Wednesday, May 4, 2016
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Drill Baby Drill: $CXO Ups Production Guidance


Here we go again. Production came in at the high end of guidance. Moreover, the company has upped production guidance to flat from -5%.



  • Reports Q1 (Mar) loss of $0.05 per share, excluding non-recurring items, $0.05 worse than the Capital IQ Consensus of ($0.00); revenues fell 31.4% year/year to $283.6 mln vs the $273.92 mln Capital IQ Consensus
    • Delivered quarterly production of 12.7 million Boe, or 139.5 MBoepd, exceeding the high end of the co’s guidance.
    • Production for the first quarter of 2016 was 12.7 million barrels of oil equivalent (MMBoe), or an average of 139.5 thousand Boe per day (MBoepd), an increase of 6% from the first quarter of 2015 and above the high end of the co’s guidance
    • First-quarter 2016 production was comprised of 64% oil and 36% natural gas.
    • During the first quarter of 2016, Concho averaged 10 rigs, compared to 12 rigs in the fourth quarter of 2015. Concho started drilling or participating in a total of 40 gross wells (31 operated) and completed 50 gross wells during the first quarter of 2016.


  • Co raises 2016 production growth guidance to 0%, up from -5% to 0%

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The Trash Heap of Oil Producers, $CLR, Just Upped Production Guidance



Revenues plummeted by 27%, but production was up 12% over last year. Let that sink in.

I keep highlighting the notes emanating from these oil producers to unveil the lie that is being purported by them and the media. The current thesis to be long oil is that production is being wildly cut, across the board, because of the 60% drop in crude. This is a bald faced lie. Nothing could be further from the truth.

Over the past year, small players have washed away. But these guys, the CLR’s, CVX’s and XOM’s of the world are drilling and producing more than ever.


  • Reports Q1 (Mar) loss of $0.41 per share, $0.04 worse than the Capital IQ Consensus of ($0.37); revenues fell 27.6% year/year to $453.17 mln vs the $442.74 mln Capital IQ Consensus.
  • First quarter 2016 net production totaled 21.0 million barrels of oil equivalent (Boe), or 230,800 Boe per day, up 3% from fourth quarter 2015 and 12% higher than first quarter 2015. Total net production for first quarter 2016 included 146,500 barrels of oil (Bo) per day (63% of production) and 506.0 million cubic feet (MMcf) of natural gas per day (37% of production).
  • Based on strong first quarter production, the Company today increased its production guidance for 2016. The Company expects to exit the year between 190,000 and 200,000 Boe per day, which is an increase of 10,000 Boe per day. Likewise, 2016 average production is now expected to be between 205,000 and 215,000 Boe per day.
  • Continental also announced it closed the sale in late April of approximately 132,000 net acres of leasehold in the Washakie Basin in Wyoming for $110 million. The leasehold was non-core, non-producing, undeveloped acreage in Sweetwater and Carbon counties and included no proved reserves. After this transaction, the Company retained non-operated production and approximately 40,000 net acres in the basin.

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Come Hither Children and See the Fruits of #SOHN2016 Arduous Labor


Nick Danaher of Domando Capital Management said during his presentation today that TRIP was ‘an easy double’ and ‘possible multi-bagger.’ Almost immediately thereafter, the stock cascaded lower in what could only be described as a ‘non-game changing’ quarter.

Investors are tripping over themselves, trying to blow out of TRIP in the after-hours.


After the market close, the Needham, MA-based online travel company posted adjusted earnings of 32 cents per diluted share, which fell short of analysts’ expectations of 46 cents per share.

Revenue declined by 3% to $352 million year-over-year and was below Wall Street’s forecasts of $370.5 million.

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Chanos Seeks to Destroy Elon Musk, Says He’s Short $TSLA, $SCTY


Chanos is out talking trash today at the Sohn Conference. He’s not mincing words and paints a picture of Elon Musk as a two-bit huckster and snake oil salesman. His rhetoric is strong, pimp hand even stronger. His track record for Sohn conference short picks is unparalleled.

BID -31%
STX -47%
WDC -28%
PBR -66%
VALE -72%

With a track record like that, I think it’s fair to say Jim is worth listening to when he describes his next short.

He thinks SCTY runs into financing problems in this calendar year and describes TSLA as being something made up in a fictional world, unsustainable and bound to break into 10,000 pieces.

NOTE: Both TSLA and SCTY are owned by E. Musk.

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More News from the #SOHN2016 Front: Druckenmiller Says to Sell Stocks, Buy Gold


Legendary investor, Stanley Drunckenmiller said the Fed is obsessed with preventing a 20% drop in the markets and have based policy around that core thesis. He thinks it’s absurd.

Moreover, he suggests that you and I should get out of the market, saying the bull market has exhausted itself and that gold is the preferred investment for the times we live in.

Lastly, he said the Federal Reserve is the ‘least data dependent Fed in history’. They have no end game and the apocalypse is near.

Post-script: he notes that China is going to blow up, citing their current form of economic policy and ‘zombie lending’ to a ‘supreme mania’, denoting its similarities to America, circa mid 2000s.

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BEHOLD: The Earl of Muddy Waters Announces His Next Victim


Yes, indeed. The financial aristocracy has gathered to fraternize amongst each other, offering sageness and stock picks, all for the explicit benefit for kids with cancer. While talking their books with pointed malice to ‘inadvertently’ profit from their well rehearsed presentations, it would behoove me to not report on these ongoings, especially when stock market royalty announced their latest short position.

Come hither small dirty man reading the internets from this portal station, corner of the world.

Carson Block, The Earl at Muddy Waters, would like to announce his latest short sale.

Upon mentioning his ‘thesis’ behind the short sale, the stock plummeted by as much as 14%. It has, since then, rebounded with vigor, now off by a mere 4%, greatly distressing and upsetting the good earl, who had wild eyed hopes and expectations of wanton cataclysm to befall the Little Rock, AK bank.

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Gold Falls by 1%; Pandemonium Breaks Loose


Gold is trading down today, after soaring for the better part of 2016. I guess it’s due to the rise in the dollar, which is higher by 0.25%. Nevertheless, precious metals are down by a trifling today, just about 1%.

What is the response by the even handed folks trading in and out of gold stocks?

Complete and utter chaos.


As a whole, gold stocks are off by more than 5%, as investors run around with their heads on fire in search of a bucket of water. For the year, these stocks have gone up triple digits, even though the yellow metal is up much less than that, higher by 20%.

I suppose there’s a multiplier effect of 5 in this idiotic sector. For every 1% move in the underlying commodity, there is a 5% move in the stocks. Makes sense.

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Glenview from the Sohn Conference: ‘Hold on’ Lads; Don’t Sell!

Larry Robbins, founder and chief executive of hedge fund Glenview Capital Management, speaks at the Sohn Investment Conference in New York, May 5, 2014. REUTERS/Eduardo Munoz

Desperation is in the air. L. Robbins, in between eating hamburgers, pleaded with the other billionaires at this year’s Sohn conference to just ‘hang on’ and to get from point A to point B. Don’t worry. Everything is going to be ok.

I haven’t kept up with Larry for quite some time. I know that he shed 18% last year and is down another 12% this year, managing an astounding $17 some odd billion.

He gave every excuse under the sun for his shitty performance, from China to oil to drug pricing to the elections to the fed, even the fucking zika virus.

Additionally, he thinks it’s unfair for people to criticize the hedge fund industry, calling it a game of dodgeball.

You know what’s unfair, Larry? Down 30% over the past year and change with your shitty stock picks, run by the moronic gorillas over at Glenview.

Just hang on,” Robbins said Wednesday. “We just want to get from Point A to Point B, and frankly, as long as the fundamentals are tracking what we want them to be doing, we will get safely through our journey.”

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Singapore, PSA cargo container handling facility.

Don’t mind me, I’m just getting my doom on. You’ve been reading me since 2007, some earlier than that. You know that I have a flair for the dramatic, but often and usually for the bull camp. I have a bias and I’m not afraid to reveal that. Much of my life has been dedicated to offering professional guidance for financial matters. I’ve taken the things I’ve learned over the past two decades and laid them bare, here for the unwashed reader class.

A storm is coming. You’ll thank me later.

Imported merchandise declined 3.6 percent, the most since February 2009, as American companies strived to get inventories in line with weaker first-quarter demand. At the same time, shipments overseas fell for the fifth time in six months amid soft global sales.

“The most troubling thing was in the consumer sector — we’re not exactly sure what’s going on there and whether it’s sort of a one-off effect,” in terms of the slump in imports, Jay Bryson, global economist at Wells Fargo Securities LLC, in Charlotte, North Carolina, said before the report.

Still, “I think you’re going to see import growth outpace export growth as you go forward, and therefore trade will continue to be a modest headwind to growth in the U.S.,” he said.

Q2 GDP will be revised lower.

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Shares of $PCLN Negotiated Lower on Truly Heinous Guidance


I haven’t seen an earnings warning like this in quite some time. It’s certainly noteworthy to see a bellwether, like PCLN, give guidance, so bad, it boggles the mind.

The company is guiding down by almost $3.50. This isn’t a minor blip, but a collapse.


Reports Q1 (Mar) earnings of $10.54 per share, $0.90 better than the Capital IQ Consensus of $9.64; revenues rose 16.7% year/year to $2.15 bln vs the $2.12 bln Capital IQ Consensus.

Co issues downside guidance for Q2, sees EPS of $11.60-12.50 vs. $14.96 Capital IQ Consensus Estimate.

Year-over-year increase in room nights booked of approximately 15% – 22%.

Year-over-year increase in total gross travel bookings of approximately 11% – 18% (an increase of approximately 11% – 18% on a constant currency basis).

Year-over-year increase in revenue of approximately 7% – 14%.
Year-over-year increase in gross profit of approximately 9% – 16% (an increase of approximately 9% – 16% on a constant currency basis).

Adjusted EBITDA of approximately $740 million to $795 million.

Gross profit for the quarter Priceline Group was $2 billion; +21% y/y US dollars and by about +27% on a constant currencyior year.

Gross profit was helped by performing in Q1 this year versus Q2 last year.

Estimate the early Easter timing shift of about $40 million of gross profit in adjusted EBITDA into Q1 that would’ve been recognized in Q2.

The timing shift benefits Q1 gross profit operating profit adjusted EBITDA net income and operating margins and will exert pressure on those metrics in Q2 in both cases compared to the prior year.

This is one of the greatest performers I’ve ever seen. The stock has steadily risen to new heights, under the radar, and mostly without pause. I’ve seen misses in high price stocks have minor effects on the share price, due to a strong and fervent shareholder base. There aren’t many people willing to fork over $1,200 per share. Mostly, this stock is owned institutionally and those fuckers aren’t likely to sell after one bad quarter.

Thus far, the stock is lower by 10%. I’d expect any other stock to be down 25-30% on guidance this bad.

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