GONE PUMPKIN CRAZY

Let me preface this post with a few facts regarding “The Fly” and the discretion he exhibits on a daily basis when it comes to his nutrition. I am relegated to the strictest of plans, as I am cutting down to 10-11% body fat. While doing so, I am eating loads of protein and minimizing the carbs, like any decent, law abiding, citizen who cares about his/her body should.

HOWEVER, ever since the Fall has attacked me, I’ve been craving pumpkin in just about any food product. I’ve eaten pumpkin bread, pie, cookies, washed it down with pumpkin beer and coffee. Just today I ordered pumpkin raviolis, but decided to send it back to the chef for being “completely inadequate and entirely inedible” (those were my exact words). By the way, once you say something like that, forget about eating at that establishment, forever. Send the food back and ask for your check. Trust me on that.

Back to the crisis at hand. All of this pumpkin stuff is driving me mad. I even had a “pumpkin shandy” yesterday. I don’t even know what that is, yet I drank it. In the pantry lies two packs of pumpkin jello that I picked up. I was fixing on having Mrs. Fly make it for me. Just last week I created some sort of pumpkin protein bar crap. Oh, by the way, I have pumpkin granola bars too. If pumpkin could be injected and mainlined, I’d probably do it, despite my aversion to needles.

Did I mention that I’ve been going to this organic smoothie store for “pumpkin smoothies” for lunch? It’s like a god damned pumpkin pie in a 12oz cup.

Bear in mind, I’m consuming all of this in a very methodical, organized manner, still conforming to my nutritional plan. Nonetheless, I find myself to be a ridiculous person, devouring all of this pumpkin. Surely any gentleman worth a pinch of salt shouldn’t behave in such a depraved manner.

By the way, this god damned Pumpking beer is phenomenal and is sold out at my local alcoholic spot. If you should happen to see it at your local alcoholic resting store, buy it in spades.

So we lost a little coin today, at least some of us mortals did. I know Option Addict has been cheating with his picks, seeking advice vis a vis the company time machine–leaving the rest of us in awe. His latest pick, YGE, is nothing less than staggering.

The solars are a funny sector. I was buying YGE in the $2’s, putting a price target of $6 on it, based upon an apples to apples comparison of its peers. Lo and behold, he we are at $6.

The PPT scores have been very gloomy as of late, reminiscent of a cold war. We’re not oversold, not overbought. We are simply floating aimlessly, losing a little here and a little there. I’ve been fortunate to escape the latest sell off, save today’s 1.5% drubbing. However, I am not complacent and understand that all good things end, at least temporarily, so I better be prepared for that eventuality.

‘Tis the season for market catastrophes and government shut downs. Over the weekend, I am going to comb all of my favourite screens for the very best of stocks and post them, exclusively for the top hatted, white glove wearing, gents inside of The PPT.

I sold out of FFIV to raise money, locking in a 7% loss. To be honest, it felt good booking a loss. Between that and CVV, I’ve cleared my decks of the waste, in order to make room for the bounty. In a market like this, we don’t have time for stragglers. Throw them into the wind, off the helicopter, and into the zombie horde. There is work to be done, but not on a Friday afternoon ahead of the government shutting down.

Over the past few days, I’ve reduced my market exposure and now find myself at a mere 100% long position, as opposed to something much higher. I employ the tools of leverage because I am an artist, a person with an eye for knowing what is good.

Speaking of which, the Dry Bulkers are selling off a bit here, save EGLE. No worries. Rome wasn’t built overnight, nor a decent shareholder base. When the solars began to run, they were stricken with volatility designed to kill old people. Now look at them. They are institutional favorites and we all want a piece of the action, now don’t we?

I view the shippers in a similar vein. Rates have skyrocketed, but no one believes they’re sustainable. Just today, my good friends over at Zerohedge took a swipe at them. I applaud them for it and look forward to taking the money of their readers for my own personal harem, once they cover their shorts.

I’m off by 1%, watching movies at home, laughing at the stupid people on the teevee.

I am sorry to inform you of this horrid news, but your government is going to shut down soon and there is nothing that you or your stupid friends can do about it.

As an aside, I am watching a video of Steve Ballmer go absolutely crazy on stage. This is a perfect example of money not being able to instill class into a sub-human. The man is a hairless ape, raging through the world in his private jet. Unreal.

Back to your government shut down. Yeah, they’re not interested in keeping it open any longer. The republicans feel that Obamacare is a trojan horse for the second coming of Hitler. They’re trying to save the Anne Franks of the world from Nazi extermination. The democrats feel as if the republicans are just a bunch of Steve Ballmers, loud mouth apes who do not curry the favor of anyone outside of the flyover states.

The net result is you’re screwed.

Expect markets to take a breather; but do not panic, small man on the computer. Although the market has been week, we’ve been killing it here on iBC for months now and it’s only fair that you give a little back. Don’t be so damned greedy.

In short, “The Fly” looks forward to a good old fashioned draw down, hopefully of profound proportions. I work best under grotesque conditions. See, not all of us were born into a life of privilege, always begging for the easy path, grown babies dependent upon easy wins to mask the pain of inadequacy.

BALT was designed to be a pure play, based upon the day rates of the BDI. Within the BDI, there are numerous rates, depending on the size of the ship. The biggest ships are Capesizes; BALT owns two of them.

Do you know where day rates were for Capesizes when they reported earnings?

Answer: $5,000 per day.

Do you know where they are now?

$41,000

If you combine all of their ships together and figure out what they make on a daily basis, based on today’s rates, that number is $15,000 per day. If you take that 15k times 11 ships by 90 (days in the qt.), they stand to do $13.5 million in revenue.

Do you know what they did last quarter?

Answer: $6.5 million.

Their net income break even number is $13,000 per day, meaning, at current levels, the company is operating in the black and will most likely return earnings back to shareholders, as it is company policy to do so. They currently pay a 1 cent divvy, despite operating in the red.

There isn’t a risk of dilution, because the company just raised $60 million. Instead, they will take said cash to buy more ships, investing in their business at a time when it makes sense. Not too many shippers can do this, since they are burdened with crushing debt loads.

Talking with management and people in the industry, I can tell you that demand for iron ore out of China is real. They aren’t restocking either, since inventories are low. They’re probably using it to build tanks to fight us in a world war. On the supply side, fleet growth is stymied at a paltry 3-5% this year, at least 10% off historical averages, due to scrapping and the inability for many shippers to finance new builds.

Throw all of the valuation numbers out the window. This company isn’t trading 5x sales, but 2. Analysts aren’t even updating their numbers–because they missed the move. No one is calling the company!

Like it or not, analysts will need to bring their guidance into line with reality, which will shock and surprise many, who will find out for the first time that these companies are growing at 100% clips on a quarter to quarter basis.

There isn’t a better growth story.

http://www.youtube.com/watch?v=gAjwV0ll03Y

I bulked up on MODN and added to my BALT position.

Also, I sold out of CVV.

Although I think it trades higher, I needed the money. I am out.

When I started buying GOGO at $11.5, I was researching MODN too. On paper, it’s so cheap!

The company came public and its stock ran up into the mid 20’s, amidst widespread praise and adulation from the media. However, something went awry at MODN, awfully quick, and it was reflected in their staggering earnings shortfall.

They were supposed to do 25-26 mill for the quarter, but instead did $21 mill. Analysts were pissed and threw the company under a bus. During the conference call, the CEO said it was a matter of not being able to “close deals.” He insisted that the company didn’t lose any clients and were refocused on finding a new sales manager to right the ship.

I gotta say, it sounded like a bunch of BS to me. The company guided down for the next year, not just 1 or two quarters. They went from profitability to potentially burning through $20 mill over the next 12 months.

In my estimation, the real problem is growing pains. Ironically, the company is in the business of helping life science’s companies manage their top and bottom lines more efficiently. But they managed to over-expand, and as a result, have many, many disgruntled workers leaving scathing reviews on Glassdoor.

They paint a picture of middle management anarchy run amok, something reminiscent of the movie Office Space. Upper management seems to be unable to motivate people, and as a result, performance and productivity have suffered.

None of what I said sounds good and certainly not a reason to buy the stock. However, the company has over $100 million in cash, equating to 50% of its market cap. The p/s ratio is in the league of ZNGA and is 60% cheap, when compared to other companies in the SAAS space. Providing management can right this ship, this stock will make a bee-line for $20.

If management continues to fail, I am almost certain this stock will be a feasting ground for activist shareholders, demanding change, clamoring over the strong cash backstop.

In summary, MODN sucks, but I took a position nonetheless.

Dry Bulk day rates are racing higher, most likely due to a robust Brazilian grain harvest, and of course the much lauded iron ore demand from china, which is now being sent seaworthy. It was only a matter of time before shipping rates exploded to the upside. After all, end user demand is still strong. The problem was over-capacity; but that’s been getting rectified by massive insolvency striking the shippers, forcing banks to seize assets (ships) and scrap them for their metal.

Economics 101 dictates that whoever is left standing will benefit from a new supply/demand paradigm. Also, since 2007, major innovations in fuel consumption have been made, giving the companies who own new ships a distinct advantage over those with old gas guzzlers. On average, fuel is 60% of a shippers expense.

To that end, enter BALT. They just did a capital raise and do not have any debt maturities due until 2015. They have a fleet of 9 ships, 2 of which are Capesizes. The Capes are the biggest ships and their rates are +300% over the past few months. Since BALT’s fleet is so young (3.5 years), they are fuel efficient and able to make money at a much lower rate than its peers. In other words, this is a company that will benefit from its peers going by the wayside, profiting best from a rising day rate environment most because of their capital structure and superior fleet.

If rates continue to break necks to the upside, look for material upside guidance and profits to be reported at some of your favorite dry bulkers, something that hasn’t been reported in years.

Classic Krull. Very funny.

For those of you who haven’t seen the movie Glenn Gary Glenn Ross, go youtube the Alec Baldwin speech and this will make sense to you.