePCP - 12mo price objective is $240
ReplyDeleteI might be fast enough to trade this one and even have enough time to blink a few times if I can find a reasonable entry.
FLY up 6% this morning on really good results. Reduced debt, sold some planes for a profit. Stock even cheaper now.
ReplyDeleteThanks CP for the report. FLY indicating good demand contrary to BACML report. Will hold it for now as they do have valuation support and management has done a lot of good things for several years now. Last cycle air lease companies got pretty high valuations - probably won't happen this time, but maybe the yield chasers start going after more risk and start bidding stocks like FLY higher.
Yeah, I've noticed analysts know plenty of three letter acronyms and are good at making up believable stories using convincing language but you know I have to wonder if they're just FOS or worse, trying to mislead.
Deleteie: What's supposed to go up doesn't, at best, quite often.
BB - Have you heard anything new about Treasury debt issuance's being scaled back? Supposedly Bernanke said something about not having as much for FED to buy and now traders are thinking FED might have to increase buying MBS to make up the difference?
DeleteDidn't really notice, but don't pay too much attention to that stuff to be honest. Better to spend time looking at stocks and industries.
DeleteHXM - You wouldn't have to be a jack rabbit to take your gain here.
ReplyDeleteI guess my point is, assuming someone(s) can actually read a chart, surely this chart screamed buy yesterday...
DeleteAnd this one could return to $15, at which time everyone would want to buy.
DeleteBought some ING today. Saw they did the IPO of their US business and reminded me of their stock again.
ReplyDeleteING owned some sub prime paper and had to raise a bunch of capital back in the financial crisis. Issued a bunch of shares and got a loan from the Dutch government. That loan is now almost fully repaid. Very, very profitable in banking and insurance. In excellent shape but cannot pay a dividend until they finish paying off the loan, which will probably happen by the end of 2013 and expect they will resume paying dividends in 2014, maybe 2015 (and they are committed to paying them). Trading for a very low multiple (fwd p/e under 5). Less than half of BV.
The other thing that I've been reading about these European financials is that they are only making top quality loans now due to their capital restriction which limit the amount they can loan and because they are very conservative now. Most bad loans are over 5 years old now, so as these continue to roll off, their loan portfolio quality improves and writedowns will shrik.
DeleteDidn't ING change their ticker, I saw 2nd mentioned something about this...
DeleteBACML has a 12mo PO of $12.40 on this ticker
DeleteThey IPO'd the US business, but the main Dutch business is still ING.
DeleteGASL - They did a poor job of yanking this one around this morning, unfortunately didn't hit my stink bid.
ReplyDeleteSold NOG off of NG report
ReplyDeleteYeah, pretty incredible report.
DeleteSometimes you just get lucky. I was playing the OGRe and sold BOIL at 56. Good thing, that would have left a nasty mark.
DeleteAUMN - This one seems like a good price here right now, if you think it might bounce back $0.20 or so in the next few hours.
ReplyDeleteKinda like clipping the bottom side of the opening sinc function.
ANR- That must be one crappy call.
ReplyDelete"Our coal is clean as a whistle, and it contains no toxic heavy metals or radioactive substances whatsoever."
DeleteMark - I read over the comments they made in the report early this morning and my first thought was "this is going to be ugly". It opened higher to my surprise but the down move now makes more sense.
DeleteTrying a little HDGE @ 17.11...
ReplyDeleteOff @ 17.02...
DeleteXPP - If China is really in the dumper, then why isn't XPP heading decisively south?
ReplyDeleteNATI - This one looks like a bull flag formation, doesn't it? I was hoping to get this one near 52wk lows.....
Will be interesting to see how the jobs report turns out tomorrow but I still think the bigger picture of improving housing and therefore improving credit markets is the story and it will be the story for a long time. I also think the economy excluding government is doing quite well. And the best part is:
ReplyDelete(1) not that many big money managers believe in this market and consumer sentiment (i.e., Univ of Michigan Sentiment Surveys) is still far below prior highs in previous bull markets
(2) Valuations are still reasonable
With housing truly on the mend, I think now is the time to seriously consider those beaten down sectors/stocks that were tried in 2011 and 2012 but ultimately failed. That's the trade for 2013. I think CECO is a huge buy right now. Still researching it.
I'm listening on the CECO subject, racked my brain trying to comprehend that balance sheet. Maybe I can learn something.....
DeleteYeah I'm still reading through the SEC reports...probably will get to them again this afternoon/evening.
DeleteIn regards to the market, one thing I have noticed is a gradually weakening RSI_EMA reading on each new high since 1/25/13. That is always something to keep an eye on. The same thing was happening with nat gas since mid March.
YRCW - Sure looks good.
ReplyDeleteVE - Remains in that channel that goes back to last October, and PE is 682, which has to be one of the strongest buy indicators out there.
ReplyDeleteMexican economy is growing at 4%, wonder if this can help HXM a little bit?
ReplyDeleteBOIL - Woof, woof, what a racket.
ReplyDeleteboy i tell you what. i think ANR is a buy here. i mentioned to jesse a week or two ago that the ultimate conundrum would be a drop in nat gas, people sell the coal stocks, and then the coal stocks rise hard.
ReplyDeletewho has the balls to enter this stock right here?
DeleteAlright just bought a little at $6.99. Stop out below $6.7.
DeleteExactly, whatever happened to playing the bounces? I love hearing about trades made after the fact, a couple days later.
DeleteCLWR - Dang, I wish I'd known the amount of bandwidth these guys own.
ReplyDeleteSTRA - Not exactly burnin' hot right now, another earnings bounce play?
ReplyDeleteThe gap down is closed now though, maybe too late.
DeleteWant to get real angry or real depressed?
ReplyDeleteF_ _ _ing unbelievable.
http://www.bloomberg.com/news/2013-05-01/china-cyberspies-outwit-u-s-stealing-military-secrets.html
Sounds pretty stupid, it's amazing these guys are actually capable of developing anything worth protecting. Thank MSFT though, for operating systems chocked full of back doors designed for the purpose, the one aspect where they outshine.
DeleteYou would think with national security involved, that they would go back to meeting face to face and exchanging physical information and isolate the computers until they actually resolved the security issue. IMO a firing squad is too good for these assholes.
DeleteIf you are any defense contractor and you have a security breach, you should be prosecuted to the fullest extent possible. There is no excuse.
Well, even we were using that dual-layer system to access our servers remotely and we weren't working on national security secret squirrel propeller head stuff, our work was much more boring than that although we did experience pyrophoric fires or chemical spills caused by carelessness. Thankfully on rare occasion.
DeleteI nearly was fired once for suggesting a pregnant woman probably shouldn't be working with aromatic VOC's, it was an eye opener.
"AAII still has more bears 36% than bulls 31%. 10-week MA of bulls is down to 32%. This area has marked some nice buying opps past 3 years."
ReplyDeleteLooks like AUMN has some unresolved bad karma and it is paying for it today...
ReplyDeleteAUMN always moves in the opposite direction, this really baffles me. I honestly suspect that once AUMN begins trading above SVM, if ever, then a very powerful move is possible.
DeleteActually screw it fellas. I think the better trade if you're looking to choose between the two is the CECO trade. I think that could potentially go up several times its current price and I think people in general have basically given up on the public education / university stocks, much more so than the coal stocks. Sold it at breakeven and moved to CECO. Earnings on Monday.
ReplyDeleteTrying UGAZ @ 29.43...
ReplyDeleteOff @ 29.66...
DeleteTXT - Does this one count as some kind of exotic sounding inverse knockout or bowtie play, the bear flag triggered and seems to be rebuilding for perhaps another leg down, or maybe this is close to the area where bears take gains and move on?
ReplyDeleteI'm running out of bad ideas, could use a few suggestions.... CECO qualifies as one, I wanna see earnings first though, since taking a brow-beating on my BIDU blunder.
Marine and Navy units won't be mission ready due to sequestration, yet military contractor stocks are booming....... WTFITBS.....
ReplyDeleteNatty - Watch as natty craters and punishes chasers. Look at that inverted bowtie, wonder how much longer $4 holds?
ReplyDeleteGASL - Is that an H&S necktie hazard formation, couldn't be could it? Another leg down soon in the works for the likes of GASL?
Looks like commercials have been selling the whole way up, while large traders have been covering their shorts and small traders have been buying.
DeleteFIG earnings looked pretty good. Their ability to pay an good deal higher dividend is there.
ReplyDeleteFLY - According to Finviz, insider ownership is ~15%. If correct, that sounds pretty good huh? This is another stock that analysts are low-balling, guess they were trying to cover up success.
ReplyDeleteBank of America Corporation 503,517 $6,203,329 Dec 31, 2012
DeleteCould be. Like I said management has been very astute and you are right about the insider ownership being high.
DeleteI guess the risk is if the economy collapses, the value of planes will fall, but I don't see that happening. Airplane travel is a long term growth trend.
Santa Anna winds, sounds like.
ReplyDeleteSPWR early release...destroyed estimates.
ReplyDeleteWow, sure did! Right off a beautiful bull flag formation. Short interest is now 7.7% according to my broker data.
DeleteThe flag formation suggests a target of ~$17, best I can tell. The pole is $4 in length, added to the breakout price yields ~$17
DeleteWhere are all the hired chart experts with their super scanners when you need one?
Paul McCartney is playing Seattle at Safeco field.
ReplyDeleteThe most expensive seats (2) $2182.
I'll buy the bootleg. I bet I'll over pay for it under $10. If it were the Beatles, I'd put it on the card. The nosebleed seats can be had for a hair over $50 each.
Grab a bottle of Pinot, break out the white album and throw it on the turntable, see how that works for ya. You can always step it up a notch from there if need be.....
DeleteCNH/AGCO - Both of these beat, does insider ownership impress? Are these potentially capable of going on to return a double from here?
ReplyDeleteCNH makes a nice tractor(New Holland), I think probably the best available, not made in Japan for DE, or China
"CNH share reaction is stock specific, in our view On Tuesday, CNH shares fell over 9% on a day when agriculture equipment peers AGCO and Deere shares rose +3.9% and +0.5%, respectively. We believe CNH’s share price reaction is stock specific and not reflective of ag equipment trends currently facing the industry. CNH just posted a 45% EPS beat for Q113 driven by a 9% and 26% YoY increase in Ag Equipment sales and EBIT, despite concerns over the global economic environment. The beat was even more impressive when we consider that CNH received no help from construction equipment, which delivered its third consecutive quarterly loss."
CECO- Will look into it tonight. Love the set up, but a damn scary space.
ReplyDeleteI don't understand the insider selling that's been going on, trying just gave me a headache.
DeleteOccupy Wall Street?
ReplyDeletehttps://www.facebook.com/photo.php?v=10151558661058984
FB PE is still only 2900, should really get rolling now.....
Delete"Strong demand for tractors"
ReplyDeleteIf this is the case, I'd expect used tractors to be in demand as well, TITN sells used and refurbished tractors and construction equipment.
TA - Kinda looks like another bull flag, suggesting a $21 target?
ReplyDelete