Checking In – Year To Date +16%

I haven’t checked in much recently, and for good reason. You, dear reader, probably check out of life enough without having an excuse to. There’s a big bright world outside, and you are missing it, neglecting your children in favor of reading a blog on the internet, run by a man you have never met.

Today, the weather is crappy (in my neck of the woods, anyway), so I will take a minute to scrawl out some thoughts. But really, go outside already.

When you are lying on your death bed, you are not going to regret never getting to read another stock picking article. If you are a normal man, you will probably regret not staring at clouds more often. Or gazing at the stars. Or feeling the warm breeze on your skin, standing by the water.

You may check in once per day to read my work. You have my permission. But other than that, get your ass outside. You’re not getting any younger, buddy.

Writing has been scant here because I have been following my own advise. Despite this neglect, my person is doing just fine. Year to date, my gains are just now over 16%. CCJ has pushed back above $20, and if it can recover to $23, I’ll be sitting inside 20% shortly.

Almost all my positions are higher. HCLP and BAS seem to be breathing, but that’s alright. Everything is holding up well.

Up Another 1% Again Today

HCLP just blew through $60, as analysts raise targets in response to the HAL announcement.

BAS is back above $27. I guess I could have held onto all of those shares, but I have no regrets. Retaining a 15% position in BAS is more than reasonable.

SLW is pushing its way to $26.

My only position that is down noticeably today is UEC. And that remains my smallest position at 5% of assets.

Fracking investments remain the place to be. Oil names are doing well by extension (and a high price per barrel). I’m telling you, coal will be the next thing to run.

Have a wonderful afternoon.

Reduced Size Of BAS Position To 15% Of Assets

I made a large series of sales in BAS for $26.23 on average. These shares were sold for an average gain of 116% from my initial purchase price a few years ago.

This sale brings BAS back in line to a 15% position in my portfolio. It had been almost 25%. The 10% cash raise will sit on my books for now.

I ran some numbers, and from their last report, I’m thinking BAS was probably worth about $8 a share. This massive move higher has been from the company managing to stop the losses they were taking every quarter. However, the next major risk to the shares will be execution; can the company turn a profit?

I think I can see how the company could make $1.60 a year in earnings pretty easily. That puts an 11 year break even point, which is about the top end of my acceptable range. At this junction, the shares are a fair price, in my book.

But I love the company, so I’ll be keeping the 15% position I have in them. I think they don’t just turn $1.60. I think they surprise us all and make $2.50-3 per share annually, sending the shares into the $30-40 range.

I cannot justify keeping the massive ~25% of my portfolio in BAS though. That’s too much, and I do have a lot of money sitting on the table here. I’m only willing to take regular risks that Basic Energy Services makes the next step successfully, even though I’m confident they will.

New Position: SLW

I think the other contributors on this site are dead on about a new move in the precious metals, so I have my lotto ticket selected. I bought SLW for $24.90.

SLW has managed to keep revenues flat from 2011 to 2013; think about that. Gold and silver were cut down (silver lost more than 50% from the highs). But SLW held revenues flat.

How did they accomplish this? Well, part of it was probably that they weren’t getting the top dollar for their production anyway (either holding out for higher spot or held down by existing futures contracts). But an equally big attribute has been the unwavering stream of acquisitions they’ve been from 2011-2013.

They’ve been offsetting their own loss of revenues by buying out competitors.

That has put them in a curious position of being a very strong play on a rebound in silver and gold. In spite of that, when I look at their cash flows and financial position, they don’t look distressed (if you believe their filing, it’s foreign).

Personally, I don’t completely renounce my common sense here, and I’ll be on the look out for signs of trouble (for instance, creative accounting and instruments of financial destruction buttressing up their book).

But at the moment, taking a new position at these levels feels right enough. They pass the first smell test.

I offset the purchase will sales of HCLP and BAS.

No before you ask, I do not think HCLP or BAS are to be sold here, I just have way too much in them after they doubled this year. It made sense, while taking this new position, to use them to offset the purchase. My other positions were driven below 10%. I need to rebalance soon but want to wait to see if BAS and HCLP can break out further before I do too much.

Small Add To My BTU Position For $16.80

I added to BTU for $16.80. This is just a small addition; a couple of percent of my net worth.

This play on coal is to be edged into incrementally. There is no hurry.

I offset the purchase with a minor sale of HCLP, which has become outlandishly sized. It is near unanimously disproportionate to the rest of my holdings – I presently have more in HCLP than CCJ – which is astounding when you consider that CCJ has priced pretty steady to where I’ve held it, and it was once more than 20% of my portfolio.

HCLP makes up 26% of my holdings after today’s sale. I may pare back BAS and HCLP some more, just to get them back in line a little. I’ll think about it over the weekend.

BAS Down After Secondary Offering

Basic Energy Services is down 5% on me after they announced a secondary offering good for about a 5% dilution.

This pain is never welcome, but I’m not necessarily concerned. I have a long standing policy of not getting puffy over equity raises so long as they are put to good use. What I want to see is what BAS intends to do with the money.

So long as they aren’t hoarding cash or using it to pay existing expenses, there’s no problem here. I want payrolls to grow, lines of business to expand, revenues to increase (and it better be above current per share growth rates)…I want to make money.

If that means selling a little stock, what’s the issue?

I’m not sure I’m a buyer of this drop, because I own a lot. But I’ll be taking a look at the numbers later.

(Interestingly, HCLP is also getting hooked today, probably because automated correlation programs lack subtlety)

Checking In – Year To Date +16%

I haven’t checked in much recently, and for good reason. You, dear reader, probably check out of life enough without having an excuse to. There’s a big bright world outside, and you are missing it, neglecting your children in favor of reading a blog on the internet, run by a man you have never met.

Today, the weather is crappy (in my neck of the woods, anyway), so I will take a minute to scrawl out some thoughts. But really, go outside already.

When you are lying on your death bed, you are not going to regret never getting to read another stock picking article. If you are a normal man, you will probably regret not staring at clouds more often. Or gazing at the stars. Or feeling the warm breeze on your skin, standing by the water.

You may check in once per day to read my work. You have my permission. But other than that, get your ass outside. You’re not getting any younger, buddy.

Writing has been scant here because I have been following my own advise. Despite this neglect, my person is doing just fine. Year to date, my gains are just now over 16%. CCJ has pushed back above $20, and if it can recover to $23, I’ll be sitting inside 20% shortly.

Almost all my positions are higher. HCLP and BAS seem to be breathing, but that’s alright. Everything is holding up well.

Up Another 1% Again Today

HCLP just blew through $60, as analysts raise targets in response to the HAL announcement.

BAS is back above $27. I guess I could have held onto all of those shares, but I have no regrets. Retaining a 15% position in BAS is more than reasonable.

SLW is pushing its way to $26.

My only position that is down noticeably today is UEC. And that remains my smallest position at 5% of assets.

Fracking investments remain the place to be. Oil names are doing well by extension (and a high price per barrel). I’m telling you, coal will be the next thing to run.

Have a wonderful afternoon.

Reduced Size Of BAS Position To 15% Of Assets

I made a large series of sales in BAS for $26.23 on average. These shares were sold for an average gain of 116% from my initial purchase price a few years ago.

This sale brings BAS back in line to a 15% position in my portfolio. It had been almost 25%. The 10% cash raise will sit on my books for now.

I ran some numbers, and from their last report, I’m thinking BAS was probably worth about $8 a share. This massive move higher has been from the company managing to stop the losses they were taking every quarter. However, the next major risk to the shares will be execution; can the company turn a profit?

I think I can see how the company could make $1.60 a year in earnings pretty easily. That puts an 11 year break even point, which is about the top end of my acceptable range. At this junction, the shares are a fair price, in my book.

But I love the company, so I’ll be keeping the 15% position I have in them. I think they don’t just turn $1.60. I think they surprise us all and make $2.50-3 per share annually, sending the shares into the $30-40 range.

I cannot justify keeping the massive ~25% of my portfolio in BAS though. That’s too much, and I do have a lot of money sitting on the table here. I’m only willing to take regular risks that Basic Energy Services makes the next step successfully, even though I’m confident they will.

New Position: SLW

I think the other contributors on this site are dead on about a new move in the precious metals, so I have my lotto ticket selected. I bought SLW for $24.90.

SLW has managed to keep revenues flat from 2011 to 2013; think about that. Gold and silver were cut down (silver lost more than 50% from the highs). But SLW held revenues flat.

How did they accomplish this? Well, part of it was probably that they weren’t getting the top dollar for their production anyway (either holding out for higher spot or held down by existing futures contracts). But an equally big attribute has been the unwavering stream of acquisitions they’ve been from 2011-2013.

They’ve been offsetting their own loss of revenues by buying out competitors.

That has put them in a curious position of being a very strong play on a rebound in silver and gold. In spite of that, when I look at their cash flows and financial position, they don’t look distressed (if you believe their filing, it’s foreign).

Personally, I don’t completely renounce my common sense here, and I’ll be on the look out for signs of trouble (for instance, creative accounting and instruments of financial destruction buttressing up their book).

But at the moment, taking a new position at these levels feels right enough. They pass the first smell test.

I offset the purchase will sales of HCLP and BAS.

No before you ask, I do not think HCLP or BAS are to be sold here, I just have way too much in them after they doubled this year. It made sense, while taking this new position, to use them to offset the purchase. My other positions were driven below 10%. I need to rebalance soon but want to wait to see if BAS and HCLP can break out further before I do too much.

Small Add To My BTU Position For $16.80

I added to BTU for $16.80. This is just a small addition; a couple of percent of my net worth.

This play on coal is to be edged into incrementally. There is no hurry.

I offset the purchase with a minor sale of HCLP, which has become outlandishly sized. It is near unanimously disproportionate to the rest of my holdings – I presently have more in HCLP than CCJ – which is astounding when you consider that CCJ has priced pretty steady to where I’ve held it, and it was once more than 20% of my portfolio.

HCLP makes up 26% of my holdings after today’s sale. I may pare back BAS and HCLP some more, just to get them back in line a little. I’ll think about it over the weekend.

BAS Down After Secondary Offering

Basic Energy Services is down 5% on me after they announced a secondary offering good for about a 5% dilution.

This pain is never welcome, but I’m not necessarily concerned. I have a long standing policy of not getting puffy over equity raises so long as they are put to good use. What I want to see is what BAS intends to do with the money.

So long as they aren’t hoarding cash or using it to pay existing expenses, there’s no problem here. I want payrolls to grow, lines of business to expand, revenues to increase (and it better be above current per share growth rates)…I want to make money.

If that means selling a little stock, what’s the issue?

I’m not sure I’m a buyer of this drop, because I own a lot. But I’ll be taking a look at the numbers later.

(Interestingly, HCLP is also getting hooked today, probably because automated correlation programs lack subtlety)

Previous Posts by Mr. Cain Thaler