I started doing blogs on Wordpress.At first it looked like I had only a little space in the blog and so I used it for suggestions on possible combinations and mergers for stocks.There was no formal structure in place so I never knew if my suggestions were acted upon or not.So in effect it was like a bulletin board for interested parties. If interested parties liked the ideas in the blog they could act upon the suggestions.There was never any compensation for these ideas or "notes". I did write one or two long blogs on Wordpress but mostly these were saved for my two blogs on Blogger called Blogdaleupsome and Workathon.I tried for a third blog on Blogger but could not get it.
The Two on Blogger
These two blogs are really like small articles in a magazine.The main purpose is to get readership and to increase readership.Just like all authors;these blogs are trying to get a bigger audience.In the case of Blogdaleupsome and Workathon the idea is to get more page views and Google will check and give the blog a higher "page ranking".This has not happened to these two blogs yet.And yet for every blog on these two websites Google itself has one or more page views.Theoretically Google could transfer my blog to another of their blogs and sell them on their own site.This,of course, if they did it, would keep my page ranking lower than it should be.
After all blogging is about advertising and I, like all other bloggers, are trying to get my readership higher so more page views can be translated into advertising.Products advertised on the blog are more likely to be tried if the author seems believable.Google calls this monetizing your website.So far I have been unable to raise my page ranking and unable to monetize my website.This however may come with time as Google checks my blog again and raises the page ranking.Many readers use search engines to pick their blogs and those with a higher page ranking always get more page views and hence more advertising.
Another Business Blog
Both of my blogs are about business.In particular,they analyze quarterly reports and forecast revenues and profits and earnings per share.Blogdaleupsome likes to point out stocks that trade at a low earnings multiple and are a bargain in comparison to other stocks.It is intended as an information centre to advise readers that there are stocks that are bargains and that investors can make money on.Blogdaleupsome tries to make corporate reports more transparent so readers can see good investment opportunities to make money.This will bring readers to the blog without them even knowing what the current article is about.They should feel that they can always find bargains on this site.Many do.
The main purpose of Workathon is to sort through the business and engineering details and point out to more sophisticated investors and to senior corporate managers things that might improve revenues or profits.It is not clear that many or even any managers read this blog but if they do they might find strategies to improve their business.It must be pointed out that these managers do not give me direct feedback on my ideas but sometimes I can read about changes(I suggested) made in their way of doing business.By far the best feedback I get is through the price of the stock that I write my blog about.Sometimes I see immediate price increases and sometimes slow but steady rises.
Recent Examples
One recent example is Crocodile Gold.A company press release pointed out that there were new gold extensions running from their existing Fosterville mine.They estimated the gold resource at about 2 million ounces.I recalculated the ore body using their information and estimated the size of the resource at 3 to 5 million ounces.The main fact that I used was the high grade of the ore in the new fault.A recent press release shows that there are intercepts with very high grades of gold and imply that the ore body could easily be close to 3 to 5 million ounces of gold.The price of the stock has not risen yet because the company is not able to increase it 's production immediately and the price of gold has fallen again.But this stock will rise in price soon.
Another company where this blog pointed out a resource much bigger than originally stated was Twin Butte Resources.They bought a property(light oil) from another privately run company; the original pools of oil were reported to be much smaller than they actually were.I used the fine details in their press releases(2or3 of them) to point out to readers of the blog that in fact the pools were bigger than thought and there were other pools connected to them.Twin Butte has still only hinted at these new pools and the total size of the resource.In both these cases readers have gotten better information and more clear information from reading these two blogs but particularly Workathon.By the way ,Workathon has found other anomalies that the reader could have benefitted from.
Workathon discovers anomalies that make investors profit
Tuesday, 24 February 2015
Wednesday, 18 February 2015
Chorus Aviation signs deal with Bombardier
On February2,2015 Chorus Aviation announced that it had signed an agreement with Bombardier Aircraft to buy 13 Q400 NexGen aircraft with an option to buy 10 more.The firm order is valued at $424 million US and could increase to $758 million US with the options.Chorus also announced a maintenance agreement that will extend the life of their Dash8-300 aircraft by 50% or15 years.The agreement covers a minimum of 19 aircraft and will start in early 2017.It is not known how many aircraft this will eventually cover but it is known that Bombardier has firm orders for 534 Q400 aircraft.The Dash8-300 is a top performing turboprop and has been around for two decades.The order size for Dash8-300 aircraft should be somewhat smaller.This will make for a sizeable maintenance business arising from the Dash8-300s. Chorus adds that they are the world's largest operator of Dash 8s;this new agreement will extend the life of their Dash-8s by up to 15 years.The announcement did not say whether the agreement applied to the Dash8-100s.
The Program
The Dash8-300 is an efficient turboprop that holds 50 passengers.It is well-suited to short and medium haul which makes it perfect for regional aircraft.Chorus says that it will put out a Service Bulletin for operators to read and follow.Chorus will also arrange for the replacement of some structural and systems compoents.It does not say if Bombardier personnel will play a part in this program.But it is known that Chorus has a large and well-run maintenance program in Halifax;also Chorus just bought an expert maintenance facility called Telesys.Chorus has been gradually building a maintenance arm to their operation and this will be even bigger by early 2017 when this agreement takes place.It is very likely that by then the agreement will be extended to the Dash8 -100s as well.It is clear that by 2017 Chorus will start to bring in significant revenues from this operation.
The Program
The Dash8-300 is an efficient turboprop that holds 50 passengers.It is well-suited to short and medium haul which makes it perfect for regional aircraft.Chorus says that it will put out a Service Bulletin for operators to read and follow.Chorus will also arrange for the replacement of some structural and systems compoents.It does not say if Bombardier personnel will play a part in this program.But it is known that Chorus has a large and well-run maintenance program in Halifax;also Chorus just bought an expert maintenance facility called Telesys.Chorus has been gradually building a maintenance arm to their operation and this will be even bigger by early 2017 when this agreement takes place.It is very likely that by then the agreement will be extended to the Dash8 -100s as well.It is clear that by 2017 Chorus will start to bring in significant revenues from this operation.
Thursday, 12 February 2015
Crocodile Gold gives resource update
On February2,2015 Crocodile Gold gave an update on the size of the resource in the Fosterville mine deposit.Back in March 2014 Crocodile Gold revised the size of the resource to about 2.2 million ounces but it also reported extensions from the Phoenix and the Lower Phoenix faults.My blog in Workathon(in Blogger) used their information and concluded that the resource could be as large as 5 million ounces.It really depended on the mineralization in the extensions.Now Crocodile says that they have found three new faults,namely the Lower Phoenix Footwall Fault and the Kestrel Fault and The East Dipping Fault.The grade of the gold in the three new faults is reportedly very high.
Two Mines or One
Crocodile Gold says in their update that this"may represent a second gold event".This means that the grade of the ore reported by Crocodile is much higher than that mined in the Fosterville mine.For example, one of the intercepts in the Lower Phoenix Footwall fault measures 294 grams per tonne over 1.85 metres and also123 grams per tonne over 9.45 metres.This is either a phenomenonal resource or the grade is very inconsistent over the whole strike.But if the grade is consistent over the fault then Crocodile may have two good mines not one Fosterville mine.Crocodile says that they have drilled 490 metres north of the Lower Phoenix structure and 100 metres south of the Lower Phoenix structure.It would certainly be economical to have two mine entrances ;one in the north and the existing entrance.This ,in theory, would increase production.Secondly it would have production from a new mine entrance and theoretically a new mine.
The Royalty Agreement
Crocodile Gold had a net cash flow agreement with Aurico Gold relating to the production from the Fosterville and the Stawell mines.This recently was replaced with a smelter royalty agreement whereby Aurico is paid 2% of production from the Fosterville mine.If these drill intercepts are typical of that in the entire structure then it is possible that the resource in the Fosterville mine could be as large as 4 to 6 million ounces.However if there are two mines instead of one would the royalty on the second mine be only at .5 or 1% of the production? Perhaps the mine production is not as important as the amount of gold that is produced by the smelter.
Raising their guidance
Unfortunately for Crocodile Gold investors either seem to not believe them or are not impressed by this update.After all it was released on February 2 and the stock has not reacted to this immense amount of gold in these extensions that they are calling the Lower Phoenix Footwall fault, the Kestrel fault and the East Dipping fault.In addition,Crocodile Gold has not raised it's guidance from that of 2014.It's guidance is still for 205,000 to 220,000 ounces of gold.If this update was accurate would guidance not be for 250,000 to 300,000 ounces of gold for 2015 and 350,000 to 400,000 ounces for 2016.Investors are either very naiive or very slow to react to this massive gold deposit in these three new faults.
Two Mines or One
Crocodile Gold says in their update that this"may represent a second gold event".This means that the grade of the ore reported by Crocodile is much higher than that mined in the Fosterville mine.For example, one of the intercepts in the Lower Phoenix Footwall fault measures 294 grams per tonne over 1.85 metres and also123 grams per tonne over 9.45 metres.This is either a phenomenonal resource or the grade is very inconsistent over the whole strike.But if the grade is consistent over the fault then Crocodile may have two good mines not one Fosterville mine.Crocodile says that they have drilled 490 metres north of the Lower Phoenix structure and 100 metres south of the Lower Phoenix structure.It would certainly be economical to have two mine entrances ;one in the north and the existing entrance.This ,in theory, would increase production.Secondly it would have production from a new mine entrance and theoretically a new mine.
The Royalty Agreement
Crocodile Gold had a net cash flow agreement with Aurico Gold relating to the production from the Fosterville and the Stawell mines.This recently was replaced with a smelter royalty agreement whereby Aurico is paid 2% of production from the Fosterville mine.If these drill intercepts are typical of that in the entire structure then it is possible that the resource in the Fosterville mine could be as large as 4 to 6 million ounces.However if there are two mines instead of one would the royalty on the second mine be only at .5 or 1% of the production? Perhaps the mine production is not as important as the amount of gold that is produced by the smelter.
Raising their guidance
Unfortunately for Crocodile Gold investors either seem to not believe them or are not impressed by this update.After all it was released on February 2 and the stock has not reacted to this immense amount of gold in these extensions that they are calling the Lower Phoenix Footwall fault, the Kestrel fault and the East Dipping fault.In addition,Crocodile Gold has not raised it's guidance from that of 2014.It's guidance is still for 205,000 to 220,000 ounces of gold.If this update was accurate would guidance not be for 250,000 to 300,000 ounces of gold for 2015 and 350,000 to 400,000 ounces for 2016.Investors are either very naiive or very slow to react to this massive gold deposit in these three new faults.
Thursday, 29 January 2015
Transalta Power needs Capital efficiency
Transalta Power is an utility that generates power in Canada but much of it is in Alberta where power prices are down almost 33%.It also has a lot of traditional power generating stations that could use some updating.However Transalta has a lot of earnings;it reported $1 billion in EBITDA in 2013.Some of this will have to used to(a) make existing plants more efficient and (b) have more power generating stations outside of Alberta.
Capital Power's method
Capital Power had a coal-fired generating station at the Genesee coal mines.It was basically a steam generating operation.They just arranged to buy new Mitsubishi J series gas turbines.These are combined with a steam heat recovery generator to make a combined cycle generating station.This is a top of the line generator and is much more efficient than the original coal-fired operation.This is the way of the future for utilities with old traditional generating methods.Transalta which has a tremenduous amount of internally generated cash must follow suit.They must adapt old structures with new generating methods in order to adjust to the existing power prices.
Australia and beyond
In July28,2014 Transalta announced that it had agreed to build,own and operate a 150 MW combined cycle gas plant in South Hedland, Australia.This at a cost of $570 million.This plant should be in commercial operation by late 2016.This will be an additional 150 MW of generated power and will increase total EBITDA for Transalta.Sometimes building from scratch is easier than modifying existing plants but this will give TA the necessary expertise with which to modify their Canadian coal operations and some hydro operations.This is better than waiting for Alberta and Canadian power prices to come back.In addition, Transalta Power may soon approach $1.25 to $1.40 billion in EBITDA.
Capital Power's method
Capital Power had a coal-fired generating station at the Genesee coal mines.It was basically a steam generating operation.They just arranged to buy new Mitsubishi J series gas turbines.These are combined with a steam heat recovery generator to make a combined cycle generating station.This is a top of the line generator and is much more efficient than the original coal-fired operation.This is the way of the future for utilities with old traditional generating methods.Transalta which has a tremenduous amount of internally generated cash must follow suit.They must adapt old structures with new generating methods in order to adjust to the existing power prices.
Australia and beyond
In July28,2014 Transalta announced that it had agreed to build,own and operate a 150 MW combined cycle gas plant in South Hedland, Australia.This at a cost of $570 million.This plant should be in commercial operation by late 2016.This will be an additional 150 MW of generated power and will increase total EBITDA for Transalta.Sometimes building from scratch is easier than modifying existing plants but this will give TA the necessary expertise with which to modify their Canadian coal operations and some hydro operations.This is better than waiting for Alberta and Canadian power prices to come back.In addition, Transalta Power may soon approach $1.25 to $1.40 billion in EBITDA.
Friday, 23 January 2015
Northland Power still on track
On January12,2015 Northland Power announced an update on developments at several Canadian projects.Also they announced that they will meet guidance on 2014 EBITDA and 2015 EBITDA and on their payout ratio.They stated that they will give more details in their annual report on February 18.Northland has taken on two big projects(both wind projects in Europe);one is called Gemini which will produce 600MW and it has a 2.8 billion Euro price tag and the second a 332 MW project in the North Sea near Germany.The second is called Nordsee and has three components(Nordsee One,Two and Three).Nordsee One is under advanced development and has been awarded power contracts already.Nordsee One may be ready for commercial operations by late 2016 or early 2017.
Canadian projects
Northland Power has made developments in four Canadian projects.This ,in effect, tightens things up for their two big projects.The first is Kirkland Lake Generating station and it has a new 20 year contract up until August 2035 for a 30 MW gas generating station;it provides stable revenues until 2035.The second is the Cochrane Generating station.It will get an extended contract until May 2015.This will give it time to negotiate a new long term contract.The third one is Phase 3 of their ground mounted solar projects which has a capacity of 40MW.They signed a contract with two First Nations organization which gives them a combined 37.5% equity interest in 4 Phase 3 solar projects in Northern Ontario.The total consideration is for $46 million for which about $15 million will be a take-back loan.This is the final 4 of the total of 13 solar projects.Northland has had good increases in cash flow for the last two quarters and is expecting an increase in Q4.It is clear that Northland needs profit from it's Canadian operations to finance these two large international projects and they are getting it.
How well are they doing
Northland Power has had significant increases in cash flow and is expecting continued increases.It's Canadian operations have been very successful to date.But Northland is planning for the future with it's two large European projects.Many brokers may have underrated their profitability.Northland says it is on track to meet 2014 and 2015 guidance.If true then earnings per share measured by EBITDA would be around $2.50 per share.However a better measure would be adjusted EBITDA which would be properly about $2.25 to $2.35 per share.In 2015 if they meet guidance, e.p.s. could be as high as $2.50 to $2.60 per share.This can easily support a price per share of $19.Some brokers may worry about their rising payout ratio but Northland says even as it rises, their dividend will be safe.So it is fairly clear that Northland is still on track and is preparing adequately for it's Gemini project.
Canadian projects
Northland Power has made developments in four Canadian projects.This ,in effect, tightens things up for their two big projects.The first is Kirkland Lake Generating station and it has a new 20 year contract up until August 2035 for a 30 MW gas generating station;it provides stable revenues until 2035.The second is the Cochrane Generating station.It will get an extended contract until May 2015.This will give it time to negotiate a new long term contract.The third one is Phase 3 of their ground mounted solar projects which has a capacity of 40MW.They signed a contract with two First Nations organization which gives them a combined 37.5% equity interest in 4 Phase 3 solar projects in Northern Ontario.The total consideration is for $46 million for which about $15 million will be a take-back loan.This is the final 4 of the total of 13 solar projects.Northland has had good increases in cash flow for the last two quarters and is expecting an increase in Q4.It is clear that Northland needs profit from it's Canadian operations to finance these two large international projects and they are getting it.
How well are they doing
Northland Power has had significant increases in cash flow and is expecting continued increases.It's Canadian operations have been very successful to date.But Northland is planning for the future with it's two large European projects.Many brokers may have underrated their profitability.Northland says it is on track to meet 2014 and 2015 guidance.If true then earnings per share measured by EBITDA would be around $2.50 per share.However a better measure would be adjusted EBITDA which would be properly about $2.25 to $2.35 per share.In 2015 if they meet guidance, e.p.s. could be as high as $2.50 to $2.60 per share.This can easily support a price per share of $19.Some brokers may worry about their rising payout ratio but Northland says even as it rises, their dividend will be safe.So it is fairly clear that Northland is still on track and is preparing adequately for it's Gemini project.
Wednesday, 14 January 2015
Capital Power gets regulatory approvals
On January 8,2015 Capital Power announced that it had received regulatory approval for new and the most advanced gas turbines to be used in their Genesee 4 and 5 power projects.Capital Power(CPX) also announced more detail on the nature of the agreement with joint venture partner Enmax.The capital cost of the project will be $1.4 billion with Enmax looking for a 50% interest.CPX announced that it has already executed agreements with Mitsubishi Power for the most advanced natural gas turbines (J series) with a capacity of 1060 MW of power.There will be two 530 megawatt units.The facility consists of natural gas turbines, steam turbine generators and a heat recovery steam generator.The first of two units could be completed in late 2018.
The Genesee station
The new installation will be at the existing Genesee generating station near Edmonton.The Genesee plant was originally a coal-fired generator.The new plant will make use of existing water intake/discharge structures and the existing transmission interconnections.The first unit will add 530 MW to CPX's 3071 MW of generating capacity for an increase of almost 20%.This will be an efficient and cost effective generator and will replace some of Alberta's more expensive coal-fired generating units.It may also allow CPX to sell off some of it's more expensive units for cash.Capital Power has lots of time to decide on it's replacement options.But when built it will ensure that Capital Power does not get caught in an expensive power shortage like it did this year.This equipment is more flexible than any of the other turbines to handle power fluctuations.
The Genesee station
The new installation will be at the existing Genesee generating station near Edmonton.The Genesee plant was originally a coal-fired generator.The new plant will make use of existing water intake/discharge structures and the existing transmission interconnections.The first unit will add 530 MW to CPX's 3071 MW of generating capacity for an increase of almost 20%.This will be an efficient and cost effective generator and will replace some of Alberta's more expensive coal-fired generating units.It may also allow CPX to sell off some of it's more expensive units for cash.Capital Power has lots of time to decide on it's replacement options.But when built it will ensure that Capital Power does not get caught in an expensive power shortage like it did this year.This equipment is more flexible than any of the other turbines to handle power fluctuations.
Monday, 12 January 2015
Superior Plus-an Overview
This is the second blog on the same piece of information about Superior Plus, that is, their third quarter report.The other blog was written on January 9 on Blogdaleupsome.It was a more detailed blog as Superior used some accounting concepts that had to be explained.However doing this missed the overview of Superior Plus. SPB takes a healthy restructuring charge from earnings;in the last quarter they took a restructuring charge of $150 million.This is because in 2011 or 2012, SPB had some damage at one of it's plants and took a $300 million impairment charge.Since then Superior Plus has been rebuilding facilities.Consequently it has built new hydrochloric acid facilities in Port Edwards,Wisconsin and chloralkali facilities in Saskatoon.Now it has moved it's Construction Products division at a cost of $3 million to Dallas and is expecting increased profit here.The propane distribution business has had small improvements also.This blog expects that restructuring will likely be smaller in 2015.But there will likely have to be improvements made to their new Dallas operation.
Superior Plus made a forecast of earnings(AOCF) in the second quarter of $1.65 to $1.95(AOCF) and now has raised it to $1.75 to $1.95 per share.For 2015 the forecast is for $1.80 to $2.10 per share.Superior Plus expects modest increases for all divisions.This blog thinks this is a little low but recognizes that the newly improved Construction Products division will be the wild card here.Their propane distribution division should have modest increases in sales and margin but the Specialty Chemicals could show a healthy increase with their new facilities in place.
2015 Improvements
SPB has just raised it's earnings per share for 2014 and expects an improvement for 2015.But with new facilities coming onstream results could be up more than 5%;depending on the American market results could be up by 15 to 20%.Also SPB has just raised it's dividend so it looks more attractive to investors.Superior Plus was trading at $15.00 per share in August and so could easily hit $13.50 even if the American market does not materialize like expected.
Superior Plus made a forecast of earnings(AOCF) in the second quarter of $1.65 to $1.95(AOCF) and now has raised it to $1.75 to $1.95 per share.For 2015 the forecast is for $1.80 to $2.10 per share.Superior Plus expects modest increases for all divisions.This blog thinks this is a little low but recognizes that the newly improved Construction Products division will be the wild card here.Their propane distribution division should have modest increases in sales and margin but the Specialty Chemicals could show a healthy increase with their new facilities in place.
2015 Improvements
SPB has just raised it's earnings per share for 2014 and expects an improvement for 2015.But with new facilities coming onstream results could be up more than 5%;depending on the American market results could be up by 15 to 20%.Also SPB has just raised it's dividend so it looks more attractive to investors.Superior Plus was trading at $15.00 per share in August and so could easily hit $13.50 even if the American market does not materialize like expected.
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